PHILTRANCO SERVICE ENTERPRISES, INC. vs.

COURT
OF APPEALS
Facts:
Civil Case No. 373 was an action against herein petitioners for damages instituted by the
heirs of Ramon A. Acuesta, namely, Gregorio O. Acuesta; Julio O. Acuesta; Ramon O.
Acuesta, Jr.; Baltazar O. Acuesta; Rufino O. Acuesta; Maximo O. Acuesta; Neri O.
Acuesta; Iluminada O. Acuesta; Rosario Acuesta-Sanz; and Pamfilo O. Acuesta. Atty.
Julio O. Acuesta also appeared as counsel for the plaintiffs (herein private respondents). 3
The private respondents alleged that the petitioners were guilty of gross negligence,
recklessness, violation of traffic rules and regulations, abandonment of victim, and
attempt to escape from a crime.
To support their allegations, the private respondents presented eight witnesses. On 10
February 1992, after the cross examination of the last witness, the private respondents'
counsel made a reservation to present a ninth witness. The case was then set for
continuation of the trial on 30 and 31 March 1992. Because of the non-appearance of the
petitioners' counsel, the 30 March 1992 hearing was cancelled. The next day, private
respondents' counsel manifested that he would no longer present the ninth witness. He
thereafter made an oral offer of evidence and rested the case. The trial court summarized
private respondents' evidence in this wise:
[I]n the early morning of March 24, 1990, about 6:00 o'clock, the victim Ramon A.
Acuesta was riding in his easy rider bicycle (Exhibit 'O'), along the Gomez Street of
Calbayog City. The Gomez Street is along the side of Nijaga Park. On the Magsaysay
Blvd., also in Calbayog City, defendant Philtranco Service Enterprises, Inc. (Philtranco
for brevity) Bus No. 4025 with plate No. EVA-725 driven by defendant Rogasiones
Manilhig y Dolira was being pushed by some persons in order to start its engine. The
Magsaysay Blvd. runs perpendicular to Gomez St. and the said Philtranco bus 4025 was
heading in the general direction of the said Gomez Street. Some of the persons who were
pushing the bus were on its back, while the others were on the sides. As the bus was
pushed, its engine started thereby the bus continued on its running motion and it occurred
at the time when Ramon A. Acuesta who was still riding on his bicycle was directly in
front of the said bus. As the engine of the Philtranco bus started abruptly and suddenly,
its running motion was also enhanced by the said functioning engine, thereby the subject
bus bumped on the victim Ramon A. Acuesta who, as a result thereof fell and, thereafter,
was run over by the said bus. The bus did not stop although it had already bumped and
ran [sic] over the victim; instead, it proceeded running towards the direction of the
Rosales Bridge which is located at one side of the Nijaga Park and towards one end of the
Gomez St., to which direction the victim was then heading when he was riding on his
bicycle. P/Sgt. Yabao who was then jogging thru the Gomez Street and was heading and
meeting the victim Ramon A. Acuesta as the latter was riding on his bicycle, saw when
the Philtranco bus was being pushed by some passengers, when its engine abruptly
started and when the said bus bumped and ran over the victim. He approached the bus
driver defendant Manilhig herein and signalled to him to stop, but the latter did not listen.
So the police officer jumped into the bus and introducing himself to the driver defendant
as policeman, ordered the latter to stop. The said defendant driver stopped the Philtranco
bus near the Nijaga Park and Sgt. Yabao thereafter, told the driver to proceed to the
Police Headquarter which was only 100 meters away from Nijaga Park because he was
apprehensive that the said driver might be harmed by the relatives of the victim who
might come to the scene of the accident. Then Sgt. Yabao cordoned the scene where the
vehicular accident occurred and had P/Cpl. Bartolome Bagot, the Traffic Investigator,
conduct an investigation and make a sketch of the crime scene. Sgt. Yambao Yabao was
only about 20 meters away when he saw the bus of defendant Philtranco bumped [sic]
and [sic] ran over the victim. From the place where the victim was -actually bumped by
the bus, the said vehicle still had run to a distance of about 15 meters away.

As might be expected, the petitioners had a different version of the incident. They alleged
that in the morning of 24 March 1990, Manilhig, in preparation for his trip back to Pasay
City, warmed up the engine of the bus and made a few rounds within the city proper of
Calbayog. While the bus was slowly and moderately cruising along Gomez Street, the
victim, who was biking towards the same direction as the bus, suddenly overtook two
tricycles and swerved left to the center of the road. The swerving was abrupt and so
sudden that even as Manilhig applied the brakes and blew the bus horn, the victim was
bumped from behind and run over by the bus. It was neither willful nor deliberate on
Manilhig's part to proceed with the trip after his bus bumped the victim, the truth being
that when he looked at his rear-view window, he saw people crowding around the victim,
with others running after his bus. Fearing that he might be mobbed, he moved away from
the scene of the accident and intended to report the incident to the police. After a man
boarded his bus and introduced himself as a policeman, Manilhig gave himself up to the
custody of the police and reported the accident in question.
The petitioners further claimed that it was the negligence of the victim in overtaking two
tricycles, without taking precautions such as seeing first that the road was clear, which
caused the death of the victim. The latter did not even give any signal of his intention to
overtake. The petitioners then counterclaimed for P50,000 as and for attorney's fees; P1
million as moral damages; and P50,000 for litigation expenses.
However, the petitioners were not able to present their evidence, as they were deemed to
have waived that right by the failure of their counsel to appear at the scheduled hearings
on 30 and 31 March 1992. The trial court then issued an Order 6 declaring the case
submitted for decision. Motions for the reconsideration of the said Order were both
denied.
On 22 January 1992, the trial court handed down a decision ordering the petitioners to
jointly and severally pay the private respondents
In its decision of 31 January 1995, the Court of Appeals affirmed the decision of the trial
court. It held that the petitioners were not denied due process, as they were given an
opportunity to present their defense. The records show that they were notified of the
assignment of the case for 30 and 31 March 1992. Yet, their counsel did not appear on
the said dates. Neither did he file a motion for postponement of the hearings, nor did he
appeal from the denial of the motions for reconsideration of the 31 March 1992 Order of
the trial court. The petitioners have thereby waived their right to present evidence. Their
expectation that they would have to object yet to a formal offer of evidence by the private
respondents was "misplaced," for it was within the sound discretion of the court to allow
oral offer of evidence.
Issue: Whether or not ART. 2194, should be applied INSTEAD OF ART.
2180, OF THE CIVIL CODE, AND IN HOLDING THAT PETITIONER
PHILTRANCO ?
Held:
Civil Case No. 373 is an action for damages based on quasi-delict under Article 2176 and
2180 of the Civil Code against petitioner Manilhig and his employer, petitioner
Philtranco, respectively. These articles pertinently provide:
ART. 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict and
is governed by the provisions of this Chapter.
ART. 2180. The obligation imposed by Article 2176 is
demandable not only for one's own acts or omissions, but also for
those of persons for whom one is responsible.

The owners and managers of an establishment or enterprise are
likewise responsible for damages caused by their employees in the
service of the branches in which the latter are employed or on the
occasion of their functions.
Employers shall be liable for the damages caused by their
employees and household helpers acting within the scope of their
assigned tasks even though the former are not engaged in any
business or industry.
The responsibility treated of in this article shall cease when the
persons herein mentioned prove that they observed all the
diligence of a good father of a family to prevent damage.
We have consistently held that the liability of the registered owner of a public service
vehicle, like petitioner Philtranco, for damages arising from the tortious acts of the driver
is primary, direct, and joint and several or solidary with the driver. As to solidarity,
Article 2194 expressly provides:
ART. 2194. The responsibility of two or more persons who are
liable for a quasi-delict is solidary.
Since the employer's liability is primary, direct and solidary, its only recourse if the
judgment for damages is satisfied by it is to recover what it has paid from its employee
who committed the fault or negligence which gave rise to the action based on quasi-
delict. Article 2181 of the Civil Code provides:
ART. 2181. Whoever pays for the damage caused by his
dependents or employees may recover from the latter what he has
paid or delivered in satisfaction of the claim.
We concur with petitioners' view that the trial court intended the award of "P200,000.00
as death indemnity" not as compensation for loss of earning capacity. Even if the trial
court intended the award as indemnity for loss of earning capacity, the same must be
struck out for lack of basis. There is no evidence on the victim's earning capacity and life
expectancy.
Only indemnity for death under the opening paragraph of Article 2206 is due, the amount
of which has been fixed by current jurisprudence at P50,000. 18
The award of P1 million for moral damages to the heirs of Ramon Acuesta has no
sufficient basis and is excessive and unreasonable. This was based solely on the
testimony of one of the heirs, Atty. Julio Acuesta,
Moral damages are emphatically not intended to enrich a plaintiff at the expense of the
defendant. They are awarded only to allow the former to obtain means, diversion, or
amusements that will serve to alleviate the moral suffering he has undergone due to the
defendant's culpable action and must, perforce, be proportional to the suffering inflicted.
20 In light of the circumstances in this case, an award of P50,000 for moral damages is in
order.
The award of P500,000 for exemplary damages is also excessive. In quasi-delicts,
exemplary damages may be awarded if the party at fault acted with gross negligence. 21
The Court of Appeals found that there was gross negligence on the part of petitioner
Manilhig. 22 Under Article 2229 of the Civil Code, exemplary damages are imposed by
way of example or correction for the public good, in addition to the moral, temperate,
liquidated, or compensatory damages. Considering its purpose, it must be fair and
reasonable in every case and should not be awarded to unjustly enrich a prevailing party.
In the instant case, an award of P50,000 for the purpose would be adequate, fair, and
reasonable.
The petitioners did not contest the award for actual damages fixed by the trial court.
Hence, such award shall stand.
IN VIEW OF THE FOREGOING, the petition is hereby partly granted and the
challenged decision of CA-G.R. CV No. 41140 is AFFIRMED, subject to modifications
as to the damages awarded, which are reduced as follows:
(a) Death indemnity, from P200,000 to P50,000;
(b) Moral damages, from P1 million to P50,000;
(c) Exemplary damages, from P500,000 to P50,000; and
(d) Attorney's fees, from P50,000 to P25,000.

CASTILEX INDUSTRIAL CORPORATION vs. VASQUEZ,
Facts:
On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So Vasquez,
was driving a Honda motorcycle around Fuente Osmea Rotunda. He was
traveling counter-clockwise, (the normal flow of traffic in a rotunda) but
without any protective helmet or goggles. He was also only carrying a Student's
Permit to Drive at the time. Upon the other hand, Benjamin Abad [was a]
manager of Appellant Castilex Industrial Corporation, registered owner [of] a
Toyota Hi-Lux Pick-up with plate no. GBW-794. On the same date and time,
Abad drove the said company car out of a parking lot but instead of going
around the Osmea rotunda he made a short cut against [the] flow of the traffic
in proceeding to his route to General Maxilom St. or to Belvic St.
In the process, the motorcycle of Vasquez and the pick-up of Abad collided
with each other causing severe injuries to the former. Abad stopped his vehicle
and brought Vasquez to the Southern Islands Hospital and later to the Cebu
Doctor's Hospital.
On September 5, 1988, Vasquez died at the Cebu Doctor's Hospital. It was
there that Abad signed an acknowledgment of Responsible Party (Exhibit K)
wherein he agreed to pay whatever hospital bills, professional fees and other
incidental charges Vasquez may incur.
The trial court ruled in favor of private respondents Vicente and Luisa Vasquez and
ordered Jose Benjamin Abad (hereafter ABAD) and petitioner Castilex Industrial
Corporation (hereafter CASTILEX) to pay jointly and solidarily (1) Spouses Vasquez,
the amounts of P8,000.00 for burial expenses; P50,000.00 as moral damages; P10,000.00
as attorney's fees; and P778,752.00 for loss of earning capacity; and (2) Cebu Doctor's
Hospital, the sum of P50,927.83 for unpaid medical and hospital bills at 3% monthly
interest from 27 July 1989 until fully paid, plus the costs of litigation. 2
In its decision 3 of 21 May 1997, the Court of Appeals affirmed the ruling of the trial
court holding ABAD and CASTILEX liable but held that the liability of the latter is "only
vicarious and not solidary" with the former. It reduced the award of damages representing
loss of earning capacity from P778,752.00 to P214,156.80; and the interest on the
hospital and medical bills, from 3% per month to 12% per annum from 5 September 1988
until fully paid.
Upon CASTILEX's motion for reconsideration, the Court of Appeals modified its
decision by (1) reducing the award of moral damages from P50,000 to P30,000 in view of
the deceased's contributory negligence; (b) deleting the award of attorney's fees for lack
of evidence; and (c) reducing the interest on hospital and medical bills to 6% per annum
from 5 September 1988 until fully paid. 4
Issue: Whether or not an employer may be held vicariously liable for the death resulting
from the negligent operation by a managerial employee of a company-issued vehicle?

Held:

The negligence of ABAD is not an issue at this instance. Petitioner CASTILEX presumes
said negligence but claims that it is not vicariously liable for the injuries and subsequent
death caused by ABAD.
A distinction must be made between the two provisions to determine what is applicable.
Both provisions apply to employers: the fourth paragraph, to owners and managers of an
establishment or enterprise; and the fifth paragraph, to employers in general, whether or
not engaged in any business or industry. The fourth paragraph covers negligent acts of
employees committed either in the service of the branches or on the occasion of their
functions, while the fifth paragraph encompasses negligent acts of employees acting
within the scope of their assigned task. The latter is an expansion of the former in both
employer coverage and acts included. Negligent acts of employees, whether or not the
employer is engaged in a business or industry, are covered so long as they were acting
within the scope of their assigned task, even though committed neither in the service of
the branches nor on the occasion of their functions. For, admittedly, employees
oftentimes wear different hats. They perform functions which are beyond their office,
title or designation but which, nevertheless, are still within the call of duty.
This court has applied the fifth paragraph to cases where the employer was engaged in a
business or industry such as truck operators and banks. The Court of Appeals cannot,
therefore, be faulted in applying the said paragraph of Article 2180 of the Civil Code to
this case.
Under the fifth paragraph of Article 2180, whether or not engaged in any business or
industry, an employer is liable for the torts committed by employees within the scope of
his assigned tasks. But it is necessary to establish the employer-employee relationship;
once this is done, the plaintiff must show, to hold the employer liable, that the employee
was acting within the scope of his assigned task when the tort complained of was
committed. It is only then that the employer may find it necessary to interpose the
defense of due diligence in the selection and supervision of the employee.
It is undisputed that ABAD was a Production Manager of petitioner CASTILEX at the
time of the tort occurrence. As to whether he was acting within the scope of his assigned
task is a question of fact, which the court a quo and the Court of Appeals resolved in the
affirmative.
Well-entrenched in our jurisprudence is the rule that the factual findings of the Court of
Appeals are entitled to great respect, and even finality at times. This rule is, however,
subject to exceptions such as when the conclusion is grounded on speculations, surmises,
or conjectures. Such exception obtain in the present case to warrant review by this Court
of the finding of the Court of Appeals that since ABAD was driving petitioner's vehicle
he was acting within the scope of his duties as a manager.
Before we pass upon the issue of whether ABAD was performing acts within the range of
his employment, we shall first take up the other reason invoked by the Court of Appeals
in holding petitioner CASTILEX vicariously liable for ABAD's negligence, i.e., that the
petitioner did not present evidence that ABAD was not acting within the scope of his
assigned tasks at the time of the motor vehicle mishap. Contrary to the ruling of the Court
of Appeals, it was not incumbent upon the petitioner to prove the same. It was enough for
petitioner CASTILEX to deny that ABAD was acting within the scope of his duties;
petitioner was not under obligation to prove this negative averment. Ei incumbit probatio
qui dicit, non qui negat (He who asserts, not he who denies, must prove). The Court
has consistently applied the ancient rule that if the plaintiff, upon whom rests the burden
of proving his cause of action, fails to show in a satisfactory manner facts which he bases
his claim, the defendant is under no obligation to prove his exception or defense.

Now on the issue of whether the private respondents have sufficiently established that
ABAD was acting within the scope of his assigned tasks.
ABAD, who was presented as a hostile witness, testified that at the time of the incident,
he was driving a company-issued vehicle, registered under the name of petitioner. He was
then leaving the restaurant where he had some snacks and had a chat with his friends after
having done overtime work for the petitioner.
No absolutely hard and fast rule can be stated which will furnish the complete answer to
the problem of whether at a given moment, an employee is engaged in his employer's
business in the operation of a motor vehicle, so as to fix liability upon the employer
because of the employee's action or inaction; but rather, the result varies with each state
of facts.
The court a quo and the Court of Appeals were one in holding that the driving by a
manager of a company-issued vehicle is within the scope of his assigned tasks regardless
of the time and circumstances.
We do not agree. The mere fact that ABAD was using a service vehicle at the time of the
injurious incident is not of itself sufficient to charge petitioner with liability for the
negligent operation of said vehicle unless it appears that he was operating the vehicle
within the course or scope of his employment.
The following are principles in American Jurisprudence on the employer's liability for the
injuries inflicted by the negligence of an employee in the use of an employer's motor
vehicle:
I. Operation of Employer's Motor Vehicle in Going to or from Meals
It has been held that an employee who uses his employer's vehicle in going from his work
to a place where he intends to eat or in returning to work from a meal is not ordinarily
acting within the scope of his employment in the absence of evidence of some special
business benefit to the employer.
II. Operation of Employer's Vehicle in Going to or from Work
In the same vein, traveling to and from the place of work is ordinarily a personal problem
or concern of the employee, and not a part of his services to his employer. Hence, in the
absence of some special benefit to the employer other than the mere performance of the
services available at the place where he is needed, the employee is not acting within the
scope of his employment even though he uses his employer's motor vehicle. 14
The employer may, however, be liable where he derives some special benefit from
having the employee drive home in the employer's vehicle as when the employer benefits
from having the employee at work earlier and, presumably, spending more time at his
actual duties. Where the employee's duties require him to circulate in a general area with
no fixed place or hours of work, or to go to and from his home to various outside places
of work, and his employer furnishes him with a vehicle to use in his work, the courts
have frequently applied what has been called the "special errand" or "roving commission"
rule, under which it can be found that the employee continues in the service of his
employer until he actually reaches home. However, even if the employee be deemed to be
acting within the scope of his employment in going to or from work in his employer's
vehicle, the employer is not liable for his negligence where at the time of the accident, the
employee has left the direct route to his work or back home and is pursuing a personal
errand of his own.
III. Use of Employer's Vehicle Outside Regular Working Hours
An employer who loans his motor vehicle to an employee for the latter's personal use
outside of regular working hours is generally not liable for the employee's negligent
operation of the vehicle during the period of permissive use, even where the employer
contemplates that a regularly assigned motor vehicle will be used by the employee for
personal as well as business purposes and there is some incidental benefit to the
employer.
In the case at bar, it is undisputed that ABAD did some overtime work at the petitioner's
office, which was located in Cabangcalan, Mandaue City. Thereafter, he went to Goldie's
Restaurant in Fuente Osmea, Cebu City, which is about seven kilometers away from
petitioner's place of business. A witness for the private respondents, a sidewalk vendor,
testified that Fuente Osmea is a "lively place" even at dawn because Goldie's Restaurant
and Back Street were still open and people were drinking thereat. Moreover, prostitutes,
pimps, and drug addicts littered the place.
At the Goldie's Restaurant, ABAD took some snacks and had a chat with friends. It was
when ABAD was leaving the restaurant that the incident in question occurred. That same
witness for the private respondents testified that at the time of the vehicular accident,
ABAD was with a woman in his car, who then shouted: "Daddy, Daddy!" This woman
could not have been ABAD's daughter, for ABAD was only 29 years old at the time.
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a
personal purpose not in line with his duties at the time he figured in a vehicular accident.
It was then about 2:00 a.m. of 28 August 1988, way beyond the normal working hours.
ABAD's working day had ended; his overtime work had already been completed. His
being at a place which, as petitioner put it, was known as a "haven for prostitutes, pimps,
and drug pushers and addicts," had no connection to petitioner's business; neither had it
any relation to his duties as a manager. Rather, using his service vehicle even for personal
purposes was a form of a fringe benefit or one of the perks attached to his position.
Since there is paucity of evidence that ABAD was acting within the scope of the
functions entrusted to him, petitioner CASTILEX had no duty to show that it exercised
the diligence of a good father of a family in providing ABAD with a service vehicle.
Thus, justice and equity require that petitioner be relieved of vicarious liability for the
consequences of the negligence of ABAD in driving its vehicle.
WHEREFORE, the petition is GRANTED, and the appealed decision and resolution of
the Court of Appeals is AFFIRMED with the modification that petitioner Castilex
Industrial Corporation be absolved of any liability for the damages caused by its
employee, Jose Benjamin Abad.




