FIRST DIVISION [G.R. No. 129282. November 29, 2001.] DMPI EMPLOYEES CREDIT COOPERATIVE, INC.

, (DMPI-ECCI), petitioner, vs. HON. ALEJANDRO M. VELEZ, as Presiding Judge of the RTC, Misamis Oriental, Br. 20, and ERIBERTA VILLEGAS, respondents. SYNOPSIS Carmen Mandawe is an employee of DMPI-ECCI. Allegedly, respondent Villegas entrusted money to Mandawe for deposit with DMPI Employees Credit Corporation,Inc. DMPI-ECCI. Mandawe, however, failed to account the entrusted amount and hence, an information for estafa was filed against her. Subsequently, when Villegas also filed a complaint for sum of money and damages against Mandawe and DMPI-ECCI, DMPI-ECCI sought the dismissal of the same on the ground that there is a pending criminal case and the civil complaint failed to contain a certification against forum shopping as required under Circular No. 28-91. There was no violation of the circular. At the time of the filing of the civil complaint, the requirement of certification on forum shopping is not yet applicable to the lower courts. On the issue of the pending criminal case, under the present rule, only the civil liability arising from the offense charged is deemed instituted with the criminal action unless the same is waived or its filing reserved. This does not include recovery of civil liability under Arts. 32, 33, 34 and 2176 of the Civil Code arising from the same act or omission which may be prosecuted separately without reservation. Thus, the independent civil action for damages on account of the fraud committed against Villegas under Art. 33 of the Civil Code may proceed independently even if without reservation as to its filing.

from the commission of the offense in the criminal case since the civil action is either deemed instituted with the criminal action or is separately instituted. However, with respect to civil actions for recovery of civil liability under Articles 32, 33, 34 and 2176 of the Civil Code arising from the same act or omission, the rule has been changed. Under the present rule, only the civil liability arising from the offense charged is deemed instituted with the criminal action unless the offended party waives the civil action, reserves his right to institute it separately, or institutes the civil action prior to the criminal action. There is no more need for a reservation of the right to file the independent civil actions under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines. "The reservation and waiver referred to refers only to the civil action for the recovery of the civil liability arising from the offense charged. This does not include recovery of civil liability under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines arising from the same act or omission which may be prosecuted separately even without a reservation." AaECSH 3.REMEDIAL LAW; CRIMINAL PROCEDURE; RETRO-ACTIVE EFFECT OF INDEPENDENT CIVIL ACTIONS. The changes in the Revised Rules on Criminal Procedure pertaining to independent civil actions which became effective on December 1, 2000 are applicable to this case. Procedural laws may be given retroactive effect to actions pending and undetermined at the time of their passage. There are no vested rights in the rules of procedure. Thus, Civil Case No. CV-94-214, an independent civil action for damages on account of the fraud committed against respondent Villegas under Article 33 of the Civil Code, may proceed independently even if there was no reservation as to its filing. DECISION PARDO, J p: The Case In this special civil action for certiorari, petitioner DMPI Employees Credit Cooperative, Inc. (DMPI-ECCI) seeks the annulment of the order 1 of the Regional Trial Court, Misamis Oriental, Branch 20, granting the motion for reconsideration of respondent Eriberta Villegas, and thus reversing the previous dismissal of Civil Case No. CV-94214. The Facts On February 18, 1994, the prosecuting attorney filed with the Regional Trial Court, Misamis Oriental, Branch 37, an information for estafa 2 against Carmen Mandawe for alleged failure to account to respondent Eriberta Villegas the amount of P608,532.46. Respondent Villegas entrusted this amount to Carmen Mandawe, an employee of petitioner DMPI-ECCI, for deposit with the teller of petitioner. Subsequently, on March 29, 1994, respondent Eriberta Villegas filed with the Regional Trial Court, Misamis Oriental, Branch 20, a complaint 3 against Carmen Mandawe and petitioner DMPI-ECCI for a sum of money and damages with preliminary attachment arising out of the same transaction. In time, petitioner sought the dismissal of the civil case on the following grounds: (1) that there is a pending criminal case in RTC Branch 37, arising from the same facts, and (2) that the complaint failed to contain a certification against forum shopping as required by Supreme Court Circular No. 28-91. 4 On December 12, 1996, the trial court issued an order 5 dismissing Civil Case No. CV-94-214. On January 21, 1997, respondent filed a motion for reconsideration 6 of the order.

SYLLABUS 1.REMEDIAL LAW; CIRCULAR NO. 28-91 (CERTIFICATION OF NON-FORUM SHOPPING); EXTENDED APPLICATION THEREOF. Circular No. 28-91 of the Supreme Court requires a certificate of non-forum shopping to be attached to petitions filed before the Supreme Court and the Court of Appeals. This circular was revised on February 8, 1994 by extending the requirement to all initiatory pleadings filed in all courts and quasi-judicial agencies other than the Supreme Court and the Court of Appeals. Respondent Villegas' failure to attach a certificate of non-forum shopping in her complaint did not violate Circular No. 28-91, because at the time of filing, the requirement applied only to petitions filed with the Supreme Court and the Court of Appeals. Likewise, Administrative Circular No. 04-94 is inapplicable for the reason that the complaint was filed on March 29, 1994, three days before April 1, 1994, the date of effectivity of the circular. 2.CRIMINAL LAW; CLASSES OF INJURIES; PERSONAL INJURY; CIVIL LIABILITY; ELUCIDATED. As a general rule, an offense causes two (2) classes of injuries. The first is the social injury produced by the criminal act which is sought to be repaired thru the imposition of the corresponding penalty, and the second is the personal injury caused to the victim of the crime which injury is sought to be compensated through indemnity which is civil in nature. Thus, "every person criminally liable for a felony is also civilly liable." This is the law governing the recovery of civil liability arising from the commission of an offense. Civil liability includes restitution, reparation for damage caused, and indemnification of consequential damages. The offended party may prove the civil liability of an accused arising

On February 21, 1997, the trial court issued an order 7 granting respondent's motion for reconsideration, thereby recalling the dismissal of the case.Hence, this petition. 8 The Issues The issues raised are: (1) whether the plaintiff's failure to attach a certification against forum shopping in the complaint is a ground to dismiss the case; 9 and, (2) whether the civil case could proceed independently of the criminal case for estafa without having reserved the filing of the civil action. The Court's Ruling On the first issue, Circular No. 28-91 10 of the Supreme Court requires a certificate of non-forum shopping to be attached to petitions filed before the Supreme Court and the Court of Appeals. This circular was revised on February 8, 1994 11 by extending the requirement to all initiatory pleadings filed in all courts and quasi-judicial agencies other than the Supreme Court and the Court of Appeals. Respondent Villegas' failure to attach a certificate of non-forum shopping in her complaint did not violate Circular No. 28-91, because at the time of filing, the requirement applied only to petitions filed with the Supreme Court and the Court of Appeals. 12 Likewise, Administrative Circular No. 04-94 is inapplicable for the reason that the complaint was filed on March 29, 1994, three days before April 1, 1994, the date of effectivity of the circular. 13 On the second issue, as a general rule, an offense causes two (2) classes of injuries. The first is the social injury produced by the criminal act which is sought to be repaired thru the imposition of the corresponding penalty, and the second is the personal injury caused to the victim of the crime which injury is sought to be compensated through indemnity which is civil in nature. 14 Thus, "every person criminally liable for a felony is also civilly liable." 15 This is the law governing the recovery of civil liability arising from the commission of an offense. Civil liability includes restitution, reparation for damage caused, and indemnification of consequential damages. 16 The offended party may prove the civil liability of an accused arising from the commission of the offense in the criminal case since the civil action is either deemed instituted with the criminal action or is separately instituted. Rule 111, Section 1 of the Revised Rules of Criminal Procedure, which became effective on December 1, 2000, provides that: SCEDaT "(a)When a criminal action is instituted, the civil action for the recovery of civil liability arising from the offense charged shall be deemed instituted with the criminal action unless the offended party waives the civil action, reserves the right to institute it separately or institutes the civil action prior to the criminal action." [Italics supplied] Rule 111, Section 2 further provides that

"After the criminal action has been commenced, the separate civil action arising therefrom cannot be instituted until final judgment has been entered in the criminal action." [Italics supplied] However, with respect to civil actions for recovery of civil liability under Articles 32, 33, 34 and 2176 of the Civil Code arising from the same act or omission, the rule has been changed. Under the present rule, only the civil liability arising from the offense charged is deemed instituted with the criminal action unless the offended party waives the civil action, reserves his right to institute it separately, or institutes the civil action prior to the criminal action. 17 There is no more need for a reservation of the right to file the independent civil actions under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines. "The reservation and waiver referred to refers only to the civil action for the recovery of the civil liability arising from the offense charged. This does not include recovery of civil liability under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines arising from the same act or omission which may be prosecuted separately even without a reservation." 18 Rule 111, Section 3 reads: "Sec. 3.When civil action may proceed independently. In the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action may be brought by the offended party. It shall proceed independently of the criminal action and shall require only a preponderance of evidence. In no case, however, may the offended party recover damages twice for the same act or omission charged in the criminal action." The changes in the Revised Rules on Criminal Procedure pertaining to independent civil actions which became effective on December 1, 2000 are applicable to this case. Procedural laws may be given retroactive effect to actions pending and undetermined at the time of their passage. There are no vested rights in the rules of procedure. 19 Thus, Civil Case No. CV-94-214, an independent civil action for damages on account of the fraud committed against respondent Villegas under Article 33 of the Civil Code, may proceed independently even if there was no reservation as to its filing. The Fallo WHEREFORE, the Court DENIES the petition. The Court AFFIRMS the order dated February 21, 1997. 20 No costs. SO ORDERED.

SECOND DIVISION [G.R. No. 165496. February 12, 2007.] HUN HYUNG PARK, petitioner, vs. EUNG WON CHOI, respondent. DECISION CARPIO-MORALES, J p: Petitioner, Hun Hyung Park, assails the Court of Appeals (CA) Resolutions dated May 20, 2004 1 and September 28, 2004 2 in CA G.R. CR No. 28344 dismissing his petition and denying reconsideration thereof, respectively. In an Information 3 dated August 31, 2000, respondent, Eung Won Choi, was charged for violation of Batas Pambansa Blg. 22, otherwise known as the Bouncing Checks Law, for issuing on June 28, 1999 Philippine National Bank Check No. 0077133 postdated August 28, 1999 in the amount of P1,875,000 which was dishonored for having been drawn against insufficient funds. Upon arraignment, respondent, with the assistance of counsel, pleaded "not guilty" to the offense charged. Following the pre-trial conference, the prosecution presented its evidence-in-chief. After the prosecution rested its case, respondent filed a Motion for Leave of Court to File Demurrer to Evidence to which he attached his Demurrer, asserting that the prosecution failed to prove that he received the notice of dishonor, hence, the presumption of the element of knowledge of insufficiency of funds did not arise. 4 By Order 5 of February 27, 2003, the Metropolitan Trial Court (MeTC) of Makati, Branch 65 granted the Demurrer and dismissed the case. The prosecution's Motion for Reconsideration was denied. 6 Petitioner appealed the civil aspect 7 of the case to the Regional Trial Court (RTC) of Makati, contending that the dismissal of the criminal case should not include its civil aspect. By Decision of September 11, 2003, Branch 60 of the RTC held that while the evidence presented was insufficient to prove respondent's criminal liability, it did not altogether extinguish his civil liability. It accordingly granted the appeal of petitioner and ordered respondent to pay him the amount of P1,875,000 with legal interest.8 Upon respondent's motion for reconsideration, however, the RTC set aside its decision and ordered the remand of the case to the MeTC "for further proceedings, so that the defendant [-respondent herein] may adduce evidence on the civil aspect of the case." 9 Petitioner's motion for reconsideration of the remand of the case having been denied, he elevated the case to the CA which, by the assailed resolutions, dismissed his petition for the following reasons: 1.The verification and certification of non-forum shopping attached to the petition does not fully comply with Section 4, as amended by A.M. No. 00-2-10-SC, Rule 7, 1997 Rules of Court, because it does not give the assurance that the allegations of the petition are true and correct based on authentic records. TCDHaE

2.The petition is not accompanied by copies of certain pleadings and other material portions of the record, (i.e., motion for leave to file demurrer to evidence, demurrer to evidence and the opposition thereto, and the Municipal [sic] Trial Court's Order dismissing Criminal Case No. 294690) as would support the allegations of the petition (Sec. 2, Rule 42, ibid.). 3.The Decision dated September 11, 2003 of the Regional Trial Court attached to the petition is an uncertified and illegible mere machine copy of the original (Sec. 2, Rule 42, ibid.). 4.Petitioners failed to implead the People of the Philippines as party-respondent in the petition. 10 In his present petition, petitioner assails the above-stated reasons of the appellate court in dismissing his petition. The manner of verification for pleadings which are required to be verified, such as a petition for review before the CA of an appellate judgment of the RTC, 11 is prescribed by Section 4 of Rule 7 of the Rules of Court: Sec. 4.Verification. Except when otherwise specifically required by law or rule, pleadings need not be under oath, verified or accompanied by affidavit. A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his personal knowledge orbased on authentic records. A pleading required to be verified which contains a verification based on "information and belief," or upon "knowledge, information and belief," or lacks a proper verification shall be treated as an unsigned pleading. 12 (Emphasis and underscoring supplied) Petitioner argues that the word "or" is a disjunctive term signifying disassociation and independence, hence, he chose to affirm in his petition he filed before the courta quo that its contents are "true and correct of my own personal knowledge," 13 and not on the basis of authentic documents. On the other hand, respondent counters that the word "or" may be interpreted in a conjunctive sense and construed to mean as "and," or vice versa, when the context of the law so warrants. A reading of the above-quoted Section 4 of Rule 7 indicates that a pleading may be verified under either of the two given modes or under both. The veracity of the allegations in a pleading may be affirmed based on either one's own personal knowledge or on authentic records, or both, as warranted. The use of the preposition "or" connotes that either source qualifies as a sufficient basis for verification and, needless to state, the concurrence of both sources is more than sufficient. 14Bearing both a disjunctive and conjunctive sense, this parallel legal signification avoids a construction that will exclude the combination of the alternatives or bar the efficacy of any one of the alternatives standing alone. 15

Contrary to petitioner's position, the range of permutation is not left to the pleader's liking, but is dependent on the surrounding nature of the allegations which may warrant that a verification be based either purely on personal knowledge, or entirely on authentic records, or on both sources. As pointed out by respondent, "authentic records" as a basis for verification bear significance in petitions wherein the greater portions of the allegations are based on the records of the proceedings in the court of origin and/or the court a quo, and not solely on the personal knowledge of the petitioner. To illustrate, petitioner himself could not have affirmed, based on his personal knowledge, the truthfulness of the statement in his petition 16 before the CA that at the pre-trial conference respondent admitted having received the letter of demand, because he (petitioner) was not present during the conference. 17 Hence, petitioner needed to rely on the records to confirm its veracity. Verification is not an empty ritual or a meaningless formality. Its import must never be sacrificed in the name of mere expedience or sheer caprice. For what is at stake is the matter of verity attested by the sanctity of an oath 18 to secure an assurance that the allegations in the pleading have been made in good faith, or are true and correct and not merely speculative. 19 This Court has strictly been enforcing the requirement of verification and certification and enunciating that obedience to the requirements of procedural rules is needed if fair results are to be expected therefrom. Utter disregard of the rules cannot just be rationalized by harking on the policy of liberal construction. 20 While the requirement is not jurisdictional in nature, it does not make it less a rule. A relaxed application of the rule can only be justified by the attending circumstances of the case. 21 To sustain petitioner's explanation that the basis of verification is a matter of simple preference would trivialize the rationale and diminish the resoluteness of the rule. It would play on predilection and pay no heed in providing enough assurance of the correctness of the allegations. On the second reason of the CA in dismissing the petition that the petition was not accompanied by copies of certain pleadings and other material portions of the record as would support the allegations of the petition (i.e., Motion for Leave to File Demurrer to Evidence, Demurrer to Evidence and the Opposition thereto, and the MeTC February 27, 2003 Order dismissing the case) petitioner contends that these documents are immaterial to his appeal. Contrary to petitioner's contention, however, the materiality of those documents is very apparent since the civil aspect of the case, from which he is appealing, was likewise dismissed by the trial court on account of the same Demurrer. Petitioner, nonetheless, posits that he subsequently submitted to the CA copies of the enumerated documents, save for the MeTC February 27, 2003 Order, as attachments to his Motion for Reconsideration. The Rules, however, require that the petition must "be accompanied by clearly legible duplicate original or true copies of the judgments or final orders of both lower courts, certified correct by the clerk of court." 22 A perusal of the petition filed before the CA shows that the only duplicate original or certified true copies attached as annexes thereto are the January 14, 2004 RTC Order granting respondent's Motion for Reconsideration and the

March 29, 2004 RTC Order denying petitioner's Motion for Reconsideration. The copy of the September 11, 2003 RTC Decision, which petitioner prayed to be reinstated, is not a certified true copy and is not even legible. Petitioner later recompensed though by appending to his Motion for Reconsideration a duplicate original copy. aHcDEC While petitioner averred before the CA in his Motion for Reconsideration that the February 27, 2003 MeTC Order was already attached to his petition as Annex "G," Annex "G" bares a replicate copy of a different order, however. It was to this Court that petitioner belatedly submitted an uncertified true copy of the said MeTC Order as an annex to his Reply to respondent's Comment. This Court in fact observes that the copy of the other MeTC Order, that dated May 5, 2003, which petitioner attached to his petition before the CA is similarly uncertified as true. Since both Orders of the MeTC were adverse to him even with respect to the civil aspect of the case, petitioner was mandated to submit them in the required form.23 In fine, petitioner fell short in his compliance with Section 2 (d) of Rule 42, the mandatory tenor of which is discernible thereunder and is well settled. 24 He has not, however, advanced any strong compelling reasons to warrant a relaxation of the Rules, hence, his petition before the CA was correctly dismissed. Procedural rules are tools designed to facilitate the adjudication of cases. Courts and litigants alike are thus enjoined to abide strictly by the rules. And while the Court, in some instances, allows a relaxation in the application of the rules, this we stress, was never intended to forge a bastion for erring litigants to violate the rules with impunity. The liberality in the interpretation and application of the rules applies only in proper cases and under justifiable causes and circumstances. While it is true that litigation is not a game of technicalities, it is equally true that every case must be prosecuted in accordance with the prescribed procedure to insure an orderly and speedy administration of justice. 25 (Emphasis supplied) As to the third reason for the appellate court's dismissal of his petition failure to implead the People of the Philippines as a party in the petition indeed, as petitioner contends, the same is of no moment, he having appealed only the civil aspect of the case. Passing on the dual purpose of a criminal action, this Court ruled: Unless the offended party waives the civil action or reserves the right to institute it separately or institutes the civil action prior to the criminal action, there are two actions involved in a criminal case. The first is the criminal action for the punishment of the offender. The parties are the People of the Philippines as the plaintiff and the accused. In a criminal action, the private complainant is merely a witness for the State on the criminal aspect of the action. The second is the civil action arising from the delict. The private complainant is the plaintiff and the accused is the defendant. There is a merger of the trial of the two cases to avoid multiplicity of suits. 26 (Underscoring supplied)

It bears recalling that the MeTC acquitted respondent. 27 As a rule, a judgment of acquittal is immediately final and executory and the prosecution cannot appeal the acquittal because of the constitutional prohibition against double jeopardy. Either the offended party or the accused may, however, appeal the civil aspect of the judgment despite the acquittal of the accused. The public prosecutor has generally no interest in appealing the civil aspect of a decision acquitting the accused. The acquittal ends his work. The case is terminated as far as he is concerned.The real parties in interest in the civil aspect of a decision are the offended party and the accused. 28 Technicality aside, the petition is devoid of merit. When a demurrer to evidence is filed without leave of court, the whole case is submitted for judgment on the basis of the evidence for the prosecution as the accused is deemed to have waived the right to present evidence. 29 At that juncture, the court is called upon to decide the case including its civil aspect, unless the enforcement of the civil liability by a separate civil action has been waived or reserved. 30 If the filing of a separate civil action has not been reserved or priorly instituted or the enforcement of civil liability is not waived, the trial court should, in case of conviction, state the civil liability or damages caused by the wrongful act or omission to be recovered from the accused by the offended party, if there is any. 31 For, in case of acquittal, the accused may still be adjudged civilly liable. The extinction of the penal action does not carry with it the extinction of the civil action where (a) the acquittal is based on reasonable doubt as only preponderance of evidence is required; (b) the court declares that the liability of the accused is only civil; and (c) the civil liability of the accused does not arise from or is not based upon the crime of which the accused was acquitted. 32 The civil action based on delict may, however, be deemed extinguished if there is a finding on the final judgment in the criminal action that the act or omission from which the civil liability may arise did not exist. 33 In case of a demurrer to evidence filed with leave of court, the accused may adduce countervailing evidence if the court denies the demurrer. 34 Such denial bears no distinction as to the two aspects of the case because there is a disparity of evidentiary value between the quanta of evidence in such aspects of the case. In other words, a court may not deny the demurrer as to the criminal aspect and at the same time grant the demurrer as to the civil aspect, for if the evidence so far presented is not insufficient to prove the crime beyond reasonable doubt, then the same evidence is likewise not insufficient to establish civil liability by mere preponderance of evidence. On the other hand, if the evidence so far presented is insufficient as proof beyond reasonable doubt, it does not follow that the same evidence is insufficient to establish a preponderance of evidence. For if the court grants the demurrer, proceedings on the civil aspect of the case generally proceeds. The only recognized instance when an acquittal on demurrer carries with it the dismissal of the civil aspect is when there is a finding that the act or omission from which the civil liability may arise did not exist. Absent such determination, trial as to the civil aspect of the case must perforce continue. Thus this Court, in Salazar v. People, 35 held:

If demurrer is granted and the accused is acquitted by the court, the accused has the right to adduce evidence on the civil aspect of the case unless the court also declares that the act or omission from which the civil liability may arise did not exist. 36 In the instant case, the MeTC granted the demurrer and dismissed the case without any finding that the act or omission from which the civil liability may arise did not exist. Respondent did not assail the RTC order of remand. He thereby recognized that there is basis for a remand. Indicatively, respondent stands by his defense that he merely borrowed P1,500,000 with the remainder representing the interest, and that he already made a partial payment of P1,590,000. Petitioner counters, however, that the payments made by respondent pertained to other transactions. 37 Given these conflicting claims which are factual, a remand of the case would afford the fullest opportunity for the parties to ventilate, and for the trial court to resolve the same. Petitioner finally posits that respondent waived his right to present evidence on the civil aspect of the case (1) when the grant of the demurrer was reversed on appeal, citing Section 1 of Rule 33, 38 and (2) when respondent orally opposed petitioner's motion for reconsideration pleading that proceedings with respect to the civil aspect of the case continue. Petitioner's position is tenuous. Petitioner's citation of Section 1 of Rule 33 is incorrect. Where a court has jurisdiction over the subject matter and over the person of the accused, and the crime was committed within its territorial jurisdiction, the court necessarily exercises jurisdiction over all issues that the law requires it to resolve. One of the issues in a criminal case being the civil liability of the accused arising from the crime, the governing law is the Rules of Criminal Procedure, not the Rules of Civil Procedure which pertains to a civil action arising from the initiatory pleading that gives rise to the suit. 39 As for petitioner's attribution of waiver to respondent, it cannot be determined with certainty from the records the nature of the alleged oral objections of respondent to petitioner's motion for reconsideration of the grant of the demurrer to evidence. Any waiver of the right to present evidence must be positively demonstrated. Any ambiguity in the voluntariness of the waiver is frowned upon, 40 hence, courts must indulge every reasonable presumption against it. 41 This Court therefore upholds respondent's right to present evidence as reserved by his filing of leave of court to file the demurrer. WHEREFORE, the petition is, in light of the foregoing discussions, DENIED. The case is REMANDED to the court of origin, Metropolitan Trial Court of Makati City, Branch 65 which is DIRECTED to forthwith set Criminal Case No. 294690 for further proceedings only for the purpose of receiving evidence on the civil aspect of the case. Costs against petitioner. SO ORDERED.

SECOND DIVISION [G.R. No. 177960. January 29, 2009.] JEFFREY RESO DAYAP, petitioner, vs. PRETZY-LOU SENDIONG, GENESA SENDIONG, ELVIE SY and DEXIE DURAN, respondents. DECISION TINGA, J p: Before us is a petition for review 1 on certiorari of the Decision 2 dated 17 August 2006 and Resolution 3 dated 25 April 2007 by the Court of Appeals in CA-G.R. SP No. 01179 entitled, Pretzy-Lou P. Sendiong, Genesa R. Sendiong, Elvie H. Sy and Dexie Duran v. Hon. Judge Cresencio Tan and Jeffrey Reso Dayap. cACEHI The case had its origins in the filing of an Information 4 on 29 December 2004 by the Provincial Prosecutor's Office, Sibulan, Negros Oriental, charging herein petitioner Jeffrey Reso Dayap with the crime of Reckless Imprudence resulting to Homicide, Less Serious Physical Injuries, and Damage to Property. The pertinent portion of the information reads: That at about 11:55 o'clock in the evening of 28 December 2004 at Brgy. Maslog, Sibulan, Negros Oriental, Philippines, and within the jurisdiction of this Honorable Court, the abovenamed accused, did then and there, willfully, unlawfully and feloniously drive in a reckless and imprudent manner a 10-wheeler cargo truck with plate number ULP-955, color blue, fully loaded with sacks of coconut shell, registered in the name of Ruben Villabeto of Sta. Agueda Pamplona, Negros Oriental, thereby hitting an automobile, a Colt Galant with plate number NLD-379 driven by Lou Gene R. Sendiong who was with two female passengers, namely: Dexie Duran and Elvie Sy, thus causing the instantaneous death of said Lou Gene R. Sendiong, less serious physical injuries on the bodies of Dexie Duran and Elvie Sy and extensive damage to the above-mentioned Colt Galant which is registered in the name of Cristina P. Weyer of 115 Dr. V. Locsin St., Dumaguete City, to the damage of the heirs of the same Lou Gene R. Sendiong and the other two offended parties above-mentioned. An act defined and penalized by Article 365 of the Revised Penal Code. On 10 January 2005, before the Municipal Trial Court (MTC) of Sibulan, Negros Oriental, petitioner was arraigned and he pleaded not guilty to the charge. 5 On 17 January 2005, respondents Pretzy-Lou P. Sendiong, Genesa Sendiong and Dexie Duran filed a motion for leave of court to file an amended information. 6 They sought to add the allegation of abandonment of the victims by petitioner, thus: "The driver of the 10-wheeler cargo truck abandoned the victims, at a time when said [LouGene] R. Sendiong was still alive inside the car; he was only extracted from the car by the by-standers." 7 On 21 January 2005, however, the Provincial Prosecutor filed an Omnibus Motion praying that the motion to amend the information be considered withdrawn. 8 On 21 January 2003, the MTC granted the withdrawal and the motion to amend was considered withdrawn. 9

Pre-trial and trial of the case proceeded. Respondents testified for the prosecution. After the prosecution had rested its case, petitioner sought leave to file a demurrer to evidence which was granted. Petitioner filed his Demurrer to Evidence 10 dated 15 April 2005 grounded on the prosecution's failure to prove beyond reasonable doubt that he is criminally liable for reckless imprudence, to which respondents filed a Comment 11 dated 25 April 2005. STECDc In the Order 12 dated 16 May 2005, the MTC granted the demurrer and acquitted petitioner of the crime of reckless imprudence. The MTC found that the evidence presented by respondents failed to establish the allegations in the Information. Pertinent portions of the order state: An examination of the allegations in the information and comparing the same with the evidence presented by the prosecution would reveal that the evidence presented has not established said allegations. The facts and circumstances constituting the allegations charged have not been proven. It is elementary in the rules of evidence that a party must prove his own affirmative allegations. xxx xxx xxx Nowhere in the evidence of the prosecution can this Court find that it was the accused who committed the crime as charged. Its witnesses have never identified the accused as the one who has committed the crime. The prosecution never bothered to establish if indeed it was the accused who committed the crime or asked questions which would have proved the elements of the crime. The prosecution did not even establish if indeed it was the accused who was driving the truck at the time of the incident. The Court simply cannot find any evidence which would prove that a crime has been committed and that the accused is the person responsible for it. There was no evidence on the allegation of the death of Lou Gene R. Sendiong as there was no death certificate that was offered in evidence. The alleged less serious physical injuries on the bodies of Dexie Duran and Elvie Sy were not also proven as no medical certificate was presented to state the same nor was a doctor presented to establish such injuries. The alleged damage to the [C]olt [G]alant was also not established in any manner as no witness ever testified on this aspect and no documentary evidence was also presented to state the damage. The prosecution therefore failed to establish if indeed it was the accused who was responsible for the death of Lou Gene R. Sendiong and the injuries to Dexie Duran and Elvie Sy, including the damage to the Colt Galant. The mother of the victim testified only on the expenses she incurred and the shock she and her family have suffered as a result of the incident. But sad to say, she could not also pinpoint if it was the accused who committed the crime and be held responsible for it. This Court could only say that the prosecution has practically bungled this case from its inception. xxx xxx xxx The defense furthermore argued that on the contrary, the prosecution's [evidence] conclusively show that the swerving of vehicle 1 [the Colt Galant] to the lane of vehicle 2 [the cargo truck] is the proximate cause of the accident. The court again is inclined to agree

with this argument of the defense. It has looked carefully into the sketch of the accident as indicated in the police blotter and can only conclude that the logical explanation of the accident is that vehicle 1 swerved into the lane of vehicle 2, thus hitting the latter's inner fender and tires. Exhibit "7" which is a picture of vehicle 2 shows the extent of its damage which was the effect of vehicle 1's ramming into the rear left portion of vehicle 2 causing the differential guide of vehicle 2 to be cut, its tires busted and pulled out together with their axle. The cutting of the differential guide cause[d] the entire housing connecting the tires to the truck body to collapse, thus causing vehicle 2 to tilt to its left side and swerve towards the lane of vehicle 1. It was this accident that caused the swerving, not of [sic] any negligent act of the accused. xxx xxx xxx Every criminal conviction requires of the prosecution to prove two things the fact of the crime, i.e., the presence of all the elements of the crime for which the accused stands charged, and the fact that the accused is the perpetrator of the crime. Sad to say, the prosecution has miserably failed to prove these two things. When the prosecution fails to discharge its burden of establishing the guilt of the accused, an accused need not even offer evidence in his behalf. HIEAcC xxx xxx xxx WHEREFORE, premises considered, the demurrer is granted and the accused JEFFREY RESO DAYAP is hereby acquitted for insufficiency of evidence. The bail bond posted for his temporary liberty is also hereby cancelled and ordered released to the accused or his duly authorized representative. SO ORDERED. 13 Respondents thereafter filed a petition for certiorari under Rule 65, 14 alleging that the MTC's dismissal of the case was done without considering the evidence adduced by the prosecution. Respondents added that the MTC failed to observe the manner the trial of the case should proceed as provided in Sec. 11, Rule 119 of the Rules of Court as well as failed to rule on the civil liability of the accused in spite of the evidence presented. The case was raffled to the Regional Trial Court (RTC) of Negros Oriental, Br. 32. In the order 15 dated 23 August 2005, the RTC affirmed the acquittal of petitioner but ordered the remand of the case to the MTC for further proceedings on the civil aspect of the case. The RTC ruled that the MTC's recital of every fact in arriving at its conclusions disproved the allegation that it failed to consider the evidence presented by the prosecution. The records also demonstrated that the MTC conducted the trial of the case in the manner dictated by Sec. 11, Rule 119 of the Rules of Court, except that the defense no longer presented its evidence after the MTC gave due course to the accused's demurrer to evidence, the filing of which is allowed under Sec. 23, Rule 119. The RTC however agreed that the MTC failed to rule on the accused's civil liability, especially since the judgment of acquittal did not include a declaration that the facts from which the civil liability might arise did not exist. Thus, the RTC

declared that the aspect of civil liability was not passed upon and resolved to remand the issue to the MTC. The dispositive portion of the decision states: WHEREFORE, the questioned order of the Municipal Trial Court of Sibulan on accused's acquittal is AFFIRMED. The case is REMANDED to the court of origin or its successor for further proceedings on the civil aspect of the case. No costs. SO ORDERED. 16 Both parties filed their motions for reconsideration of the RTC order, but these were denied for lack of merit in the order 17 dated 12 September 2005. Respondents then filed a petition for review with the Court of Appeals under Rule 42, docketed as CA-G.R. SP. No. 01179. The appellate court subsequently rendered the assailed decision and resolution. The Court of Appeals ruled that there being no proof of the total value of the properties damaged, the criminal case falls under the jurisdiction of the RTC and the proceedings before the MTC are null and void. In so ruling, the appellate court cited Tulor v. Garcia (correct title of the case isCuyos v. Garcia) 18 which ruled that in complex crimes involving reckless imprudence resulting in homicide or physical injuries and damage to property, the jurisdiction of the court to take cognizance of the case is determined by the fine imposable for the damage to property resulting from the reckless imprudence, not by the corresponding penalty for the physical injuries charged. It also found support in Sec. 36 of the Judiciary Reorganization Act of 1980 and the 1991 Rule 8 on Summary Procedure, which govern the summary procedure in first-level courts in offenses involving damage to property through criminal negligence where the imposable fine does not exceed P10,000.00. As there was no proof of the total value of the property damaged and respondents were claiming the amount of P1,500,000.00 as civil damages, the case falls within the RTC's jurisdiction. The dispositive portion of the Decision dated 17 August 2006 reads: cTSDAH WHEREFORE, premises considered, judgment is hereby rendered by Us REMANDING the case to the Regional Trial Court (RTC), Judicial Region, Branch 32, Negros Oriental for proper disposition of the merits of the case. SO ORDERED. 19 Petitioner moved for reconsideration of the Court of Appeals decision, 20 arguing that jurisdiction over the case is determined by the allegations in the information, and that neither the 1991 Rule on Summary Procedure nor Sec. 36 of the Judiciary Reorganization Act of 1980 can be the basis of the RTC's jurisdiction over the case. However, the Court of Appeals denied the motion for reconsideration for lack of merit in the Resolution dated 25 April 2007. 21 It reiterated that it is the RTC that has proper jurisdiction considering that the information alleged a willful, unlawful, felonious killing as well as abandonment of the victims. In the present petition for review, petitioner argues that the MTC had jurisdiction to hear the criminal case for reckless imprudence, owing to the enactment of Republic Act (R.A.) No. 7691, 22 which confers jurisdiction to firstlevel courts on offenses involving damage to property through criminal negligence. He asserts that the RTC could not have acquired jurisdiction on the basis of a legally unfiled and officially withdrawn amended information

alleging abandonment. Respondents are also faulted for challenging the MTC's order acquitting petitioner through a special civil action for certiorari under Rule 65 in lieu of an ordinary appeal under Rule 42. The petition has merit. It should be granted. The first issue is whether the Court of Appeals erred in ruling that jurisdiction over the offense charged pertained to the RTC. Both the MTC and the RTC proceeded with the case on the basis of the Information dated 29 December 2004 charging petitioner only with the complex crime of reckless imprudence resulting to homicide, less serious physical injuries and damage to property. The Court of Appeals however declared in its decision that petitioner should have been charged with the same offense but aggravated by the circumstance of abandonment of the victims. It appears from the records however that respondents' attempt to amend the information by charging the aggravated offense was unsuccessful as the MTC had approved the Provincial Prosecutor's motion to withdraw their motion to amend the information. The information filed before the trial court had remained unamended. 23 Thus, petitioner is deemed to have been charged only with the offense alleged in the original Information without any aggravating circumstance. Article 365 of the Revised Penal Code punishes any person who, by reckless imprudence, commits any act which, had it been intentional, would constitute a grave felony, with the penalty of arresto mayor in its maximum period to prision correccional in its medium period. When such reckless imprudence the use of a motor vehicle, resulting in the death of a person attended the same article imposes upon the defendant the penalty of prision correccional in its medium and maximum periods. IDaEHS The offense with which petitioner was charged is reckless imprudence resulting in homicide, less serious physical injuries and damage to property, a complex crime. Where a reckless, imprudent, or negligent act results in two or more grave or less grave felonies, a complex crime is committed. 24 Article 48 of the Revised Penal Code provides that when the single act constitutes two or more grave or less grave felonies, or when an offense is a necessary means for committing the other, the penalty for the most serious crime shall be imposed, the same to be applied in its maximum period. Since Article 48 speaks of felonies, it is applicable to crimes through negligence in view of the definition of felonies in Article 3 as "acts or omissions punishable by law" committed either by means of deceit (dolo) or fault(culpa). 25 Thus, the penalty imposable upon petitioner, were he to be found guilty, is prision correccional in its medium period (2 years, 4 months and 1 day to 4 years) and maximum period (4 years, 2 months and 1 day to 6 years). Applicable as well is the familiar rule that the jurisdiction of the court to hear and decide a case is conferred by the law in force at the time of the institution of the action, unless such statute provides for a retroactive application thereof. 26 When this case was filed on 29 December 2004, Section 32 (2) of Batas Pambansa Bilang 129 had already been amended by R.A. No. 7691. R.A. No. 7691 extended the jurisdiction of the first-level courts over criminal cases to include all offenses punishable with imprisonment not exceeding six (6) years irrespective of the amount of fine, and regardless of other imposable accessory or other penalties including those for civil liability. It explicitly states "that in offenses involving damage to property through criminal negligence, they shall have exclusive original jurisdiction thereof." It follows that criminal cases for reckless imprudence punishable with prision correccional in its medium and maximum periods should fall within the jurisdiction of the MTC and not the RTC. Clearly, therefore, jurisdiction to hear and try the same pertained to the MTC and the RTC did not have original

jurisdiction over the criminal case. 27 Consequently, the MTC of Sibulan, Negros Oriental had properly taken cognizance of the case and the proceedings before it were valid and legal. As the records show, the MTC granted petitioner's demurrer to evidence and acquitted him of the offense on the ground of insufficiency of evidence. The demurrer to evidence in criminal cases, such as the one at bar, is "filed after the prosecution had rested its case", and when the same is granted, it calls "for an appreciation of the evidence adduced by the prosecution and its sufficiency to warrant conviction beyond reasonable doubt, resulting in a dismissal of the case on the merits, tantamount to an acquittal of the accused." 28 Such dismissal of a criminal case by the grant of demurrer to evidence may not be appealed, for to do so would be to place the accused in double jeopardy. 29 But while the dismissal order consequent to a demurrer to evidence is not subject to appeal, the same is still reviewable but only by certiorari under Rule 65 of the Rules of Court. Thus, in such case, the factual findings of the trial court are conclusive upon the reviewing court, and the only legal basis to reverse and set aside the order of dismissal upon demurrer to evidence is by a clear showing that the trial court, in acquitting the accused, committed grave abuse of discretion amounting to lack or excess of jurisdiction or a denial of due process, thus rendering the assailed judgment void. 30 Accordingly, respondents filed before the RTC the petition for certiorari alleging that the MTC gravely abused its discretion in dismissing the case and failing to consider the evidence of the prosecution in resolving the same, and in allegedly failing to follow the proper procedure as mandated by the Rules of Court. The RTC correctly ruled that the MTC did not abuse its discretion in dismissing the criminal complaint. The MTC's conclusions were based on facts diligently recited in the order thereby disproving that the MTC failed to consider the evidence presented by the prosecution. The records also show that the MTC correctly followed the procedure set forth in the Rules of Court. ETDHaC The second issue is whether the Court of Appeals erred in ordering the remand of the case of the matter of civil liability for the reception of evidence. We disagree with the Court of Appeals on directing the remand of the case to the RTC for further proceedings on the civil aspect, as well as with the RTC in directing a similar remand to the MTC. The acquittal of the accused does not automatically preclude a judgment against him on the civil aspect of the case. The extinction of the penal action does not carry with it the extinction of the civil liability where: (a) the acquittal is based on reasonable doubt as only preponderance of evidence is required; (b) the court declares that the liability of the accused is only civil; and (c) the civil liability of the accused does not arise from or is not based upon the crime of which the accused is acquitted. 31 However, the civil action based on delict may be deemed extinguished if there is a finding on the final judgment in the criminal action that the act or omission from which the civil liability may arise did not exist 32 or where the accused did not commit the acts or omission imputed to him. 33 Thus, if demurrer is granted and the accused is acquitted by the court, the accused has the right to adduce evidence on the civil aspect of the case unless the court also declares that the act or omission from which the civil liability may arise did not exist. 34 This is because when the accused files a demurrer to evidence, he has not yet adduced evidence both on the criminal and civil aspects of the case. The only evidence on record is the evidence for the prosecution. What the trial court should do is issue an order or partial judgment granting the demurrer to evidence and acquitting the accused, and set the case for continuation of trial for the accused to adduce evidence on the civil

aspect of the case and for the private complainant to adduce evidence by way of rebuttal. Thereafter, the court shall render judgment on the civil aspect of the case. 35 A scrutiny of the MTC's decision supports the conclusion that the acquittal was based on the findings that the act or omission from which the civil liability may arise did not exist and that petitioner did not commit the acts or omission imputed to him; hence, petitioner's civil liability has been extinguished by his acquittal. It should be noted that the MTC categorically stated that it cannot find any evidence which would prove that a crime had been committed and that accused was the person responsible for it. It added that the prosecution failed to establish that it was petitioner who committed the crime as charged since its witnesses never identified petitioner as the one who was driving the cargo truck at the time of the incident. Furthermore, the MTC found that the proximate cause of the accident is the damage to the rear portion of the truck caused by the swerving of the Colt Galant into the rear left portion of the cargo truck and not the reckless driving of the truck by petitioner, clearly establishing that petitioner is not guilty of reckless imprudence. Consequently, there is no more need to remand the case to the trial court for proceedings on the civil aspect of the case, since petitioner's acquittal has extinguished his civil liability. WHEREFORE, the petition is GRANTED. The Court of Appeals' Decision dated 17 August 2006 and Resolution dated 25 April 2007 in CA-G.R. SP. No. 01179 are REVERSED and SET ASIDE. The Order dated 16 May 2005 of the Municipal Trial Court of Sibulan, Negros Oriental in Criminal Case No. 3016-04 granting the Demurrer to Evidence and acquitting petitioner Jeffrey Reso Dayap of the offense charged therein is REINSTATED and AFFIRMED. ISHaCD SO ORDERED.

FIRST DIVISION [G.R. No. 19495. February 2, 1924.] HONRION LASAM ET AL., plaintiffs-appellants, vs. FRANK SMITH, jr., defendant-appellant. Palma & Leuterion for plaintiffs-appellant. Mariano Alisngco for defendant-appellant. SYLLABUS 1.DAMAGES; CONTRACT OF CARRIAGE OF PASSENGERS; BREACH OF CONTRACT. Defendant, the owner of a public garage, under took to convey the plaintiffs by automobile from San Fernando, La union, to Currimao, Ilocos Norte. While on the way to result of which the plaintiffs were injured. Held: That the action for damages articles 1101-1107 of the Civil Code, and not article 1903, were applicable. 2.ID.; ID.; FORTUITOUS EVENT. The expression "events which cannot be foreseen and which having been foreseen, are inevitable" is synonymous with the term "fortuitous event" of which some extraordinary circumstance independent of the will of the obligor, or of his employees, is one of the essential elements. 3.ID.; ID.; CARRIER OF PASSENGERS NOT AN INSURER AGAINST ALL RISKS. Neither under American nor Spanish law is a carrier of passengers an absolute insurer against the risks of travel from which the passenger may protect himself by exercising due care and diligence. 4.DAMAGES; CONTRACT, NEGLIGENCE IN FULFILLMENT . In determining the extent of the liability for losses or damages resulting the courts have a discretionary power to moderate the liability according to the circumstance (Civil Code article 1103; De Guia vs. Manila Electric Railroad & Light Co., 40 Phil., 766.) DECISION OSTRAND, J p: The plaintiffs are husband and wife and this action is brought to recover damages in the sum of P20,000 for physical injuries sustained by them in an automobile accident. The trial court rendered a judgment in their favor for the sum of P1,254.10, with legal interest from the date of the judgment. Both the plaintiffs and the defendant appeal, the former maintaining that the damages awarded are insufficient while the latter denies all liability for any damages whatever. It appears from the evidence that on February 27, 1918, the defendant was of San Fernando, La Union, and engaged in the business of carrying passengers for hire from one point to another in the Province of La Union and the surrounding provinces. On the date mentioned, he undertook to convey plaintiff from San Fernando to Currimao, Ilocos Norte, in a Ford automobile. On leaving San Fernando, the automobile was operated by a licensed chauffeur, but after having reached the town of San Juan, the chauffeur allowed his assistant, Remigio Bueno, to drive the car. Bueno held to driver's license, but had some experience in driving, and with the exception of some slight engine trouble while passing through the town of Luna, the car functioned well until after the crossing of the Abra River in Tagudin, when, according to the testimony of witnesses for the plaintiffs, defects developed in the steering gear so as to make accurate steering impossible, and after zigzagging for a distance of about half a kilometer, the car left the road and went down a steep embankment.

The defendant, in his testimony, maintains that there was no defect in the steering gear, neither before nor after the accident, and expresses the opinion that the swaying or zigzagging of the car must have been due to its having been driven at an excessive rate of speed. This may possibly be true, but it is, from our point of view, immaterial whether the accident was caused by negligence on the part of the defendant's employees, or whether it was due to the same in either event. In going over the bank of the road, the automobile was overturned and the plaintiffs pinned down under it. Mr. Lasam escaped with a few contusions and a "dislocated" rib, but his wife, Joaquina Sanchez, received serious injuries, among which was a compound fracture of one of the bones in her left wrist. She also appears to have suffered a nervous breakdown from which she had not fully recovered at the time of the trial. The complaint in the case was filed about a year and a half after the occurrence above related. It alleges, among other things, that the accident was due to defects in the automobile as well as to the incompetence and negligence of the chauffeur, and the case appears to have been tried largely upon the theory that it sounds in tort and that the liability of the defendant is governed by article 1903 of the Civil Code. The trial court held, however, that the cause of action rests on the defendant's breach of the contract of carriage and that, consequently, articles 1101-1107 of the Civil Code, and not article 1903, are applicable. The court further found that the breach of the contract was not due to fortuitous events and that, therefore, the defendant was liable in damages. In our opinion, the conclusions of the court below are entirely correct. That upon the facts stated the defendant's liability, if any, is contractual, is well settled by previous decisions of the court, beginning with the case of Rakes vs. Atlantic, Gulf & Pacific Co. (7 Phil., 359), and the distinction between extra-contractual liability and contractual liability has been so ably and exhaustively discussed in various other cases, that nothing further need here be said upon that subject. (See Cangco vs. Manila Railroad Co. 38 Phil., 768; Manila Railroad Co. Compania Trasatlantica and Atlantic, Gulf & Pacific Co., 38 Phil., 875; De Guia vs. Manila Electric Railroad & Light source of the defendant's legal liability is the contract of carriage; the by entering into that contract he bound himself to carry the plaintiffs safely and securely to their destination; and that having failed to do so he is liable in damages unless he shows that the failure to fulfill his obligation was due to causes mentioned in article 1105 of the Civil Code, which reads as follows: "No one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable, with the exception of the cases in which the law expressly provides otherwise and those in which the obligation itself imposes such liability." This brings us to the principal question in the case: What is meant by "events which cannot be foreseen and which having been foreseen, are inevitable?" The Spanish authorities regard the language employed as an effort to define the term caso fortuito and hold that the two expressions are synonymous. (Manresa,Comentarios al Co Civil Espaol, vol. 8, pp. 88 et seq.; Scaevola, Codigo Civil, vol. 19, pp. 526 et seq.) The antecedent to article 1105 is found in Law 11, Title 33, Partida 7, which defines caso fortuito as "ocasion que acaese por aventura deque non se puede ante ver. E son estos, derrivamientos de casas e fuego que se enciende so ora, e quebrantamiento de navio, fuerca de ladrones. . . . ( An event that takes place by accident and could not have been foreseen, Examples of this are destruction of houses, unexpected fire, shipwreck, violence of robbers. . . .)" Escriche defines caso fortuito as "an unexpected event such as floods, torrents, shipwrecks, conflagrations, lightning, compulsion, insurrections, destruction of buildings by unforeseen accidents and other occurrences of a similar nature."