FILAMER CHRISTIAN INSTITUTE vs. IAC
Facts

The private respondents, heirs of the late Potenciano Kapunan, seek reconsideration of
the decision rendered by this Court on October 16, 1990 (Filamer Christian Institute v.
Court of Appeals, 190 SCRA 477) reviewing the appellate court's conclusion that there
exists an employer-employee relationship between the petitioner and its co-defendant
Funtecha. The Court ruled that the petitioner is not liable for the injuries caused by
Funtecha on the grounds that the latter was not an authorized driver for whose acts the
petitioner shall be directly and primarily answerable, and that Funtecha was merely a
working scholar who, under Section 14, Rule X, Book III of the Rules and Regulations
Implementing the Labor Code is not considered an employee of the petitioner.
The private respondents assert that the circumstances obtaining in the present case call
for the application of Article 2180 of the Civil Code since Funtecha is no doubt an
employee of the petitioner. The private respondents maintain that under Article 2180 an
injured party shall have recourse against the servant as well as the petitioner for whom, at
the time of the incident, the servant was performing an act in furtherance of the interest
and for the benefit of the petitioner. Funtecha allegedly did not steal the school jeep nor
use it for a joy ride without the knowledge of the school authorities.
After a re-examination of the laws relevant to the facts found by the trial court and the
appellate court, the Court reconsiders its decision. We reinstate the Court of Appeals'
decision penned by the late Justice Desiderio Jurado and concurred in by Justices Jose C.
Campos, Jr. and Serafin E. Camilon. Applying Civil Code provisions, the appellate court
affirmed the trial court decision which ordered the payment of the P20,000.00 liability in
the Zenith Insurance Corporation policy, P10,000.00 moral damages, P4,000.00 litigation
and actual expenses, and P3,000.00 attorney's fees.
It is undisputed that Funtecha was a working student, being a part-time janitor and a
scholar of petitioner Filamer. He was, in relation to the school, an employee even if he
was assigned to clean the school premises for only two (2) hours in the morning of each
school day.
Having a student driver's license, Funtecha requested the driver, Allan Masa, and was
allowed, to take over the vehicle while the latter was on his way home one late afternoon.
It is significant to note that the place where Allan lives is also the house of his father, the
school president, Agustin Masa. Moreover, it is also the house where Funtecha was
allowed free board while he was a student of Filamer Christian Institute.
Allan Masa turned over the vehicle to Funtecha only after driving down a road,
negotiating a sharp dangerous curb, and viewing that the road was clear. (TSN, April 4,
1983, pp. 78-79) According to Allan's testimony, a fast moving truck with glaring lights
nearly hit them so that they had to swerve to the right to avoid a collision. Upon
swerving, they heard a sound as if something had bumped against the vehicle, but they
did not stop to check. Actually, the Pinoy jeep swerved towards the pedestrian,
Potenciano Kapunan who was walking in his lane in the direction against vehicular
traffic, and hit him. Allan affirmed that Funtecha followed his advise to swerve to the
right. (Ibid., p. 79) At the time of the incident (6:30 P.M.) in Roxas City, the jeep had
only one functioning headlight.
Allan testified that he was the driver and at the same time a security guard of the
petitioner-school. He further said that there was no specific time for him to be off-duty
and that after driving the students home at 5:00 in the afternoon, he still had to go back to
school and then drive home using the same vehicle.
Driving the vehicle to and from the house of the school president where both Allan and
Funtecha reside is an act in furtherance of the interest of the petitioner-school. Allan's job
demands that he drive home the school jeep so he can use it to fetch students in the
morning of the next school day.
It is indubitable under the circumstances that the school president had knowledge that the
jeep was routinely driven home for the said purpose. Moreover, it is not improbable that
the school president also had knowledge of Funtecha's possession of a student driver's
license and his desire to undergo driving lessons during the time that he was not in his
classrooms.
In learning how to drive while taking the vehicle home in the direction of Allan's house,
Funtecha definitely was not having a joy ride. Funtecha was not driving for the purpose
of his enjoyment or for a "frolic of his own" but ultimately, for the service for which the
jeep was intended by the petitioner school. (See L. Battistoni v. Thomas, Can SC 144, 1
D.L.R. 577, 80 ALR 722 [1932]; See also Association of Baptists for World Evangelism,
Inc. v. Fieldmen's Insurance Co., Inc. 124 SCRA 618 [1983]). Therefore, the Court is
constrained to conclude that the act of Funtecha in taking over the steering wheel was one
done for and in behalf of his employer for which act the petitioner-school cannot deny
any responsibility by arguing that it was done beyond the scope of his janitorial duties.
The clause "within the scope of their assigned tasks" for purposes of raising the
presumption of liability of an employer, includes any act done by an employee, in
furtherance of the interests of the employer or for the account of the employer at the time
of the infliction of the injury or damage. (Manuel Casada, 190 Va 906, 59 SE 2d 47
[1950]) Even if somehow, the employee driving the vehicle derived some benefit from
the act, the existence of a presumptive liability of the employer is determined by
answering the question of whether or not the servant was at the time of the accident
performing any act in furtherance of his master's business.


Held:
The present case does not deal with a labor dispute on conditions of employment between
an alleged employee and an alleged employer. It invokes a claim brought by one for
damages for injury caused by the patently negligent acts of a person, against both doer-
employee and his employer. Hence, the reliance on the implementing rule on labor to
disregard the primary liability of an employer under Article 2180 of the Civil Code is
misplaced. An implementing rule on labor cannot be used by an employer as a shield to
avoid liability under the substantive provisions of the Civil Code.
There is evidence to show that there exists in the present case an extra-contractual
obligation arising from the negligence or reckless imprudence of a person "whose acts or
omissions are imputable, by a legal fiction, to other(s) who are in a position to exercise an
absolute or limited control over (him)." (Bahia v. Litonjua and Leynes, 30 Phil. 624
[1915])
Funtecha is an employee of petitioner Filamer. He need not have an official appointment
for a driver's position in order that the petitioner may be held responsible for his grossly
negligent act, it being sufficient that the act of driving at the time of the incident was for
the benefit of the petitioner. Hence, the fact that Funtecha was not the school driver or
was not acting within the scope of his janitorial duties does not relieve the petitioner of
the burden of rebutting the presumption juris tantum that there was negligence on its part
either in the selection of a servant or employee, or in the supervision over him. The
petitioner has failed to show proof of its having exercised the required diligence of a
good father of a family over its employees Funtecha and Allan.
An employer is expected to impose upon its employees the necessary discipline called for
in the performance of any act indispensable to the business and beneficial to their
employer.
In the present case, the petitioner has not shown that it has set forth such rules and
guidelines as would prohibit any one of its employees from taking control over its
vehicles if one is not the official driver or prohibiting the driver and son of the Filamer
president from authorizing another employee to drive the school vehicle. Furthermore,
the petitioner has failed to prove that it had imposed sanctions or warned its employees
against the use of its vehicles by persons other than the driver.
The petitioner, thus, has an obligation to pay damages for injury arising from the
unskilled manner by which Funtecha drove the vehicle In the absence of evidence that the
petitioner had exercised the diligence of a good father of a family in the supervision of its
employees, the law imposes upon it the vicarious liability for acts or omissions of its
employees. The liability of the employer is, under Article 2180, primary and solidary.
However, the employer shall have recourse against the negligent employee for whatever
damages are paid to the heirs of the plaintiff.
It is an admitted fact that the actual driver of the school jeep, Allan Masa, was not made a
party defendant in the civil case for damages. This is quite understandable considering
that as far as the injured pedestrian, plaintiff Potenciano Kapunan, was concerned, it was
Funtecha who was the one driving the vehicle and presumably was one authorized by the
school to drive. The plaintiff and his heirs should not now be left to suffer without
simultaneous recourse against the petitioner for the consequent injury caused by a janitor
doing a driving chore for the petitioner even for a short while. For the purpose of
recovering damages under the prevailing circumstances, it is enough that the plaintiff and
the private respondent heirs were able to establish the existence of employer-employee
relationship between Funtecha and petitioner Filamer and the fact that Funtecha was
engaged in an act not for an independent purpose of his own but in furtherance of the
business of his employer. A position of responsibility on the part of the petitioner has
thus been satisfactorily demonstrated.
NPC vs. CA
Facts
On July 22, 1979, a convoy of four (4) dump trucks owned by the National Power
Corporation (NPC) left Marawi City bound for Iligan City. Unfortunately, enroute to its
destination, one of the trucks with plate no. RFT-9-6-673 driven by a certain Gavino
Ilumba figured in a head-on-collision with a Toyota Tamaraw. The incident resulted in
the death of three (3) persons riding in the Toyota Tamaraw, as well as physical injuries
to seventeen other passengers. cda
On June 10, 1980, the heirs of the victims filed a complaint for damages against National
Power Corporation (NPC) and PHESCO Incorporated (PHESCO) before the then Court
of First Instance of Lanao del Norte, Marawi City. When defendant PHESCO filed its
answer to the complaint it contended that it was not the owner of the dump truck which
collided with the Toyota Tamaraw but NPC. Moreover, it asserted that it was merely a
contractor of NPC with the main duty of supplying workers and technicians for the
latter's projects. On the other hand, NPC denied any liability and countered that the driver
of the dump truck was the employee of PHESCO.
After trial on the merits, the trial court rendered a decision dated July 25, 1988 absolving
NPC of any liability. The dispositive portion reads:
"Consequently, in view of the foregoing consideration, judgment is
hereby rendered ordering PHESCO, Inc. and Gavino Ilumba upon
receipt hereof:
1. To pay jointly and severally the plaintiffs thru the Dansalan
College the sum of P954,154.55 representing the actual or
compensatory damages incurred by the plaintiffs; and
2. To pay the sum of P50,000.00 representing Attorney's fees.
Dissatisfied, PHESCO appealed to the Court of Appeals, which on November 10, 1994
reversed the trial court's judgment. We quote the pertinent portion of the decision. prcd
"A 'labor only' contractor is considered merely as an agent of the
employer (Deferia vs. National Labor Relations Commission, 194
SCRA 525). A finding that a contractor is a 'labor only' contractor
is equivalent to a finding that there is an employer-employee
relationship between the owner of the project and the employees of
the 'labor only' contractor (Industrial Timer Corporation vs.
National Labor Relations Commission, 202 SCRA 465). So, even
if Phesco hired driver Gavino Ilumba, as Phesco is admittedly a
'labor only' contractor of Napocor, the statute itself establishes an
employer-employee relationship between the employer (Napocor)
and the employee (driver Ilumba) of the labor only contractor
(Phesco). (Ecal vs. National Labor Relations Commission, 195
SCRA 224).
Consequently, we hold Phesco not liable for the tort of driver
Gavino Ilumba, as there was no employment relationship between
Phesco and driver Gavino Ilumba. Under Article 2180 of the Civil
Code, to hold the employer liable for torts committed by his
employees within the scope of their assigned task, there must exist
an employer-employee relationship. (Martin vs. Court of Appeals,
205 SCRA 591).

Held:
Before we decide who is the employer of Ilumba, it is evidently necessary to ascertain the
contractual relationship between NPC and PHESCO. Was the relationship one of
employer and job (independent) contractor or one of employer and "labor only"
contractor?
There is no doubt that PHESCO was engaged in "labor-only" contracting vis-a-vis NPC
and as such, it is considered merely an agent of the latter. In labor-only contracting, an
employer-employee relationship between the principal employer and the employees of
the "labor-only" contractor is created. Accordingly, the principal employer is responsible
to the employees of the "labor only" contractor as if such employees had been directly
employed by the principal employer. Since PHESCO is only a "labor-only" contractor,
the workers it supplied to NPC, including the driver of the ill-fated truck, should be
considered as employees of NPC. After all, it is axiomatic that any person (the principal
employer) who enters into an agreement with a job contractor, either for the performance
of a specified work or for the supply of manpower, assumes responsibility over the
employees of the latter.
However, NPC maintains that even assuming that a "labor only" contract exists between
it and PHESCO, its liability will not extend to third persons who are injured due to the
tortious acts of the employee of the "labor-only" contractor. 16 Stated otherwise, its
liability shall only be limited to violations of the Labor Code and not quasi-delicts.
The reliance is misplaced. It bears stressing that the action was premised on the recovery
of damages as a result of quasi-delict against both NPC and PHESCO, hence, it is the
Civil Code and not the Labor Code which is the applicable law in resolving this case.
To be sure, the pronouncement of this Court in Filamer Christian Institute v. IAC, is
most instructive:
"The present case does not deal with a labor dispute on conditions
of employment between an alleged employee and an alleged
employer. It invokes a claim brought by one for damages for injury
caused by the patently negligent acts of a person, against both
doer-employee and his employer. Hence, the reliance on the
implementing rule on labor to disregard the primary liability of an
employer under Article 2180 of the Civil Code is misplaced. An
implementing rule on labor cannot be used by an employer as a
shield to avoid liability under the substantive provisions of the
Civil Code."
Given the above considerations, it is apparent that Article 2180 of the Civil Code and not
the Labor Code will determine the liability of NPC in a civil suit for damages instituted
by an injured person for any negligent act of the employees of the "labor only"
contractor. This is consistent with the ruling that a finding that a contractor was a "labor-
only" contractor is equivalent to a finding that an employer-employee relationship existed
between the owner (principal contractor) and the "labor-only" contractor, including the
latter's workers.
With respect to the liability of NPC as the direct employer, Article 2180 of the Civil
Code explicitly provides:
"Employers shall be liable for the damages caused by their
employees and household helpers acting within the scope of their
assigned tasks, even though the former are not engaged in any
business or industry."
In this regard, NPC's liability is direct, primary and solidary with PHESCO and the
driver. Of course, NPC, if the judgment for damages is satisfied by it, shall have recourse
against PHESCO and the driver who committed the negligence which gave rise to the
action.
Finally, NPC, even if it truly believed that it was not the employer of the driver, could
still have disclaimed any liability had it raised the defense of due diligence in the
selection or supervision of PHESCO and Ilumba. 23 However, for some reason or
another, NPC did not invoke said defense. Hence, by opting not to present any evidence
that it exercised due diligence in the supervision of the activities of PHESCO and Ilumba,
NPC has foreclosed its right to interpose the same on appeal in conformity with the rule
that points of law, theories, issues of facts and arguments not raised in the proceedings
below cannot be ventilated for the first time on appeal. 24 Consequently, its liability
stands.
WHEREFORE, in view of the foregoing, the assailed decision of the Court of Appeals
dated November 10, 1994 and its accompanying resolution dated February 9, 1995 are
AFFIRMED without prejudice to the right of NPC to demand from PHESCO and Ilumba
reimbursement of the damages it would be adjudged to pay to complainants. No costs.
dctai

LRT vs. Navidad
Facts
On 14 October 1993, about half an hour past seven oclock in the evening, Nicanor
Navidad, then drunk, entered the EDSA LRT station after purchasing a "token"
(representing payment of the fare). While Navidad was standing on the platform near the
LRT tracks, Junelito Escartin, the security guard assigned to the area approached
Navidad. A misunderstanding or an altercation between the two apparently ensued that
led to a fist fight. No evidence, however, was adduced to indicate how the fight started or
who, between the two, delivered the first blow or how Navidad later fell on the LRT
tracks. At the exact moment that Navidad fell, an LRT train, operated by petitioner
Rodolfo Roman, was coming in. Navidad was struck by the moving train, and he was
killed instantaneously.
On 08 December 1994, the widow of Nicanor, herein respondent Marjorie Navidad,
along with her children, filed a complaint for damages against Junelito Escartin, Rodolfo
Roman, the LRTA, the Metro Transit Organization, Inc. (Metro Transit), and Prudent for
the death of her husband. LRTA and Roman filed a counterclaim against Navidad and a
cross-claim against Escartin and Prudent. Prudent, in its answer, denied liability and
averred that it had exercised due diligence in the selection and supervision of its security
guards.
The LRTA and Roman presented their evidence while Prudent and Escartin, instead of
presenting evidence, filed a demurrer contending that Navidad had failed to prove that
Escartin was negligent in his assigned task. On 11 August 1998, the trial court rendered
its decision; it adjudged:
"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the
defendants Prudent Security and Junelito Escartin ordering the latter to pay jointly and
severally the plaintiffs

Prudent appealed to the Court of Appeals. On 27 August 2000, the appellate court
promulgated its now assailed decision exonerating Prudent from any liability for the
death of Nicanor Navidad and, instead, holding the LRTA and Roman jointly and
severally liable thusly:
"WHEREFORE, the assailed judgment is hereby MODIFIED, by exonerating the
appellants from any liability for the death of Nicanor Navidad, Jr. Instead, appellees
Rodolfo Roman and the Light Rail Transit Authority (LRTA) are held liable for his death
and are hereby directed to pay jointly and severally to the plaintiffs-appellees
The appellate court ratiocinated that while the deceased might not have then as yet
boarded the train, a contract of carriage theretofore had already existed when the victim
entered the place where passengers were supposed to be after paying the fare and getting
the corresponding token therefor. In exempting Prudent from liability, the court stressed
that there was nothing to link the security agency to the death of Navidad. It said that
Navidad failed to show that Escartin inflicted fist blows upon the victim and the evidence
merely established the fact of death of Navidad by reason of his having been hit by the
train owned and managed by the LRTA and operated at the time by Roman. The
appellate court faulted petitioners for their failure to present expert evidence to establish
the fact that the application of emergency brakes could not have stopped the train.
Held:
Law and jurisprudence dictate that a common carrier, both from the nature of its business
and for reasons of public policy, is burdened with the duty of exercising utmost diligence
in ensuring the safety of passengers.
4
The Civil Code, governing the liability of a
common carrier for death of or injury to its passengers, provides:
"Article 1755. A common carrier is bound to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious persons, with
a due regard for all the circumstances.
"Article 1756. In case of death of or injuries to passengers, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove that they
observed extraordinary diligence as prescribed in articles 1733 and 1755."
"Article 1759. Common carriers are liable for the death of or injuries to passengers
through the negligence or willful acts of the formers employees, although such
employees may have acted beyond the scope of their authority or in violation of the
orders of the common carriers.
"This liability of the common carriers does not cease upon proof that they exercised all
the diligence of a good father of a family in the selection and supervision of their
employees."
"Article 1763. A common carrier is responsible for injuries suffered by a passenger on
account of the willful acts or negligence of other passengers or of strangers, if the
common carriers employees through the exercise of the diligence of a good father of a
family could have prevented or stopped the act or omission."
The law requires common carriers to carry passengers safely using the utmost diligence
of very cautious persons with due regard for all circumstances.
5
Such duty of a common
carrier to provide safety to its passengers so obligates it not only during the course of the
trip but for so long as the passengers are within its premises and where they ought to be
in pursuance to the contract of carriage.
6
The statutory provisions render a common
carrier liable for death of or injury to passengers (a) through the negligence or wilful acts
of its employees or b) on account of wilful acts or negligence of other passengers or of
strangers if the common carriers employees through the exercise of due diligence could
have prevented or stopped the act or omission.
7
In case of such death or injury, a carrier
is presumed to have been at fault or been negligent, and
8
by simple proof of injury, the
passenger is relieved of the duty to still establish the fault or negligence of the carrier or
of its employees and the burden shifts upon the carrier to prove that the injury is due to an
unforeseen event or to force majeure.
9
In the absence of satisfactory explanation by the
carrier on how the accident occurred, which petitioners, according to the appellate court,
have failed to show, the presumption would be that it has been at fault,
10
an exception
from the general rule that negligence must be proved.
11