In discussing and analyzing the term caso fortuito the Enciclopedia Juridica Espaola says: " In a legal sense and, consequently, also in relation to contracts, a caso fortuito presents the following essential characteristics: (1) The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will. (2) It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid. (3) The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. And (4) the obligor (debtor) must be free from any participation in the aggravation of the injury resulting to the creditor." (5 Enciclopedia Juridica Espaola, 309.) As will be seen, these authorities agree that some extraordinary circumstance independent of the will of the obligor, or of his employees, is an essential element of a caso fortuito. Turning to the present case, it is at once apparent that this elements is lacking. It is not suggested that the accident in question was due to an act of God or to adverse road conditions which could not have been foreseen. As far as the record shows, the accident was caused either by defects in the automobile or else through the negligence of its driver. That is not a caso fortuito. We agree with counsel that neither under the American nor Spanish law is a carrier of passengers an absolute insurer against the risks of travel from which the passenger may protect himself by exercising ordinary care and diligence. The case of Alba vs. Sociedad Anonima de Tranvias, Jurisprudencia Civil, vol. 102, p. 928, cited by the defendant in support of his contentions, affords a good illustration of the application of this principle. In that case Alba, a passenger on a street car, was standing on the platform of the car while it was in motion. The car rounded a curve causing Alba to lose his balance and fall off the platform, sustaining sever injuries. In an action brought by him to recover damages, the supreme court of Spain held that inasmuch as the car at the time of the accident was travelling at a moderate rate of speed and there was no infraction of the regulations, and the plaintiff was exposed to no greater danger than that inherent in that particular mode of travel, the plaintiff could not recover, especially so since he should have been on his guard against a contingency as natural as that of losing his balance to a greater or less extent when the car rounded the curve. But such is not the present case; here the passengers had no means of avoiding the danger or escaping the injury. The plaintiffs maintain that the evidence clearly establishes that they are entitled to damages in the sum of P7,832.80 instead of P1,254.10 as found by the trial court, and their assignments of error relate to this point only.

There can be no doubt that the expenses incurred by the plaintiffs as a result of the accident greatly exceeded the amount of the damages awarded. But bearing in mind that in determining the extent of the liability for losses or damages resulting from negligence in the fulfillment of a contractual obligation, the courts have " a discretionary power to moderate the liability according to the circumstances" (De Guia vs. Manila Electric Railroad & light Co., 40 Phil., 706 Phil; art. 1103, Civil Code), we do not think that the evidence is such as to justify us in interfering with the discretion of the court below in this respect. As pointed out by that court in its well-reasoned and well considered decision, by far the greater part of the damages claimed by the plaintiffs resulted from the fracture of a bone in the left wrist of Joaquina Sanchez and from her objections to having a decaying splinter of the bone refusal to submit to such an operation, a series of infections ensued and which required constant and expensive medical treatment for several years. We agree with the these expenses. For the reasons stated, the judgment appealed from is affirmed, without costs in this instance. So ordered.

SECOND DIVISION [G.R. No. L-24803. May 26, 1977.] PEDRO ELCANO and PATRICIA ELCANO, in their capacity as Ascendants of Agapito Elcano, deceased, plaintiffs-appellants, vs.REGINALD HILL, minor, and MARVIN HILL, as father and Natural Guardian of said minor, defendants-appellees. Cruz & Avecilla for appellants. Marvin R. Hill & Associates for appellees. DECISION BARREDO, J p: Appeal from the order of the Court of First Instance of Quezon City dated January 29, 1965 in Civil Case No. Q-8102, Pedro Elcano et al. vs. Reginald Hill et al. dismissing, upon motion to dismiss of defendants, the complaint of plaintiffs for recovery of damages from defendant Reginald Hill, a minor, married at the time of the occurrence, and his father, the defendant Marvin Hill, with whom he was living and getting subsistence, for the killing by Reginald of the son of the plaintiffs, named Agapito Elcano, of which, when criminally prosecuted, the said accused was acquitted on the ground that his act was not criminal, because of "lack of intent to kill, coupled with mistake." Actually, the motion to dismiss based on the following grounds: "1.The present action is not only against but a violation of section 1, Rule 107, which is now Rule III, of the Revised Rules of Court; "2.The action is barred by a prior judgment which is now final and or in res-adjudicata; "3.The complaint had no cause of action against defendant Marvin Hill, because he was relieved as guardian of the other defendant through emancipation by marriage." (P. 23, Record [p. 4, Record on Appeal.]) was first denied by the trial court. It was only upon motion for reconsideration of the defendants of such denial, reiterating the above grounds that the following order was issued: "Considering the motion for reconsideration filed by the defendants on January 14, 1965 and after thoroughly examining the arguments therein contained, the Court finds the same to be meritorious and well-founded. WHEREFORE, the Order of this Court on December 8, 1964 is hereby reconsidered by ordering the dismissal of the above entitled case. "SO ORDERED. "Quezon City, Philippines, January 29, 1965." (p. 40, Record [p. 21, Record on Appeal.)

Hence, this appeal where plaintiffs-appellants, the spouses Elcano, are presenting for Our resolution the following assignment of errors: "THE LOWER COURT ERRED IN DISMISSING THE CASE BY UPHOLDING THE CLAIM OF DEFENDANTS THAT I "THE PRESENT ACTION IS NOT ONLY AGAINST BUT ALSO A VIOLATION OF SECTION 1, RULE 107, NOW RULE 111, OF THE REVISED RULES OF COURT, AND THAT SECTION 3(c) OF RULE 111, RULES OF COURT IS INAPPLICABLE; II "THE ACTION IS BARRED BY A PRIOR JUDGMENT WHICH IS NOW FINAL OR RESADJUDICATA; III "THE PRINCIPLES OF QUASI-DELICTS, ARTICLES 2176 TO 2194 OF THE CIVIL CODE, ARE INAPPLICABLE IN THE INSTANT CASE; and IV "THAT THE COMPLAINT STATES NO CAUSE OF ACTION AGAINST DEFENDANT MARVIN HILL BECAUSE HE WAS RELIEVED AS GUARDIAN OF THE OTHER DEFENDANT THROUGH EMANCIPATION BY MARRIAGE." (page 4, Record.) It appears that for the killing of the son, Agapito, of plaintiffs-appellants, defendant-appellee Reginald Hill was prosecuted criminally in Criminal Case No. 5102 of the Court of First Instance of Quezon City. After due trial, he was acquitted on the ground that his act was not criminal because of "lack of intent to kill, coupled with mistake." Parenthetically, none of the parties has favored Us with a copy of the decision of acquittal, presumably because appellants do not dispute that such indeed was the basis stated in the court's decision. And so, when appellants filed their complaint against appellees Reginald and his father, Atty. Marvin Hill, on account of the death of their son, the appellees filed the motion to dismiss above-referred to. As We view the foregoing background of this case, the two decisive issues presented for Our resolution are: 1.Is the present civil action for damages barred by the acquittal of Reginald in the criminal case wherein the action for civil liability was not reversed?

2.May Article 2180 (2nd and last paragraphs) of the Civil Code be applied against Atty. Hill, notwithstanding the undisputed fact that at the time of the occurrence complained of, Reginald, though a minor, living with and getting subsistence from his father, was already legally married? The first issue presents no more problem than the need for a reiteration and further clarification of the dual character, criminal and civil, of fault or negligence as a source of obligation which was firmly established in this jurisdiction in Barredo vs. Garcia, 73 Phil. 607. In that case, this Court postulated, on the basis of a scholarly dissertation by Justice Bocobo on the nature of culpa aquiliana in relation to culpa criminal or delito and mere culpa or fault, with pertinent citation of decisions of the Supreme Court of Spain, the works of recognized civilians, and earlier jurisprudence of our own, that the same given act can result in civil liability not only under the Penal Code but also under the Civil Code. Thus, the opinion holds: "The above case is pertinent because it shows that the same act may come under both the Penal Code and the Civil Code. In that case, the action of the agent was unjustified and fraudulent and therefore could have been the subject of a criminal action. And yet, it was held to be also a proper subject of a civil action under article 1902 of the Civil Code. It is also to be noted that it was the employer and not the employee who was being sued." (pp. 615-616, 73 Phil.) 1 "It will be noticed that the defendant in the above case could have been prosecuted in a criminal case because his negligence causing the death of the child was punishable by the Penal Code. Here is therefore a clear instance of the same act of negligence being a proper subject matter either of a criminal action with its consequent civil liability arising from a crime or of an entirely separate and independent civil action for fault or negligence under article 1902 of the Civil Code. Thus, in this jurisdiction, the separate individuality of a cuasidelito or culpa aquiliana under the Civil Code has been fully and clearly recognized, even with regard to a negligent act for which the wrongdoer could have been prosecuted and convicted in a criminal case and for which, after such a conviction, he could have been sued for this civil liability arising from his crime." (p. 617, 73 Phil.) 2 "It is most significant that in the case just cited, this Court specifically applied article 1902 of the Civil Code. It is thus that although J. V. House could have been criminally prosecuted for reckless or simple negligence and not only punished but also made civilly liable because of his criminal negligence, nevertheless this Court awarded damages in an independent civil action for fault or negligence under article 1902 of the Civil Code." (p. 618, 73 Phil.) 3 "The legal provisions, authors, and cases already invoked should ordinarily be sufficient to dispose of this case. But inasmuch as we are announcing doctrines that have been little understood, in the past, it might not be inappropriate to indicate their foundations. "Firstly, the Revised Penal Code in articles 365 punishes not only reckless but also simple negligence. If we were to hold that articles 1902 to 1910 of the Civil Code refer only to fault or negligence not punished by law, accordingly to the literal import of article 1093 of the Civil Code, the legal institution of culpa aquilina would have very little scope and application in actual life. Death or injury to persons and damage to property through any

degree of negligence even the slightest would have to be indemnified only through the principle of civil liability arising from a crime. In such a state of affairs, what sphere would remain for cuasi-delito or culpa aquiliana? We are loath to impute to the lawmaker any intention to bring about a situation to absurd and anomalous. Nor are we, in the interpretation of the laws, disposed to uphold the letter that killeth rather than the spirit that giveth life. We will not use the literal meaning of the law to smother and render almost lifeless a principle of such ancient origin and such full-grown development as culpa aquiliana or cuasi-delito, which is conserved and made enduring in articles 1902 to 1910 of the Spanish Civil Code. "Secondly, to find the accused guilty in a criminal case, proof of guilt beyond reasonable doubt is required, while in a civil case, preponderance of evidence is sufficient to make the defendant pay in damages. There are numerous cases of criminal negligence which can not be shown beyond reasonable doubt, but can be proved by a preponderance of evidence. In such cases, the defendant can and should be made responsible in a civil action under articles 1902 to 1910 of the Civil Code. Otherwise, there would be many instances of unvindicated civil wrongs. Ubi jus ibi remedium." (p. 620, 73 Phil.) "Fourthly, because of the broad sweep of the provisions of both the Penal Code and the Civil Code on this subject, which has given rise to the overlapping or concurrence of spheres already discussed, and for lack of understanding of the character and efficacy of the action for culpa aquiliana, there has grown up a common practice to seek damages only by virtue of the civil responsibility arising from a crime, forgetting that there is another remedy, which is by invoking articles 1902-1910 of the Civil Code. Although this habitual method is allowed by our laws, it has nevertheless rendered practically useless and nugatory the more expeditious and effective remedy based on culpa aquiliana or culpa extra-contractual. In the present case, we are asked to help perpetuate this usual course. But we believe it is high time we pointed out to the harms done by such practice and to restore the principle of responsibility for fault or negligence under articles 1902 et seq. of the Civil Code to its full rigor. It is high time we caused the stream of quasi-delict or culpa aquiliana to flow on its own natural channel, so that its waters may no longer be diverted into that of a crime under the Penal Code. This will, it is believed, make for the better safeguarding or private rights because it re-establishes an ancient and additional remedy, and for the further reason that an independent civil action, not depending on the issues, limitations and results of a criminal prosecution, and entirely directed by the party wronged or his counsel, is more likely to secure adequate and efficacious redress." (p. 621, 73 Phil.) Contrary to an immediate impression one might get upon a reading of the foregoing excerpts from the opinion in Garcia - that the concurrence of the Penal Code and the Civil Code therein referred to contemplate only acts of negligence and not intentional voluntary acts deeper reflection would reveal that the thrust of the pronouncements therein is not so limited, but that in fact it actually extends to fault or culpa. This can be seen in the reference made therein to the Sentence of the Supreme Court of Spain of February 14, 1919, supra, which involved a case of fraud or estafa, not a negligent act. Indeed, Article 1093 of the Civil Code of Spain, in force here at the time of Garcia, provided textually that obligations "which are derived from acts or omissions in which fault or negligence, not punishable by law, intervene shall be the subject of Chapter II, Title XV of this book (which refers to

quasi-delicts.)" And it is precisely the underline qualification, "not punishable by law", that Justice Bocobo emphasized could lead to an undesirable construction or interpretation of the letter of the law that "killeth, rather than the spirit that giveth life" hence, the ruling that "(W)e will not use the literal meaning of the law to smother and render almost lifeless a principle of such ancient origin and such full-grown development as culpa aquiliana or cuasi-delito, which is conserved and made enduring in articles 1902 to 1910 of the Spanish Civil Code." And so, because Justice Bacobo was Chairman of the Code Commission that drafted the original text of the new Civil Code, it is to be noted that the said Code, which was enacted after the Garcia doctrine, no longer uses the term, "not punishable by law," thereby making it clear that the concept of culpa aquiliana includes acts which are criminal in character or in violation of the penal law, whether voluntary or negligent. Thus, the corresponding provisions to said Article 1093 in the new code, which is Article 1162, simply says, "Obligations derived from quasi-delicts shall be governed by the provisions of Chapter 2, Title XVII of this Book, (on quasi-delicts) and by special laws." More precisely, a new provision, Article 2177 of the new code provides: "ART. 2177.Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant." According to the Code Commission: "The foregoing provision (Article 2177) through at first sight startling, is not so novel or extraordinary when we consider the exact nature of criminal and civil negligence. The former is a violation of the criminal law, while the latter is a 'culpa aquilian' or quasi-delict, of ancient origin, having always had its own foundation and individuality, separate from criminal negligence. Such distinction between criminal negligence and 'culpa extra-contractual' or 'cuasi-delito' has been sustained by decision of the Supreme Court of Spain and maintained as clear, sound and perfectly tenable by Maura, an outstanding Spanish jurist. Therefore, under the proposed Article 2177, acquittal from an accusation of criminal negligence, whether on reasonable doubt or not, shall not be a bar to a subsequent civil action, not for civil liability arising from criminal negligence, but for damages due to a quasi-delict or 'culpa aquiliana'. But said article forestalls a double recovery." (Report of the Code) Commission, p. 162.) Although, again, this Article 2177 does seem to literally refer to only acts of negligence, the same argument of Justice Bacobo about construction that upholds "the spirit that giveth life" rather than that which is literal that killeth the intent of the lawmaker should be observed in applying the same. And considering that the preliminary chapter on human relations of the new Civil Code definitely establishes the separability and independence of liability in a civil action for acts criminal in character (under Articles 29 to 32) from the civil responsibility arising from crime fixed by Article 100 of the Revised Penal Code, and, in a sense, the Rules of Court, under Sections 2 and 3 (c), Rule 111, contemplate also the same separability, it is "more congruent with the spirit of law, equity and justice, and more in harmony with modern progress", to borrow the felicitous relevant language in Rakes vs. Atlantic. Gulf and Pacific Co., 7 Phil. 359, to hold, as We do hold, that Article 2176, where it refers to "fault or negligence," covers not only acts "not punishable by law" but also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a separate civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed, if he is actually charged also criminally, to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. In other words, the extinction of civil liability referred to in Par. (e) of Section 3, Rule 111, refers exclusively to civil liability founded on Article 100 of the Revised Penal Code, whereas the civil liability for the same act considered as a quasi-delictonly and not as a crime is not estinguished even by a declaration in the criminal case that the criminal act charged has

not happened or has not been committed by the accused. Briefly stated, We here hold, in reiteration of Garcia, that culpa aquiliana includes voluntary and negligent acts which may be punishable by law. 4 It results, therefore, that the acquittal of Reginal Hill in the criminal case has not extinguished his liability for quasidelict, hence that acquittal is not a bar to the instant action against him. Coming now to the second issue about the effect of Reginald's emancipation by marriage on the possible civil liability of Atty. Hill, his father, it is also Our considered opinion that the conclusion of appellees that Atty. Hill is already free from responsibility cannot be upheld. While it is true that parental authority is terminated upon emancipation of the child (Article 327, Civil Code), and under Article 397, emancipation takes place "by the marriage of the minor (child)", it is, however, also clear that pursuant to Article 399, emancipation by marriage of the minor is not really full or absolute. Thus "(E)mancipation by marriage or by voluntary concession shall terminate parental authority over the child's person. It shall enable the minor to administer his property as though he were of age, but he cannot borrow money or alienate or encumber real property without the consent of his father or mother, or guardian. He can sue and be sued in court only with the assistance of his father, mother or guardian." Now under Article 2180, "(T)he obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. The father and, in case of his death or incapacity, the mother, are responsible. The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live in their company." In the instant case, it is not controverted that Reginald, although married, was living with his father and getting subsistence from him at the time of the occurrence in question. Factually, therefore, Reginald was still subservient to and dependent on his father, a situation which is not unusual. It must be borne in mind that, according to Manresa, the reason behind the joint and solidary liability of parents with their offending child under Article 2180 is that is the obligation of the parent to supervise their minor children in order to prevent them from causing damage to third persons. 5 On the other hand, the clear implication of Article 399, in providing that a minor emancipated by marriage may not, nevertheless, sue or be sued without the assistance of the parents, is that such emancipation does not carry with it freedom to enter into transactions or do any act that can give rise to judicial litigation. (See Manresa, id., Vol. II, pp. 766-767, 776.) And surely, killing someone else invites judicial action. Otherwise stated, the marriage of a minor child does not relieve the parents of the duty to see to it that the child, while still a minor, does not give answerable for the borrowings of money and alienation or encumbering of real property which cannot be done by their minor married child without their consent. (Art. 399; Manresa, supra.) Accordingly, in Our considered view, Article 2180 applies to Atty. Hill notwithstanding the emancipation by marriage of Reginald. However, inasmuch as it is evident that Reginald is now of age, as a matter of equity, the liability of Atty. Hill has become merely subsidiary to that of his son. WHEREFORE, the order appealed from is reversed and the trial court is ordered to proceed in accordance with the foregoing opinion. Costs against appellees.

FIRST DIVISION [G.R. No. L-46179. January 31, 1978.] CANDIDA VIRATA, TOMAS VIRATA, MANOLITO VIRATA, EDERLINDA VIRATA, NAPOLEON VIRATA, ARACELY VIRATA, ZENAIDA VIRATA, LUZMINDA VIRATA, PACITA VIRATA, and EVANGELINA VIRATA, petitioners, vs. VICTORIO OCHOA, MAXIMO BORILLA and THE COURT OF FIRST INSTANCE OF CAVITE, 7th JUDICIAL DISTRICT, BRANCH V, stationed at BACOOR, CAVITE, respondents.

civil case for damages based on quasi-delict. The source of obligation sought to be enforced in the civil action is quasi-delict, not an act or omission punishable by law. Under Article 1157 of the Civil Code of the Philippines, quasidelict and an act or omission punishable by law are two different sources of obligation. Moreover, to prevail in the action for damages, plaintiff have only be establish its cause of action by preponderance of evidence.

DECISION

FERNANDEZ, J p: Remulla, Estrella & Associates for petitioners. Exequil C. Masangkay for respondents. SYNOPSIS A criminal action for reckless imprudence was filed against a driver of a jeepney. Before the criminal case could be decided, the heirs of the victim manifested that they were filing and they so did file a separate civil action for damages against the owner and the driver of the jeepney based on quasi-delict. The driver was subsequently acquitted of the crime charge. The defendants in the civil case then moved to dismiss the same, which motion the trial court granted. The principal issue before the Supreme Court is whether the heirs of the victim can prosecute an action for damages based on quasi-delict against the driver and owner. The Supreme Court held that the acquittal of the driver of the crime charged is not a bar to the prosecution of a civil case for damages based on quasi-delict. Order of dismissal set aside and case remanded to the lower court for further proceedings. This is an appeal by certiorari, from the order of the Court of First Instance of Cavite, Branch V, in Civil Case No. B134 granting the motion of the defendants to dismiss the complaint on the ground that there is another action pending between the same parties for the same cause 1 The record shows that on September 24, 1975 one Arsenio Virata died as a result of having been bumped while walking along Taft Avenue, Pasay City by a passenger jeepney driven by Maximo Borilla and registered in the name of Victorio Ochoa; that Borilla is the employee driver of Ochoa; that for the death of Arsenio Virata, a criminal action for homicide through reckless imprudence was instituted on September 25, 1975 against Maximo Borilla in the Court of First Instance of Rizal at Pasay City, docketed as Criminal Case No. 3162-P of said court; that at the hearing of the said criminal case on December 12, 1975, Atty. Julio Francisco, the private prosecutor, made a reservation to face a separate civil action for damages against the driver on his criminal liability; that on February 19, 1976 Atty. Julio Francisco filed a motion in said criminal case to withdraw the reservation to file a separate civil action; that thereafter, the private prosecutor actively participated in the trial and presented evidence on the damages; that on June 29, 1976 the heirs of Arsenio Virata again reserved their right to institute in separate civil action; that on July 29, 1977 the heirs of Arsenio Virata, petitioners herein, commenced Civil No. B-134 in the Court of First Instance of Cavite at Bacoor, Branch V, for damages based on quasi-delict against the driver Maximo Borilla and the registered owner of the jeepney, Victorio Ochoa; that on August 13, 1976 the defendants, private respondents herein, filed a motion to dismiss on the ground that there is another action, Criminal Case No. 3162-P, pending between the same parties for the same cause; that on September 8, 1976 the Court of First Instance of Rizal at Pasay City rendered in decision in Criminal Case No. 3612-P acquitting the accused, Maximo Borilla, on the ground that he caused an injury by mere accident; and that on January 31, 1977, the Court of First Instance of Cavite at Bacoor granted the motion to dismiss Civil Case No. B-134 for damages 2 The principal issue is whether or not the petitioners, heirs of the deceased Arsenio Virata, can prosecute an action for damages based on quasi-delict against Maximo Borilla and Victorio Ochoa, driver and owner, respectively of the passenger jeepney that bumped Arsenio Virata. It is settled that in negligence cases the aggrieved parties may choose between an action under the Revised Penal Code or for quasi-delict under Article 2176 of the Civil Code of the Philippines. What is prohibited by Article 2177 of the Civil Code of the Philippines is to recover twice for the same negligent act. LLpr The Supreme Court has held that:

SYLLABUS 1.ACTIONS; CULPA AQUILIANA; AGGRIEVED PARTY MAY FILE SEPARATE ACTION BASED ON CULPA AQUILIANA. In negligence cases the aggrieved parties may choose between an action under the Revised Penal Code or for quasidelict under Article 2176 of the Civil Code of the Philippines. What is prohibited by Article 2177 of the Civil Code is to recover twice for the same negligent act. 2.ID.; ID.; ACQUITTAL OF ACCUSED NOT A BAR TO PROSECUTION FOR DAMAGES BASED ON QUASI-DELICT. The acquittal of the accused of the crime of homicide through reckless imprudence is not a bar to the prosecution of a

"According to the Code Commission: 'The foregoing provision (Article 2177) though at first sight startling, is not so novel or extraordinary when we consider the exact nature of criminal and civil negligence. The former is a violation of the criminal law, while the latter is a 'culpa aquiliana' or quasi-delict, of ancient origin, having always had its own foundation and individuality, separate from criminal negligence. Such distinction between criminal negligence and 'culpa extra-contractual' or 'quasi-delito' has been sustained by decision of the Supreme Court of Spain and maintained as clear, sound and perfectly tenable by Maura, an outstanding Spanish jurist. Therefore, under the proposed Article 2177, acquittal from an accusation of criminal negligence, whether on reasonable doubt or not, shall not be a bar to a subsequent civil action, not for civil liability arising from criminal negligence, but for damages due to a quasi-delict or 'culpa aquiliana'. But said article forestalls a double recovery." (Report of the Code Commission, p. 162.) Although, again, this Article 2177 does seem to literally refer to only acts of negligence, the same argument of Justice Bocobo about construction that upholds 'the spirit that giveth life' rather than that which is literal that killeth the intent of the lawmaker should be observed in applying the same. And considering that the preliminary chapter on human relations of the new Civil Code definitely establishes the separability and independence of liability in a civil action for acts criminal in character (under Articles 29 to 32) from the civil responsibility arising from crime fixed by Article 100 of the Revised Penal Code, and, in a sense, the Rules of Court, under Sections 2 and 3(c), Rule 111, contemplate also the same separability, it is 'more congruent with the spirit of law, equity and justice, and more in harmony with modern progress', to borrow the felicitous relevant language in Rakes vs. Atlantic Gulf and Pacific Co., 7 Phil. 359, to hold, as We do hold, that Article 2176, where it refers to 'fault or negligence,' covers not only acts 'not punishable by law' but also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a separate civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed, if he is actually charged also criminally, to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. In other words, the extinction of civil liability referred to in Par (e) of Section 3, Rule 111, refers exclusively to civil liability founded on Article 100 of the Revised Penal Code, whereas the civil liability for the same act considered as a quasi-delict only and not as a crime is not extinguished even by a declaration in the criminal case that the criminal act charged has not happened or has not been committed by the accused. Briefly stated, We here hold, in reiteration of Garcia, that culpa aquiliana includes voluntary and negligent acts which may be punishable by law. 3 The petitioners are not seeking to recover twice for the same negligent act. Before Criminal Case No. 3162-P was decided, they manifested in said criminal case that they were filing a separate civil action for damages against the owner and driver of the passenger jeepney based on quasi-delict. This acquittal of the driver, Maximo Borilla, of the crime charged in Criminal Case No. 3162-P is not a bar to the prosecution of Civil Case No. B-134 for damages based on quasi-delict. The source of the obligation sought to be enforced in Civil Case No. B-134 is quasi-delict, not an act or omission punishable by law. Under Article 1157 of the Civil Code of the Philippines, quasi-delict and an act or omission punishable by law are two different sources of obligation.

Moreover, for the petitioners to prevail in the action for damages, Civil Case No. B-134, they have only to establish their cause of action by preponderance of the evidence. WHEREFORE, the order of dismissal appealed from is hereby set aside and Civil Case No. B-134 is reinstated and remanded to the lower court for further proceedings, with costs against the private respondents. SO ORDERED.

THIRD DIVISION [G.R. No. 141986. July 11, 2002.] NEPLUM, INC., petitioner, vs. EVELYN V. ORBESO, respondent. DECISION PANGANIBAN, J p: Within what period may private offended parties appeal the civil aspect of a judgment acquitting the accused based on reasonable doubt? Is the 15-day period to be counted from the promulgation of the decision to the accused or from the time a copy thereof is served on the offended party? Our short answer is: from the time the offended party had actual or constructive knowledge of the judgment, whether it be during its promulgation or as a consequence of the service of the notice of the decision. The Case Before us is a Petition 1 for Review on Certiorari under Rule 45 of the Rules of Court, seeking to set aside the February 17, 2000 Order 2 of the Regional Trial Court (RTC) of Makati City (Branch 133) in Criminal Case No. 96-246. The Order reads in full as follows: "Opposition to Notice of Appeal being well-taken, as prayed for, the Notice of Appeal and the Amended Notice of Appeal are denied due course." 3 The foregoing Order effectively prevented petitioner from appealing the civil aspect of the criminal proceedings in which the accused was acquitted based on reasonable doubt. CIAHDT The Facts

'2.03.1Considering that 27 November 1999 was a Saturday, petitioner filed its Motion for Reconsideration on 29 November 1999, a Monday.' "2.04On 28 January 2000, a Friday, petitioner received its copy of the 24 January 2000 Order of the Trial Court denying for lack of merit petitioner's Motion for Reconsideration. "2.05On 31 January 2000, a Monday, petitioner filed its 28 January 2000 Notice of Appeal from the Judgment. On the same day, petitioner filed by registered mail its 28 January 2000 Amended Notice of Appeal. "2.06On 17 February 2000, the Trial Court issued its Challenged Order, which petitioner received through the private prosecutor on 22 February 2000, denying due course to petitioner's Notice of Appeal and Amended Notice of Appeal . . . ." 5 Ruling of the Trial Court The RTC refused to give due course to petitioner's Notice of Appeal 6 and Amended Notice of Appeal. 7 It accepted respondent's arguments that the Judgment from which the appeal was being taken had become final, because the Notice of Appeal and the Amended Notice of Appeal were filed beyond the reglementary period. The 15-day period was counted by the trial court from the promulgation of the Decision sought to be reviewed. THacES Hence, this Petition. 8 The Issue In its Memorandum, petitioner submits this lone issue for our consideration:

The factual antecedents, as narrated by petitioner in its Memorandum, 4 are as follows: "2.01On 29 October 1999, the trial court promulgated its judgment (the 'Judgment') in Criminal Case No. 96-246 acquitting the accused of the crime of estafa on the ground that the prosecution failed to prove the guilt of the accused beyond reasonable doubt. The accused and her counsel as well as the public and private prosecutors were present during such promulgation. '2.01.1The private prosecutor represented the interests of the petitioner who was the private offended party in Criminal Case No. 96-246.' "2.02On 12 November 1999, the petitioner, through the private prosecutor, received its copy of the Judgment. "2.03On 29 November 1999, petitioner filed its 25 November 1999 Motion for Reconsideration (Civil Aspect) of the Judgment. The Petition is unmeritorious. Preliminary Matter: Mode of Review "Whether the period within which a private offended party may appeal from, or move for a reconsideration of, or otherwise challenge, the civil aspect of a judgment in a criminal action should be reckoned from the date of promulgation or from the date of such party's actual receipt of a copy of such judgment considering that any party appealing or challenging such judgment would necessarily need a copy thereof, which is in writing and which clearly express the factual and legal bases thereof to be able to file an intelligent appeal or other challenge." 9 The Court's Ruling

Petitioner brought this case to this Court through a Petition for Review on Certiorari under Rule 45 of the Rules of Court. The Petition seeks to set aside the February 17, 2000 Order of the RTC which, in effect, disallowed petitioner's appeal of its Judgment. An ordinary appeal from the RTC to the Court of Appeals (CA) is "taken by filing a notice of appeal with the court which rendered the judgment or final order appealed from and serving a copy thereof upon the adverse party." 10 Consequently, the disallowance of the notice of appeal signifies the disallowance of the appeal itself. IDSaEA A petition for review under Rule 45 is a mode of appeal of a lower court's decision or final order direct to the Supreme Court. However, the questioned Order is not a "decision or final order" from which an appeal may be taken. The Rules of Court states explicitly: "No appeal may be taken from: xxx xxx xxx (d)An order disallowing or dismissing an appeal;" 11 On the other hand, a petition for certiorari is the suitable remedy that petitioner should have used, in view of the last paragraph of the same provision which states: "In all the above instances where the judgment or final order is not appealable, the aggrieved party may file an appropriate special civil action under Rule 65."12 In turn, Rule 65, Section 1, provides: "SEC. 1.Petition for certiorari When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require." 13 (Italics supplied) By availing itself of the wrong or inappropriate mode of appeal, the Petition merits an outright dismissal. 14 Supreme Court Circular No. 2-90 15 (hereinafter "Circular") is unequivocal in directing the dismissal of an inappropriate mode of appeal thus: "4.Erroneous Appeals An appeal taken to either the Supreme Court or the Court of Appeals by the wrong or inappropriate mode shall be dismissed." 16

The same Circular provides that petitioner's counsel has the duty of using the proper mode of review. ICHcaD "e)Duty of counsel It is therefore incumbent upon every attorney who would seek review of a judgment or order promulgated against his client to make sure of the nature of the errors he proposes to assign, whether these be of fact or of law; then upon such basis to ascertain carefully which Court has appellate jurisdiction; and finally, to follow scrupulously the requisites for appeal prescribed by law, ever aware that any error or imprecision in compliance may well be fatal to his client's cause." 17 This Court has often admonished litigants for unnecessarily burdening it with the task of determining under which rule a petition should fall. It has likewise warned lawyers to follow scrupulously the requisites for appeal prescribed by law, ever aware that any error or imprecision in compliance may well be fatal to the client's cause. 18 On this score alone, the Petition could have been given short shrift and outrightly dismissed. Nevertheless, due to the novelty of the issue presented and its far-reaching effects, the Court will deal with the arguments raised by petitioner and lay down the rule on this matter. As an exception to Circular 2-90, it will treat the present proceedings as a petition for certiorari under Rule 65. Main Issue: Timeliness of Appeal Petitioner contends that an appeal by the private offended party under the Rules of Criminal Procedure must be made within 15 days from the time the appealing party receives a copy of the relevant judgment. It cites Section 6, Rule 122 of the 1985 Rules on Criminal Procedure, which provides: "SEC. 6.When appeal to be taken. An appeal must be taken within fifteen (15) days from promulgation or notice of the judgment or order appealed from. This period for perfecting an appeal shall be interrupted from the time a motion for new trial or reconsideration is filed until notice of the order overruling the motion shall have been served upon the accused or his counsel." (Italics supplied) The italicized portion of the provision uses the conjunctive "or" in providing for the reckoning period within which an appeal must be taken. It shall be counted from the promulgation or the notice of the judgment or order. It is petitioner's assertion that "the parties would always need a written reference or a copy of the judgment . . . to intelligently examine and consider the judgment from which an appeal will be taken." 19 Thus, it concludes that the 15-day period for filing a notice of appeal must be counted from the time the losing party actually receives a copy of the decision or order. Petitioner ratiocinates that it "could not be expected to capture or memorize all the material details of the judgment during the promulgation thereof." 20 It likewise poses the question: "why require all proceedings in court to be recorded in writing if the parties thereto would not be allowed the benefit of utilizing these written [documents]?" 21

We clarify. Had it been the accused who appealed, we could have easily ruled that the reckoning period for filing an appeal be counted from the promulgation of the judgment. In People v. Tamani, 22 the Court was confronted with the question of when to count the period within which the accused must appeal the criminal conviction. Answered the Court: ACTISD

3.The only limitation is that the offended party cannot recover more than once for the same act or omission. Thus, deemed instituted in every criminal prosecution is the civil liability arising from the crime or delict per se (civil liability ex delicto), but not those liabilities from quasi-delicts, contracts or quasi-contracts. In fact, even if a civil action is filed separately, the ex delicto civil liability in the criminal prosecution remains, and the offended party may subject to the control of the prosecutor still intervene in the criminal action in order to protect such remaining civil interest therein. 31 By the same token, the offended party may appeal a judgment in a criminal case acquitting the accused on reasonable doubt, but only in regard to the civil liability ex delicto. EATcHD And this is precisely what herein petitioner wanted to do: to appeal the civil liability arising from the crime the civil liability ex delicto. Period for Perfecting an Appeal Section 6 of Rule 122 of the 2000 Rules on Criminal Procedure declares: "Section 6.When appeal to be taken. An appeal must be taken within fifteen (15) days from promulgation of the judgment or from notice of the final order appealed from. This period for perfecting an appeal shall be suspended from the time a motion for new trial or reconsideration is filed until notice of the order overruling the motions has been served upon the accused or his counsel at which time the balance of the period begins to run." This provision is similar, though not identical, to Section 6 of Rule 122 of the 1985 Rules invoked by petitioner. The difference is that the former makes clear thatpromulgation refers to "judgment," and notice refers to "final order appealed from." Taken on its face, the provision seems to suggest that the period for any appeal, whether by the accused or by the private offended party, must be counted from and understood in conjunction with the provision on the promulgation of the judgment. This provision mentions the presence of the accused, the judge or the clerk of court in certain instances, and/or the counsel or representative of the accused. Petitioner is correct in observing that the private offended party is not required to be present during the promulgation; in fact, the said party is not even mentioned in the provision. For clarity, the 2000 Rule on the promulgation of judgment is quoted in full hereunder: "Section 6.Promulgation of judgment The judgment is promulgated by reading it in the presence of the accused and any judge of the court in which it was rendered. However, if the conviction is for a light offense, the judgment may be pronounced in the presence of his counsel or representative. When the judge is absent or outside the province or city, the judgment may be promulgated by the clerk of court.

"The assumption that the fifteen-day period should be counted from February 25, 1963, when a copy of the decision was allegedly served on appellant's counsel by registered mail is not well-taken. The word 'promulgation' in Section 6 should be construed as referring to 'judgment,' while the word 'notice' should be construed as referring to 'order.'" 23 The interpretation in that case was very clear. The period for appeal was to be counted from the date of promulgation of the decision. Text writers 24 are in agreement with this interpretation. In an earlier case, 25 this Court explained the same interpretation in this wise: "It may, therefore, be stated that one who desires to appeal in a criminal case must file a notice to that effect within fifteen days from the date the decision is announced or promulgated to the defendant. And this can be done by the court either by announcing the judgment in open court as was done in this case, or by promulgating the judgment in the manner set forth in [S]ection 6, Rule 116 of the Rules of Court." 26 Clear as those interpretations may have been, they cannot be applied to the case at bar, because in those instances it was the accused who appealed, while here we are confronted with the offended party's appeal of the civil aspect only. Thus, the question arises whether the accused-appellant's period for appeal, as construed in the cited cases, is the same as that for the private offended party. We answer in the negative. No Need to Reserve Independent Civil Action At the outset, we must explain that the 2000 Rules on Criminal Procedure deleted the requirement of reserving independent civil actions and allowed these to proceed separately from criminal ones. Thus, the civil actions referred to in Articles 32, 27 33, 28 34 29 and 2176 30 of the Civil Code shall remain "separate, distinct and independent" of any criminal prosecution based on the same act. Here are some direct consequences of such revision and omission: 1.The right to bring the foregoing actions based on the Civil Code need not be reserved in the criminal prosecution, since they are not deemed included therein. 2.The institution or waiver of the right to file a separate civil action arising from the crime charged does not extinguish the right to bring such action.

"If the accused is confined or detained in another province or city, the judgment may be promulgated by the executive judge of the Regional Trial Court having jurisdiction over the place of confinement or detention upon request of the court which rendered the judgment. The court promulgating the judgment shall have authority to accept the notice of appeal and to approve the bail bond pending appeal; provided, that if the decision of the trial court convicting the accused changed the nature of the offense from non-bailable to bailable, the application for bail can only be filed and resolved by the appellate court. "The proper clerk of court shall give notice to the accused personally or through his bondsman or warden and counsel, requiring him to be present at the promulgation of the decision. If the accused was tried in absentia because he jumped bail or escaped from prison, the notice to him shall be served at his last known address. "In case the accused fails to appear at the scheduled date of promulgation of judgment despite notice, the promulgation shall be made by recording the judgment in the criminal docket and serving him a copy thereof at his last known address or thru his counsel. "If the judgment is for conviction and the failure of the accused to appear was without justifiable cause, he shall lose the remedies available in these rules against the judgment and the court shall order his arrest. Within fifteen (15) days from promulgation of judgment, however, the accused may surrender and file a motion for leave of court to avail of these remedies. He shall state the reasons for his absence at the scheduled promulgation and if he proves that his absence was for a justifiable cause, he shall be allowed to avail of said remedies within fifteen (15) days from notice." 32 Appeal of the Accused Different from That of the Offended Party Clearly, the Rule on the promulgation of judgment refers to the accused, not to the private offended party, who is not even required to be present during the proceedings. Since the judgment may be promulgated in the absence of the latter, it will be inequitable to count from that date the period of appeal for the said party. It is but logical to begin tolling such period only upon service of the notice of judgment upon the offended party, and not from its promulgation to the accused. It is only through notice to the former that an appeal can reasonably be made, for it is only from that date that the complainant will have knowledge of the need to elevate the case. Till then, the remedy of appeal would not be an option in the event of an adverse judgment. AaSCTD We clarify also that the situations covered by this Rule (Section 6, Rule 122) are limited to appeals of judgments rendered by regional trial and inferior courts. In higher courts, there is no promulgation in the concept of Section 6, Rule 122 of the 2000 Rules on Criminal Procedure. In the Supreme Court and the Court of Appeals, a decision is promulgated when the signed copy thereof is filed with the clerk of court, who then causes copies to be served upon the parties or their counsels. 33Hence, the presence of either party during promulgation is not required.

The period to appeal, embodied in Section 6 of Rule 122 of the Rules on Criminal Procedure, cannot be applied equally to both accused-appellant and private offended party. Further bolstering this argument is the second sentence of this provision which mandates as follows: ". . . . This period for perfecting an appeal shall be suspended from the time a motion for new trial or reconsideration is filed until notice of the order overruling the motions has been served upon the accused or his counsel at which time the balance of the period begins to run." 34 (Italics supplied) The above-quoted portion provides for the procedure for suspending and resuming the reglementary period of appeal specifically mentioned in the preceding sentence. However, it is clear that the procedure operates only in relation to the accused. This conclusion can be deduced from the fact that after being interrupted, the period to appeal begins to run again only after the accused or the counsel of the accused is given notice of the order overruling the motion for reconsideration or for new trial. Verily, the assumption behind this provision is that the appeal was taken by the accused, not by the private offended party. Indeed, the rules governing the period of appeal in a purely civil action should be the same as those covering the civil aspects of criminal judgments. If these rules are not completely identical, the former may be suppletory to the latter. As correctly pointed out by petitioner, "[t]he appeal from the civil aspect of a judgment in a criminal action is, for all intents and purposes, an appeal from a judgment in a civil action as such appeal cannot affect the criminal aspect thereof." 35 Being akin to a civil action, the present appeal may be guided by the Rules on Civil Procedure. CTcSAE

In People v. Santiago, 36 the Court has definitively ruled that in a criminal case in which the offended party is the State, the interest of the private complainant or the private offended party is limited to the civil liability arising therefrom. If a criminal case is dismissed by the trial court or if there is an acquittal, an appeal of the criminal aspect may be undertaken, whenever legally feasible, only by the State through the solicitor general. As a rule, only the solicitor general may represent the People of the Philippines on appeal. The private offended party or complainant may not undertake such appeal. However, the offended party or complainant may appeal the civil aspect despite the acquittal of the accused. As such, the present appeal undertaken by the private offended party relating to the civil aspect of the criminal judgment can no longer be considered a criminal action per se, wherein the State prosecutes a person for an act or omission punishable by law. Instead, it becomes a suit analogous to a civil action. Being in the nature of a civil case, the present intended appeal involves proceedings brought to the Court of Appeals from a decision of the RTC in the exercise of the latter's original jurisdiction. Thus, it should be properly done by filing a notice of appeal. 37 An appeal by virtue of such notice shall be filed within 15 days from notice of the judgment or final order appealed from. 38 For the private offended party, this rule then forecloses the counting of the period to appeal from the "promulgation" of the judgment to the accused.

In sum, we hold that an offended party's appeal of the civil liability ex delicto of a judgment of acquittal should be filed within 15 days from notice of the judgment or the final order appealed from. To implement this holding, trial courts are hereby directed to cause, in criminal cases, the service of their judgments upon the private offended parties or their duly appointed counsels the private prosecutors. This step will enable them to appeal the civil aspects under the appropriate circumstances. General Rule Not Applicable to the Present Case Having laid down the general rule on the appeal of civil liabilities ex delicto, we now determine its application to the present controversy. In short, was petitioner's appeal timely filed? If we were to follow the reasoning of petitioner, the Notice of Appeal filed on January 31, 2000 was on time, considering that (1) the judgment had been received by its counsel only on November 12, 1999; and (2) the Motion for Reconsideration filed on November 29, 2000 interrupted the running of the reglementary period. ATCEIc However, a peculiar circumstance in this case militates against this conclusion. Here, the private prosecutor himself was present during the promulgation of the Judgment. This fact is undeniable, as petitioner itself admits his presence in its Memorandum as follows: "2.01On 29 October 1999, the Trial Court promulgated its judgment (the 'Judgment') in Criminal Case No. 96-246 acquitting the accused of the crime of estafa on the ground that the prosecution failed to prove the guilt of the accused beyond reasonable doubt. The accused and her counsel as well as the public and private prosecutors were present during such promulgation." 39 (Italics supplied) Further, private prosecutor 40 even signed a copy of the Judgment dated October 29, 1999, a signature which in unequivocal terms signifies notification of the party he represents herein petitioner. Having been present during the promulgation and having been furnished a copy of the judgment at the time, private offended party was in effect actually notified of the Judgment, and from that time already had knowledge of the need to appeal it. Thus, the very raison d'tre of this Decision is already satisfied: the filing of an appeal by the said party, only after being notified of the Judgment. As argued by respondent, "did not the public and private prosecutors acquire notice of judgment at its promulgation because of their presence? Notice of the judgment may not be defined in any other way . . . ." 41 Petitioner stresses the need for service of the judgment on the offended party. It harps on the fact that based on constitutional, statutory and even jurisprudential edicts judgments must be in writing and with the factual and legal bases thereof clearly expressed. Petitioner posits that it can make an appeal only after receiving a written copy of the judgment, for "the parties would always need a written reference or a copy [thereof which] they can review or refer to from time to time." 42 To rule otherwise would supposedly deny them due process.