The foundation of LRTAs liability is the contract of carriage and its obligation to
indemnify the victim arises from the breach of that contract by reason of its failure to
exercise the high diligence required of the common carrier. In the discharge of its
commitment to ensure the safety of passengers, a carrier may choose to hire its own
employees or avail itself of the services of an outsider or an independent firm to
undertake the task. In either case, the common carrier is not relieved of its responsibilities
under the contract of carriage.
Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the late
Nicanor Navidad, this Court is concluded by the factual finding of the Court of Appeals
that "there is nothing to link (Prudent) to the death of Nicanor (Navidad), for the reason
that the negligence of its employee, Escartin, has not been duly proven x x x." This
finding of the appellate court is not without substantial justification in our own review of
the records of the case.
There being, similarly, no showing that petitioner Rodolfo Roman himself is guilty of
any culpable act or omission, he must also be absolved from liability. Needless to say, the
contractual tie between the LRT and Navidad is not itself a juridical relation between the
latter and Roman; thus, Roman can be made liable only for his own fault or negligence.
The award of nominal damages in addition to actual damages is untenable. Nominal
damages are adjudicated in order that a right of the plaintiff, which has been violated or
invaded by the defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him.
18
It is an established rule that
nominal damages cannot co-exist with compensatory damages.
19

WHEREFORE, the assailed decision of the appellate court is AFFIRMED with
MODIFICATION but only in that (a) the award of nominal damages is DELETED and
(b) petitioner Rodolfo Roman is absolved from liability. No costs

VALENZUELA vs. COURT OF APPEALS,
Facts:
Plaintiff's version of the accident is as follows: At around 2:00 in the morning of June 24,
1990, plaintiff Ma. Lourdes Valenzuela was driving a blue Mitsubishi lancer with Plate
No. FFU 542 from her restaurant at Marcos highway to her home at Palanza Street,
Araneta Avenue. She was travelling along Aurora Blvd. with a companion, Cecilia
Ramon, heading towards the direction of Manila. Before reaching A. Lake Street, she
noticed something wrong with her tires; she stopped at a lighted place where there were
people, to verify whether she had a flat tire and to solicit help if needed. Having been told
by the people present that her rear right tire was flat and that she cannot reach her home
in that car's condition, she parked along the sidewalk, about 1-1/2 feet away, put on her
emergency lights, alighted from the car, and went to the rear to open the trunk. She was
standing at the left side of the rear of her car pointing to the tools to a man who will help
her fix the tire when she was suddenly bumped by a 1987 Mitsubishi Lancer driven by
defendant Richard Li and registered in the name of defendant Alexander Commercial,
Inc. Because of the impact plaintiff was thrown against the windshield of the car of the
defendant, which was destroyed, and then fell to the ground. She was pulled out from
under defendant's car. Plaintiff's left leg was severed up to the middle of her thigh, with
only some skin and sucle connected to the rest of the body. She was brought to the
UERM Medical Memorial Center where she was found to have a "traumatic amputation,
leg, left up to distal thigh (above knee)". She was confined in the hospital for twenty (20)
days and was eventually fitted with an artificial leg. The expenses for the hospital
confinement (P120,000.00) and the cost of the artificial leg (P27,000.00) were paid by
defendants from the car insurance.
Defendant Richard Li denied that he was negligent. He was on his way home, travelling
at 55 kph; considering that it was raining, visibility was affected and the road was wet.
Traffic was light. He testified that he was driving along the inner portion of the right lane
of Aurora Blvd. towards the direction of Araneta Avenue, when he was suddenly
confronted, in the vicinity of A. Lake Street, San Juan, with a car coming from the
opposite direction, travelling at 80 kph, with "full bright lights". Temporarily blinded, he
instinctively swerved to the right to avoid colliding with the oncoming vehicle, and
bumped plaintiff's car, which he did not see because it was midnight blue in color, with
no parking lights or early warning device, and the area was poorly lighted. He alleged in
his defense that the left rear portion of plaintiff's car was protruding as it was then "at a
standstill diagonally" on the outer portion of the right lane towards Araneta Avenue (par.
18, Answer). He confirmed the testimony of plaintiff's witness that after being bumped
the car of the plaintiff swerved to the right and hit another car parked on the sidewalk.
Defendants counterclaimed for damages, alleging that plaintiff was reckless or negligent,
as she was not a licensed driver.
The police investigator, Pfc. Felic Ramos, who prepared the vehicular accident report and
the sketch of the three cars involved in the accident, testified that the plaintiff's car was
"near the sidewalk"; this witness did not remember whether the hazard lights of plaintiff's
car were on, and did not notice if there was an early warning device; there was a street
light at the corner of Aurora Blvd. and F. Roman, about 100 meters away. It was not
mostly dark, i.e. "things can be seen" (p. 16, tsn, Oct. 28, 1991).
A witness for the plaintiff, Rogelio Rodriguez, testified that after plaintiff alighted from
her car and opened the trunk compartment, defendant's car came approaching very fast
ten meters from the scene; the car was "zigzagging". The rear left side of plaintiff's car
was bumped by the front right portion of defendant's car; as a consequence, the plaintiff's
car swerved to the right and hit the parked car on the sidewalk. Plaintiff was thrown to
the windshield of defendant's car, which was destroyed, and landed under the car. He
stated that defendant was under the influence of liquor as he could "smell it very well"
After trial, the lower court sustained the plaintiff's submissions and found defendant
Richard Li guilty of gross negligence and liable for damages under Article 2176 of the
Civil Code. The trial court likewise held Alexander Commercial, Inc., Li's employer,
jointly and severally liable for damages pursuant to Article 2180. It ordered the
defendants to jointly and severally pay
In agreeing with the trial court that the defendant Li was liable for the injuries sustained
by the plaintiff, the Court of Appeals, in its decision, however, absolved the Li's
employer, Alexander Commercial, Inc. from any liability towards petitioner Lourdes
Valenzuela and reduced the amount of moral damages to P500,000.00. Finding
justification for exemplary damages, the respondent court allowed an award of
P50,000.00 for the same, in addition to costs, attorney's fees and the other damages. The
Court of Appeals, likewise, dismissed the defendants' counterclaims.
3

Consequently, both parties assail the respondent court's decision by filing two separate
petitions before this Court. Richard Li, in G.R. No. 117944, contends that he should not
be held liable for damages because the proximate cause of the accident was Ma. Lourdes
Valenzuela's own negligence. Alternatively, he argues that in the event that this Court
finds him negligent, such negligence ought to be mitigated by the contributory negligence
of Valenzuela.
On the other hand, in G.R. No. 115024, Ma. Lourdes Valenzuela assails the respondent
court's decision insofar as it absolves Alexander Commercial, Inc. from liability as the
owner of the car driven by Richard Li and insofar as it reduces the amount of the actual
and moral damages awarded by the trial court.
4

As the issues are intimately related, both petitions are hereby consolidated.
We agree with the respondent court that Valenzuela was not guilty of contributory
negligence.
Contributory negligence is conduct on the part of the injured party, contributing as a legal
cause to the harm he has suffered, which falls below the standard to which he is required
to conform for his own protection.
14
Based on the foregoing definition, the standard or act
to which, according to petitioner Li, Valenzuela ought to have conformed for her own
protection was not to park at all at any point of Aurora Boulevard, a no parking zone. We
cannot agree.
Courts have traditionally been compelled to recognize that an actor who is confronted
with an emergency is not to be held up to the standard of conduct normally applied to an
individual who is in no such situation. The law takes stock of impulses of humanity when
placed in threatening or dangerous situations and does not require the same standard of
thoughtful and reflective care from persons confronted by unusual and oftentimes
threatening conditions.
15

Under the "emergency rule" adopted by this Court in Gan vs. Court of Appeals,
16
an
individual who suddenly finds himself in a situation of danger and is required to act
without much time to consider the best means that may be adopted to avoid the
impending danger, is not guilty of negligence if he fails to undertake what subsequently
and upon reflection may appear to be a better solution, unless the emergency was brought
by his own negligence.
17

Applying this principle to a case in which the victims in a vehicular accident swerved to
the wrong lane to avoid hitting two children suddenly darting into the street, we held, in
Mc Kee vs. Intermediate Appellate Court,
18
that the driver therein, Jose Koh, "adopted the
best means possible in the given situation" to avoid hitting the children. Using the
"emergency rule" the Court concluded that Koh, in spite of the fact that he was in the
wrong lane when the collision with an oncoming truck occurred, was not guilty of
negligence.
19

While the emergency rule applies to those cases in which reflective thought, or the
opportunity to adequately weigh a threatening situation is absent, the conduct which is
required of an individual in such cases is dictated not exclusively by the suddenness of
the event which absolutely negates thoroughful care, but by the over-all nature of the
circumstances. A woman driving a vehicle suddenly crippled by a flat tire on a rainy
night will not be faulted for stopping at a point which is both convenient for her to do so
and which is not a hazard to other motorists. She is not expected to run the entire
boulevard in search for a parking zone or turn on a dark street or alley where she would
likely find no one to help her. It would be hazardous for her not to stop and assess the
emergency (simply because the entire length of Aurora Boulevard is a no-parking zone)
because the hobbling vehicle would be both a threat to her safety and to other motorists.
In the instant case, Valenzuela, upon reaching that portion of Aurora Boulevard close to
A. Lake St., noticed that she had a flat tire. To avoid putting herself and other motorists
in danger, she did what was best under the situation. As narrated by respondent court:
"She stopped at a lighted place where there were people, to verify whether she had a flat
tire and to solicit help if needed. Having been told by the people present that her rear
right tire was flat and that she cannot reach her home she parked along the sidewalk,
about 1 1/2 feet away, behind a Toyota Corona Car."
20
In fact, respondent court noted,
Pfc. Felix Ramos, the investigator on the scene of the accident confirmed that
Valenzuela's car was parked very close to the sidewalk.
21
The sketch which he prepared
after the incident showed Valenzuela's car partly straddling the sidewalk, clear and at a
convenient distance from motorists passing the right lane of Aurora Boulevard. This fact
was itself corroborated by the testimony of witness Rodriguez.
22

Under the circumstances described, Valenzuela did exercise the standard reasonably
dictated by the emergency and could not be considered to have contributed to the
unfortunate circumstances which eventually led to the amputation of one of her lower
extremities. The emergency which led her to park her car on a sidewalk in Aurora
Boulevard was not of her own making, and it was evident that she had taken all
reasonable precautions.
Obviously in the case at bench, the only negligence ascribable was the negligence of Li
on the night of the accident. "Negligence, as it is commonly understood is conduct which
creates an undue risk of harm to others."
23
It is the failure to observe that degree of care,
precaution, and vigilance which the circumstances justly demand, whereby such other
person suffers injury.
24
We stressed, in Corliss vs. Manila Railroad Company,
25
that
negligence is the want of care required by the circumstances.
The circumstances established by the evidence adduced in the court below plainly
demonstrate that Li was grossly negligent in driving his Mitsubishi Lancer. It bears
emphasis that he was driving at a fast speed at about 2:00 A.M. after a heavy downpour
had settled into a drizzle rendering the street slippery. There is ample testimonial
evidence on record to show that he was under the influence of liquor. Under these
conditions, his chances of effectively dealing with changing conditions on the road were
significantly lessened. As Presser and Keaton emphasize:
[U]nder present day traffic conditions, any driver of an automobile must be prepared for
the sudden appearance of obstacles and persons on the highway, and of other vehicles at
intersections, such as one who sees a child on the curb may be required to anticipate its
sudden dash into the street, and his failure to act properly when they appear may be found
to amount to negligence.
26

Li's obvious unpreparedness to cope with the situation confronting him on the night of
the accident was clearly of his own making.
We now come to the question of the liability of Alexander Commercial, Inc. Li's
employer. In denying liability on the part of Alexander Commercial, the respondent court
held that:
There is no evidence, not even defendant Li's testimony, that the visit was in connection
with official matters. His functions as assistant manager sometimes required him to
perform work outside the office as he has to visit buyers and company clients, but he
admitted that on the night of the accident he came from BF Homes Paranaque he did not
have "business from the company" (pp. 25-26, ten, Sept. 23, 1991). The use of the
company car was partly required by the nature of his work, but the privilege of using it
for non-official business is a "benefit", apparently referring to the fringe benefits
attaching to his position.
Under the civil law, an employer is liable for the negligence of his employees in the
discharge of their respective duties, the basis of which liability is not respondeat
superior, but the relationship of pater familias, which theory bases the liability of the
master ultimately on his own negligence and not on that of his servant (Cuison v. Norton
and Harrison Co., 55 Phil. 18). Before an employer may be held liable for the negligence
of his employee, the act or omission which caused damage must have occurred while an
employee was in the actual performance of his assigned tasks or duties (Francis High
School vs. Court of Appeals, 194 SCRA 341). In defining an employer's liability for the
acts done within the scope of the employee's assigned tasks, the Supreme Court has held
that this includes any act done by an employee, in furtherance of the interests of the
employer or for the account of the employer at the time of the infliction of the injury or
damage (Filamer Christian Institute vs. Intermediate Appellate Court, 212 SCRA 637).
An employer is expected to impose upon its employees the necessary discipline called for
in the performance of any act "indispensable to the business and beneficial to their
employer" (at p. 645).
In light of the foregoing, We are unable to sustain the trial court's finding that since
defendant Li was authorized by the company to use the company car "either officially or
socially or even bring it home", he can be considered as using the company car in the
service of his employer or on the occasion of his functions. Driving the company car was
not among his functions as assistant manager; using it for non-official purposes would
appear to be a fringe benefit, one of the perks attached to his position. But to impose
liability upon the employer under Article 2180 of the Civil Code, earlier quoted, there
must be a showing that the damage was caused by their employees in the service of the
employer or on the occasion of their functions. There is no evidence that Richard Li was
at the time of the accident performing any act in furtherance of the company's business or
its interests, or at least for its benefit. The imposition of solidary liability against
defendant Alexander Commercial Corporation must therefore fail.
27