We clarify. If petitioner or its counsel had never been notified of the Judgment, then the period for appeal would never have run. True, no law requires the offended party to attend the promulgation, much less to secure a copy of the decision on that date. But fiction must yield to reality. By mere presence, the offended party was already actually notified of the Decision of acquittal and should have taken the necessary steps to ensure that a timely appeal be filed. Besides, all that petitioner had to do was to file a simple notice of appeal a brief statement of its intention to elevate the trial court's Decision to the CA. There was no reason why it could not have done so within 15 days after actually knowing the adverse judgment during the promulgation. 43 Parties and their counsels are presumed to be vigilant in protecting their interests and must take the necessary remedies without delay and without resort to technicalities. Appeal Not Part of Due Process It should be stressed that the right to appeal is neither a natural right nor a part of due process. It is merely a procedural remedy of statutory origin and may be exercised only in the manner prescribed by the provisions of law authorizing its exercise. 44 Hence, its requirements must be strictly complied with. 45 The failure of petitioner to file a timely notice of appeal from the judgment, thus rendering the judgment final and executory, is not a denial of due process. It might have lost its right to appeal, but it was not denied its day in court. TCDHaE It would be incorrect to perceive the procedural requirements of the rules on appeal as merely harmless and trivial technicalities that can be discarded. 46 Indeed, deviations from the rules cannot be tolerated. 47 "The rationale for this strict attitude is not difficult to appreciate. These rules are designed to facilitate the orderly disposition of appealed cases. In an age where courts are bedeviled by clogged dockets, these rules need to be followed by appellants with greater fidelity. Their observance cannot be left to the whims and caprices of appellants." 48 Neither has petitioner justified a deviation from an otherwise stringent rule. Anyone seeking exemption from the application of the reglementary period for filing an appeal has the burden of proving the existence of exceptionally meritorious instances warranting such deviation. 49 A fundamental precept is that the reglementary periods under the Rules are to be strictly observed, for they are indispensable interdictions against needless delay and for an orderly discharge of judicial business. 50 After judgment has become final, vested rights are acquired by the winning party. Just as the losing party has the right to file an appeal within the prescribed period, so does the winning party also have the correlative right to enjoy the finality of the resolution of the case. 51 This principle becomes even more essential in view of the fact that the criminal aspect has already been adjudicated. WHEREFORE, the Petition is hereby DENIED and the assailed Order AFFIRMED. Costs against petitioner. SO ORDERED.

FIRST DIVISION [G.R. No. L-2684. March 15, 1907.] THE FIDELITY AND DEPOSIT COMPANY OF MARYLAND, plaintiff-appellant, vs. WILLIAM A. WILSON, ET AL., defendants-appellees.

1 bill of $5, No. 333,448, on the Bank of Montreal. 1 United States bill, silver certificate, $10, series of 1891. 3 United States $10 notes, series of 1882. 5 United States $10 notes, series of 1891. 24 United States $10 notes, series of 1880. 45 United States $10 notes, series of 1901. This sum and amount was turned over to the custody of Mr. Branagan, the Insular Treasurer.

Hartigan, Marple, Rohde & Gutierrez, for appellant. F.G. Waite and H.D. Terrell, for appellees.

SYLLABUS 1CONTRACT; DELIVERY. The delivery of a thing is a necessary and indispensable requisite for the acquiring of ownership of the same by virtue of a contract. (Manresa, Commentaries on Civil Code, vol. 10, p. 339.) 2.PREFERRED CREDITORS. The credit of the appellee is shown in a private document, and the right or credit of the appellant, as surety on the bond of W., to the Government. These credits, therefore, not being in the classes enumerated in the Civil Code as privileged, neither creditor should enjoy preference over the other. They should be paid pro rata from the funds in question.

The facts of this case, among others, are the following: On October 17, 1904, the plaintiff filed a complaint against Wilson and The American Surety Company asking, first, that judgment be rendered against Wilson for the sum of $4,464.90, that amount having been paid by plaintiff to the Government under plaintiff's surety bond; second, that there be applied to the payment of said judgment the said sum of $785 found in possession of Wilson and that said plaintiff be preferred in its right to the said money and to receive the same; and third, that a depositary be named by the court for the purpose of caring for and administering said amount during the pendency of the case. On the same date, October 17, a depositary was named, such depositary taking in charge the said $785 on that date, the said sum of money being at this time in the possession of said depositary. On October 26, 1904, H.D. Terrell filed a complaint as intervenor in the case, alleging that on September 3, of the same year, the defendant Wilson had ceded and transferred to the said Terrell all of his, the said Wilson's rights in and to the said $785 in payment on account of a larger sum then owed by said Wilsonto the said H.D. Terrell for professional services already rendered and to be rendered as attorney for said Wilson, under agreement with the same; that Treasurer Branagan was duly notified on the 17th day of October, 1904, of this transfer, at which time the Treasurer had said sum in his care, and this before the notifications of the appointment of said depositary in the principal case. Basing his claim on these facts, Terrell claims the right of ownership in and to the said sum and asks that the same be delivered to him as the legitimate owner to the exclusion of the other parties in the case. In this case of intervention The Fidelity and Deposit Company of Maryland, the plaintiff in the principal cause, and The American Surety Company of New York together in cooperation and against the claim of the intervenor Terrell, both of them, alleging on their part, better right that the intervenor to receive the sum in question, asked that the said sum be delivered to them in equal shares and portions as part payment and on account of the amounts which they had paid respectively to the Government as sureties on the bond of Wilson. In this way the first pretension or claim of preference as alleged by The Fidelity and Deposit Company in its complaint was modified with respect to and as against The American Surety Company of New York. It is asserted by these companies, as a basis of their right and claim, that the funds in question are a portion of the money taken from the Government by Wilson and therefore the property of the said Government and that they became subrogated to rights of the Government in and to the said sum by reason of the payment by them as sureties on the bond ofWilson.

DECISION

MAPA, J p: The defendant Wilson was, on the 1st of October, 1902, an employee of the Government of the Philippine Islands, as disbursing officer of the Bureau of Coast Guard and Transportation. For the security of the Government the plaintiff company and another company. The American Surety Company of New York, became sureties on the official bond of Wilson for the sum of $ 15,000, United State currency. Wilson defaulted in the sum of $ 8,931.80, United States currency, and the said two surety companies, after demand duly made upon them by the Government, were compelled to pay and, as a matter of fact, did pay to said Government, in accordance with said bond, the sum of $ 4,465.90, United States currency, each. Wilson, who had left the Philippine Islands, was captured in the city of Montreal, Canada, for the purpose of being tried before the courts of the Philippine Islands for the defalcation of said sum. When apprehended Wilson had on his person the sum of $ 785 in gold, consisting of the following:

Judgment was rendered against Wilson by default, the latter not having answered to the complaint of Terrell were true, in this way coming into the case in cooperation with said Terrell in his pretension. After due trial of the cause a judgment was rendered by the court declaring proven, among others, the facts as stated in the first part of his decision and found as a conclusion of law that the said intervenor Terrell "became the owner and with the right to the possession of said funds before the commencement of this action and still has the right to the possession of the same." In accordance with this conclusion and the facts as set out in the judgment, the following order was made by the court: "Let judgment be entered in favor of the party plaintiff, The Fidelity and Deposit Company of Maryland, and against the defendant Wilson, for the sum of $4,465.90, United States currency, the equivalent of P8,931.80, Philippine currency, together with interest on the same at the rate of 6 per cent per annum from the 22d day of October, 1903, and for the costs of this action, and in favor of the intervenor H.D. Terrell and against all the other parties of this action, plaintiff and defendant, for the possession of the funds now in the hands of the depositary appointed by this court, . . . amounting in value to the sum of $785, United States currency, and in the event that the identical money can not be delivered, then its equivalent of the total of the same that is to say, 1,570 pesos, Philippine currency without costs . . ." The plaintiff only in the principal suit that is to say, The Fidelity and Deposit Company filed its exception to the judgment. The American Surety Company of New York failing to appeal, the judgment with respect to that company became final, hence this court can not decide with regard to that. The same should be said with regard to that part of the judgment against Wilson for the payment to The Fidelity and Deposit Company of the sum $4,465.90, no appeal from said judgment having been made by Wilson. There was no new trial asked for and the parties in this instance expressly admit, as proven, the facts as set out in the decision rendered. The only assignment of error alleged by the appellant in its brief, is in the following terms: "The court erred" its says, "in rendering judgment in favor of the intervenor H.D. Terrell for the $785 in the hands of the depositary." Therefore, that part of the judgment of the lower court that refers to this point is the only thing, in fact, submitted to us for review. According to our point of view, the only question here is to deduce and determine the true legal effects of the transfer made by Wilson in favor of Terrell. This transfer is made literally in the following terms: "MANILA, P.I., September 3, 1904. "To whom it concerns: "For value received, I hereby transfer and cede to Judge H. D. Terrell all my rights, title, and interest in the following-described property belonging to me and now in the hands of Frank A. Branagan, Treasurer of the Philippine Archipelago, under the attachment of the court of Manila. (Here appears the description of the bank bills transferred, hereinabove described.) (Signed) "W.A. WILSON." As is seen, this transfer was made before the filing of the complaint of the appellant, and in addition thereto, it is said that the Insular Treasurer, Mr. Branagan, was also notified before the filing of said complaint. The last does not appear to be clear in the record for the reason that the said notification served on Branagan was so served on October 17, 1904, precisely the same date upon which the complaint was filed

and appointment of the depositary was made by the court in virtue of the same, and upon which said date the depositary took possession of the said funds, the subject matter of this suit. There is no data at hand to show in a precise manner which of the said acts took place before the other. It is true that the judgment of the lower court states that Terrell became the owner of the funds before the commencement of the action, but we consider this rather as a conclusion of law than of fact; that is to say, that fact that the notification of the said transfer had been served on Treasurer Branagan before the filing of the complaint. However, it may be, this may be admitted as true and so taken into consideration in this decision. Terrell claims, and the court below so holds in its judgment, that in virtue of said transfer the ownership of Wilson in and to the funds was transferred to Terrell in fact and in law. If this had been the case, the judgment would have been just and legal and would, therefore, be affirmed herein. But our opinion is contrary to that sustained by the trial court in regard to this point. We are of the opinion that the transfer by itself, and afterwards the notification of the same of Treasurer Branagan, did not produce nor could it produce the effect of transfer to Terrell of the ownership of the funds so transferred and which were then in the possession of the said Treasurer. To have this effect, it would have been necessary that the delivery of the funds had been made directly Terrell, which fact has not been proved at any time. There is no question as to this last point. The funds were in the possession of Branagan and afterwards were transferred to the possession of the depositary appointed, by the court where such funds now are, and this without their ever having been taken possession of the intervenor Terrell. It is not alleged, nor it is claimed by Terrell, that the delivery of the funds was ever made in any manner recognized by the law. He claims the right of ownership from the mere fact of having derived the same, not from the fact of any delivery, but from the very fact of the transfer and of his subsequent notification to Treasurer Branagan, it being, in addition, very clear that such notification does not constitute, in any manner, the fact of delivery as established by articles 1462, 1463, and 1464 of the Civil Code, all of which cover, in full this subject-matter.

Therefore, in our Civil Code it is a fundamental principle in all matters of contracts and a wellknown doctrine of law that "non mudis pactis, sed traditione dominia rerum transferuntur." In conformity with said doctrine as established in paragraph 2 of article 609 of said code, that "the ownership and other property rights are acquired and transmitted by law, by gift, by testate or intestate succession, and, in consequence of certain contracts, by tradition." And as the logical application of this disposition article 1095 prescribes the following: "A creditor has the rights to the fruits of a thing from the time the obligation to deliver it arises. However, he shall not acquire a real right." (and the ownership is surely such) "until the property has been delivered to him." In accordance with such disposition and provisions the delivery of a thing constitutes a necessary and indispensable requisite for the purpose of acquiring the ownership of the same by virtue for a contract. As Manresa states in his Commentaries on the Civil Code, volume 10, pages 339 and 340: "Our law does not admit the doctrine of the transfer of property by mere consent but limits the effect of the agreement to the due execution of the contract . . . The ownership, the property right, is only deprived from the delivery of a thing . . ." Applying this doctrine concretely to the contract of transfer set up by Terrell as the basis of his complaint in intervention, the author says, at page 341 of the volume and work above cited: "The transfer of the ownership in the contract of such transfer, does not produce the effect by the fact of the mere consent, but is acquired by tradition and in the due observance of general precepts." Therefore, by reason of the nondelivery Terrell did not acquire the ownership of the property transferred to him by Wilson. It is only the jus ad rem, and not the jus in re, that was acquired by Terrell by virtue of the transfer, made by the consent of the

transferor and the transferee but not consummated by the delivery which never came to pass and which delivery was the object of such transfer. But if Terrell could not be considered as the owner of said funds in question, it is undeniable that he had rights with regard to the same as a creditor by virtue of that transfer. The same right, that of a creditor, and no other is the right of the appellant in that it has not been contradicted that the rights of the Government, in its judicial relation to Wilson, had not been subrogated to the appellant. The allegation of the appellant that the bank bills taken from the person ofWilson are the property of the Government, in order to be taken into consideration, is to conclude that they belong to the appellant as owner of the same by reason of said subrogation of right, as aforesaid. This has no fundamental basis for the reason that such bank bills have never been duly identified. Without any proof of identification it is not possible to know if said bank bills are really a part of the funds of the Government appropriated by Wilson. The Government under such circumstances could not allege specifically the right of ownership of said bank bills. Now, the creditors, the appellant and the appellee are both claiming at the same time the delivery of the funds in question for the payment of their respective credits and it becomes a question of preference of creditors, since the sum, the object of the suit, is not sufficient to satisfy the claims of both parties. According to our view, neither of the two creditors should enjoy preference with regard to the other. Preference is determined by the nature of the credit in some cases and by the priority of date in others. The first, when it deals with privileged credits, which different kinds of privileged credits are enumerated in articles 1922, 1923, and 1924 of the Civil Code; and the second, when such credits are without special privilege, but are set forth in a public document or a final judgment. (Par. 3, article 1924.) In neither of these two classes do we find the credit of the appellant or that of the appellee. The credit of the appellee is only shown in a private document, and the right, or credit, of the appellant is that derived by reason of the payment made by appellant to the Government as a surety on the bond of Wilson, and nothing more than this appears in the allegations and admissions of the parties during the trial of the case. It does not appear by the bill of exceptions in this case that any document was ever presented in justification of such payment. Neither does the decision refer to any document as showing, as proven, said payment. These two credits not coming under any of the articles herein cited, the same pertain to a general class, and therefore do not enjoy any preference, in accordance with provisions of article 1925 of the Civil Code. This being so, the two creditors should be paid pro rata from the funds in question and without consideration of the dates. (Rule 3, of article 1929.) The judgment appealed from is, therefore, reversed with respect to the order of the trial court ordering the delivery of said funds, in their total amount, to the intervenor, H.D. Terrell, and in place of said order of said trial court we order that the payment and delivery of said funds be made to said Terrell and to the appellant, The Fidelity and Deposit Company of Maryland, pro rata, with respect to their respective credits, without special provision as to days from the notification hereof let judgment be entered in accordance herewith, and ten days thereafter let the case be remanded to the court from whence it came for proper action. So ordered.

FIRST DIVISION [G.R. No. 10244. February 29, 1916.] SANTIAGO CRUZADO, plaintiff-appellant, vs. ESTEFANIA BUSTOS and MANUEL ESCALER, defendants-appellees.

Felix Ferrer for appellant. Augusto Gonzalez for appellees.

SYLLABUS 1.VENDOR AND PURCHASER; FICTITIOUS CONTRACT OF SALE; BINDING FORCE. A contract of sale was simulated for the sole purpose of making it appear that the vendee acquired for the sum of P2,200, and became the owner of a piece of real properly, which was to serve him as security to enable him to hold the office of procurador of a Court of First Instance, pursuant to the statutes in force during the previous sovereignty. Such contract was perfect and binding upon both contracting parties, it appearing in the public instrument executed for the purpose that the vendor and the vendee agreed upon the property sold and on the price stipulated; but such contract cannot be considered to have been consummated, unless it is proved that the purchaser paid the price and took possession of the property. 2.ID.; ID.; ID. Even though the said fictitious deed of sale be considered valid and effective, as being a perfect and binding contract between the contracting parties, yet when the vendee has not paid the price nor taken possession of the property which continued in the possession of the vendors until they later sold it to a third person, such contract cannot give rise to an action for the recovery of possession. Such an action arises from a consummated contract and the contract is what confers a title which transfers the ownership. 3.ID.; ID.; ID. The vendee of a piece of real property acquired by means of a simulated purchase, who has neither paid the price of the said property nor taken possession of it, cannot convey to his successors in interest any property right or title therein, but only the right to demand in a personal action the fulfillment of the perfected contract of sale; and he cannot be permitted to assert any right of ownership, nor to bring an action for recovery of possession, for the reason that said contract of sale was not consummated. 4.ID.; ID.; DELIVERY. The legal fiction of the delivery, by the vendor to the vendee, of the public instrument executed for the purpose, instead of the tradition or possession of the thing sold, produces no effect, nor is the sale consummated, if the vendee does not take possession of the thing and pay the price thereof. (Arts. 1258 and 1450, Civil Code; and decisions of the supreme court of Spain of January 19, 1898, June 1, 1900, and March 8, 1901.) 5.ID.; ID.; RIGHT TO PRODUCTS. The vendee is also like a creditor with respect to the products of the thing sold and is entitled to demand them from the moment the obligation arises to deliver to him the

thing which produces such fruits; notwithstanding, he acquires no real right in the thing sold to him, until it has been delivered to him by tradition or possession. (Arts. 609 and 1095, Civil Code.) 6.ID.; ID.; REGISTRATION OF SECOND COPY OF INSTRUMENT OF SALE. The entry in the property registry of the second copy of said simulated deed of sale, obtained from the archives because the whereabouts of the first copy was unknown, cannot affect the rights acquired by the present owner of the realty apparently sold in the said instrument, because the contract of sale was not consummated and because the successor in interest of the pretended vendee who obtained the registration of the property has acquired no property right or title in the said registered realty. 7.ID.; ID.; LIMITATION OF ACTIONS. After the lapse of 35 years, both the personal action and the real action for recovery of possession have prescribed, even though the latter action be proper, pursuant to the provisions of article 1939 of the Civil Code, and even though account be taken of Law 5, Title 8, Book 11 of the Novisima Recopilacion, and of Law 21, Title 29, Partida 3, in force on the date of the execution of the said fictitious deed of sale.

larger parcel of land, both parcels aggregating a total area of 100 balitas, 9 loanes, and 41 square brazas; that in September, 1891, with plaintiff's knowledge, the defendant Bustos sold and conveyed all the said property to the other defendant Manuel Escaler who then acquired the possession and ownership of the said parcel of land, and had retained such ownership and possession up to the present time; that at no time and on no account whatever had plaintiff or any other person except defendants acquired possession of the said parcel of land or any part thereof, nor any right or title therein. She therefore prayed to be absolved from the complaint, with the costs against plaintiff. The other defendant, Manuel Escaler, in an amended answer to the aforementioned complaint, denied each and all of the allegations therein contained and each and all of its clauses, and, as a special defense, alleged that plaintiff's title to the said land was illegal as only a simulated sale was made by and between Agapito Geronimo Cruzado, plaintiff's predecessor in interest, and Bernardino Dizon; that defendants had been in possession of the said parcel of land for more than thirty years; that the defendant Escaler in good faith purchased the land in question from Estefania Bustos, widow of Dizon, without ever having had any notice of any defect in the vendor's title; that plaintiff had knowledge of the contract of sale of the land in question yet did nothing to oppose its purchase by the defendant Escaler, wherefore the latter, in acquiring the property, did so under the belief that the plaintiff Santiago Cruzado had no right or interest therein. He therefore prayed that the complaint be dismissed, with the costs against plaintiff, and that an injunction issue to restrain the latter from interfering with the defendant Escaler in the enjoyment of his property and rights and from performing any act prejudicial to his interests. On the case coming to trial, both parties adduced evidence, among which was included the deposition of Inocencio Rosete. Counsel for defendants, in a cross-complaint set forth: that as shown by the evidence, the defendant Escaler acquired in good faith from Estefania Bustosthe land in question at a time when there was no record whatever in the property registry to show that this land belonged to a third person or any other than the vendor; that, on entering into possession of the property, Escaler spent P4,000 in improvements and in the repair of a long dike to prevent the erosion of the land by the frequent overflows of the adjoining estuary; that of this sum P2,000 was paid by Escaler and the remaining P2,000 by Estefania Bustos, in her capacity as lessee of the land; and that in case the judgment of the court should be adverse to defendants, these latter, as owners in good faith, were entitled to be indemnified by plaintiff for the said expenses. He therefore asked that plaintiff be ordered to reimburse half of the said P4,000 to each of the defendants in case judgment should be rendered favorable to plaintiff. The latter's counsel, in answer to the said cross-complaint, specifically denied each and all of the allegations thereof and, in special defense, reproduced plaintiff's amended complaint in all its parts and alleged that the facts set forth in the cross-complaint did not constitute a cause of action. He therefore prayed that plaintiff be absolved from the cross-complaint and that judgment be rendered against defendants, in conformity with the prayer of his complaint. After the evidence was all in, counsel for the defendant Escaler moved that the deposition of the witness Inocencio Espanol Rosete be admitted into the record, and in support of his motion stated that with the authorization of the court the said deposition had been taken on November 21, 1913, in the municipality of Arayat in the presence of plaintiff's attorney; that the said declaration of the deponent was duly forwarded to the clerk of the court, and there attached to the record, but through an unintentional oversight of defendant's attorney, it was not presented in evidence at the trial; that this deposition was very important for the defendants' defense; and that the deponent was and continued to be unable to appear before the court on account of a threatened attack of brain fever which might develop during the journey from Arayat to San Fernando.

DECISION

TORRES, J p: This appeal, by bill of exceptions, was taken from the judgment of June 17, 1914, in which the trial judge absolved defendants from the complaint and plaintiff from the cross-complaint, without express finding as to costs. Counsel for plaintiff appealed from this judgment and moved for a new trial. This motion was denied, exception was taken by appellant, and, on the filing of the proper bill of exceptions, the same was approved, certified, and transmitted to the clerk of this court, together with a transcript of the evidence introduced at the trial. Counsel for the plaintiff Santiago Cruzado filed a written complaint on October 8, 1910, amended on September 25, 1913, in which he alleged that plaintiff was the owner of certain rural property situated in the barrio of Dolores, formerly San Isidro, of the municipality of Bacolor, Pampanga, containing an area of 65balitas and bounded as set forth in the complaint; that Estefania Bustos, during her lifetime, and now the administrator of her estate, together with the other defendant, Manuel Escaler, had, since the year 1906 up to the present, been detaining the said parcel of land, and had refused to deliver the possession thereof to plaintiff and to recognize his ownership of the same, notwithstanding the repeated demands made upon them; that by such detention, the plaintiff had suffered losses and damages to the amount of P3,500. He therefore asked for judgment declaring plaintiff to be the owner of the said parcel of land and ordering defendants to return it to plaintiff and to pay the latter P3,500 for losses and damages, and the costs. The demurrer filed by the defendant Bustos having been overruled, in her answer she made a general denial of each and all of the allegations of the complaint, and of each and all of the paragraphs thereof, and, as a special defense, alleged that the title to the said land, produced by the plaintiff, was not a lawful one, for the reason that only a simulated sale of the land was made by and between herself and the deceased Agapito Geronimo Cruzado, plaintiff's father, and that for more than thirty years preceding the present time she had been the sole, exclusive, and lawful owner of the said parcel of land in question; that she had been holding it quietly, peaceably, publicly and in good faith; that it formed an integral part of another

Plaintiff's counsel asked that the foregoing motion be overruled and that the deposition of the witness Rosete be stricken from the record, because defendants' motion was made out of time and was contrary to the rules of procedures, and there was no reason for altering the order of procedure, as requested by defendants, for, when the period for the reception of the evidence of both parties is closed, an alteration in the order of procedure such as asked by defendants would be improper and illegal, counsel citing the decision of this court in the case of Garcia vs. Reyes.(1) He alleged, moreover, that the said deposition necessarily affected the main issue in controversy and that to allow the motion would be in contravention of the provisions of section 364 of the Code of Civil Procedure. He therefore asked that the said motion be overruled. The court, however, ordered that the deposition of the witness Inocencio Rosete be omitted in evidence, and that plaintiff's exception be noted. In view of the foregoing, the judgment aforementioned was rendered. (1) 17 Phil. Rep., 127. The question herein submitted for the decision of this court are: 1.Is it or is it not true that the deed of sale, Exhibit A, (p. 40 of the record) of 65 balitas of land situated in the municipality of Bacolor, Pampanga, executed by Estefania Bustos, with the assistance of her husband Bernardino Dizon, in favor of Agapito Geronimo Cruzado, for the sum of P2,200, was simulated, not with intent to defraud any third person, but for the sole purpose of making it appear that the vendee, Cruzado, then a candidate for the position of procuradoron the date of the said deed, September 7, 1875, possessed real estate to the value of P2,200 with which to guarantee the faithful discharge of the duties of the office of procurador? 2.Is it or is it not true that, notwithstanding such apparent alienation of the 65 balitas of land, the supposed vendee continued in possession thereof, without the supposed purchaser having taken possession of the property until September 10, 1891, when its owner Bustos sold to Escaler, not only the said 65balitas of land, but also all the remainder of a large tract of agricultural land of which the portion appearing as sold to Agapito G. Cruzado formed and forms a part, and that Escaler was then and, until the date of plaintiff's claim, continued to be in peaceable, uninterrupted possession of the said whole tract of land, including the aforementioned portion of 65 balitas? 3.Has the right of ownership prescribed which Manuel Escaler is and has been enjoying in the land which Estefania Bustos had sold to him and which includes the parcel of 65 balitas claimed by plaintiff, Santiago Cruzado, or has the right of any real or personal action he might exercise by reason of the sale toCruzado prescribed on account of the lapse of the respective periods fixed by law, between the 7th of September, 1875, the date of said sale, and the 8th of October, 1910, that of the filing of the complaint? To judge from the evidence adduced in this case, there is ample ground for holding that the said deed of sale of a parcel of 65 balitas of land was simulated, not to defraud any creditor or other person interested in the land nor for the purpose of eluding any lawful obligation on the part of its owner, Estefania Bustos, but for the sole purpose of doing a favor, of rendering a special service to Agapito Geronimo Cruzado, father of the plaintiff Santiago Cruzado. During his lifetime Agapito G. Cruzado aspired to hold the office of procurador in the Court of First Instance of Pampanga, but notwithstanding that he possessed the required ability for the discharge of the duties of that position, he was unable to give the required bond, an indispensable condition for his appointment, as he was possessed of no means or real property wherewith to guarantee the proper discharge of his duties in the manner prescribed by the laws then in force.

In the certified copy of the record of the case tried in the Secretaria de Gobierno of the abolished Real Audiencia de Manila, issued by the Assistant Executive Secretary and chief of the division of archives, there appears on page 178 a decree by the presidencia of this latter tribunal, issued by virtue of the resolution passed by the sala de gobierno on November 24, 1875, whereby it was ordered that Agapito Geronimo Cruzado should be notified that within the period of 30 days he must show proof of having furnished a bond of P700 in cash or of P2,100 in real property as security for the position of procurador to which he had been appointed, with the understanding that should he fail to furnish such bond he would not be issued the certificate entitling him to practice the profession ofprocurador. After complying with the requirements of the said court and executing the mortgage deed of the land purchased by the procurador elect Cruzado from Estefania Bustos, on March 18, 1876, the mortgage was recorded in the old mortgage registry then kept in the office of the Ayuntamiento of Manila during the former sovereignty, and thereafter Agapito G. Cruzado received his appointment and commenced to discharge the duties of his position. The above-related facts conclusively prove that Estefania Bustos executed the deed of sale Exhibit A in favor of the deceased Cruzado in order to enable the latter, by showing that he was a property owner, to hold the office of procurador. This position he held for many years, thanks to the liberality of the pretended vendor, who, notwithstanding the statements contained in the deed of sale, does not appear to have been paid anything as a result of the sham sale, a sale which was effected, not in prejudice or fraud of any person, nor those who were entitled to hold Cruzado liable for the proper discharge of the duties of his office, because, had the need arisen, any liability of his could have been covered by the value of the land, the sale of which was fictitiously set forth in that deed as lawfully belonging to Cruzado, and then Estefania Bustos would have had no right either to object to or escape the consequences of that alienation, although simulated. The simulation of the said sale was effected by making a pretended contract which bore the appearances of truth, when really and truly there was no contract, because the contracting parties did not in fact intend to execute one, but only to formulate a sale in such a manner that, for the particular purposes sought by Bustos and Cruzado, it would appear to have been celebrated solely that Cruzado might hold his office of procurador on the strength of the security afforded by the value of the land feignedly sold. The record does not show when the procurador Cruzado died, but it is unquestionable that he was still living during the last months of 1882, judging from the certificate which he himself issued to Norberto Decena (Exhibit 3). He must have died sometime between the years 1882 and 1890, to judge from the contents of the letters plaintiff addressed to Natalio Dizon, one of the children of Estefania Bustos, on July 7, 1891, and July 4, 1896, and from the fact that in the said year 1890 Agapito G. Cruzado was no longer a practicing procurador in the Court of First Instance of Pampanga. It is true that even after the death of the aforesaid procurador, any liability he might have incurred in connection with the exercise of his office could have been, upon presentation of the proper claim, collected out of the value of the land apparently sold by Estefania Bustos and pledged as security for the proper discharge of the duties of his office. On October 8, 1910, when his son Santiago Cruzado filed his complaint, already more than twenty years had elapsed since 1889, if plaintiff's father died in 1889 and not between 1883 and 1889; therefore, any right of action to foreclose the mortgage, or any personal action with regard to the value of the encumbered land, as the result of any liability incurred in the performance of his duties as procurador, has more than prescribed. (Art. 1964, Civil Code, and secs. 38, 39 and 43, Act No. 190.) On the termination of the sovereignty of Spain over this Archipelago, the Spanish courts here established went out of existence on January 31, 1899, the Pampanga court indeed being abolished about the middle of 1897 as a result of the revolution against the former sovereignty. The personnel of those courts also

ceased to render service as such. It may therefore be affirmed that, if the said lien on the land in question has not terminated by its no longer having any object, it is at least undeniable that prescription has already run with respect to any action that might have been brought against the pledged land to recover for any liability which might have been incurred by the procurador Cruzado during his lifetime in connection with his office, so that this real estate may now be considered as free from that hypothecary encumbrance. At the present time we have only to explain what rights Agapito G. Cruzado transmitted at his death to his son, the herein plaintiff, by virtue of the deed of sale of the land in litigation, executed by its owner Estefania Bustos. It is unquestionable that the contract of sale of the 65 balitas of land was perfect and binding upon both contracting parties, since they both appear in that instrument to have agreed upon the thing sold, to wit, the 65 balitas of land, and upon the price, P2,200; but it is also undeniable that the said contract was not consummated, inasmuch as, notwithstanding that the deed of sale Exhibit A was accomplished and this document was kept by the pretended purchaser, it is positively certain that the latter did not pay the purchase price of P2,200, and never took possession of the land apparently sold in the said deed. All that this vendee afterwards did was to pledge the land-on March 14, 1876, that is, six months and some days after the 7th of September, 1875, the date when he purchased it as security for the faithful discharge of the duties of his office of procurador of the Court of First Instance of Pampanga.

"Ownership is acquired by retention. "Ownership and other property rights are acquired and transmitted by law, by gift, by testate or intestate succession, and, in consequence of certain contracts, by tradition. "They can also be acquired by prescription." The provisions of the said article 1095 are also in accord with those of article 1462 which reads: "A thing sold shall be considered as delivered, when it is placed in the hands and possession of the vendee. "When the sale should be made by means of a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if in said instrument the contrary does not appear or may be clearly inferred." It is true that the deed of sale Exhibit A remained in possession of the vendee Cruzado, but the sale is not to be considered as consummated by this because the said vendee never entered into possession of the land and neither did his son the plaintiff. The latter, moreover, was unable to prove that at any time as owner of the land he collected the fruits harvested thereon, or that any other person cultivated the said land in the name and representation of his deceased father or of the plaintiff himself. The fiction created by means of the execution and delivery of a public instrument produces no effect if the person acquiring it never takes possession of the thing sold or acquired, as happened in the case at bar. If, as prescribed by the preinserted article 1095, the creditor, and in the present case the vendee, does not acquire a property right in the land purchased until the property has been delivered to him or he has taken possession of it, it is unquestionable that, as neither the plaintiff nor his predecessor in interest took possession of the land in litigation, neither of them acquired any property right therein and, consequently, could not and cannot now bring an action for recovery of possession which arises out of a property right in a thing which belongs to them and not a mere right productive of a personal obligation. The plaintiff SantiagoCruzado could only, in a proper case, exercise the personal right of action flowing from the right possessed by his father to compel the vendor to fulfill the contract made in a public instrument to deliver the land sold or to give him possession of it, in consequence of the said contract, though simulated and executed for the sole purpose that the deceased Cruzado in default of P700 in cash might appear to own real estate with which to insure the proper performance of his duties asprocurador, an office he then desired to hold. The supreme court of Spain in a decision of cassation of June 1, 1900, established the following doctrine: "That articles 1258 and 1450 of the Civil Code and the decisions of cassation of June 30, 1854, April 13 and December 13, 1861, June 30, 1864, and April 19 and December 15, 1865, do not warrant the conclusion that whoever purchases personal or real property may exercise with respect thereto all rights of action inherent in its ownership, without it having, in some way or another, been placed at his disposal. On the contrary, the distinction between the perfecting and the consummation of a contract marks the diversity of relations of the contracting parties among themselves and of the owner with respect to what constitutes his property." This principle is in harmony with those set up by the same high tribunal in its decision of January 19, 1898, and March 8, 1901.

The plaintiff, Santiago Cruzado, a son of the vendee, claiming that the said land was being detained by the vendor, or by the administrator of the latter's estate on her death after the commencement of these proceedings, and by the other defendant Manuel Escaler, prayed the court to declare him to be the owner thereof, to order the defendants to return it to him and to pay him for losses and damages, and the costs. The action brought by the plaintiff is evidently one for recovery of possession, founded on the right transmitted to him by his father at his death, a right arising from the said simulated deed of sale of the land in question. This action is of course improper, not only because the sale was simulated, but also because it was not consummated. The price of the land was not paid nor did the vendee take possession of the property from the 7th of September, 1875, when the said sale was feigned, until the time of his death; nor did any of his successors, nor the plaintiff himself until the date of his claim, enter into possession of the land. It is indeed true that it is not necessary that the thing sold or its price should have been delivered in order that the contract of purchase and sale be deemed perfect on account of its being consensual, and from it reciprocal obligations arise mutually to compel the parties to effect its fulfillment; but there is no transmission of ownership until the thing, as in the case at bar, the land, has been delivered, and the moment such delivery is made the contract of purchase and sale is regarded as consummated. Article 1450 of the Civil Code, relied upon in this connection by the appellant, refers solely to the perfection of the contract and not to its consummation. The purchaser is also a creditor with respect to the products of the thing sold, and article 1095 of the Civil Code prescribes as follows: "A creditor has a right to the fruits of a thing from the time the obligation to deliver it arises. However, he shall not acquire a property right thereto until it has been delivered to him." The provisions of this article are in agreement with that of the second paragraph of article 609 of the same Code, which is of the following tenor:

In this last decision, also rendered on an appeal in cassation, the doctrine enunciated in the excerpt copied here below was established: "That the contract of purchase and sale, as consensual, is perfected by consent as to the price and the thing and is consummated by the reciprocal delivery of the one of the other, the full ownership of the thing sold being conveyed to the vendee, from which moment the rights of action derived from this right may be exercised." It is, then, of the utmost importance to examine whether in the said sale the purchase price was paid and whether the vendee took possession of the land supposed to have been sold. The record discloses that Cruzado during his lifetime was, before he became a procurador, an official escribiente or clerk charged with the duty of coursing records and proceedings in the Court of Pampanga; that his salary was hardly sufficient to maintain him and his family; that on account of the insufficiency of his monthly stipend, he was frequently obliged to borrow money from his friends, notwithstanding that he with his family lodged in the house of Bernardino Dizon, the husband of the vendor Bustos, situated in the municipality of Bacolor, with whom Cruzado maintained intimate relations of friendship, and on this account the said couple were content to live in a country house they owned on one of their rice fields. Such was the testimony of several witnesses who lived in that municipality, and who knew and had considerable dealings with the plaintiff's father for many years. It was the opinion of these witnesses that the deceased Agapito G.Cruzado was a poor man, for the reason that his monthly salary scarcely provided for the needs of himself and his family, and they therefore believed that he could not have furnished the sum of P2,200 to purchase the land in question, and, furthermore, if the plaintiff's father had possessed this sum, he would have made the deposit of the sum of P700, the amount of security required by the Presidencia of the former Real Audiencia de Manila for his appointment as procurador, since, having the means, he would have preferred to deposit this smaller sum rather than to have used P2,200 in acquiring a piece of land from which he would derive no benefit whatever, as in fact he never did, as he must have known that in spite of the simulated sale of the property its owner would continue in its possession and would cultivate it, as she did do until her death. It is, therefore, unquestionable that the price of the sale was not paid, an omission which would indicate that it was in effect simulated. Aside from the fact that the spouses Estefania Bustos and Bernardino Dizon had no need to sell the said 65 balitas of land, or of fencing or separating this parcel from the large tract of land that belonged to them and of which it formed a part, for the reason that they were rich and at that time were not in need of money to cultivate their extensive land holdings, it is also to be noted that the portion of land sold was worth very much more than the P2,200 which, in the said instrument, purported to be its price. In addition to the foregoing, the proceedings in the case at bar furnish ample proof that Agapito Geronimo Cruzado during his lifetime stated to various persons that he succeeded in giving bond for his appointment as procurador by means of the said instrument of simulated sale, executed in his favor by the spouses Dizon and Bustos, as he did not have the money to make the deposit required for his appointment. So close were the relations that then existed between the Cruzado family and that of Dizon and Bustos, that later on the plaintiff married a daughter of these latter; hence, plaintiff, in the beginning of his letters Exhibits 8 and 9 addressed to Natalio Dizon, a son of the vendor Estefania Bustos, calls his correspondent his "dear and esteemed brother-in-law." It is therefore not strange that these spouses should have wished to help plaintiff's predecessor in interest by assisting him to obtain the office of procurador, even to the extent of making a feigned sale. However, years afterwards, prompted by an intuition of possible future difficulties, Dizon and his wife Bustos went to the office of Agapito G. Cruzado and required him to cancel the said deed of sale, in order

to avoid any lawsuit after their death. Cruzado promised to look for money wherewith to substitute the mortgage bond. This demand had to be repeated several times, because Cruzado did not cancel the deed as he promised.

Furthermore, it is shown that the instrument Exhibit A is merely a second copy obtained by the plaintiff from the chief of division of archives, without prior summons or notification to the vendor Estefania Bustos, who was still living, in conformity with the provisions contained in article 18 of the Notarial Law of February 15, 1889, and without the plaintiff's having explained what became of the first copy. Besides, the clerk and notary who certified that instrument did not attest therein that in his presence the vendee Cruzado paid over the sum of P2,200, the price of the land sold, and as the vendor denied having received this sum, the obligation devolved upon plaintiff to prove that his deceased father had paid the price stated in that instrument. By his not having done so, his omission constitutes additional proof that the sale of the land, the recovery of possession of which plaintiff now seeks, was really simulated. The supreme court of Spain, in a decision dated February 20, 1899, rendered on an appeal in cassation, laid down the doctrine that, in accordance with the provisions of article 40 of the Mortgage Law, in the alienation of real property it is understood that no price has been paid if the notary does not attest its delivery or the contracting parties do not prove that it was previously paid. The courts are allowed full latitude to accept the presumption that the purchase price has not been paid when the notary before whom the instrument was executed does not attest the delivery of the money, and when, such delivery being denied by one of the contracting parties, the other does not adduce proof of its payment, especially when such presumption is corroborated by other circumstantial evidence which, all together, undoubtedly prove that the sale was feigned and simulated for certain purposes sought to be attained by the parties, though, as in the case at bar, the simulation was not effected in fraud of creditors. Besides the failure to pay the purchase price, the record discloses another very important fact, to wit, that neither the vendee nor his heirs, among these latter, the plaintiff, had at any time taken possession of the land which in the said instrument Exhibit A appeared to have been sold, for, by the testimony of seven competent witnesses examined at the trial it is decisively and conclusively proven that the alleged vendor, Estefania Bustos, and her husband while he was living, notwithstanding the said alienation, continued to possess the said land supposedly sold to plaintiff's father, and cultivated it, as she had done long before the sale of September, 1875, and continued to do so up to the date of the complaint filed by Santiago Cruzado; in the first period, until September 10, 1891, as the owner of the land, and from this date, when the whole of the large tract of land of which the said portion apparently sold forms a part was sold to the other defendant Manuel Escaler, the original owner Estefania Bustos continued in the material possession of the land, but now as the lessee of the new owner, until 1908, when she was substituted by Marcelo Rodriguez as the new lessee of the property. The plaintiff at no time after his father's death occupied the land in litigation, notwithstanding his allegation that he has been collecting rentals from Estefania Bustos, his mother-in-law, by reason of his having leased the land to her. The plaintiff endeavored to prove that during the years 1882 and 1883 he personally took charge of and tilled the disputed land on shares through his tenants named Florentino de los Reyes, Lino Cortes, Macario de los Reyes and Regino de los Reyes, all of whom corroborated plaintiff's testimony in this regard. However, six of the defendants' witnesses positively stated that they never were aware that the said tenants had worked on the land in question during either the said two years or in any other, for these latter were working on the adjacent lands belonging to other owners. Pablo Angeles, one of the defendants' witnesses, testified that Regino and Florentino de los Reyes were his tenants on shares and were employed on his land

adjoining that in question. He was positively certain that they never worked on the disputed land during or about the years aforementioned, because the carabaos used by his said two tenants belonged to him and he never would have permitted them to use these animals in working land that did not belong to him. He added that Regino's children, Macario and Basilio, were at that time so young, being about eight years of age, that they were not yet able to work in the fields. The plaintiff must have been well convinced that he had no right whatever in the land supposedly purchased by his father. The latter never demanded its possession from its owner Estefania Bustos and never thought of declaring the property as belonging to him, for the purposes of the land tax, from the time this tax was established in this country, notwithstanding that the plaintiff, knowing his obligation, filed a sworn declaration relative to a lot he owned in the municipality of Bacolor. This procedure of plaintiff's proves that he did not believe himself to be the owner of the land he claims and which its present owner Manuel Escaler has constantly declared for the purpose of assessment. Moreover, about the middle of the year 1891, the plaintiff Santiago Cruzado begged his brother-inlaw Natalio Dizon to tell the latter's mother, plaintiff's mother-in-law, that Cruzado desired to lease four balitas of the land in question, and some days afterwards, possibly because he received no reply from his said brother-in-law, he addressed a letter to Dizon (Exhibit 9, page 152 of the record, translated on page 154) in which he repeated his request and asked for a reply; but notwithstanding that his brother-in-law Dizon told him that he could not dispose of any part of the said land for the reason that his mother Estefania Bustoswas negotiating for the sale of all the land she possessed in the sitio of Sicat to Manuel Escaler, plaintiff went to Dizon's house on an occasion when Paulino de la Cruz was there. Cruz was a representative of Escaler and had been charged to inform himself of the situation, condition and quality of the land which Bustos was about to sell to his principal and was at the said house for the purpose of being shown the land offered for sale. On this occasion plaintiff learned that negotiations were being made for the sale of all the land owned by Estefania Bustos of which the 65 balitas in litigation formed a part. Plaintiff did not then or afterwards make any statement or objection whatever in defense of his rights and interest, if he really believed that he was entitled to the land shown in the instrument Exhibit A to have been purchased by his father. Plaintiff made no protest whatsoever, because he well knew that the said sale was simulated and that his father had acquired no right whatever in the property; he was therefore anxious to lease four balitas of the same land, a purpose in which he was unsuccessful because a deal was then already going forward for the sale of the said land to its present owner, Manuel Escaler, who in fact did buy it on September 10, 1891. If plaintiff were convinced that he was the owner of the land, as he rashly asserted that he was in his complaint for recovery of possession, it is not understood why about the middle of the year 1891 he wished to lease, not all the 65 balitas, but only four of them, as stated in his said letter, Exhibit 9. From that time the land sold by Estefania Bustos, including the 65 balitas in litigation, and continued in its possession as the owner thereof until October 8, 1910, when plaintiff filed his claim. Thus, more than the ten years required by law for ordinary prescription had already elapsed, as Escaler purchased the land and was holding it in good faith under a lawful title and was not disturbed in his continuous and peaceable possession, one that was adverse to the whole world. It is therefore unquestionable that he has absolutely acquired by prescription the ownership of the disputed land, and the action brought by plaintiff, founded solely on a simulated sale executed by the original owner of the land, not to the prejudice, but to the benefit, of the pretended vendee, cannot prevail against Escaler's rights. The registration obtained by the plaintiff in the property registry of the second copy of the said instrument Exhibit A, about two months before filing his action for recovery, to wit, on August 23, 1910, has not improved the deed of sale nor made it more effective, nor could it affect the rights held by the original owner and the present proprietor of the land in question, inasmuch as their predecessor in interest, by default

of payment of the price of the sale and on account of his never having taken possession of the land sold, was not the owner thereof, nor did he acquire any property right whatever therein. Consequently at his death he could not have transmitted to the plaintiff as his successor any greater right than a personal right to exact the fulfillment of a contract, and as plaintiff was not the owner of the land, he could not validly register it. Article 1473 of the Civil Code prescribes: "If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be personal property. "Should it be real property, it shall belong to the person acquiring it who first recorded it in the registry. "Should there be no entry, the property shall belong to the person who first took possession of it in good faith, and, in the absence thereof, to the person who presents the oldest title, provided there is good faith." On the sale of the land to the defendant Escaler, neither he nor the plaintiff had had it entered in the property registry, but the said new owner, Escaler, took possession of the land on the date of its acquisition, September 10, 1891, and has retained possession thereof up to the present time. So that when plaintiff registered the land he was not in possession thereof and no longer had any right whatever therein, because it already belonged to the defendant Escaler, its lawful owner.