We agree with the respondent court that the relationship in question is not based on the
principle of respondeat superior, which holds the master liable for acts of the servant, but
that of pater familias, in which the liability ultimately falls upon the employer, for his
failure to exercise the diligence of a good father of the family in the selection and
supervision of his employees. It is up to this point, however, that our agreement with the
respondent court ends. Utilizing the bonus pater familias standard expressed in Article
2180 of the Civil Code,
28
we are of the opinion that Li's employer, Alexander
Commercial, Inc. is jointly and solidarily liable for the damage caused by the accident of
June 24, 1990.
First, the case of St. Francis High School vs. Court of Appeals
29
upon which respondent
court has placed undue reliance, dealt with the subject of a school and its teacher's
supervision of students during an extracurricular activity. These cases now fall under the
provision on special parental authority found in Art. 218 of the Family Code which
generally encompasses all authorized school activities, whether inside or outside school
premises.
Second, the employer's primary liability under the concept of pater familias embodied by
Art 2180 (in relation to Art. 2176) of the Civil Code is quasi-delictual or tortious in
character. His liability is relieved on a showing that he exercised the diligence of a good
father of the family in the selection and supervision of its employees. Once evidence is
introduced showing that the employer exercised the required amount of care in selecting
its employees, half of the employer's burden is overcome. The question of diligent
supervision, however, depends on the circumstances of employment.
Ordinarily, evidence demonstrating that the employer has exercised diligent supervision
of its employee during the performance of the latter's assigned tasks would be enough to
relieve him of the liability imposed by Article 2180 in relation to Article 2176 of the
Civil Code. The employer is not expected to exercise supervision over either the
employee's private activities or during the performance of tasks either unsanctioned by
the former or unrelated to the employee's tasks. The case at bench presents a situation of
a different character, involving a practice utilized by large companies with either their
employees of managerial rank or their representatives.
It is customary for large companies to provide certain classes of their employees with
courtesy vehicles. These company cars are either wholly owned and maintained by the
company itself or are subject to various plans through which employees eventually
acquire their vehicles after a given period of service, or after paying a token amount.
Many companies provide liberal "car plans" to enable their managerial or other
employees of rank to purchase cars, which, given the cost of vehicles these days, they
would not otherwise be able to purchase on their own.
Under the first example, the company actually owns and maintains the car up to the point
of turnover of ownership to the employee; in the second example, the car is really owned
and maintained by the employee himself. In furnishing vehicles to such employees, are
companies totally absolved of responsibility when an accident involving a company-
issued car occurs during private use after normal office hours?
Most pharmaceutical companies, for instance, which provide cars under the first plan,
require rigorous tests of road worthiness from their agents prior to turning over the car
(subject of company maintenance) to their representatives. In other words, like a good
father of a family, they entrust the company vehicle only after they are satisfied that the
employee to whom the car has been given full use of the said company car for company
or private purposes will not be a threat or menace to himself, the company or to others.
When a company gives full use and enjoyment of a company car to its employee, it in
effect guarantees that it is, like every good father, satisfied that its employee will use the
privilege reasonably and responsively.
In the ordinary course of business, not all company employees are given the privilege of
using a company-issued car. For large companies other than those cited in the example of
the preceding paragraph, the privilege serves important business purposes either related
to the image of success an entity intends to present to its clients and to the public in
general, or - for practical and utilitarian reasons - to enable its managerial and other
employees of rank or its sales agents to reach clients conveniently. In most cases,
providing a company car serves both purposes. Since important business transactions and
decisions may occur at all hours in all sorts of situations and under all kinds of guises, the
provision for the unlimited use of a company car therefore principally serves the business
and goodwill of a company and only incidentally the private purposes of the individual
who actually uses the car, the managerial employee or company sales agent. As such, in
providing for a company car for business use and/or for the purpose of furthering the
company's image, a company owes a responsibility to the public to see to it that the
managerial or other employees to whom it entrusts virtually unlimited use of a company
issued car are able to use the company issue capably and responsibly.
In the instant case, Li was an Assistant Manager of Alexander Commercial, Inc. In his
testimony before the trial court, he admitted that his functions as Assistant Manager did
not require him to scrupulously keep normal office hours as he was required quite often
to perform work outside the office, visiting prospective buyers and contacting and
meeting with company clients.
30
These meetings, clearly, were not strictly confined to
routine hours because, as a managerial employee tasked with the job of representing his
company with its clients, meetings with clients were both social as well as work-related
functions. The service car assigned to Li by Alexander Commercial, Inc. therefore
enabled both Li - as well as the corporation - to put up the front of a highly successful
entity, increasing the latter's goodwill before its clientele. It also facilitated meeting
between Li and its clients by providing the former with a convenient mode of travel.
Moreover, Li's claim that he happened to be on the road on the night of the accident
because he was coming from a social visit with an officemate in Paranaque was a bare
allegation which was never corroborated in the court below. It was obviously self-
serving. Assuming he really came from his officemate's place, the same could give rise to
speculation that he and his officemate had just been from a work-related function, or they
were together to discuss sales and other work related strategies.
In fine, Alexander Commercial, inc. has not demonstrated, to our satisfaction, that it
exercised the care and diligence of a good father of the family in entrusting its company
car to Li. No allegations were made as to whether or not the company took the steps
necessary to determine or ascertain the driving proficiency and history of Li, to whom it
gave full and unlimited use of a company car.
31
Not having been able to overcome the
burden of demonstrating that it should be absolved of liability for entrusting its company
car to Li, said company, based on the principle of bonus pater familias, ought to be
jointly and severally liable with the former for the injuries sustained by Ma. Lourdes
Valenzuela during the accident.
Finally, we find no reason to overturn the amount of damages awarded by the respondent
court, except as to the amount of moral damages. In the case of moral damages, while the
said damages are not intended to enrich the plaintiff at the expense of a defendant, the
award should nonetheless be commensurate to the suffering inflicted. In the instant case
we are of the opinion that the reduction in moral damages from an amount of
P1,000,000.00 to P800,000,00 by the Court of Appeals was not justified considering the
nature of the resulting damage and the predictable sequelae of the injury.
As a result of the accident, Ma. Lourdes Valenzuela underwent a traumatic amputation of
her left lower extremity at the distal left thigh just above the knee. Because of this,
Valenzuela will forever be deprived of the full ambulatory functions of her left extremity,
even with the use of state of the art prosthetic technology. Well beyond the period of
hospitalization (which was paid for by Li), she will be required to undergo adjustments in
her prosthetic devise due to the shrinkage of the stump from the process of healing.
These adjustments entail costs, prosthetic replacements and months of physical and
occupational rehabilitation and therapy. During her lifetime, the prosthetic devise will
have to be replaced and re-adjusted to changes in the size of her lower limb effected by
the biological changes of middle-age, menopause and aging. Assuming she reaches
menopause, for example, the prosthetic will have to be adjusted to respond to the changes
in bone resulting from a precipitate decrease in calcium levels observed in the bones of
all post-menopausal women. In other words, the damage done to her would not only be
permanent and lasting, it would also be permanently changing and adjusting to the
physiologic changes which her body would normally undergo through the years. The
replacements, changes, and adjustments will require corresponding adjustive physical and
occupational therapy. All of these adjustments, it has been documented, are painful.
The foregoing discussion does not even scratch the surface of the nature of the resulting
damage because it would be highly speculative to estimate the amount of psychological
pain, damage and injury which goes with the sudden severing of a vital portion of the
human body. A prosthetic device, however technologically advanced, will only allow a
reasonable amount of functional restoration of the motor functions of the lower limb. The
sensory functions are forever lost. The resultant anxiety, sleeplessness, psychological
injury, mental and physical pain are inestimable.
As the amount of moral damages are subject to this Court's discretion, we are of the
opinion that the amount of P1,000,000.00 granted by the trial court is in greater accord
with the extent and nature of the injury - physical and psychological - suffered by
Valenzuela as a result of Li's grossly negligent driving of his Mitsubishi Lancer in the
early morning hours of the accident.
WHEREFORE, PREMISES CONSIDERED, the decision of the Court of Appeals is
modified with the effect of REINSTATING the judgment of the Regional Trial Court.

Separate Opinions
VITUG, J .
Pursuant to Article 2180
1
of the Civil Code that acknowledges responsibility under a
relationship of patria potestas, a person may be held accountable not only for his own
direct culpable act or negligence but also for those of others albeit predicated on his own
supposed failure to exercise due care in his supervisory authority and functions. In the
case of an employer, that vicarious liability attaches only when the tortious conduct of the
employee relates to, or is in the course of, his employment.




E. MERRITT vs. GOVERNMENT OF THE PHILIPPINE
Facts:
Counsel for the plaintiff insist that the trial court erred (1) "in limiting the general
damages which the plaintiff suffered to P5,000, instead of P25,000 as claimed in the
complaint," and (2) "in limiting the time when plaintiff was entirely disabled to two
months and twenty-one days and fixing the damage accordingly in the sum of P2,666,
instead of P6,000 as claimed by plaintiff in his complaint."
The Attorney-General on behalf of the defendant urges that the trial court erred: (a) in
finding that the collision between the plaintiff's motorcycle and the ambulance of the
General Hospital was due to the negligence of the chauffeur; (b) in holding that the
Government of the Philippine Islands is liable for the damages sustained by the plaintiff
as a result of the collision, even if it be true that the collision was due to the negligence of
the chauffeur; and (c) in rendering judgment against the defendant for the sum of
P14,741.
The trial court's findings of fact, which are fully supported by the record, are as follows:
It is a fact not disputed by counsel for the defendant that when the plaintiff, riding on a
motorcycle, was going toward the western part of Calle Padre Faura, passing along the
west side thereof at a speed of ten to twelve miles an hour, upon crossing Taft Avenue
and when he was ten feet from the southwestern intersection of said streets, the General
Hospital ambulance, upon reaching said avenue, instead of turning toward the south, after
passing the center thereof, so that it would be on the left side of said avenue, as is
prescribed by the ordinance and the Motor Vehicle Act, turned suddenly and
unexpectedly and long before reaching the center of the street, into the right side of Taft
Avenue, without having sounded any whistle or horn, by which movement it struck the
plaintiff, who was already six feet from the southwestern point or from the post place
there.
By reason of the resulting collision, the plaintiff was so severely injured that, according
to Dr. Saleeby, who examined him on the very same day that he was taken to the General
Hospital, he was suffering from a depression in the left parietal region, a would in the
same place and in the back part of his head, while blood issued from his nose and he was
entirely unconscious.
At another examination six days before the day of the trial, Dr. Saleeby noticed that the
plaintiff's leg showed a contraction of an inch and a half and a curvature that made his leg
very weak and painful at the point of the fracture. Examination of his head revealed a
notable readjustment of the functions of the brain and nerves. The patient apparently was
slightly deaf, had a light weakness in his eyes and in his mental condition. This latter
weakness was always noticed when the plaintiff had to do any difficult mental labor,
especially when he attempted to use his money for mathematical calculations.
According to the various merchants who testified as witnesses, the plaintiff's mental and
physical condition prior to the accident was excellent, and that after having received the
injuries that have been discussed, his physical condition had undergone a noticeable
depreciation, for he had lost the agility, energy, and ability that he had constantly
displayed before the accident as one of the best constructors of wooden buildings and he
could not now earn even a half of the income that he had secured for his work because he
had lost 50 per cent of his efficiency. As a contractor, he could no longer, as he had
before done, climb up ladders and scaffoldings to reach the highest parts of the building.
As a consequence of the loss the plaintiff suffered in the efficiency of his work as a
contractor, he had to dissolved the partnership he had formed with the engineer. Wilson,
because he was incapacitated from making mathematical calculations on account of the
condition of his leg and of his mental faculties, and he had to give up a contract he had
for the construction of the Uy Chaco building."
We may say at the outset that we are in full accord with the trial court to the effect that
the collision between the plaintiff's motorcycle and the ambulance of the General
Hospital was due solely to the negligence of the chauffeur.
The two items which constitute a part of the P14,741 and which are drawn in question by
the plaintiff are (a) P5,000, the award awarded for permanent injuries, and (b) the P2,666,
the amount allowed for the loss of wages during the time the plaintiff was incapacitated
from pursuing his occupation. We find nothing in the record which would justify us in
increasing the amount of the first. As to the second, the record shows, and the trial court
so found, that the plaintiff's services as a contractor were worth P1,000 per month. The
court, however, limited the time to two months and twenty-one days, which the plaintiff
was actually confined in the hospital. In this we think there was error, because it was
clearly established that the plaintiff was wholly incapacitated for a period of six months.
The mere fact that he remained in the hospital only two months and twenty-one days
while the remainder of the six months was spent in his home, would not prevent recovery
for the whole time. We, therefore, find that the amount of damages sustained by the
plaintiff, without any fault on his part, is P18,075.
Issue: whether the Government is legally-liable for the damages ?
Held:
Act No. 2457, effective February 3, 1915, reads:
An Act authorizing E. Merritt to bring suit against the Government of the Philippine
Islands and authorizing the Attorney-General of said Islands to appear in said suit.
Whereas a claim has been filed against the Government of the Philippine Islands by Mr.
E. Merritt, of Manila, for damages resulting from a collision between his motorcycle and
the ambulance of the General Hospital on March twenty-fifth, nineteen hundred and
thirteen;
Whereas it is not known who is responsible for the accident nor is it possible to determine
the amount of damages, if any, to which the claimant is entitled; and
Whereas the Director of Public Works and the Attorney-General recommended that an
Act be passed by the Legislature authorizing Mr. E. Merritt to bring suit in the courts
against the Government, in order that said questions may be decided:
Did the defendant, in enacting the above quoted Act, simply waive its immunity from suit
or did it also concede its liability to the plaintiff? If only the former, then it cannot be
held that the Act created any new cause of action in favor of the plaintiff or extended the
defendant's liability to any case not previously recognized.
All admit that the Insular Government (the defendant) cannot be sued by an individual
without its consent. It is also admitted that the instant case is one against the Government.
As the consent of the Government to be sued by the plaintiff was entirely voluntary on its
part, it is our duty to look carefully into the terms of the consent, and render judgment
accordingly.
The plaintiff was authorized to bring this action against the Government "in order to fix
the responsibility for the collision between his motorcycle and the ambulance of the
General Hospital and to determine the amount of the damages, if any, to which Mr. E.
Merritt is entitled on account of said collision, . . . ." These were the two questions
submitted to the court for determination. The Act was passed "in order that said questions
may be decided." We have "decided" that the accident was due solely to the negligence of
the chauffeur, who was at the time an employee of the defendant, and we have also fixed
the amount of damages sustained by the plaintiff as a result of the collision. Does the Act
authorize us to hold that the Government is legally liable for that amount? If not, we must
look elsewhere for such authority, if it exists.
By consenting to be sued a state simply waives its immunity from suit. It does not
thereby concede its liability to plaintiff, or create any cause of action in his favor, or
extend its liability to any cause not previously recognized. It merely gives a remedy to
enforce a preexisting liability and submits itself to the jurisdiction of the court, subject to
its right to interpose any lawful defense.
It being quite clear that Act No. 2457 does not operate to extend the Government's
liability to any cause not previously recognized, we will now examine the substantive law
touching the defendant's liability for the negligent acts of its officers, agents, and
employees. Paragraph 5 of article 1903 of the Civil Code reads:
The state is liable in this sense when it acts through a special agent, but not when the
damage should have been caused by the official to whom properly it pertained to do the
act performed, in which case the provisions of the preceding article shall be applicable.
The supreme court of Spain in defining the scope of this paragraph said:
That the obligation to indemnify for damages which a third person causes to another by
his fault or negligence is based, as is evidenced by the same Law 3, Title 15, Partida 7, on
that the person obligated, by his own fault or negligence, takes part in the act or omission
of the third party who caused the damage. It follows therefrom that the state, by virtue of
such provisions of law, is not responsible for the damages suffered by private individuals
in consequence of acts performed by its employees in the discharge of the functions
pertaining to their office, because neither fault nor even negligence can be presumed on
the part of the state in the organization of branches of public service and in the
appointment of its agents; on the contrary, we must presuppose all foresight humanly
possible on its part in order that each branch of service serves the general weal an that of
private persons interested in its operation. Between these latter and the state, therefore, no
relations of a private nature governed by the civil law can arise except in a case where the
state acts as a judicial person capable of acquiring rights and contracting obligations.
(Supreme Court of Spain, January 7, 1898; 83 Jur. Civ., 24.)
That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which arise
out of fault or negligence; and whereas in the first article thereof. No. 1902, where the
general principle is laid down that where a person who by an act or omission causes
damage to another through fault or negligence, shall be obliged to repair the damage so
done, reference is made to acts or omissions of the persons who directly or indirectly
cause the damage, the following articles refers to this persons and imposes an identical
obligation upon those who maintain fixed relations of authority and superiority over the
authors of the damage, because the law presumes that in consequence of such relations
the evil caused by their own fault or negligence is imputable to them. This legal
presumption gives way to proof, however, because, as held in the last paragraph of article
1903, responsibility for acts of third persons ceases when the persons mentioned in said
article prove that they employed all the diligence of a good father of a family to avoid the
damage, and among these persons, called upon to answer in a direct and not a subsidiary
manner, are found, in addition to the mother or the father in a proper case, guardians and
owners or directors of an establishment or enterprise, the state, but not always, except
when it acts through the agency of a special agent, doubtless because and only in this
case, the fault or negligence, which is the original basis of this kind of objections, must
be presumed to lie with the state.
That although in some cases the state might by virtue of the general principle set forth in
article 1902 respond for all the damage that is occasioned to private parties by orders or
resolutions which by fault or negligence are made by branches of the central
administration acting in the name and representation of the state itself and as an external
expression of its sovereignty in the exercise of its executive powers, yet said article is not
applicable in the case of damages said to have been occasioned to the petitioners by an
executive official, acting in the exercise of his powers, in proceedings to enforce the
collections of certain property taxes owing by the owner of the property which they hold
in sublease.
That the responsibility of the state is limited by article 1903 to the case wherein it acts
through a special agent (and a special agent, in the sense in which these words are
employed, is one who receives a definite and fixed order or commission, foreign to the
exercise of the duties of his office if he is a special official) so that in representation of
the state and being bound to act as an agent thereof, he executes the trust confided to him.
This concept does not apply to any executive agent who is an employee of the acting
administration and who on his own responsibility performs the functions which are
inherent in and naturally pertain to his office and which are regulated by law and the
regulations." (Supreme Court of Spain, May 18, 1904; 98 Jur. Civ., 389, 390.)
That according to paragraph 5 of article 1903 of the Civil Code and the principle laid
down in a decision, among others, of the 18th of May, 1904, in a damage case, the
responsibility of the state is limited to that which it contracts through a special agent, duly
empowered by a definite order or commission to perform some act or charged with some
definite purpose which gives rise to the claim, and not where the claim is based on acts or
omissions imputable to a public official charged with some administrative or technical
office who can be held to the proper responsibility in the manner laid down by the law of
civil responsibility. Consequently, the trial court in not so deciding and in sentencing the
said entity to the payment of damages, caused by an official of the second class referred
to, has by erroneous interpretation infringed the provisions of articles 1902 and 1903 of
the Civil Code. (Supreme Court of Spain, July 30, 1911; 122 Jur. Civ., 146.)
It is, therefore, evidence that the State (the Government of the Philippine Islands) is only
liable, according to the above quoted decisions of the Supreme Court of Spain, for the
acts of its agents, officers and employees when they act as special agents within the
meaning of paragraph 5 of article 1903, supra, and that the chauffeur of the ambulance of
the General Hospital was not such an agent.


INOCENCIO ROSETE vs. THE AUDITOR GENERAL
Facts:
This is an appeal from the decision of the Insular Auditor denying the claim of Inocencio
Rosete and others against the Government in the amount of P35,376, for damages caused
to buildings belonging to the claimant, which according to the appellant's claim were
destroyed by fire that came from the contiguous warehouse of the Emergency Control
Administration, ECA, located at No. 2262 Azcarraga, due to the negligence of a certain
Jose Frayno y Panlilio in igniting recklessly his cigarette-lighter near a five gallon drum
into which gasoline was being drained, and of the officers of the said ECA, which is an
office or agency of the Government, in storing gasoline in said warehouse contrary to the
provisions of Ordinances of the City of Manila.
Issue: whether or not assuming them to be true, the Insular Auditor erred in denying or
dismissing the appellant's claim?
Held:
The claimant contends that the Auditor General erred in not finding that the government
agency or instrumentality known as the Emergency Control Administration of the
officers thereof, were guilty of negligence in storing a highly combustible and
inflammable substance in its warehouse on bodega in Manila in violation of City
Ordinances, and therefore the government is liable for the damages sustained by the
claimant under article 1903 of the Civil Code, which in its pertinent part reads as follows:
ART. 1903. The obligation imposed by the preceding article is enforceable not only for
personal acts and omissions but also for those persons for whom another is responsible.
The state is liable in the scene when it acts through a special agent, but not when the
damage should have been caused by the official to whom it properly pertained to do the
act performed, in which case the provisions of the preceding article shall be applicable.
In the case of Merritt vs. Government of the Philippine Islands (34 Phil., 311), this Court
held the following:
. . . Paragraph 5 of article 1903 of the Civil Code reads:
"The state is liable in this sense when it acts through a special agent, but not when the
damage should have been caused by the official to whom properly it pertained to do the
act performed, in which cast the provisions of the preceding article shall be applicable."
"That the responsibility of the state is limited by article 1903 to the case wherein it acts
through a special agent (and a special agent, in the sense in which these words are
employed, is one who receives a definite and fixed order or commission, foreign to the
exercise of the duties of his office if he is a special official) so that in representation of
the state and being bound to act as an agent thereof, he executes the trust confided to him.
This concept does not apply to any executive agent who is an employee of the active
administration and who on his own responsibility performs the functions which are
inherent in and naturally pertain to his office and which are regulated by law and the
regulations." (Supreme Court of Spain, May 18, 1904; 98 Jur. Civ., 389, 390.).
There being no showing that whatever negligence may be imputed to the Emergency
Control Administration or its officers, was done by an special agent, because the officers
of the Emergency Control Administration did not act as special agents of the government
within the above defined meaning of that word in article 1903 of the Civil Code in storing
gasoline in warehouse of the ECA, the government is not responsible for the damages
caused through such negligence.




EMILIANO R. DE LOS SANTOS, SPOUSES NORMA A. PADILLA and
ISIDORO L. PADILLA and the HEIRS OF FRANCISCO DAYRIT, petitioners,
vs. THE HON. INTERMEDIATE APPELLATE COURT, HON. JUDGE
CICERRO C. JURADO and EDILBERTO CADIENTE, respondents.
Isidoro L. Padilla for petitioners.
Joaquin G. Mendoza for E. Cadiente.