However, even though it were proper for plaintiff to bring the real action for recovery derived, though we do not admit that it could be, from the simulated sale before mentioned, both this action as well as the personal action the only one available in a proper case, as before demonstrated, pursuant to the provisions of article 1095 of the Civil Code have both certainly prescribed, for the reason that the periods fixed by law for filing such actions have much more than elapsed. Article 1939 of the Civil Code says: "Prescription, which began to run before the publication of this code, shall be governed by the prior laws; but it, after this code became operative, all the time required in the same for prescription has elapsed, it shall be effectual, even if according to said prior laws a longer period of time may be required." Personal actions prescribe after ten years; and the same with the writ of execution therein issued, after twenty years; while real actions prescribe after thirty years: according to Law 5, Title 8, Book 11 of the Novisima Recopilacion, and Law 21, Title 29, Partida 3, which were those in force on the date of the execution of the deed of sale, Exhibit A. From September 7, 1875, to October 8, 1910, when the complaint was filed, thirty-five years have elapsed. Therefore, not only in accordance with the laws aforecited, but also pursuant to the provisions of articles 1963 and 1964 of the Civil Code, the periods fixed for the prescription of the personal action which could, in a proper case, have been exercised, as well as for the real action for recovery of possession brought by the plaintiff without right so to do, have more than prescribed. For all the foregoing reasons, whereby the errors assigned to the judgment appealed from have been duly refuted, the said judgment should be, as it is hereby, affirmed, with the costs against the appellant. So ordered.

EN BANC [G.R. No. L-14040. January 31, 1961.] SEGUNDA PORNELLOSA and JOSE ANGELES, petitioners, vs. THE LAND TENURE ADMINISTRATION and HERMINIO GUZMAN,respondents. Bustos, Meneses & Pingol for petitioners. Arturo M. Tolentino for respondent. SYLLABUS 1.APPEALS BY CERTIORARI; COURT OF APPEALS; FINDINGS OF FACT CONCLUSIVE; EVIDENCE; PLAINTIFF MUST RELY ON STRENGTH OF HIS EVIDENCE. The finding of the Court of Appeals that the petitioners have failed to prove that lot 44 is included in the lot formerly occupied by their predecessor-in-interest, is binding upon the Supreme Court. A plaintiff is duty bound to prove his claim by competent evidence and must rely on the strength of his evidence and not on the weakness of that of his opponent. 2.SALE OF REALTY; CONTRACT MUST APPEAR IN A PUBLIC DOCUMENT. The deed of sale (Exhibit A) being in a private document, it could not convey title or any right to the residential lot in litigation, because acts and contracts which have for their object the creation, transmission, modification, or extinction of rights over immovable property must appear in a public document. (Art. 1358 [1], New Civil Code; Art. 1280 [1], old Civil Code). DECISION PADILLA, J p: Petition for certiorari under Rule 46 to review a judgment of the Court of Appeals (C.A.-G.R. No. 13901-R). An action to compel the Director of Lands to execute a deed of sale of a residential lot in favor of the petitioners upon payment of the purchase price of P1,505, to declare null and void a deed of sale of the lot executed by the then Minister of Agriculture and Natural Resources in favor of the respondent Herminio Guzman, to collect from the defendants the sum of P1,000 as actual and P5,000 as moral damages, and to secure other just and equitable relief, was brought by the petitioners in the Court of First Instance of Manila (civil No. 8695). After trial the Court rendered judgment in favor of the petitioners granting them the relief prayed for except the amount of moral damages which was reduced to P2,000.00. The trial court dismissed the defendant's counterclaim. They appealed and the Court of Appeals rendered judgment reversing that of the Court of First Instance and dismissing the petitioner's complaint (C.A.-G.R. No. 13901-R). Hence this petition for certiorari to review the judgment rendered by the Court of Appeals. The facts as found by the appellate court are: The lot in controversy is a part of the Santa Clara Estate on which many families have settled through the consent of its owner. Each paid a rental which, in all likelihood, was fixed proportionately to the extent of the holding. There is no evidence whether or not an occupant was given a formal contract for the specific portion he holds. In May, 1941, the Santa Clara Estate was acquired by the Government under the provisions of Commonwealth Act No. 539, section 1 of which recites thus:

"The President of the Philippines is authorized to acquire private lands or any interest therein, through purchase or expropriation, and to subdivide the same into home lots or small farms for resale at reasonable prices and under such conditions as he may fix to their bona fide tenants or occupants or to private individuals who will work the lands themselves and who are qualified to acquire and own lands in the Philippines." The administration and disposition of the land so acquired was entrusted to an Office known as the Rural Progress Administration. 1 This Office was abolished later on and its functions were transferred to the Bureau of Lands. 2 Recently, such duties were given to the Land Tenure Administration. 3 The evidence tends to show that on April 1, 1941 the plaintiffs acquired by purchase the rights of occupation of the lot in question on the strength of a document which reads as follows: "DAPAT MABATID NG MADLA: "Akong si VICENTA SAN JOSE, may sapat na gulang, walang asawa (balo), na nakatira sa daang Galicia, Sampalok, Maynila, ay pinatotohanan kong tinanggap ko ang halagang ISANG DAAN AT LIMAN-PUNG PISO (P150.00) kay Gng. Segunda Pornellosa bilang kabayaran sa aking bahay na nakatayo sa daang Galicia, bilang 502. Kaya't isinasalin ko sa kanila ang boong kapangyarihan sa nasabing bahay, ganon din ang karapatan na sila ang makikipagunawaan sa pamahalaan sa pagbili ng nasabing lupa. Sa katotohanan ay aking inilagda ang aking pangalan sa kasunduang ito sa harap ng mga saksi at ganon ang tatak ng aking hinlalaki, ngayon ika 1 ng Abril ng 1941. (FDO.) VICENTA SAN JOSE SAKSI: MOISES SAN PEDRO"(Exhibit A) The vendor, Vicenta San Jose, was an old tenant thereof. After the purchase of the Santa Clara Estate by the Government, the plaintiffs were allowed to make payments on account of the purchase price of the lot which, as fenced, included two hundred (200) square meters. All the amounts so paid were duly receipted as shown by Exhs. B, C, D, E, F, G, H, and I. Following these payments the plaintiffs sent a check in the amount of P200.00 but it was not accepted. Thereafter the plaintiffs found out that the lot, the right of occupancy of which they had purchased from Vicenta San Jose, had been subdivided into two smaller lots, Nos. 44 and 78, Block No. 12. Lot No. 44 had been sold to Herminio Guzman. The plaintiffs then filed a complaint and, as a result, the investigator, Atty. Vizconde, recommended that the lot vacated by San Jose be restored to them. The evidence of the defendants is purely documentary. We do not deem it necessary to dwell thereon. The appellate Court held:

Our discussion will be confined to the proposition of whether or not the plaintiffs are entitled to purchase from the Government the lot formerly held by San Jose, allegedly including about two hundred (200) square meters. The plaintiffs believe they are, relying mainly on the deed of sale executed by San Jose in their favor (Exh. A). In that document, however, the area of the lot on which San Jose's house stood had not been specified, nor had the boundaries thereof been mentioned. Any receipt for the rentals paid by San Jose to the old management of the Santa Clara Estate would have given us an idea of the extent of her holding on the basis of the amount of the rent paid, but none was presented. The plaintiffs presented a sketch, Exh. L-1, which allegedly represents the lot they claim. But this piece of evidence is devoid of persuasive value, considering that the old subdivision plan was not offered. Significantly, the plaintiffs cannot show a contract whereby the Rural Progress Administration has sold or promised to sell them a lot of two hundred square meters. It is true that they hold receipts (Exhs. B, C, D, E, F, G, H, and I) for payments made on account of the purchase price of a lot but in none of them are the number of the lot and its area stated. On the contrary, a note was visible in all the said receipts, except two, which reads: "subject to further re-adjustment". The plaintiffs claim that a certain Moises San Pedro, Sr. supervisor of collectors of the Sta. Clara Estate, made them believe that the lot they had purchased was, more or less, of 200 square meters, as enclosed by a fence at the time San Jose vacated it. They furthermore claim that San Pedro explained that the note "subject to further re-adjustment" appearing in their receipt meant that their lot would be increased or decreased should the proposed extension of the adjoining street (the Lealtad St.) would eventually be carried out. It suffices to say that it does not appear that San Pedro by his position in the Government had power to sell any of the lots included in the Santa Clara Estate. It is obvious that such power resides only in the Chief of the Office in charge of the disposition of lands acquired by the Government for resale to the needy. It would not be amiss to state further that receipts of payment issued to other purchasers of lots not adjoining any street invariably carries the warning: "subject to further re-adjustment". Pornellosa, one of the plaintiffs, was given lot No. 78 and she would not agree. She tried to convince us that lot No. 44 was given to a wrong party, Herminio Guzman, who was not a bona fide occupant thereof. Guzman might not have been a bona fide occupant, but the law does not bar him from acquiring the lot, at least, as against the plaintiffs who have not satisfactorily established their right thereto. The intention of the law in authorizing the acquisition of the Santa Clara Estate was to give home to the homeless. Jose B. Angeles, the husband of Segunda Pornellosa and one of the plaintiffs here, presently resides with his family in a house built on a lot included in the Santa Clara Estate and which had been sold to him by the Government. The intention of the law, as stated is to give home to the homeless, and let that be a reality if we are to lend a contribution to the building of a strong and law-abiding citizenry. Now for all the reasons stated above, we believe that the plaintiffs failed to established their right to compel the Director of Lands, now the Chairman of

theLand Tenure Administration, to execute a deed of sale conveying to them a residential lot as they claim in this action. It appearing that the functions of the Bureau of Lands in the administration of lands acquired through purchase or expropriation by the government for resale have passed to the Land Tenure Administration, the Director of Lands, as one of the defendants here, is understood substituted by the Chairman of the LandTenure administration, and all the pleadings are accordingly amended. The finding of the Court of Appeals that the petitioners have failed to prove that lot 44 is included in the lot formerly occupied by Vicenta San Jose, their predecessor-in-interest, is binding upon this Court. A party claiming a right granted or created by law must prove his claim by competent evidence. A plaintiff is duty bound to prove his allegations in the complaint. He must rely on the strength of his evidence and not on the weakness of that of his opponent.

In their amended complaint, the petitioners allege that they and their predecessor Vicenta San Jose, from whom they bought the residential lot in litigation containing an area of 200 sq. m. more or less, had been for many years in actual possession thereof, and that following the avowed policy of the government to sell the lots acquired from the Santa Clara Estate, of which the residential lot in litigation forms part, only to bona fide occupants or tenants thereof, the defunct Rural ProgressAdministration agreed to sell to them the said residential lot (pp. 1, 2-3, rec. on app.). Reviewing the petitioners' evidence, the Court of Appeals found that in Exhibit A, the deed of sale executed by Vicenta San Jose in favor of Pornellosa, "the area of the lot on which San Jose's house stood had not been specified, nor had the boundaries thereof been mentioned;" and that there is no showing of the extent of the alleged vendor's holding or interest. Besides, the petitioners have not presented any document or evidence showing that the defunct Rural Progress Administration had agreed to sell to them the residential lot in litigation. Granting that the respondent Herminio Guzman is not entitled to acquire by purchase the said residential lot, still that fact does not relieve the petitioners from the duty of proving by competent evidence the allegations of their complaint. Moreover, the deed of sale (Exhibit A), allegedly executed by Vicenta San Jose in favor of Pornellosa is a mere private document and does not conclusively establish their right to the parcel of land. While it is valid and binding upon the parties with respect to the sale of the house erected thereon, yet it is not sufficient to convey title or any right to the residential lot in litigation. Acts and contracts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property must appear in a public document. 4 The petitioners having failed to prove their right to acquire lot 44 under Commonwealth Act No. 539 cannot compel the respondent, the Land Tenure Administration, to convey the lot to them. The judgment under review is affirmed, with costs against the petitioners.

THIRD DIVISION [G.R. No. 77365. April 7, 1992.] RITA CALEON, petitioner, vs. AGUS DEVELOPMENT CORPORATION and COURT OF APPEALS, respondents.

4.CONSTITUTIONAL LAW; CONSTITUTIONALITY OF STATUTES PRESUMED; REQUISITES FOR SUPREME COURT DECISION ON QUESTION OF CONSTITUTIONALITY. It is well settled that all presumptions are indulged in favor of constitutionality; one who attacks a statute, alleging unconstitutionality must prove its invalidity beyond a reasonable doubt (Victoriano v. Elizalde Rope Worker's Union, 59 SCRA 54 [1974]). In fact, this Court does not decide questions of a constitutional nature unless that question is properly raised and presented in appropriate cases and is necessary to a determination of the case, i.e., the issue of constitutionality must be the very lis mota presented (Tropical Homes, Inc. v. National Housing Authority, 152 SCRA 540 [1987]). 5.ID.; POLICE POWER; GUARANTY OF NON-IMPAIRMENT OF OBLIGATIONS OF CONTRACT LIMITED BY POLICE POWER. It is now beyond question that the constitutional guaranty of non-impairment of obligations of contract is limited by and subject to the exercise of police power of the State in the interest of public health, safety, morals and general welfare (Kabiling, et al. v. National Housing Authority, 156 SCRA 623 [1987]). In spite of the constitutional prohibition, the State continues to possess authority to safeguard the vital interests of its people. Legislation appropriate to safeguarding said interest may modify or abrogate contracts already in effect (Victoriano v. Elizalde Rope Worker's Union, et al., supra). In fact, every contract affecting public interest suffers a congenital infirmity in that it contains an implied reservation of the police power as a postulate of the existing legal order. This power can be activated at anytime to change the provisions of the contract, or even abrogate it entirely, for the promotion or protection of the general welfare. Such an act will not militate against the impairment clause, which is subject to and limited by the paramount police power (Villanueva v. Castaeda, 154 SCRA 142 [1987]). 6.ID.; ID.; ID.; BATAS PAMBANSA BLG. 25 APPLICABLE TO LEASES ENTERED INTO PRIOR TO ITS EFFECTIVITY. Batas Pambansa Blg. 25, "An Act Regulating Rentals of Dwelling Units or of Land On Which Another's Dwelling is Located and For Other Purposes" shows that the subject matter of the law is the regulation of rentals and is intended only for dwelling units with specified monthly rentals constructed before the law became effective (Baens v. Court of Appeals, 125 SCRA 634 [1983]). Batas Pambansa Blg. 25 is derived from P.D. No. 20 which has been declared by this Court as a police power legislation, applicable to leases entered into prior to July 14, 1971 (effectivity date of RA 6539), so that the applicability thereof to existing contracts cannot be denied (Gutierrez v. Cantada, 90 SCRA 1 [1979]). 7.ID.; SOCIAL JUSTICE; OBJECTIVE OF BATAS PAMBANSA BLG. 25 NOT SUBJECT TO EXPLOITATION BY LESSEES. The objective of Batas Pambansa Blg. 25 is to remedy the plight of lessees, but such objective is not subject to exploitation by the lessees for whose benefit the law was enacted. Thus, the prohibition provided for in the law against the sublease of the premises without the consent of the owner. As enunciated by this Court, it must be remembered that social justice cannot be invoked to trample on the rights of property owners, who under our Constitution and laws are also entitled to protection. The social justice consecrated in our Constitution was not intended to take away rights from a person and give them to another who is not entitled thereto (Salonga v. Farrales, 105 SCRA 360 [1981]).

Luis A. Cuevas for petitioner. Pablito M. Rojas for private respondent.

SYLLABUS 1.CIVIL LAW; LEASE; LEASE OF BUILDING INCLUDES LEASE OF LOT AND RENTALS OF BUILDING INCLUDES THOSE OF LOT. The issue has already been laid to rest in the case of Duellome v. Gotico (7 SCRA 841 [1963]) where this Court ruled that the lease of a building naturally includes the lease of the lot, and the rentals of the building includes those of the lot. Thus: ". . . the lease of a building would naturally include the lease of the lot and that the rentals of the building include the rentals of the lot. . . . "Furthermore, under our Civil Code, the occupancy of a building or house not only suggests but implies the tenancy or possession in fact of the land on which they are constructed. This is not a new pronouncement. An extensive elaboration of this rule was discussed by this Court in the case of Baquiran, et al. v. Baquiran et al., 53 O.G. p. 1130. '. . . the Court of Appeals should have found the herein appellees lessees of the house, and for all legal purposes, of the lot on which it was built as well'." 2.ID.; ID.; BATAS PAMBANSA BLG. 25; GROUNDS FOR JUDICIAL EJECTMENT. Section 5 of Batas Pambansa Blg. 25 enumerates the grounds for judicial ejectment, among which is the subleasing of residential units without the written consent of the owner/lessor, to wit: "SEC. 5. Grounds for judicial ejectment. Ejectment shall be allowed on the following grounds: "a) Subleasing or assignment of lease of residential units in whole or in part, without the written consent of the owner/lessor: Provided that in the case of subleases or assignments executed prior to the approval of this Act, the sublessor/assignor shall have sixty days from the effectivity of this Act within which to obtain the written approval of the owner/lessor or terminate the sublease or assignment." 3.ID.; ID.; ID.; RESIDENTIAL UNIT, DEFINED. Section 2(b) of Batas Pambansa Blg. 25 defines the term residential unit as follows: "SEC. 2. Definition of Terms Unless otherwise indicated wherever in this Act, the following shall have the following meaning: "b. A residential unit refers to an apartment, house and/or land on which another's dwelling is located used for residential purposes and shall include not only buildings, parts or units thereof used solely as dwelling places, except motels, motel rooms, hotels, hotel rooms, boarding houses, dormitories, rooms and bedspaces for rent, but also those used for home industries, retail stores, or other business purposes if the owner thereof and his family actually live therein and use it principally for dwelling purposes: . . .."

DECISION

BIDIN, J p:

This is a petition for review on certiorari seeking the reversal of the January 28, 1987 decision of the Court of Appeals in CA-G.R. SP No. 10990 entitled "Rita Caleon v. Hon. Samilo Barlongay, et al." dismissing the petition for review of the decision of the Regional Trial Court of Manila, Branch 34, which affirmed the decision of the Metropolitan Trial Court of Manila, Branch XII, ejecting the petitioner. prLL The undisputed facts of the case are as follows: Private respondent Agus Development Corporation is the owner of a parcel of land denominated as Lot 39, Block 28, situated at 1611-1619 Lealtad, Sampaloc, Manila, which it leased to petitioner Rita Caleon for a monthly rental of P180.00. Petitioner constructed on the lot leased a 4-door apartment building. Without the consent of the private respondent, the petitioner sub-leased two of the four doors of the apartment to Rolando Guevarra and Felicisima Estrada for a monthly rental of P350.00 each. Upon learning of the sub-lease, private respondent through counsel demanded in writing that the petitioner vacate the leased premises (Rollo, Annex "A", p. 20). prcd For failure of petitioner to comply with the demand, private respondent filed a complaint for ejectment (Civil Case No. 048908) with the Metropolitan Trial Court of Manila, Branch XII against the petitioner citing as ground therefor the provisions of Batas Pambansa Blg. 25, Section 5, which is the unauthorized sub-leasing of part of the leased premises to third persons without securing the consent of the lessor within the required sixty (60)-day period from the promulgation of the new law (B.P. 25). (Rollo, Petition, p. 8). After trial, the court a quo rendered its decision ordering petitioner and all persons claiming possession under her (a) to vacate the premises alluded to in the complaint; (b) to remove whatever improvement she introduced on the property; (c) to pay private respondent the amount of P2,000.00 as attorney's fees; and (d) to pay the costs (Rollo, Annex "A", p. 19). Petitioner appealed the decision to the Regional Trial Court and on November 24, 1980, presiding judge of the RTC, the Hon. Samilo Barlongay, affirmed in toto the decision of the Metropolitan Trial Court (Rollo, Annex "A", p. 19). The decision of the Regional Trial Court was appealed to the Court of Appeals for review. The respondent Court of Appeals rendered its decision dated January 28, 1987, the dispositive portion of which reads as follows: "PREMISES CONSIDERED, the petition not being prima facie meritorious, the same is outright dismissed." "SO ORDERED." (Rollo, Annex "A", p. 21) Hence, the petition for review on certiorari. The principal issue in this case is whether or not the lease of an apartment includes a sublease of the lot on which it is constructed, as would constitute a ground for ejectment under Batas Pambansa Blg. 25.

Petitioner is of the view that Batas Pambansa Blg. 25 is not applicable because what she leased was her own apartment house which does not include a sublease of the lot she leased from private respondent on which the apartment is constructed. Petitioner's contention is untenable. The issue has already been laid to rest in the case of Duellome v. Gotico (7 SCRA 841 [1963]) where this Court ruled that the lease of a building naturally includes the lease of the lot, and the rentals of the building includes those of the lot. Thus: ". . . the lease of a building would naturally include the lease of the lot and that the rentals of the building include the rentals of the lot. xxx xxx xxx

"Furthermore, under our Civil Code, the occupancy of a building or house not only suggests but implies the tenancy or possession in fact of the land on which they are constructed. This is not a new pronouncement. An extensive elaboration of this rule was discussed by this Court in the case of Baquiran, et al. v. Baquiran et al., 53 O.G. p. 1130. '. . . the Court of Appeals should have found the herein appellees lessees of the house, and for all legal purposes, of the lot on which it was built as well'." But petitioner insists that the ruling in the aforecited case is not applicable to the case at bar because the former is a damage suit while the latter is an ejectment case. Be that as it may, this Court has categorically answered in the affirmative, the principal question, common to both cases and on which rests the resolution of the issues involved therein. Under the above ruling it is beyond dispute that petitioner in leasing her apartment has also subleased the lot on which it is constructed which lot belongs to private respondent. Consequently, she has violated the provisions of Section 5, Batas Pambansa Blg. 25 which is a ground for ejectment. Section 5 of Batas Pambansa Blg. 25 enumerates the grounds for judicial ejectment, among which is the subleasing of residential units without the written consent of the owner/lessor, to wit: "SEC. 5.Grounds for judicial ejectment. Ejectment shall be allowed on the following grounds:

"a)Subleasing or assignment of lease of residential units in whole or in part, without the written consent of the owner/lessor: Provided that in the case of subleases or assignments executed prior to the approval of this Act, the sublessor/assignor shall have sixty days from the effectivity of this Act within which to obtain the written approval of the owner/lessor or terminate the sublease or assignment." Section 2(b) of Batas Pambansa Blg. 25 defines the term residential unit as follows: "SEC. 2.Definition of Terms Unless otherwise indicated wherever in this Act, the following shall have the following meaning: xxx xxx xxx "b.A residential unit refers to an apartment, house and/or land on which another's dwelling is located used for residential purposes and shall include not only buildings, parts or units thereof used solely as dwelling places, except motels, motel rooms, hotels, hotel rooms, boarding houses, dormitories, rooms and bedspaces for rent, but also those used for home industries, retail stores, or other business purposes if the owner thereof and his family actually live therein and use it principally for dwelling purposes: . . .." Petitioner argued further that Batas Pambansa Blg. 25 cannot be applied in this case because there is a perfected contract of lease without any express prohibition on subleasing which had been in effect between petitioner and private respondent long before the enactment of Batas Pambansa Blg. 25. Therefore, the application of said law to the case at bar is unconstitutional as an impairment of the obligation of contracts. LLphil It is well settled that all presumptions are indulged in favor of constitutionality; one who attacks a statute, alleging unconstitutionality must prove its invalidity beyond a reasonable doubt (Victoriano v. Elizalde Rope Worker's Union, 59 SCRA 54 [1974]). In fact, this Court does not decide questions of a constitutional nature unless that question is properly raised and presented in appropriate cases and is necessary to a determination of the case, i.e., the issue of constitutionality must be the very lis mota presented (Tropical Homes, Inc. v. National Housing Authority, 152 SCRA 540 [1987]). In any event, it is now beyond question that the constitutional guaranty of non-impairment of obligations of contract is limited by and subject to the exercise of police power of the State in the interest of public health, safety, morals and general welfare (Kabiling, et al. v. National Housing Authority, 156 SCRA 623 [1987]). In spite of the constitutional prohibition, the State continues to possess authority to safeguard the vital interests of its people. Legislation appropriate to safeguarding said interest may modify or abrogate contracts already in effect (Victoriano v. Elizalde Rope Worker's Union, et al., supra). In fact, every contract affecting public interest suffers a congenital infirmity in that it contains an implied reservation of the police power as a postulate of the existing legal order. This power can be activated at anytime to change the provisions of the contract, or even abrogate it entirely, for the promotion or protection of the general welfare. Such an act will not militate against the impairment clause, which is subject to and limited by the paramount police power (Villanueva v. Castaneda, 154 SCRA 142 [1987]).