ROMERO, J .:
Questioned in the instant petition for review on certiorari is the Decision of the then
Intermediate Appellate Court
1
affirming the December 1, 1982 order of the then Court of
First Instance of Rizal, Branch XXII at Pasig
2
in civil Cases Nos. 46800 which states in
toto:
It appearing that the construction of the road and creek in question was a project
undertaken under the authority of the Minister of Public Works, the funding of which was
the responsibility of the National Government and that the defendants impleaded herein
are Edilberto Cadiente and Nestor Agustin and not the Republic of the Philippines which
cannot be sued without its consent, this court hereby resolves to dismiss these two (2)
cases without pronouncement as to costs.
SO ORDERED.
Civil Cases Nos. 46800 and 46801 were both filed on July 13, 1982 by petitioners who
are co-owners under TCT No. 329945 of a parcel of land located in Barrio Wawa,
Binangonan, Rizal with an area of nineteen thousand sixty-one (19,061) square meters. In
Civil Case No. 46800, petitioners alleged in the petition for prohibition that in October
1981, without their knowledge or consent, Lorenzo Cadiente, a private contractor and the
Provincial Engineer of Rizal constructed a road nine (9) meters wide and one hundred
twenty-eight meters and seventy centimeters (128.70) long occupying a total area of one
thousand one hundred sixty-five (1,165) square meters of their land.
Petitioners added that aside from the road, the said respondents also constructed, without
their knowledge and consent, an artificial creek twenty three meters and twenty
centimeters (23.20) wide and one hundred twenty-eight meters and sixty-nine centimeters
long (128.69) occupying an area of two thousand nine hundred six (2,906) square meters
of their property. Constructed in a zig-zag manner, the creek meandered through their
property.
Alleging that it completed, the road and the creek would "serve no public profitable and
practicable purpose but for respondents' personal profit, to the great damage and
prejudice of the taxpayers and the petitioners," the same petitioners invoked their rights
under Art. IV Secs. 1 and 2, of the Bill of Rights of the 1973 Constitution and prayed for
the issuance of restraining order or a writ of preliminary injunction to stop the
construction. They also prayed that after hearing on the merits, judgment be rendered: (1)
declaring illegal the construction of the road and artificial creek which was made without
their knowledge and consent, "without due process and without just compensation and in
violation of the provision of statute law and of the Philippine Constitution;" (2) issuing a
permanent prohibition; (3) ordering respondents to pay petitioners "jointly and
collectively" P15,00.00 as attorney's fees and P600.00 for each appearance, and (4)
ordering the respondents to pay the costs of the suit.
3

An action for damages, Civil Case No. 46801 on the other hand, was founded on Art. 32,
paragraphs 6 and 7 of the Civil Code and the constitutional provisions on the right against
deprivation of property without due process of law and without just compensation.
Thereafter, the two cases were consolidated. On November 11, 1982, the Solicitor
General filed a motion to dismiss both cases on the following grounds: (a) with respect to
Civil Case No. 46800, the pendency of Civil Case No. 46801 which involved the same
parties and cause of action; (b) both cases were in reality suits against the state which
could not be maintained without the State's consent; and (c) lack of cause of action.
Consequently, the lower court issued the aforequoted Order of December 1, 1982. Their
motion for the reconsideration of said Order having been denied, petitioners elevated (to)
the cases to this Court through an "appeal by certiorari" which was docketed as G. R.
No. 63610. The Second Division of this Court, however, referred the cases to the then
Intermediate Appellate Court pursuant to Sec. 16 of the Interim Rules.
4
In due course,
the Appellate court rendered a Decision on May 22, 1985 which disposed of the cases
thus:
Accordingly, the two actions cannot be maintained. They are in reality suits against the
state which has not given its consent to be sued (Minister [sic] vs. CFI, 40 SCRA 464;
Isberto vs. Raquiza, 67 SCRA 116; Begosa v. Chairman, PVA, 32 SCRA 466).
Appellants' remedy lies elsewhere.
Appellants assert that the taking of their property in the manner alleged in these two cases
was without due process of law. This is not correct. The appealed order has not closed the
door to appellants right, if any, to just compensation for the alleged area of their land
which was expropriated. The court below dismissed the cases for lack of consent on the
part of the state to be sued herein. We repeat appellants' remedy for just compensation
lies elsewhere.
WHEREFORE, the order appealed from is in full accord with the evidence and the law
and is hereby therefore affirmed in all its parts. Costs against appellants.
SO ORDERED.
5

Consequently, petitioners elevated the cases to this Court through a petition for review on
certiorari. The petition is anchored on the ruling of the Court in Amigable v. Cuenca
6

which states: ". . . . where the government takes away property from a private landowner
for public use without going through the legal process of expropriation or negotiated
sale," a suit may properly be maintained against the government.
We hold for the petitioners.
That the principle of state immunity from suit cannot be invoked to defeat petitioners'
claim has long been settled. In Ministerio v. Court of First Instance of Cebu,
7
the Court
held:
. . . . The doctrine of governmental immunity from suit cannot serve as an instrument for
perpetrating an injustice on a citizen. Had the government followed the procedure
indicated by the governing law at the time, a complaint would have been filed by it, and
only upon payment of the compensation fixed by the judgment, or after tender to the
party entitled to such payment of the amount fixed, may it "have the right to enter in and
upon the land so condemned" to appropriate the same to the public use defined in the
judgment. If there were an observance of procedural regularity, petitioners would not be
in the said plaint they are now. It is unthinkable then that precisely because there was a
failure to abide by what the law requires, the government would stand to benefit. It just as
important, if not more so, that there be fidelity to legal norms on the part of the
officialdom if the rule of law were to be maintained. It is not too much to say that when
the government takes any property for public use, which is conditioned upon the payment
of just compensation, to be judicially ascertained, it makes manifest that it submits to the
jurisdiction of a court. There is no thought then that the doctrine of immunity from suit
could still be appropriately invoked.
We find the facts of the Ministerio case on all fours with the instant cases insofar as the
fact that the respondent government officials executed a shortcut in appropriating
petitioners' property for public use is concerned. As in the Amigable case, no
expropriation proceedings were initiated before construction of the projects began. In like
manner, nowhere in his pleadings in the cases at bar does the Solicitor General mention
that the fact that expropriation proceedings had in fact been undertaken before the road
and artificial creek were constructed. Thus, quoting the answer of the defendants in Civil
Case No. 46801, the Solicitor General summarized the facts which defendants considered
as constituting justification for the construction as follows:
10. The construction of the road and creek in question on the property which at the time
was said to be public property, was initiated, and construction effected, through the usual
and ordinary course, as shown by the following:
a. November 5, 1979 Engr. Data who was the incumbent District Engineer submitted
(thru channels) plans, program of works and detailed estimates for approval of higher
authorities, thru the initiation of Mayor Ynares and Assemblyman Gilberto Duavit;
b. February 18, 1980 Regional Director Eduardo L. Lagunilla, MPW Region IV,
EDSA, Quezon City endorsed said request to the Minister of Public Works;.
c. February 13, 1981 Assemblyman Gilberto Duavit sent a hand-written follow-up
note regarding the project;
d. June 17, 1981 The undersigned defendant Nestor Agustin was designated Chief
Civil Engineer of the Rizal Engineer District, Vice Engr. Cresencio Data who reached his
compulsory retirement age;
e. September 23, 1981 Funds in the amount of P588,000.00 was released for partial
implementation of the project. The total amount requested was P1,200,000. 00;
f. October 19, 1981 The undersigned submitted a request to the MPWH Central Office
seeking authority to effect implementation of the project;
g. October 29, 1981 The Regional Director approved the plans and program of works
for the project in the amount of P588,000.00;
h. November 11, 1981 The Honorable Minister Jesus S. Hipolito granted the request
to undertake the implementation of the project;
i. November 25, 1981 Project implementation was started;
j. March 3, 1982 Construction of rock bulkhead was completed;
k. November 23, 1982 P249,000.00 was released for improvement (deepening and
diverting of flow) of Binangonan River which was a complimentary structure of
Binangonan port system;
l. April 9, 1982 Implementation was started. Contract for this project was approved by
the Regional Director in favor of EDILBERTO CADIENTE CONSTRUCTION;
m. May 21, 1982 Deepening slightly of the adjacent portion of the rock bulkhead was
completed.
11. The construction of the structures was done in good faith;
The construction of the roadway and deepening of the creek was designated to generate
for the municipality of Binangonan, Rizal more benefits in the form of substantial
revenue from fishing industry, parking area, market rentals, development site, and road
system improvements. The area covered by said public improvements is part of the
Laguna Lake area which is submerged in water even during dry season. The municipal
mayor of Binangonan, Rizal stated that said area is public property.
8

Public respondents' belief that the property involved is public, even if buttressed by
statements of other public officials, is no reason for the unjust taking of petitioners'
property. As TCT No. 329945 shows, the property was registered under the Torrens
system in the names of "Emiliano R. de los Santos, married to Corazon Dayrit; and
Norma Alabastro, married to Isidro L. Padilla" as early as March 29, 1971. Had the
public respondents, including the other officials involved in the construction, performed
their functions by exercising even the ordinary diligence expected of them as public
officials, they would not have failed to note that the property is a private one. A public
infrastructure losses its laudability if, in the process of undertaking it, private rights are
disregarded. In this connection, the Court said in Republic v. Sandiganbayan:
9

It can hardly be doubted that in exercising the right of eminent domain, the State
exercises its jus imperii, as distinguished from its proprietary rights of jus gestionis. Yet,
even in that area, it has been held that where private property has been taken in
expropriation without just compensation being paid, the defense of immunity from suit
cannot be set up by the State against an action for payment by the owner.
Public respondents' assertion that the project had been completed on May 21, 1982 meets
strong opposition from the petitioners who insist that the project "until now is not yet
finished."
10
This factual issue needs determination which only the trial court can
undertake. Thus, the need for a full blown trial on the merits. We do not subscribe to the
appellate court's suggestion that the remedy of the petitioners "lies elsewhere."
The filing of another case to determine just compensation is superfluous. The issue may
be threshed out below for practical reasons in the event that it is shown later that it is no
longer possible to prohibit the public respondents from continuing with the public work.
As held in the Amigable case, damages may be awarded the petitioners in the form of
legal interest on the price of the land to be reckoned from the time of the unlawful taking.
WHEREFORE, the petition is hereby GRANTED and Civil Cases Nos. 46800 and 46801
shall be REMANDED to the lower court for trial on the merits after the Republic of the
Philippines shall have been impleaded as defendant in both cases.

G.R. No. 90478 November 21, 1991
REPUBLIC OF THE PHILIPPINES (PRESIDENTIAL COMMISSION ON GOOD
GOVERNMENT), petitioner, vs. SANDIGANBAYAN, BIENVENIDO R.
TANTOCO, JR. and DOMINADOR R. SANTIAGO, respondents.
Dominador R. Santiago for and in his own behalf and as counsel for respondent Tantoco,
Jr.

NARVASA, J .:p
Private respondents Bienvenido R. Tantoco, Jr. and Dominador R. Santiago together
with Ferdinand E. Marcos, Imelda R. Marcos, Bienvenido R. Tantoco, Sr., Gliceria R.
Tantoco, and Maria Lourdes Tantoco-Pineda-are defendants in Civil Case No. 0008 of
the Sandiganbayan. The case was commenced on July 21, 1987 by the Presidential
Commission on Good Government (PCGG) in behalf of the Republic of the Philippines.
The complaint which initiated the action was denominated one "for reconveyance,
reversion, accounting, restitution and damages," and was avowedly filed pursuant to
Executive Order No. 14 of President Corazon C. Aquino.
After having been served with summons, Tantoco, Jr. and Santiago, instead of filing their
answer, jointly filed a "MOTION TO STRIKE OUT SOME PORTIONS OF THE
COMPLAINT AND FOR BILL OF PARTICULARS OF OTHER PORTIONS" dated
Nov. 3, 1987. 1 The PCGG filed an opposition thereto, 2 and the movants, a reply to the
opposition. 3 By order dated January 29, 1988, the Sandiganbayan, in order to expedite
proceedings and accommodate the defendants, gave the PCGG forty-five (45) days to
expand its complaint to make more specific certain allegations. 4
Tantoco and Santiago then presented a "motion for leave to file interrogatories under
Rule 25 of the Rules of Court" dated February 1, 1988, and "Interrogatories under Rule
25." 5 Basically, they sought an answer to the question: "Who were the Commissioners of
the PCGG (aside from its Chairman, Hon. Ramon Diaz, who verified the complaint) who
approved or authorized the inclusion of Messrs. Bienvenido R. Tantoco, Jr. and
Dominador R. Santiago as defendants in the . . case?" 6 The PCGG responded by filing a
motion dated February 9, 1988 to strike out said motion and interrogatories as being
impertinent, "queer," "weird," or "procedurally bizarre as the purpose thereof lacks merit
as it is improper, impertinent and irrelevant under any guise." 7
On March 18, 1988, in compliance with the Order of January 29, 1988, the PCGG filed
an Expanded Complaint. 8 As this expanded complaint, Tantoco and Santiago reiterated
their motion for bill of particulars, through a Manifestation dated April 11, 1988. 9
Afterwards, by Resolution dated July 4, 1988, 10 the Sandiganbayan denied the motion to
strike out, for bill of particulars, and for leave to file interrogatories, holding them to be
without legal and factual basis. Also denied was the PCGG's motion to strike out
impertinent pleading dated February 9, 1988. The Sandiganbayan declared inter alia the
complaint to be "sufficiently definite and clear enough," there are adequate allegations . .
which clearly portray the supposed involvement and/or alleged participation of
defendants-movants in the transactions described in detail in said Complaint," and "the
other matters sought for particularization are evidentiary in nature which should be
ventilated in the pre-trial or trial proper . ." It also opined that "(s)ervice of interrogatories
before joinder of issue and without leave of court is premature . . (absent) any special or
extraordinary circumstances . . which would justify . . (the same)."
Tantoco and Santiago then filed an Answer with Compulsory Counterclaim under date of
July 18, 1988. 11 In response, the PCGG presented a "Reply to Answer with Motion to
Dismiss Compulsory Counterclaim " 12
The case was set for pre-trial on July 31, 1989. 13 On July 25, 1989, the PCGG submitted
its PRE-TRIAL. 14 The pre-trial was however reset to September 11, 1989, and all other
parties were required to submit pre-trial briefs on or before that date. 15
On July 27, 1989 Tantoco and Santiago filed with the Sandiganbayan a pleading
denominated "Interrogatories to Plaintiff," 16 and on August 2, 1989, an "Amended
Interrogatories to Plaintiff"' 17 as well as a Motion for Production and Inspection of
Documents. 18
The amended interrogatories chiefly sought factual details relative to specific averments
of PCGG's amended complaint, through such questions, for instance, as
1. In connection with the allegations . . in paragraph 1 . ., what specific property or
properties does the plaintiff claim it has the right to recover from defendants Tantoco, Jr.
and Santiago for being ill-gotten?
3. In connection with the allegations . . in paragraph 10 (a) . . what specific act or acts . .
were committed by defendants Tantoco, Jr. and Santiago in "concert with" defendant
Ferdinand Marcos and in furtherance or pursuit, of the alleged systematic plan of said
defendant Marcos to accumulate ill-gotten wealth?"
5. In connection with . . paragraph 13 . ., what specific act or acts of the defendants
Tantoco, Jr. and Santiago . . were committed by said defendants as part, or in
furtherance, of the alleged plan to conceal assets of defendants Ferdinand and Imelda
Marcos?
7. In connection with . . paragraph 15(c) . . is it plaintiff's position or theory of the case
that Tourist Duty Free Shops, Inc., including all the assets of said corporation, are
beneficially owned by either or both defendants Ferdinand and Imelda Marcos and that
the defendants Tantoco, Jr. and Santiago, as well as, the other stockholders of record of
the same corporation are mere "dummies" of said defendants Ferdinand and /or Imelda
R. Marcos?
On the other hand, the motion for production and inspection of documents prayed for
examination and copying of
1) the "official records and other evidence" on the basis of which the verification of the
Amended Complaint asserted that the allegations thereof are "true and correct;"
2) the documents listed in PCGG's Pre-Trial Brief as those "intended to be presented and
. . marked as exhibits for the plaintiff;" and
3) "the minutes of the meeting of the PCGG which chronicles the discussion (if any) and
the decision (of the Chairman and members) to file the complaint" in the case at bar.
By Resolutions dated August 21, 1989 and August 25, 1989, the Sandiganbayan admitted
the Amended Interrogatories and granted the motion for production and inspection of
documents (production being scheduled on September 14 and 15, 1989), respectively.
On September 1, 1989, the PCGG filed a Motion for Reconsideration of the Resolution of
August 25, 1989 (allowing production and inspection of documents). It argued that
1) since the documents subject thereof would be marked as exhibits during the pre-trial
on September 11, 1989 anyway, the order for "their production and inspection on
September 14 and 15, are purposeless and unnecessary;"
2) movants already know of the existence and contents of the document which "are
clearly described . . (in) plaintiff's Pre-Trial Brief;"
3) the documents are "privileged in character" since they are intended to be used against
the PCGG and/or its Commissioners in violation of Section 4, Executive Order No. 1,
viz.:
(a) No civil action shall lie against the Commission or any member thereof for anything
done or omitted in the discharge of the task contemplated by this Order.
(b) No member or staff of the Commission shall be required to testify or produce
evidence in any judicial, legislative, or administrative proceeding concerning matters
within its official cognizance.
It also filed on September 4, 1989 an opposition to the Amended Interrogatories, 19
which the Sandiganbayan treated as a motion for reconsideration of the Resolution of
August 21, 1989 (admitting the Amended Interrogatories). The opposition alleged that
1) the interrogatories "are not specific and do not name the person to whom they are
propounded . .," or "who in the PCGG, in particular, . . (should) answer the
interrogatories;"
2) the interrogatories delve into "factual matters which had already been decreed . . as
part of the proof of the Complaint upon trial . .;"
3) the interrogatories "are frivolous" since they inquire about "matters of fact . . which
defendants . . sought to . . (extract) through their aborted Motion for Bill of Particulars;"
4) the interrogatories "are really in the nature of a deposition, which is prematurely filed
and irregularly utilized . . (since) the order of trial calls for plaintiff to first present its
evidence."
Tantoco and Santiago filed a reply and opposition on September 18, 1989.
After hearing, the Sandiganbayan promulgated two (2) Resolutions on September 29,
1989, the first, denying reconsideration (of the Resolution allowing production of
documents), and the second, reiterating by implication the permission to serve the
amended interrogatories on the plaintiff (PCGG). 20
Hence, this petition for certiorari.
The PCGG contends that said orders, both dated September 29, 1989, should be nullified
because rendered with grave abuse of discretion amounting to excess of jurisdiction.
More particularly, it claims
a) as regards the order allowing the amended interrogatories to the plaintiff PCGG:
1) that said interrogatories are not specific and do not name the particular individuals to
whom they are propounded, being addressed only to the PCGG;
2) that the interrogatories deal with factual matters which the Sandiganbayan (in denying
the movants' motion for bill of particulars) had already declared to be part of the PCGG's
proof upon trial; and
3) that the interrogatories would make PCGG Commissioners and officers witnesses, in
contravention of Executive Order No. 14 and related issuances; and
b) as regards the order granting the motion for production of documents:
1) that movants had not shown any good cause therefor;
2) that some documents sought to be produced and inspected had already been presented
in Court and marked preliminarily as PCGG's exhibits, and the movants had viewed,
scrutinized and even offered objections thereto and made comments thereon; and
3) that the other documents sought to be produced are either
(a) privileged in character or confidential in nature and their use is proscribed by the
immunity provisions of Executive Order No. 1, or
(b) non-existent, or mere products of the movants' suspicion and fear.
This Court issued a temporary restraining order on October 27, 1989, directing the
Sandiganbayan to desist from enforcing its questioned resolutions of September 29, 1989
in Civil Case No. 0008. 21
After the issues were delineated and argued at no little length by the parties, the Solicitor
General withdrew "as counsel for plaintiff . . with the reservation, however, conformably
with Presidential Decree No. 478, the provisions of Executive Order No. 292, as well as
the decisional law of 'Orbos v. Civil Service Commission, et al.,' (G.R. No. 92561,
September 12, 1990) 22 to submit his comment/observation on incidents/matters pending
with this . . Court if called for by circumstances in the interest of the Government or if he
is so required by the Court." 23 This, the Court allowed by Resolution dated January 21,
1991. 24
Subsequently, PCGG Commissioner Maximo A. Maceren advised the Court that the
cases from which the Solicitor General had withdrawn would henceforth be under his
(Maceren's) charge "and/or any of the following private attorneys: Eliseo B. Alampay,
Jr., Mario E. Ongkiko, Mario Jalandoni and such other attorneys as it may later
authorize." 25
The facts not being in dispute, and it appearing that the parties have fully ventilated their
respective positions, the Court now proceeds to decide the case.
Involved in the present proceedings are two of the modes of discovery provided in the
Rules of Court: interrogatories to parties , 26 and production and inspection of documents
and things. 27 Now, it appears to the Court that among far too many lawyers (and not a
few judges), there is, if not a regrettable unfamiliarity and even outright ignorance about
the nature, purposes and operation of the modes of discovery, at least a strong yet
unreasoned and unreasonable disinclination to resort to them which is a great pity for
the intelligent and adequate use of the deposition-discovery mechanism, coupled with
pre-trial procedure, could, as the experience of other jurisdictions convincingly
demonstrates, effectively shorten the period of litigation and speed up adjudication. 28
Hence, a few words about these remedies is not at all inappropriate.
The resolution of controversies is, as everyone knows, the raison d'etre of courts. This
essential function is accomplished by first, the ascertainment of all the material and
relevant facts from the pleadings and from the evidence adduced by the parties, and
second, after that determination of the facts has been completed, by the application of the
law thereto to the end that the controversy may be settled authoritatively, definitely and
finally.
It is for this reason that a substantial part of the adjective law in this jurisdiction is
occupied with assuring that all the facts are indeed presented to the Court; for obviously,
to the extent that adjudication is made on the basis of incomplete facts, to that extent
there is faultiness in the approximation of objective justice. It is thus the obligation of
lawyers no less than of judges to see that this objective is attained; that is to say, that
there no suppression, obscuration, misrepresentation or distortion of the facts; and that no
party be unaware of any fact material a relevant to the action, or surprised by any factual
detail suddenly brought to his attention during the trial. 29
Seventy-one years ago, in Alonso v. Villamor, 30 this Court described the nature and
object of litigation and in the process laid down the standards by which judicial contests
are to be conducted in this jurisdiction. It said:
A litigation is not a game of technicalities in which one, more deeply schooled and
skilled in the subtle art of movement and position, entraps and destroys the other. It is,
rather a contest in which each contending party fully and fairly lays before the court the
facts in issue and then brushing aside as wholly trivial and indecisive all imperfections of
form and technicalities of procedure, asks that justice be done on the merits. Lawsuits,
unlike duels, are not to be won by a rapier's thrust. Technicality, when it deserts its proper
office as an aid to justice and becomes its great hindrance and chief enemy, deserves
scant consideration from courts. There should be no vested right in technicalities. . . .
The message is plain. It is the duty of each contending party to lay before the court the
facts in issue-fully and fairly; i.e., to present to the court all the material and relevant
facts known to him, suppressing or concealing nothing, nor preventing another party, by
clever and adroit manipulation of the technical rules of pleading and evidence, from also
presenting all the facts within his knowledge.
Initially, that undertaking of laying the facts before the court is accomplished by the
pleadings filed by the parties; but that, only in a very general way. Only "ultimate facts"
are set forth in the pleadings; hence, only the barest outline of the facfual basis of a
party's claims or defenses is limned in his pleadings. The law says that every pleading
"shall contain in a methodical and logical form, a plain, concise and direct statement of
the ultimate facts on which the party pleading relies for his claim or defense, as the case
may be, omitting the statement of mere evidentiary facts." 31
Parenthetically, if this requirement is not observed, i.e., the ultimate facts are alleged too
generally or "not averred with sufficient definiteness or particularity to enable . . (an
adverse party) properly to prepare his responsive pleading or to prepare for trial," a bill of
particulars seeking a "more definite statement" may be ordered by the court on motion of
a party. The office of a bill of particulars is, however, limited to making more particular
or definite the ultimate facts in a pleading It is not its office to supply evidentiary matters.
And the common perception is that said evidentiary details are made known to the parties
and the court only during the trial, when proof is adduced on the issues of fact arising
from the pleadings.
The truth is that "evidentiary matters" may be inquired into and learned by the parties
before the trial. Indeed, it is the purpose and policy of the law that the parties before
the trial if not indeed even before the pre-trial should discover or inform themselves of
all the facts relevant to the action, not only those known to them individually, but also
those known to adversaries; in other words, the desideratum is that civil trials should not
be carried on in the dark; and the Rules of Court make this ideal possible through the
deposition-discovery mechanism set forth in Rules 24 to 29. The experience in other
jurisdictions has been that ample discovery before trial, under proper regulation,
accomplished one of the most necessary of modern procedure: it not only eliminates
unessential issue from trials thereby shortening them considerably, but also requires
parties to play the game with the cards on the table so that the possibility of fair
settlement before trial is measurably increased. . ." 32
As just intimated, the deposition-discovery procedure was designed to remedy the
conceded inadequacy and cumbersomeness of the pre-trial functions of notice-giving,
issue-formulation and fact revelation theretofore performed primarily by the pleadings.
The various modes or instruments of discovery are meant to serve (1) as a device, along
with the pre-trial hearing under Rule 20, to narrow and clarify the basic issues between
the parties, and (2) as a device for ascertaining the facts relative to those issues. The
evident purpose is, to repeat, to enable parties, consistent with recognized privileges, to
obtain the fullest possible knowledge of the issues and facts before trials and thus prevent
that said trials are carried on in the dark. 33
To this end, the field of inquiry that may be covered by depositions or interrogatories is
as broad as when the interrogated party is called as a witness to testify orally at trial. The
inquiry extends to all facts which are relevant, whether they be ultimate or evidentiary,
excepting only those matters which are privileged. The objective is as much to give every
party the fullest possible information of all the relevant facts before the trial as to obtain
evidence for use upon said trial. The principle is reflected in Section 2, Rule 24
(governing depositions) 34 which generally allows the examination of a deponent
1) "regarding any matter, not privileged, which is relevant to the subject of the pending
action, whether relating to the claim or defense of any other party;"
2) as well as:
(a) "the existence, description, nature, custody, condition and location of any books,
documents, or other tangible things" and
(b) "the identity and location of persons having knowledge of relevant facts."
What is chiefly contemplated is the discovery of every bit of information which may be
useful in the preparation for trial, such as the identity and location of persons having
knowledge of relevant facts; those relevant facts themselves; and the existence,
description, nature, custody, condition, and location of any books, documents, or other
tangible things. Hence, "the deposition-discovery rules are to be accorded a broad and
liberal treatment. No longer can the time-honored cry of "fishing expedition" serve to
preclude a party from inquiring into the facts underlying his opponent's case. Mutual
knowledge of all the relevant facts gathered by both parties is essential to proper
litigation. To that end, either party may compel the other to disgorge whatever facts he
has in his possession. The deposition-discovery procedure simply advances the stage at
which the disclosure can be compelled from the time of trial to the period preceding it,
thus reducing the possibility, of surprise, . . . 35
In line with this principle of according liberal treatment to the deposition-discovery
mechanism, such modes of discovery as (a) depositions (whether by oral examination or
written interrogatories) under Rule 24, (b) interrogatories to parties under Rule 25, and
(c) requests for admissions under Rule 26, may be availed of without leave of court, and
generally, without court intervention. The Rules of Court explicitly provide that leave of
court is not necessary to avail of said modes of discovery after an answer to the complaint
has been served. 36 It is only when an answer has not yet been filed (but after jurisdiction
has been obtained over the defendant or property subject of the action) that prior leave of
court is needed to avail of these modes of discovery, the reason being that at that time the
issues are not yet joined and the disputed facts are not clear. 37
On the other hand, leave of court is required as regards discovery by (a) production or
inspection of documents or things in accordance with Rule 27, or (b) physical and mental
examination of persons under Rule 28, which may be granted upon due application and a
showing of due cause.
To ensure that availment of the modes of discovery is otherwise untrammeled and
efficacious, the law imposes serious sanctions on the party who refuses to make
discovery, such as dismissing the action or proceeding or part thereof, or rendering
judgment by default against the disobedient party; contempt of court, or arrest of the
party or agent of the party; payment of the amount of reasonable expenses incurred in
obtaining a court order to compel discovery; taking the matters inquired into as
established in accordance with the claim of the party seeking discovery; refusal to allow
the disobedient party support or oppose designated claims or defenses; striking out
pleadings or parts thereof; staying further proceedings. 38
Of course, there are limitations to discovery, even when permitted to be undertaken
without leave and without judicial intervention. "As indicated by (the) Rules . . .,
limitations inevitably arise when it can be shown that the examination is being conducted
in bad faith or in such a manner as to annoy, embarass, or oppress the person subject to
the inquiry. 39 And . . . further limitations come into existence when the inquiry touches
upon the irrelevant or encroaches upon the recognized domains of privilege." 40
In fine, the liberty of a party to make discovery is well nigh unrestricted if the matters
inquired into are otherwise relevant and not privileged, and the inquiry is made in good
faith and within the bounds of the law.
It is in light of these broad principles underlying the deposition-discovery mechanism, in
relation of course to the particular rules directly involved, that the issues in this case will
now be resolved.
The petitioner's objections to the interrogatories served on it in accordance with Rule 25
of the Rules of Court cannot be sustained.
It should initially be pointed out as regards the private respondents "Motion for Leave
to File Interrogatories" dated February 1, 1988 41 that it was correct for them to seek
leave to serve interrogatories, because discovery was being availed of before an answer
had been served. In such a situation, i.e., "after jurisdiction has been obtained over any
defendant or over property subject of the action" but before answer, Section 1 of Rule 24
(treating of depositions), in relation to Section 1 of Rule 25 (dealing with interrogatories
to parties) explicitly requires "leave of court." 42 But there was no need for the private
respondents to seek such leave to serve their "Amended Interrogatories to Plaintiff"
(dated August 2, 1989 43) after they had filed their answer to the PCGG's complaint, just
as there was no need for the Sandiganbayan to act thereon.
1. The petitioner's first contention that the interrogatories in question are defective
because they (a) do not name the particular individuals to whom they are propounded,
being addressed only to the PCGG, and (b) are "fundamentally the same matters . .
(private respondents) sought to be clarified through their aborted Motion . . for Bill of
Particulars" are untenable and quickly disposed of.
The first part of petitioner's submission is adequately confuted by Section 1, Rule 25
which states that if the party served with interrogatories is a juridical entity such as "a
public or private corporation or a partnership or association," the same shall be "answered
. . by any officer thereof competent to testify in its behalf." There is absolutely no reason
why this proposition should not be applied by analogy to the interrogatories served on the
PCGG. That the interrogatories are addressed only to the PCGG, without naming any
specific commissioner o officer thereof, is utterly of no consequence, and may not be
invoked as a reason to refuse to answer. As the rule states, the interrogatories shall be
answered "by any officer thereof competent to testify in its behalf."
That the matters on which discovery is desired are the same matters subject of a prior
motion for bill of particulars addressed to the PCGG's amended complaint and denied
for lack of merit is beside the point. Indeed, as already pointed out above, a bill of
particulars may elicit only ultimate facts, not so-called evidentiary facts. The latter are
without doubt proper subject of discovery. 44
Neither may it be validly argued that the amended interrogatories lack specificity. The
merest glance at them disproves the argument. The interrogatories are made to relate to
individual paragraphs of the PCGG's expanded complaint and inquire about details of the
ultimate facts therein alleged. What the PCGG may properly do is to object to specific
items of the interrogatories, on the ground of lack of relevancy, or privilege, or that the
inquiries are being made in bad faith, or simply to embarass or oppress it. 45 But until
such an objection is presented and sustained, the obligation to answer subsists.
2. That the interrogatories deal with factual matters which will be part of the PCGG's
proof upon trial, is not ground for suppressing them either. As already pointed out, it is
the precise purpose of discovery to ensure mutual knowledge of all the relevant facts on
the part of all parties even before trial, this being deemed essential to proper litigation.
This is why either party may compel the other to disgorge whatever facts he has in his
possession; and the stage at which disclosure of evidence is made is advanced from the
time of trial to the period preceding it.
3. Also unmeritorious is the objection that the interrogatories would make PCGG
Commissioners and officers witnesses, in contravention of Executive Order No. 14 and
related issuances. In the first place, there is nothing at all wrong in a party's making his
adversary his witness .46 This is expressly allowed by Section 6, Rule 132 of the Rules of
Court, viz.:
Sec. 6. Direct examination of unwilling or hostile witnesses. A party may . . . call an
adverse party or an officer, director, or managing agent of a public or private corporation
or of a partnership or association which is an adverse party, and interrogate him by
leading questions and contradict and impeach him in all respects as if he had been called
by the adverse party, and the witness thus called may be contradicted and impeached by
or on behalf of the adverse party also, and may be cross-examined by the adverse party
only upon the subject-matter of his examination in chief.
The PCGG insinuates that the private respondents are engaged on a "fishing expedition,"
apart from the fact that the information sought is immaterial since they are evidently
meant to establish a claim against PCGG officers who are not parties to the action. It
suffices to point out that "fishing expeditions" are precisely permitted through the modes
of discovery. 47 Moreover, a defendant who files a counterclaim against the plaintiff is
allowed by the Rules to implead persons (therefore strangers to the action) as additional
defendants on said counterclaim. This may be done pursuant to Section 14, Rule 6 of the
Rules, to wit:
Sec. 14. Bringing new parties. When the presence of parties other than those to the
original action is required for the granting of complete relief in the determination of a
counterclaim or cross-claim, the court shall order them to be brought in as defendants, if
jurisdiction over them can be obtained."
The PCGG's assertion that it or its members are not amenable to any civil action "for
anything done or omitted in the discharge of the task contemplated by . . (Executive)
Order (No. 1)," is not a ground to refuse to answer the interrogatories. The disclosure of
facto relevant to the action and which are not self-incriminatory or otherwise privileged is
one thing; the matter of whether or not liability may arise from the facts disclosed in light
of Executive Order No. 1, is another. No doubt, the latter proposition may properly be
set up by way of defense in the action.
The apprehension has been expressed that the answers to the interrogatories may be
utilized as foundation for a counterclaim against the PCGG or its members and officers.
They will be. The private respondents have made no secret that this is in fact their
intention. Withal, the Court is unable to uphold the proposition that while the PCGG
obviously feels itself at liberty to bring actions on the basis of its study and appreciation
of the evidence in its possession, the parties sued should not be free to file counterclaims
in the same actions against the PCGG or its officers for gross neglect or ignorance, if not
downright bad faith or malice in the commencement or initiation of such judicial
proceedings, or that in the actions that it may bring, the PCGG may opt not to be bound
by rule applicable to the parties it has sued, e.g., the rules of discovery.
So, too, the PCGG's postulation that none of its members may be "required to testify or
produce evidence in any judicial . . proceeding concerning matters within its official
cognizance," has no application to a judicial proceeding it has itself initiated. As just
suggested, the act of bringing suit must entail a waiver of the exemption from giving
evidence; by bringing suit it brings itself within the operation and scope of all the rules
governing civil actions, including the rights and duties under the rules of discovery.
Otherwise, the absurd would have to be conceded, that while the parties it has impleaded
as defendants may be required to "disgorge all the facts" within their knowledge and in
their possession, it may not itself be subject to a like compulsion.
The State is, of course, immune from suit in the sense that it cannot, as a rule, be sued
without its consent. But it is axiomatic that in filing an action, it divests itself of its
sovereign character and sheds its immunity from suit, descending to the level of an
ordinary litigant. The PCGG cannot claim a superior or preferred status to the State, even
while assuming to represent or act for the State. 48
The suggestion 49 that the State makes no implied waiver of immunity by filing suit
except when in so doing it acts in, or in matters concerning, its proprietary or non-
governmental capacity, is unacceptable; it attempts a distinction without support in
principle or precedent. On the contrary
The consent of the State to be sued may be given expressly or impliedly. Express consent
may be manifested either through a general law or a special law. Implied consent is given
when the State itself commences litigation or when it enters into a contract. 50
The immunity of the State from suits does not deprive it of the right to sue private parties
in its own courts. The state as plaintiff may avail itself of the different forms of actions
open to private litigants. In short, by taking the initiative in an action against the private
parties, the state surrenders its privileged position and comes down to the level of the
defendant. The latter automatically acquires, within certain limits, the right to set up
whatever claims and other defenses he might have against the state. . . . (Sinco, Philippine
Political Law, Tenth E., pp. 36-37, citing U.S. vs. Ringgold, 8 Pet. 150, 8 L. ed. 899)" 51
It can hardly be doubted that in exercising the right of eminent domain, the State
exercises its jus imperii, as distinguished from its proprietary rights or jus gestionis. Yet,
even in that area, it has been held that where private property has been taken in
expropriation without just compensation being paid, the defense of immunity from suit
cannot be set up by the State against an action for payment by the owner. 52
The Court also finds itself unable to sustain the PCGG's other principal contention, of the
nullity of the Sandiganbayan's Order for the production and inspection of specified
documents and things allegedly in its possession.
The Court gives short shrift to the argument that some documents sought to be produced
and inspected had already been presented in Court and marked preliminarily as PCGG's
exhibits, the movants having in fact viewed, scrutinized and even offered objections
thereto and made comments thereon. Obviously, there is nothing secret or confidential
about these documents. No serious objection can therefore be presented to the desire of
the private respondents to have copies of those documents in order to study them some
more or otherwise use them during the trial for any purpose allowed by law.
The PCGG says that some of the documents are non-existent. This it can allege in
response to the corresponding question in the interrogatories, and it will incur no sanction
for doing so unless it is subsequently established that the denial is false.
The claim that use of the documents is proscribed by Executive Order No. 1 has already
been dealt with. The PCGG is however at liberty to allege and prove that said documents
fall within some other privilege, constitutional or statutory.
The Court finally finds that, contrary to the petitioner's theory, there is good cause for the
production and inspection of the documents subject of the motion dated August 3, 1989.
53 Some of the documents are, according to the verification of the amended complaint,
the basis of several of the material allegations of said complaint. Others, admittedly, are
to be used in evidence by the plaintiff. It is matters such as these into which inquiry is
precisely allowed by the rules of discovery, to the end that the parties may adequately
prepare for pre-trial and trial. The only other documents sought to be produced are
needed in relation to the allegations of the counterclaim. Their relevance is indisputable;
their disclosure may not be opposed.
One last word. Due no doubt to the deplorable unfamiliarity respecting the nature,
purposes and operation of the modes of discovery earlier mentioned, 54 there also
appears to be a widely entertained idea that application of said modes is a complicated
matter, unduly expensive and dilatory. Nothing could be farther from the truth. For
example, as will already have been noted from the preceding discussion, all that is
entailed to activate or put in motion the process of discovery by interrogatories to parties
under Rule 25 of the Rules of Court, is simply the delivery directly to a party of a letter
setting forth a list of least questions with the request that they be answered individually.
55 That is all. The service of such a communication on the party has the effect of
imposing on him the obligation of answering the questions "separately and fully in
writing underoath," and serving "a copy of the answers on the party submitting the
interrogatories within fifteen (15) days after service of the interrogatories . . ." 56 The
sanctions for refusing to make discovery have already been mentioned. 57 So, too,
discovery under Rule 26 is begun by nothing more complex than the service on a party of
a letter or other written communication containing a request that specific facts therein set
forth and/or particular documents copies of which are thereto appended, be admitted in
writing. 58 That is all. Again, the receipt of such a communication by the party has the
effect of imposing on him the obligation of serving the party requesting admission with
"a sworn statement either denying specifically the matters of which an admission is
requested or setting forth in detail the reasons why he cannot truthfully either admit or
deny those matters," failing in which "(e)ach of the matters of which admission is
requested shall be deemed admitted." 59 The taking of depositions in accordance with
Rule 24 (either on oral examination or by written interrogatories) while somewhat less
simple, is nonetheless by no means as complicated as seems to be the lamentably
extensive notion.