Batas Pambansa Blg. 25, "An Act Regulating Rentals of Dwelling Units or of Land On Which Another's Dwelling is Located and For Other Purposes" shows that the subject matter of the law is the regulation of rentals and is intended only for dwelling units with specified monthly rentals constructed before the law became effective (Baens v. Court of Appeals, 125 SCRA 634 [1983]). Batas Pambansa Blg. 25 is derived from P.D. No. 20 which has been declared by this Court as a police power legislation, applicable to leases entered into prior to July 14, 1971 (effectivity date of RA 6539), so that the applicability thereof to existing contracts cannot be denied (Gutierrez v. Cantada, 90 SCRA 1 [1979]). Finally, petitioner invokes, among others, the promotion of social justice policy of the New Constitution. Like P.D. No. 20, the objective of Batas Pambansa Blg. 25 is to remedy the plight of lessees, but such objective is not subject to exploitation by the lessees for whose benefit the law was enacted. Thus, the prohibition provided for in the law against the sublease of the premises without the consent of the owner. As enunciated by this Court, it must be remembered that social justice cannot be invoked to trample on the rights of property owners, who under our Constitution and laws are also entitled to protection. The social justice consecrated in our Constitution was not intended to take away rights from a person and give them to another who is not entitled thereto (Salonga v. Farrales, 105 SCRA 360 [1981]). WHEREFORE, the Petition is Denied for lack of merit and the assailed decision of the Court of Appeals is Affirmed. SO ORDERED.

EN BANC [G.R. No. L-27454. April 30, 1970.] REYES, J.B.L., J p: ROSENDO O. CHAVES, plaintiff-appellant, vs. FRUCTUOSO GONZALES, defendant-appellee.

DECISION

Chaves, Elio, Chaves & Associates for plaintiff-appellant. Sulpicio E. Platon for defendant-appellee.

This is a direct appeal by the party who prevailed in a suit for breach of oral contract and recovery of damages but was unsatisfied with the decision rendered by the Court of First Instance of Manila, in its Civil Case No. 65138, because it awarded him only P31.10 out of his total claim of P690 00 for actual, temperate and moral damages and attorney's fees. The appealed judgment, which is brief, is hereunder quoted in full:

SYLLABUS 1.CIVIL LAW; CONTRACTS; BREACH OF CONTRACT FOR NON-PERFORMANCE; FIXING OF PERIOD BEFORE FILING OF COMPLAINT FOR NON-PERFORMANCE, ACADEMIC. Where the time for compliance had expired and there was breach of contract by non-performance, it was academic for the plaintiff to have first petitioned the court to fix a period for the performance of the contract before filing his complaint. 2.ID.; ID.; ID.; DEFENDANT CANNOT INVOKE ARTICLE 1197 OF THE CIVIL CODE OF THE PHILIPPINES. Where the defendant virtually admitted non-performance of the contract by returning the typewriter that he was obliged to repair in a non-working condition, with essential parts missing, Article 1197 of the Civil Code of the Philippines cannot be invoked. The fixing of a period would thus be a mere formality and would serve no purpose than to delay. 3.ID.; ID.; ID.; DAMAGES RECOVERABLE; CASE AT BAR. Where the defendant-appellee contravened the tenor of his obligation because he not only did not repair the typewriter but returned it "in shambles,'' he is liable for the cost of the labor or service expended in the repair of the typewriter, which is in the amount of P58.75, because the obligation or contract was to repair it. In addition, he is likewise liable under Art. 1170 of the Code, for the cost of the missing parts, in the amount of P31.10, for in his obligation to repair the typewriter he was bound, but failed or neglected, to return it in the same condition it was when he received it. 4.ID.; ID.; ID.; CLAIMS FOR DAMAGES OR ATTORNEY'S FEES NOT RECOVERABLE; NOT ALLEGED OR PROVED IN INSTANT CASE. Claims for damages and attorney's fees must be pleaded, and the existence of the actual basis thereof must be proved. As no findings of fact were made on the claims for damages and attorney's fees, there is no factual basis upon which to make an award therefor. 5.REMEDIAL LAW; APPEALS; APPEAL FROM COURT OF FIRST INSTANCE TO SUPREME COURT; ONLY QUESTIONS OF LAW REVIEWABLE. Where the appellant directly appeals from the decision of the trial court to the Supreme Court on questions of law, he is bound by the judgment of the court a quo on its findings of fact.

"In the early part of July, 1963, the plaintiff delivered to the defendant, who is a typewriter repairer, a portable typewriter for routine cleaning and servicing. The defendant was not able to finish the job after some time despite repeated reminders made by the plaintiff. The defendant merely gave assurances, but failed to comply with the same. In October, 1963, the defendant asked from the plaintiff the sum of P6.00 for the purchase of spare parts, which amount the plaintiff gave to the defendant. On October 26, 1963, after getting exasperated with the delay of the repair of the typewriter, the plaintiff went to the house of the defendant and asked for the return of the typewriter. The defendant delivered the typewriter in a wrapped package. On reaching home, the plaintiff examined the typewriter returned to him by the defendant and found out that the same was in shambles, with the interior cover and some parts and screws missing. On October 29, 1963. the plaintiff sent a letter to the defendant formally demanding the return of the missing parts, the interior cover and the sum of P6.00 (Exhibit D). The following day, the defendant returned to the plaintiff some of the missing parts, the interior cover and the P6.00. "On August 29, 1964, the plaintiff had his typewriter repaired by Freixas Business Machines, and the repair job cost him a total of P89.85, including labor and materials (Exhibit C). "On August 23, 1965, the plaintiff commenced this action before the City Court of Manila, demanding from the defendant the payment of P90.00 as actual and compensatory damages, P100.00 for temperate damages, P500.00 for moral damages, and P500.00 as attorney's fees. "In his answer as well as in his testimony given before this court, the defendant made no denials of the facts narrated above, except the claim of the plaintiff that the typewriter was delivered to the defendant through a certain Julio Bocalin, which the defendant denied allegedly because the typewriter was delivered to him personally by the plaintiff.

"The repair done on the typewriter by Freixas Business Machines with the total cost of P89.85 should not, however, be fully chargeable against the defendant. The repair invoice, Exhibit C, shows that the missing parts had a total value of only P31.10. "WHEREFORE, judgment is hereby rendered ordering the defendant to pay the plaintiff the sum of P31.10, and the costs of suit. "SO ORDERED." The error of the court a quo, according to the plaintiff-appellant, Rosendo O. Chaves, is that it awarded only the value of the missing parts of the typewriter, instead of the whole cost of labor and materials that went into the repair of the machine, as provided for in Article 1167 of the Civil Code, reading as follows: "ART. 1167.If a person obliged to do something fails to do it, the same shall be executed at his cost. This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore it may be decreed that what has been poorly done he undone." On the other hand, the position of the defendant-appellee, Fructuoso Gonzales, is that he is not liable at all, not even for the sum of P31.10, because his contract with plaintiff-appellant did not contain a period, so that plaintiffappellant should have first filed a petition for the court to fix the period, under Article 1197 of the Civil Code, within which the defendant appellee was to comply with the contract before said defendant-appellee could be held liable for breach of contract. Because the plaintiff appealed directly to the Supreme Court and the appellee did not interpose any appeal, the facts, as found by the trial court, are now conclusive and non-reviewable. 1 The appealed judgment states that the "plaintiff delivered to the defendant . . . a portable typewriter for routine cleaning and servicing"; that the defendant was not able to finish the job after some time despite repeated reminders made by the plaintiff"; that the "defendant merely gave assurances, but failed to comply with the same"; and that "after getting exasperated with the delay of the repair of the typewriter", the plaintiff went to the house of the defendant and asked for its return, which was done. The inferences derivable from these findings of fact are that the appellant and the appellee had a perfected contract for cleaning and servicing a typewriter; that they intended that the defendant was to finish it at some future time although such time was not specified; and that such time had passed without the work having been accomplished, far the defendant returned the typewriter cannibalized and unrepaired, which in itself is a breach of his obligation, without demanding that he should be given more time to finish the job, or compensation for the work he had already done. The time for compliance having evidently expired, and there being a breach of contract by non-performance, it was academic for the plaintiff to have first petitioned the court to fix a period for the performance of the contract before filing his complaint in this case. Defendant cannot invoke Article 1197 of the Civil Code for he virtually admitted non-performance by returning the typewriter that he was obliged to repair in a non-working condition, with essential parts missing. The fixing of a period would thus be a mere formality and would serve no purpose than to delay (cf. Tiglao. et al. V. Manila Railroad Co. 98 Phil. 181).

It is clear that the defendant-appellee contravened the tenor of his obligation because he not only did not repair the typewriter but returned it "in shambles", according to the appealed decision. For such contravention, as appellant contends, he is liable under Article 1167 of the Civil Code. jam quot, for the cost of executing the obligation in a proper manner. The cost of the execution of the obligation in this case should be the cost of the labor or service expended in the repair of the typewriter, which is in the amount of P58.75. because the obligation or contract was to repair it. In addition, the defendant-appellee is likewise liable, under Article 1170 of the Code, for the cost of the missing parts, in the amount of P31.10, for in his obligation to repair the typewriter he was bound, but failed or neglected, to return it in the same condition it was when he received it. Appellant's claims for moral and temperate damages and attorney's fees were, however, correctly rejected by the trial court, for these were not alleged in his complaint (Record on Appeal, pages 1-5). Claims for damages and attorney's fees must be pleaded, and the existence of the actual basis thereof must be proved. 2The appealed judgment thus made no findings on these claims, nor on the fraud or malice charged to the appellee. As no findings of fact were made on the claims for damages and attorney's fees, there is no factual basis upon which to make an award therefor. Appellant is bound by such judgment of the court, a quo, by reason of his having resorted directly to the Supreme Court on questions of law. IN VIEW OF THE FOREGOING REASONS, the appealed judgment is hereby modified, by ordering the defendantappellee to pay, as he is hereby ordered to pay, the plaintiff-appellant the sum of P89.85, with interest at the legal rate from the filing of the complaint. Costs in all instances against appellee Fructuoso Gonzales.

Concepcion, C.J., Dizon, Makalintal, Zaldivar, Castro, Fernando, Teehankee and Villamor, JJ., concur.

FIRST DIVISION [G.R. No. 117190. January 2, 1997.] JACINTO TANGUILIG doing business under the name and style J.M.T. ENGINEERING AND GENERAL MERCHANDISING, petitioner, vs.COURT OF APPEALS and VICENTE HERCE JR., respondents.

BELLOSILLO, J p: This case involves the proper interpretation of the contract entered into between the parties. Sometime in April 1987 petitioner Jacinto M. Tanguilig doing business under the name and style J.M.T. Engineering and General Merchandising proposed to respondent Vicente Herce Jr. to construct a windmill system for him. After some negotiations they agreed on the construction of the windmill for a consideration of P60,000.00 with a oneyear guaranty from the date of completion and acceptance by respondent Herce Jr. of the project. Pursuant to the agreement respondent paid petitioner a down payment of P30,000.00 and an installment payment of P15,000.00, leaving a balance of P15,000.00. On 14 March 1988, due to the refusal and failure of respondent to pay the balance, petitioner filed a complaint to collect the amount. In his Answer before the trial court respondent denied the claim saying that he had already paid this amount to the San Pedro General Merchandising Inc. (SPGMI) which constructed the deep well to which the windmill system was to be connected. According to respondent, since the deep well formed part of the system the payment he tendered to SPGMI should be credited to his account by petitioner. Moreover, assuming that he owed petitioner a balance of P15,000.00, this should be offset by the defects in the windmill system which caused the structure to collapse after a strong wind hit their place. 1 Petitioner denied that the construction of a deep well was included in the agreement to build the windmill system, for the contract price of P60,000.00 was solely for the windmill assembly and its installation, exclusive of other incidental materials needed for the project. He also disowned any obligation to repair or reconstruct the system and insisted that he delivered it in good and working condition to respondent who accepted the same without protest. Besides, its collapse was attributable to a typhoon, a force majeure, which relieved him of any liability. In finding for plaintiff, the trial court held that the construction of the deep well was not part of the windmill project as evidenced clearly by the letter proposals submitted by petitioner to respondent. 2 It noted that "[i]f the intention of the parties is to include the construction of the deep well in the project, the same should be stated in the proposals. In the absence of such an agreement, it could be safely concluded that the construction of the deep well is not a part of the project undertaken by the plaintiff." 3 With respect to the repair of the windmill, the trial court found that "there is no clear and convincing proof that the windmill system fell down due to the defect of the construction. " 4 The Court of Appeals reversed the trial court. It ruled that the construction of the deep well was included in the agreement of the parties because the term "deep well" was mentioned in both proposals. It also gave credence to the testimony of respondent's witness Guillermo Pili, the proprietor of SPGMI which installed the deep well, that petitioner Tanguilig told him that the cost of constructing the deep well would be deducted from the contract price of P60,000.00. Upon these premises the appellate court concluded that respondent's payment of P15,000.00 to SPGMI should be applied to his remaining balance with petitioner thus effectively extinguishing his contractual obligation. However, it rejected petitioner's claim of force majeure and ordered the latter to reconstruct the windmill in accordance with the stipulated one-year guaranty. His motion for reconsideration having been denied by the Court of Appeals, petitioner now seeks relief from this Court. He raises two issues: firstly, whether the agreement to construct the windmill system included the

Ricardo C. Valmonte for petitioner. Restituto M. Mendoza for private respondent.

SYLLABUS 1.CIVIL LAW; CONTRACT; INTERPRETATION; INTENTION OF THE PARTIES SHALL BE ACCORDED PRIMORDIAL CONSIDERATION. It is a cardinal rule in the interpretation of contracts that the intention of the parties shall be accorded primordial consideration and, in case of doubt, their contemporaneous and subsequent acts shall be principally considered. prLL 2.OBLIGATION; NATURE AND EFFECTS; EXEMPTION FROM LIABILITY BY REASON OF FORTUITOUS EVENTS; REQUISITES. This Court has consistently held that in order for a party to claim exemption from liability by reason of fortuitous event under Art. 1174 of the Civil Code the event should be the sole and proximate cause of the loss or destruction of the object of the contract. In Nakpil vs. Court of Appeals, Nos. L-47851 and L- 47896, 3 October 1986, 144 SCRA 596, four (4) requisites must concur: (a) the cause of the breach of the obligation must be independent of the will of the debtor; (b) the event must be either unforseeable or unavoidable; (c) the event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and, (d) the debtor must be free from any participation in or aggravation of the injury to the creditor. 3.ID.; ID.; ID.; APPLICATION OF ART. 1167 OF THE CIVIL CODE; WHEN A PERSON OBLIGED TO DO SOMETHING FAILS TO DO IT, THE SAME SHALL BE EXECUTED AT HIS COST. In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. (Art. 1169, last par., New Civil Code) When the windmill failed to function properly it became incumbent upon petitioner to institute the proper repairs in accordance with the guaranty stated in the contract. Thus, respondent cannot be said to have incurred in delay; instead, it is petitioner who should bear the expenses for the reconstruction of the windmill. Article 1167 of the Civil Code is explicit on this point that if a person obliged to do something fails to do it, the same shall be executed at his cost. llcd

DECISION

installation of a deep well and, secondly, whether petitioner is under obligation to reconstruct the windmill after it collapsed. We reverse the appellate court on the first issue but sustain it on the second. The preponderance of evidence supports the finding of the trial court that the installation of a deep well was not included in the proposals of petitioner to construct a windmill system for respondent. There were in fact two (2) proposals: one dated 19 May 1987 which pegged the contract price at P87,000.00 (Exh. "1"). This was rejected by respondent. The other was submitted three days later, i.e., on 22 May 1987 which contained more specifications but proposed a lower contract price of P60,000.00 (Exh. "A"). The latter proposal was accepted by respondent and the construction immediately followed. The pertinent portions of the first letter-proposal (Exh. "1") are reproduced hereunder In connection with your Windmill System and Installation, we would like to quote to you as follows: One (1) Set Windmill suitable for 2 inches diameter deepwell, 2 HP, capacity, 14 feet in diameter, with 20 pieces blade, Tower 40 feet high, including mechanism which is not advisable to operate during extra-intensity wind. Excluding cylinder pump. UNIT CONTRACT PRICE P87,000.00 The second letter-proposal (Exh. "A") provides as follows: In connection with your Windmill system, Supply of Labor Materials and Installation, operated water pump, we would like to quote to you as follows One (1) set Windmill assembly for 2 inches or 3 inches deep-well pump, 6 Stroke, 14 feet diameter, 1-lot blade materials, 40 feet Tower complete with standard appurtenances up to Cylinder pump, shafting U.S. adjustable International Metal. One (1) lot Angle bar, G. I. pipe, Reducer Coupling, Elbow Gate valve, cross Tee coupling. One (1) lot Float valve. One (1) lot Concreting materials foundation. F. O. B. Laguna Contract Price P60,000.00

Notably, nowhere in either proposal is the installation of a deep well mentioned, even remotely. Neither is there an itemization or description of the materials to be used in constructing the deep well. There is absolutely no mention in the two (2) documents that a deep well pump is a component of the proposed windmill system. The contract prices fixed in both proposals cover only the features specifically described therein and no other. While the words "deep well" and "deep well pump" are mentioned in both, these do not indicate that a deep well is part of the windmill system. They merely describe the type of deep well pump for which the proposed windmill would be suitable. As correctly pointed out by petitioner, the words "deep well" preceded by the prepositions "for" and "suitable for" were meant only to convey the idea that the proposed windmill would be appropriate for a deep well pump with a diameter of 2 to 3 inches. For if the real intent of petitioner was to include a deep well in the agreement to construct a windmill, he would have used instead the conjunctions "and" or "with." Since the terms of the instruments are clear and leave no doubt as to their meaning they should not be disturbed. aisadc Moreover, it is a cardinal rule in the interpretation of contracts that the intention of the parties shall be accorded primordial consideration 5 and, in case of doubt, their contemporaneous and subsequent acts shall be principally considered. 6 An examination of such contemporaneous and subsequent acts of respondent as well as the attendant circumstances does not persuade us to uphold him. Respondent insists that petitioner verbally agreed that the contract price of P60,000.00 covered the installation of a deep well pump. He contends that since petitioner did not have the capacity to install the pump the latter agreed to have a third party do the work the cost of which was to be deducted from the contract price. To prove his point, he presented Guillermo Pili of SPGMI who declared that petitioner Tanguilig approached him with a letter from respondent Herce Jr. asking him to build a deep well pump as "part of the price/contract which Engineer (Herce) had with Mr. Tanguilig." 7

We are disinclined to accept the version of respondent. The claim of Pili that Herce Jr. wrote him a letter is unsubstantiated. The alleged letter was never presented in court by private respondent for reasons known only to him. But granting that this written communication existed, it could not have simply contained a request for Pili to install a deep well; it would have also mentioned the party who would pay for the undertaking. It strains credulity that respondent would keep silent on this matter and leave it all to petitioner Tanguilig to verbally convey to Pili that the deep well was part of the windmill construction and that its payment would come from the contract price of P60,000.00. We find it also unusual that Pili would readily consent to build a deep well the payment for which would come supposedly from the windmill contract price on the mere representation of petitioner, whom he had never met before, without a written commitment at least from the former. For if indeed the deep well were part of the windmill project, the contract for its installation would have been strictly a matter between petitioner and Pili himself with the former assuming the obligation to pay the price. That it was respondent Herce Jr. himself who paid for the deep well by handing over to Pili the amount of P15,000.00 clearly indicates that the contract for the deep well was not part of the windmill project but a separate agreement between respondent and Pili. Besides, if the price of P60,000.00 included the deep well, the obligation of respondent was to pay the entire amount to petitioner without prejudice to any action that Guillermo Pili or SPGMI may take, if any, against the latter. Significantly, when asked why he tendered payment directly to Pili and not to petitioner, respondent explained, rather lamely, that he did it "because he has (sic) the money, so (he) just paid the money in his possession. 8

Can respondent claim that Pili accepted his payment on behalf of petitioner? No. While the law is clear that "payment shall be made to the person in whose favor the obligation has been constituted, or his successor in interest, or any person authorized to receive it, " 9 it does not appear from the record that Pili and/or SPGMI was so authorized. Respondent cannot claim the benefit of the law "concerning payments made by a third person." 10 The Civil Code provisions do not apply in the instant case because no creditor-debtor relationship between petitioner and Guillermo Pili and/or SPGMI has been established regarding the construction of the deep well. Specifically, witness Pili did not testify that he entered into a contract with petitioner for the construction of respondent's deep well. If SPGMI was really commissioned by petitioner to construct the deep well, an agreement particularly to this effect should have been entered into. The contemporaneous and subsequent acts of the parties concerned effectively belie respondent's assertions. These circumstances only show that the construction of the well by SPGMI was for the sole account of respondent and that petitioner merely supervised the installation of the well because the windmill was to be connected to it. There is no legal nor factual basis by which this Court can impose upon petitioner an obligation he did not expressly assume nor ratify. The second issue is not a novel one. In a long line of cases 11 this Court has consistently held that in order for a party to claim exemption from liability by reason of fortuitous event under Art. 1174 of the Civil Code the event should be the sole and proximate cause of the loss or destruction of the object of the contract. In Nakpil vs. Court of Appeals, 12 four (4) requisites must concur: (a) the cause of the breach of the obligation must be independent of the will of the debtor; (b) the event must be either unforeseeable or unavoidable; (c) the event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and, (d) the debtor must be free from any participation in or aggravation of the injury to the creditor. Petitioner failed to show that the collapse of the windmill was due solely to a fortuitous event. Interestingly, the evidence does not disclose that there was actually a typhoon on the day the windmill collapsed. Petitioner merely stated that there was a "strong wind." But a strong wind in this case cannot be fortuitous unforeseeable nor unavoidable. On the contrary, a strong wind should be present in places where windmills are constructed, otherwise the windmills will not turn. The appellate court correctly observed that "given the newly-constructed windmill system, the same would not have collapsed had there been no inherent defect in it which could only be attributable to the appellee." 13 It emphasized that respondent had in his favor the presumption that "things have happened according to the ordinary course of nature and the ordinary habits of life." 14 This presumption has not been rebutted by petitioner. Finally, petitioner's argument that private respondent was already in default in the payment of his outstanding balance of P15,000.00 and hence should bear his own loss, is untenable. In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. 15 When the windmill failed to function properly it became incumbent upon petitioner to institute the proper repairs in accordance with the guaranty stated in the contract. Thus, respondent cannot be said to have incurred in delay; instead, it is petitioner who should bear the expenses for the reconstruction of the windmill. Article 1167 of the Civil Code is explicit on this point that if a person obliged to do something fails to do it, the same shall be executed at his cost

WHEREFORE, the appealed decision is MODIFIED. Respondent VICENTE HERCE JR. is directed to pay petitioner JACINTO M. TANGUILIG the balance of P15,000.00 with interest at the legal rate from the date of the filing of the complaint. In return, petitioner is ordered to "reconstruct subject defective windmill system, in accordance with the one-year guaranty" 16 and to complete the same within three (3) months from the finality of this decision. SO ORDERED.