REPUBLIC OF THE PHILIPPINES, petitioner, vs. HON.
PERFECTO R. PALACIO, as Judge of the Court of First
Instance of Camarines Sur, MACARIO M. OFILADA, as Ex-
officio Sheriff of Manila and ILDEFONSO ORTIZ,
respondents.
Solicitor General for petitioner.
Luis Contreras for respondents.
SYLLABUS
1. POLITICAL LAW; STATE; STATE IMMUNITY FROM SUIT: WAIVER OF
IMMUNITY DOES NOT NECESSARILY SUBJECT ITS PROPERTY AND FUNDS
TO SEIZURE. The mere waiver of the State of its immunity does not render its
property and funds liable to seizure under legal process. Judgments against a State, where
it has consented to be sued, operate merely to liquidate and establish the plaintiff's claim
but they cannot be enforced by processes of law; it is up to the legislature to provide for
their payment in such manner as it sees fit.
2. ID.; ID.; ID.; STATE LIABLE ONLY FOR TORTS CAUSED BY SPECIAL
AGENTS. The initial complaint against the Irrigation Service Unit was that it induced
the Handong Irrigation Associations, Inc., to invade and occupy the land of respondent
Ortiz. This liability thus arose from tort and not from contract and it is a well-entrenched
rule embodied in art. 2180 of the Civil Code that the State is liable only for torts caused
by its special agents specifically commissioned to carry out acts complained of outside of
such agent's regular duties. In the absence of proof that the tortious inducement was
authorized, neither the State nor its funds are liable therefor.
D E C I S I O N
REYES, J.B.L., J p:
This is a petition for review of the decision of the Court of Appeals (in CA-G.R. No.
30915), dismissing the original action for certiorari and prohibition filed with said Court
by herein petitioner Republic of the Philippines, to restrain the enforcement of a writ of
execution (issued by the Court of First Instance of Camarines Sur in its Civil Case No.
4886) on the trust fund in the account of the Irrigation Service Unit with the Philippine
National Bank.
There is no controversy as to the following facts:
On April 2, 1960, Ildefonso Ortiz instituted in the Court of First Instance of Camarines
Sur Civil Case No. 4886, against the Handong Irrigation Association, Inc., a corporation
with principal place of business in Libmanan, Camarines Sur, and the Irrigation Service
Unit, an office or agency under the Department of Public Works and Communications, to
recover possession, with damages, of 958-square meter-lot located in Handong, San Juan,
Libmanan, Camarines Sur, which the Irrigation Association allegedly entered and
occupied, at the instance of its co-defendant. For failure to appear and answer the
complaint, therein defendant Irrigation Service Unit was declared in default.
On June 3, 1960, the Republic of the Philippines, through the Solicitor General, moved
for the dismissal of the complaint, claiming that defendant Irrigation Service Unit has no
juridical personality to sue and be sued. By order of June 11, 1960, this motion was
denied, on the ground that the said defendant although a mere agency of the Republic of
the Philippines, is engaged in the private business of selling irrigation pumps and
construction materials on installment plan. The Solicitor General's motion for
reconsideration of the aforesaid order was also denied on July 19, 1960. No appeal
appears to have been taken.
On January 29, 1962, the Solicitor General was served with copy of the writ of execution
issued by the court against the defendants in the above-mentioned civil case; and, on
February 16, 1962, an order of garnishment was served by the Sheriff of Manila against
the deposits and/or pump irrigation trust fund in the account of the Irrigation Service Unit
at the Philippine National Bank, Manila, to cover the sum of P14,874.40. 1
On March 8, 1962, the Solicitor General, on behalf of the Republic of the Philippines,
filed with the lower court an urgent motion to lift the order of garnishment, for the reason
that the funds subject matter thereof are public funds and exempt from attachment or
execution. Upon denial of this motion, as well as of the motion for reconsideration of said
denial, the Solicitor General commenced the present certiorari and prohibition proceeding
in the Court of Appeals.
In its decision of August 21, 1962, the appellate court sustained the propriety of the
disputed garnishment-order, and dismissed the Government's petition, on the basis of the
finding by the trial court that the Irrigation Service Unit, "formerly an office under the
Department of Agriculture and Natural Resources created by virtue of a 'Memorandum of
Agreement on the Irrigation Pump Program of the Philippines' signed by the Chairman of
the PHILCUSA (now NEC), Chief of the MSA Mission (now AID) and the Secretary of
Agriculture and Natural Resources, and presently under the Department of Public Works
and Communications to which it was transferred", is engaged in a private business of
purchase and sale of irrigation pumps and systems. Consequently, according to the Court
of Appeals and following the ruling in the case of National Airports Corporation vs.
Teodoro et al., L-5122, April 30, 1952 (91 Phil. 203), by thus engaging in private
business, the Government, through the Irrigation Service Unit, had actually consented to
the suit. Hence, the present petition for review filed by the Republic of the Philippines.
The issue presented by this case is whether or not the pump irrigation trust fund,
deposited with the Philippine National Bank in the account of the Irrigation Service Unit,
may be garnished to satisfy a money-judgment against the latter. This issue in turn calls
for a determination of the nature of said trust fund, i.e., whether it is a fund belonging to
the national Government (which was not a party to Civil Case No. 4886), as maintained
by herein petitioner, or purely the proceeds of a private venture by the government, as
claimed by the respondents.
For a better understanding of the nature, function and operation of the Irrigation Service
Unit (ISU) which is necessary for the proper resolution of the issue herein involved, it is
worthwhile to recall that this office was originally created under the Department of
Agriculture and Natural Resources by virtue of a Memorandum Agreement between the
governments of the Philippines and the United States, dated August 13, 1952. It was later
transferred to the Department of Public Works and Communications as an office directly
under the Office of the Secretary, "to prosecute to completion the rehabilitation of pump
systems transferred from the former Irrigation Pump Administration of the Department of
Agriculture and Natural Resources, 2 including the settlement of the obligations of said
administration." The budgetary requirements to carry out the objectives of the project
were to be financed by withdrawals from the Counterpart Fund-Special Account
(Memorandum Agreement of June, 1954.)
This Counterpart Fund-Special Account referred to above was established in the Central
Bank by the Government of the Philippines and made up of deposits in pesos
commensurate with the indicated dollar cost to the Government of the United States of
economic and technical assistance made available to the Philippines, pursuant to the
Bilateral Agreement between the Philippines and the United States of April 27, 1951; of
deposits accruing to it (Philippine government) from the sale of commodities or services
supplied under the Agreement or otherwise accruing to it as a result of the import of such
commodities or service; and of any advance deposits which the Philippine government
may make in the Special Account (Sec. 1, paragraphs 2[a],[b],and [c], Annex to Memo.
Agreement of April 27, 1951). Later, on the basis of a supplemental agreement (No. 2,
Counterpart Project No. 409 Pump Irrigation), the Pump Irrigation Trust Fund was
established in the Philippine National Bank, to which all authorized releases to the ISU 3
from the Counterpart Fund Special Account, to finance the peso-cost of the Irrigation
Pump Project, were transferred. This is the fund on which the disputed writ of execution
for money judgment rendered against the ISU, is being enforced.
A reading of the records and documents submitted to the Court of Appeals will readily
show that the sales of irrigation pumps to farmers by ISU are governed by the terms of
the Supplemental Agreement No. 2 to Counterpart Project No. 409 (signed by
representatives of the Philippine and U.S. governments) hereunder copied in full:
"C Disposition of Proceeds from Payments under Contracts of
Sale.
"1. Under the Guiding Principles of the Irrigation Pump Project,
pumps are sold to farmers' associations under conditional sales
contracts. Periodic payments to ISU by each association are
required. The total payment required under the contract is stated in
the contract and is equal to the sum of (a) the landed cost of
equipment at the installation site, (b) the cost of installation and
construction including survey and design, (c) the cost of fuel and
oil financed for the first crop season, if any, (d) ten per cent of the
total of (a) and (b) to cover the costs of administration, technical
assistance furnished by the ISU, inspection and collection, and (e)
the compensating use tax to the Philippine Government. Interest is
also payable under each contract at the rate of six percent per
annum on any unpaid balance of the total amount of the contract.
"2. All principal and interest payments received by the ISU from
farmers' associations shall be deposited immediately in the Trust
Fund. The separate account established by the project agreement
for Counterpart Project 409, entitled 'Irrigation Pump Sales
Proceeds Account' is hereby abolished and any deposits therein
will be immediately transferred to the Trust Fund.
"3. Whenever the total value of all deposits made to the Trust Fund
from contract principal and interest payments exceeds the value of
total releases made to the Trust Fund from the Counterpart Fund-
Special Account, these excess deposits shall be transferred from
the Trust Fund to the Counter fund-Special Account. Such
transfers shall be considered as 'proceeds of sale' and 'advance
deposits' as provided in Annex Section 1, (b) and (c) of the
Bilateral Agreement between the Republic of the Philippines and
the United States of America."

It was also provided therein that the payments by the farmers' associations on
conditional sales agreements specified in paragraph C- 2 above, will be considered
in the preparation, and shall form part, of the ISU annual budget, which will finance
the costs of supply and equipment purchases, the installation and construction of
pump units, and the operating expenses of ISU for which appropriated funds are not
available. (Par. B 1).
It is clear from the foregoing that the ISU is not only an office in the Government of the
Republic of the Philippines, created to promote a specific economic policy of said
government, but also that its activity (of selling irrigation pumps to farmers on
installment basis) is not intended to earn profit or financial gain to its operator. The mere
fact that interests are being collected on the balance of the unpaid cost of the purchased
pumps does not convert this economic project of the government into a corporate activity.
As previously pointed out, the installment payments and interests receivable from the
farmers are to be used to replenish the counterpart funds utilized in furtherance of the
operation of the project.
Although evidently acknowledging the nature of the Pump Irrigation Trust Fund as a
public fund, the Court of Appeals nevertheless sustained the garnishment order, on the
ground that the ISU, by engaging in the private business of purchasing and selling
irrigation pumps on installment basis, has waived its governmental immunity and, by
implication, consented to the suit.
It is apparent that this decision of the Court of Appeals suffers from the erroneous
assumption that because the State has waived its immunity, its property and funds
become liable to seizure under legal process. This emphatically is not the law (Merritt vs.
Insular Government, 34 Phil. 311).
"Even though the rule as to immunity of a state from suit is
relaxed, the power of the courts ends when the judgment is
rendered. Although the liability of the state has been judicially
ascertained, the state is at liberty to determine for itself whether to
pay the judgment or not, and execution can not issue on a
judgment against the state. Such statutes do not authorize a seizure
of state property to satisfy judgments recovered, and only convey
an implication that the legislature will recognize such judgment as
final and make provision for the satisfaction thereof." (49 Am. Jur.,
sec. 104, pp. 312-320.)
"Judgment against a state, in cases where it has consented to be
sued, generally operate merely to liquidate and establish plaintiff's
claim in the absence of express provision; otherwise they can not
be enforced by processes of law; and it is for the legislature to
provide for their payment in such manner as it sees fit." (59 C.J.
sec. 501, p. 331; 81 C.J.S., sec. 232, p. 1343.)
It needs no stressing that to allow the levying under execution of the ISU funds would
amount to diverting them from the purposes originally contemplated by the P.I. U.S.
Bilateral Agreement, and would amount to a disbursement without any proper
appropriation as required by law.
A second infirmity of the decision under appeal originates from its ignoring the fact that
the initial complaint against the Irrigation Service Unit was that it had induced the
Handong Irrigation Association, Inc., to invade and occupy the land of the plaintiff
Ildefonso Ortiz. The ISU liability thus arose from tort and not from contract; and it is a
well-entrenched rule in this jurisdiction, embodied in Article 2180 of the Civil Code of
the Philippines, that the State is liable only for torts caused by its special agents,
specifically commissioned to carry out the acts complained of outside of such agent's
regular duties (Merritt vs. Insular Government, supra; Rosete vs. Auditor General, 81
Phil. 453). There being no proof that the making of the tortious inducement was
authorized, neither the State nor its funds can be made liable therefor.
WHEREFORE, the decision of the Court of Appeals under review is reversed and set
aside, and the order of garnishment issued by the Sheriff of Manila on the Pump
Irrigation Trust Fund in the account of the Irrigation Service Unit, with the Philippine
National Bank, is hereby declared null and void. The writ of preliminary injunction
heretofore issued is made permanent. No costs.
||| (Republic v. Palacio, G.R. No. L-20322, May 29, 1968)

LUIS MA. ARANETA, petitioner, vs. ANTONIO R. DE JOYA,
respondent.
Araneta, Mendoza & Papa for petitioner.
Jose F. Espinosa for respondent.
D E C I S I O N
CASTRO, J p:
Petition for review of the decision of the Court of Appeals in CA-G.R. 34277-R ordering
Luis Ma. Araneta (hereinafter referred to as the petitioner) to indemnify Antonio R. de
Joya (hereinafter referred to as the respondent) for one-third of the sum of P5,043.20
which the latter was adjudged to pay the Ace Advertising Agency, Inc., the plaintiff in
the recovery suit below.
Sometime in November 1952 the respondent, then general manager of the Ace
Advertising, proposed to the board of directors 1 that an employee, Ricardo Taylor, be
sent to the United States to take up special studies in television. The board, however,
failed to act on the proposal. Nevertheless, in September 1953 the respondent sent Taylor
abroad. J. Antonio Araneta, a company director, inquired about the trip and was assured
by the respondent that Taylor's expenses would be defrayed not by the company but by
other parties. This was thereafter confirmed by the respondent in a memorandum.
While abroad, from September 1, 1953 to March 15, 1954, Taylor continued to receive
his salaries The items corresponding to his salaries appeared in vouchers prepared upon
the orders of, and approved by, the respondent and were included in the semi-monthly
payroll checks for the employees of the corporation. The petitioner signed three of these
checks on November 27, December 15 and December 29, 1953. The others were signed
by either the respondent, or Vicente Araneta (company treasurer) who put up part of the
bill connected with Taylor's trip and also handed him letters for delivery in the United
States. The Ace Advertising disbursed P5,043 20, all told, on account of Taylor's travel
and studies.
On August 23, 1954 the Ace Advertising filed a complaint with the court of first instance
of Manila against the respondent for recovery of the total sum disbursed to Taylor,
alleging that the trip was made without its knowledge, authority or ratification. The
respondent, in his answer, denied the charge and claimed that the trip was nonetheless
ratified by the company's board of directors, and that in any event under the by-laws he
had the discretion, as general manager, to authorize the trip which was for the company's
benefit.
A 3rd-party complaint was also filed by the respondent against Vicente Araneta, the
petitioner and Ricardo Taylor. The respondent proved that Vicente Araneta, as treasurer
of the firm, signed a check representing the company's share of the transportation
expense of Taylor to the United States, and that a series of payroll checks from
September 15, 1953 to December 31, 1953, inclusive, which included the salaries of
Taylor, was signed by Vicente Araneta and the petitioner who is a vice-president of the
company. Both Aranetas disowned any personal liability, claiming that they signed the
checks in good faith as they were approved by the respondent.
On April 13, 1964 the trial court rendered judgment ordering the respondent to pay the
Ace Advertising "the sum of P5,043.20 with interest at the legal rate from August 23,
1954 until full payment," and dismissing the 3rd-party complaint.
The respondent appealed to the Court of Appeals, which on August 2, 1965, rendered a
decision affirming the trial court's judgment in favor of the Ace Advertising but reversing
the dismissal of the 3rd-party complaint. The appellate court found as a fact that Taylor's
trip had been neither authorized nor ratified by the company.
The appellate court's full statement of its categorical and unequivocal findings of fact on
the nature and extent of the participation of the petitioner as well as Vicente Araneta is
hereunder quoted:
"The evidence not only is clear, but is even not disputed at all by
Vicente and Luis Araneta who neither of them took the witness
stand to refute appellant's evidence, that as to Vicente it was to
him that appellant first broached the subject-matter of sending
Taylor to America, that Vicente Araneta evinced unusual interest,
and went to the extent of entrusting Taylor with letters for delivery
to certain principals of Gregorio Araneta, Inc. in the United States,
and he even signed the check for P105.20 to cover expenses for his
tax clearance, documentary stamps and passport fees, in
connection with the trip, on 8 September, 1953, and then on 5
October, 1953, still another check for P868.00 which was half the
amount for his plane ticket; and as to Luis Araneta, it not at all
being disputed that when Taylor was already in America, his
salaries while abroad were paid on vouchers and checks signed
either by him or by Vicente, or by appellant himself; because of all
these, the conclusion is forced upon this Court that it could not but
have been but that both Vicente and Luis were informed and gave
their approval to Taylor's trip, and to the payment of his trip
expenses and salaries during his absence, from corporate funds; if
this was the case as it was, there can be no question but that they
two were also privy to the unauthorized disbursement of the
corporate moneys jointly with the appellant; what had happened
was in truth and in fact a venture by them given their stamp of
approval; and as it was an unauthorized act of expenditure of
corporate funds, and it was these three without whose acts the
same could not have happened, the juridical situation was a simple
quasi-delict by them committed upon the corporation, for which
solidary liability should have been imposed upon all in the first
place, Art. 2194, New Civil Code; and only De Joya having been
sued and made liable by the corporation, it was the right of the
latter to ask that his two joint tortfeasors be made to shoulder their
proportional responsibility." (emphasis supplied)
The basic legal issue is whether the petitioner is guilty of a quasi-delict as held below.
It is our view, and we so hold, that the judgment of the Court of Appeals should be
upheld. The petitioner's assertion that he signed the questioned payroll checks in good
faith has not been substantiated, he in particular not having testified or offered testimony
to prove such claim. Upon the contrary, in spite of his being a vice-president and director
of the Ace Advertising, the petitioner remained passive, throughout the period of Taylor's
stay abroad, concerning the unauthorized disbursements of corporate funds for the latter.
This plus the fact that he even approved thrice payroll checks for the payment of Taylor's
salary, demonstrate quite distinctly that the petitioner neglected to perform his duties
properly, to the damage of the firm of which he was an officer. The fact that he was
occupying a contractual position at the Ace Advertising is of no moment. The existence
of a contract between the parties, as has been repeatedly held by this Court, constitutes no
bar to the commission of a tort by one against the other and the consequent recovery of
damages. 2
ACCORDINGLY, the judgment of the Court of Appeals is affirmed, at petitioner's cost.

FELIX LANUZO, plaintiff-appellee, vs. SY BON PING and
SALVADOR MENDOZA, defendant-appellants.
D E C I S I O N
MELENCIO-HERRERA, J p:
Appeal certified to Us by the Court of Appeals 1 as it involves pure legal questions.
On November 25, 1969, a Complaint for damages was instituted in the Court of First
Instance of Camarines Sur (Civil Case No. 6847) by plaintiff Felix Lanuzo against Sy
Bon Ping, the owner and operator of a freight truck bearing Plate No. T-57266, and his
driver, Salvador Mendoza. As alleged therein, at about five o clock in the afternoon of
July 24, 1969, while Salvador Mendoza was driving the truck along the national highway
in the Barrio of San Ramon, Nabua, Camarines Sur, and because of his reckless
negligence, he rammed into the residential house and store of plaintiff. As a result, the
house and store were completely razed to the ground causing damage to plaintiff in the
total amount of P13,000.00. Plaintiff averred that by reason thereof he became destitute
as he lost his means of livelihood from the store which used to give him a monthly
income of P300.00.
The defendants moved to dismiss on the ground that another action, Criminal Case No.
4250 for Damage to Property through Reckless Imprudence, was pending in the
Municipal Court of Nabua, Camarines Sur, between the same parties for the same cause.
Plaintiff opposed the dismissal stressing that he had made an express reservation in the
criminal case to institute a civil action for damages separate and distinct from the
criminal suit.
The lower Court denied the Motion to Dismiss for lack of merit.
On August 13, 1970, the trial Court rendered a default judgment in plaintiff's favor, the
dispositive portion of which reads:
"WHEREFORE, judgment is hereby rendered (a) ordering the
defendants to pay jointly and severally the amount of P13,000.00
as damages, resulting to the loss of the store including the
merchandise for sale therein, the residential house of mixed
materials, furnitures, clothing and households fixtures; (b) ordering
the said defendants to pay jointly and severally P300.00 monthly
from July 24, 1969 which represents plaintiff's monthly income
from his store until the who amount of P13,000.00 is fully paid;
and (c) for attorney's fees an amount equivalent to 20% of the total
amount claimed by the plaintiff, plus the costs of this suit."
Defendants' "Motion for Reconsideration and/or New Trial and To Set Aside Order of
Default" was denied.
Upon elevation by the defendants of the case to the Court Appeals (CA-G.R. No. 48399-
R) they urged that the civil action was prematurely instituted in view of Rule 111, section
3, providing in part that "after the criminal action has been commenced the civil action
cannot be instituted until final judgment has been rendered in the criminal action."
Additionally, they contended that even assuming their liability, the lower Court
nevertheless committed an error in holding them jointly and severally liable.
On February 20, 1980, the Court of Appeals certified the case to this instance on pure
questions of law.
We start from the fundamental premise, clearly enunciated as early as the case of Barredo
vs. Garcia, et al., 2 that:
"A distinction exists between the civil liability arising from a crime
and the responsibility for cuasi-delitos or culpa-extra-contractual.
The same negligent act causing damages may produce civil
liability arising from a crime under article 100 of the Revised
Penal Code, or create an action for cuasi-delito or culpa extra-
contractual under articles 1902-1910 of the Civil Code. Plaintiffs
were free to choose which remedy to enforce."
Plaintiff's reservation before the Municipal Court in the criminal case of his right to
institute a civil action separately is quoted hereunder in full:
"UNDERSIGNED offended party in the above entitled case before
this Honorable Court respectfully alleges:
"1. That this action which was commenced by the Chief of Police
included in the complaint the claim of the undersigned for civil
liability;
"2. That the undersigned is reserving his right to institute the civil
action for damages, docketed as Civil Case No. 6847 of the Court
of First Instance of Camarines Sur, against accused herein and his
employer;
"WHEREFORE, it is respectfully prayed that reservation be made
of record therein and that the civil aspect of the above-entitled case
be not included herein.
xxx xxx xxx" 3
The terms of plaintiff's reservation clearly and unmistakably make out a case for quasi-
delict. This is also evident from the recitals in plaintiff's Complaint averring the
employer-employee relationship between the appellants, alleging that damages to the
house and store were caused by the fact that Salvador Mendoza had driven the truck
"recklessly, with gross negligence and imprudence, without observance of traffic rules
and regulations and without regard to the safety of persons and property", and praying
that appellants be held jointly and solidarily liable for damages. These are, basically,
what should be alleged in actions based on quasi-delict. 4
As it is quite apparent that plaintiff had predicated his present claim for damages on
quasi-delict, he is not barred from proceeding with this independent civil suit. The
institution of a criminal action cannot have the effect of interrupting the civil action based
on quasi-delict. 5 And the separate civil action for quasi-delict may proceed
independently and regardless of the result of the criminal case, 6 except that a plaintiff
cannot recover damages twice for the same act or commission of the defendant. 7
The civil action referred to in Sections 3(a) and (b) of Rule 111 of the Rules of Court,
which should be suspended after the institution of the criminal action, is that arising from
delict, and not the civil action based on quasi-delict or culpa aquiliana.
We come now to the subject of liability of the appellants herein. For his own negligence
in recklessly driving the truck owned and operated by his employer, the driver, Salvador
Mendoza, is primarily liable under Article 2176 of the Civil Code. On the other hand, the
liability of his employer, Sy Bon Ping, is also primary and direct under Article 2180 of
the same Code, which explicitly provides: LibLex
"Employers shall be liable for the damages caused by their
employees and household helpers acting within the scope of their
assigned tasks, even though the former are not engaged in any
business or industry."
For failure of the appellant Sy Bon Ping to rebut the legal presumption of his
negligence in the selection and supervision of this employee, 8 he is likewise
responsible for the damages caused by the negligent act of his employee (driver)
Salvador Mendoza, and his liability is primary and solidary.
". . . What needs only to be alleged under the aforequoted
provision (Article 2180, Civil Code) is that the employee (driver)
has, by his negligence (quasi-delict) caused damage to make the
employer, likewise, responsible for the tortious act of the
employee, and his liability is, as earlier observed, primary and
solidary" 9
But although the employer is solidarily liable with the employee for damages, the
employer may demand reimbursement from his employee (driver) for whatever
amount the employer will have to pay the offended party to satisfy the latter's claim.
10
WHEREFORE, the appealed decision is hereby affirmed.
Costs against defendants-appellants.
||| (Lanuzo v. Sy Bon Ping, G.R. No. L-53064, September 25, 1980)

PRIMA MALIPOL, in her own behalf and as guardian ad
litemof her minor children, LYDIA MALIJAN, JOSEFINA
MALIJAN, TEODORA MALIJAN, and SEBASTIAN
MALIJAN, plaintiffs-appellees, vs. LILY LIM TAN and
ERNESTO LABSAN, defendants-appellants.
Edgardo Moncada for plaintiffs-appellees.
Achacoso, Ocampo & Simbulan for defendants-appellants.
D E C I S I O N
ZALDIVAR, J p:
Appeal on questions of law from the decision dated July 1, 1966, a judgment by default,
and from the order dated October 10, 1966, of the Court of First Instance of Batangas in
its Civil Case No. 1732 which denied defendants-appellants' motion to lift the order of
default and for a new trial and which considered the judgment by default as standing with
full force and effect.
In the evening of February 6, 1965, at about 8:35 o'clock, Pantaleon Malijan, who was
walking with his companion Leonardo Amante on the shoulder of the road in Barrio San
Felix, Sto. Tomas, Batangas, was hit by a gasoline tanker and was thrown to the ground.
While he was sprawling on the ground Malijan was run over by the tanker's right wheel
that got detached from its axle. Malijan's companion, with the aid of the barrio captain,
brought Malijan to the San Pablo City Hospital where he died that same night, the cause
of death being "possible traumatic cerebral hemorrhage due to vehicular accident."
The gasoline tanker with Plate No. T-52573, series of 1964, driven at the time of the
accident by herein appellant Ernesto Labsan, was being used in connection with the
gasoline business of the owner, the herein appellant Lily Lim Tan.
Representations and demands for payment of damages having been ignored by
appellants, appellees filed on May 18, 1966 a complaint in the Court of First Instance of
Batangas, praying that appellants be condemned to pay, jointly and severally, the
damages as specified in said complaint. The appellees are the mother and the minor
brothers and sisters of the deceased Pantaleon Malijan.
Appellants were duly served with summons on May 19, 1966, but they failed to file their
answer within the reglementary period. Upon appellees' motion of June 8, 1966, the trial
court, in an order dated June 10, 1966, declared the appellants in default, and appellees
were permitted to present their evidence in the absence of the appellants. The trial court
rendered a decision, dated July 1, 1966, the dispositive portion of which reads as follows:
"WHEREFORE, finding the averments in the complaint as
supported by the evidence to be reasonable and justified, judgment
is hereby rendered in favor of the plaintiffs and against the
defendants. The defendant driver. Ernesto Labsan, is ordered (1) to
pay the sum of P2,100.00 to the plaintiffs for expenses for
hospitalization, medical treatment, vigil and burial of Pantaleon
Malijan; (2) to pay to the plaintiffs the sum of P6,000.00 for the
death of said victim; (3) to pay to the plaintiffs the sum of
P20,000.00 for the loss of earnings of said deceased for a period of
five years; (4) to pay to the plaintiffs the sum of P5,000.00 moral
damages; (6) to pay to the plaintiffs the sum of P2,000.00 for
attorney's fees and P500.00 for incidental and litigation expenses;
and (6) to pay the costs of the suit. Should Ernesto Labsan not be
able to pay the foregoing damages, they shall be paid for by
defendant Lily Lim Tan, who by law, being the owner and operator
of the gasoline tanker that featured in the accident, is subsidiarily
liable."
Copy of the decision was received by the appellees on August 23, 1966.
A motion for execution was filed on August 26, 1966 by appellees but the trial court held
its resolution in abeyance until September 22, 1966 when the judgment would become
final.
On September 21, 1966 appellants filed a verified motion to lift the order of default and
for a new trial, alleging that they were deprived of their day in court when the order of
default was issued and a decision rendered thereafter; that they had good and valid
defenses, namely: (a) that the accident which gave rise to the case was due to force
majeure; (b) that appellant Ernesto Labsan was without fault in the accident that gave rise
to the case; and (c) that appellant Lily Lim Tan had exercised the due diligence required
of a good father of a family to prevent damage. Finding said motion to be without merit,
the trial court denied the same on October 10, 1966. Hence, this appeal wherein
appellants made assignment of errors, as follows:
(a) The trial court erred in finding that appellants took the
complaint for granted by reason of the fact that appellants referred
to their lawyer the complaint for answer only after the lapse of
eleven (11) days from receipt thereof;
(b) The trial court erred in not holding that the mistake committed
by the late Atty. Daniel Chavez in giving the wrong date of receipt
by appellants of the summons and the complaint to Atty. Romulo
R. de Castro on June 10, 1966 due to the abnormal mental
condition of the late Atty. Daniel Chavez on June 10, 1966 which
thereafter resulted in the commission of suicide by the latter on
June 17, 1966, constitutes the mistake and accident in law which
warrant the relief from default and the granting of the new trial;
(c) The trial court erred in not holding that the fact that appellants,
through Atty. Romulo R. de Castro, filed on June 10, 1966 a
motion for extension of time to file answer, and thereafter actually
did file their answer to the complaint on June 20, 1966 wherein
they alleged good, valid and meritorious defenses against the claim
of plaintiffs in the complaint, should warrant favorable
consideration of appellants' motion to lift order of default and for
new trial; and
(d) The trial court erred in not granting appellants' motion to lift
order of default and for new trial.
1. In support of their first assignment of error, counsel for appellants contends that the
finding of the trial court, that the appellants took the complaint for granted when they
referred the complaint to their lawyer only on the eleventh day after receipt thereof, was
unwarranted, because appellants had 15 days from receipt of the summons and complaint
to answer and their lawyer, the late Atty. Daniel Chavez, after the complaint was referred
to him on the eleventh day, had still four days to file the answer, which he could very
well do inasmuch as he was well acquainted with the facts because he was the lawyer of
appellant Ernesto Labsan in Criminal Case No. 2200 of the Court of First Instance of
Batangas for homicide thru reckless imprudence which case arose from the very
accident subject of appellees' complaint; that appellant Lily Lim Tan, furthermore, had
instructed her employee, Eleuterio Dizon, to handcarry the summons and to deliver it to
nobody except to Atty. Chavez; that Atty. Chavez, in a long distance telephone
conversation with appellant Lily Lim Tan, assured the latter that he would attend to the
complaint.
We do not find merit in the contention of counsel for appellants. It is within the sound
discretion of the court to set aside an order of default and to permit a defendant to file his
answer and to be heard on the merits even after the reglementary period for the filing of
the answer has expired, but it is not error, or an abuse of discretion, on the part of the
court to refuse to set aside its order of default and to refuse to accept the answer where it
finds no justifiable reason for the delay in the filing of the answer. In motions for
reconsideration of an order of default, the moving party has the burden of showing such
diligence as would justify his being excused from not filing the answer within the
reglementary period as provided by the Rules of Court, otherwise these guidelines for an
orderly and expeditious procedure would be rendered meaningless. 1 Unless it is shown
clearly that a party has justifiable reason for the delay the court will not ordinarily
exercise its discretion in his favor. 2
In the instant case, We agree with the trial court, that appellants have not shown that they
exercised such diligence as an ordinary prudent person would exercise, to have the
answer filed within the reglementary period. Appellant Lily Lim Tan admitted in her
affidavit 3 that she received the summons and copy of the complaint on May 19, 1966,
and that having read the complaint she found out that she was being sued, together with
her driver, for damages in connection with the accident of February 6, 1965 at Sto.
Tomas, Batangas. The damages asked in the complaint amounts to P36,600.00. The
summons required them to answer the complaint within 15 days from receipt thereof, and
warned them that should they fail to answer within said period the plaintiffs would take
judgment against-them for the relief demanded in the complaint. The damages demanded
was not a negligible sum, and appellant Lily Lim Tan, who is a business woman, should
have considered the matter a serious one. Ordinary prudence would dictate that she
should concern herself about the matter, that she should refer said complaint with the
least possible delay to her lawyer. But, for reasons she did not explain, she referred the
complaint to her lawyer only after the lapse of ten (10) days from receipt thereof, i.e., on
May 30, 1966. She should have considered that four days might not be sufficient time for
her lawyer to prepare and file the answer.
Appellants, however, contend that their lawyer, Atty. Chavez, could very well prepare the
answer within the remaining four days of the reglementary period, for he was conversant
with the facts of the case. Be that as it may, the fact was that Atty. Chavez failed to file
the answer. Because Atty. Chavez assured her, in their long distance telephone
conversation that he would take care of the complaint, appellant Lily Lim Tan took for
granted that the answer would be filed on time. Said appellant should have checked
before the expiration of the period for filing the answer whether the complaint was really
taken care of, or not. But this, appellant Lily Lim Tan failed to do, and this is another
instance showing her lack of concern over the complaint. There was, therefore, no
showing of due diligence on the part of appellants which would excuse their failure to file
their answer on time. There is no showing either that the other appellant, Ernesto Labsan,
had taken any step to have an answer filed in his behalf evidently he was relying on
his employer.

2. In support of the second assignment of error, appellants contend that the facts show
that on June 10, 1966, Atty. Chavez, who was then acting strangely, endorsed the
summons and complaint to Atty. Romulo R. de Castro; that upon inquiry by Atty. de
Castro from Atty. Chavez the latter informed him that the summons was served on
appellants on May 30, 1966; that appellant Lily Lim Tan, who was assured by Atty.
Chavez in their long distance telephone conversation that the complaint would be
attended to, could not, by the exercise of ordinary diligence, have foreseen, and avoided,
the circumstance that at the time she referred the summons to Atty. Chavez, the latter was
already in an abnormal condition which later resulted in his committing suicide on June
17, 1966; that it was Atty. Chavez's abnormal condition and his having given to Atty. de
Castro the wrong date of the receipt of the summons by the appellees that caused the
delay in the filing of the answer; that said circumstances constituted mistake and accident
which entitled appellants to relief from default and a grant of new trial.
Appellants' contention that the delay in filing the answer was due to mistake and accident
is untenable.
The mistake, according to appellants, consisted in Atty. Chavez' having told Atty. de
Castro on June 10, 1966 that appellants received the summons and complaint on May 30,
1966. Even if Atty. Chavez had told Atty. de Castro the correct date, that is, that
appellants received the summons on May 19, 1966, the answer could not have been filed
on time by Atty. de Castro, because the reglementary period for filing the answer expired
on June 3, 1966, and it was already June 10, 1966, when the complaint was endorsed by
Atty. Chavez to Atty. de Castro.
The accident, according to appellants' counsel, consisted in Atty. Chavez's being in an
abnormal condition at the time the complaint was given to him on May 30, 1966. This
claim of appellants is not supported by the record.
The record does not show that Atty. Chavez was suffering from an abnormal mind on
May 30, 1966. His actuations on May 30 were those that could be expected of a normal
person. Atty. Chavez asked the employee of appellant Lily Lim Tan about the date when
his employer received the summons and complaint, and because the employee could not
give him the desired information Atty. Chavez placed a long distance telephone call to
appellant Lily Lim Tan to ask about said date. This action of Atty. Chavez showed that he
was very much aware that the reglementary period within which the answer should be
filed was to be computed from the date of the receipt of the summons and the complaint.
It also showed that Atty. Chavez knew the easiest and the most practical means to get the
information that he needed that was by a long distance telephone call to his client, Lily
Lim Tan. These actuations of Atty. Chavez showed that he knew the importance of the
matter at hand, and he was exercising the ordinary and reasonable care over the interests
of his client. These specific actions of Atty. Chavez indicated that as of May 30, 1966 he
had a sound mind.
It is claimed by appellants that on June 10, 1966 Atty. Chavez endorsed the complaint to
Atty. de Castro, and told the latter that the summons and complaint were received by the
appellants on May 30, 1966. It is further claimed by appellants that this information given
by Atty. Chavez that the summons and complaint were received by the appellants on
May 30, 1966 was the mistake that caused the delay of the filing of the answer. But it
should be noted that on June 10, 1966 when Atty. Chavez endorsed the complaint to Atty.
de Castro and informed the latter that the summons and complaint were received by the
appellants on May 30, 1966, the period within which the answer should be filed had
already expired the expiry date being June 3, 1966. There is no showing that between
May 30, when Atty. Chavez received the summons and complaint from the employee of
Lily Lim Tan, and June 3, 1973 Atty. Chavez was incapacitated to file the answer. And
so it is clear that before the case was endorsed to Atty. de Castro, the appellants were
already in default. The failure to file the answer on time may well be attributed to the
mistake or negligence of Atty. Chavez. The appellants are bound by the mistakes, and
may suffer by the negligence, of their lawyer. In fact, on June 8, 1966, or two days before
Atty. Chavez endorsed the case to Atty. de Castro, the appellees had filed a motion in
court to declare the defendants (now the appellants) in default. The moves taken by Atty.
de Castro in filing a motion for extension of time to file an answer on June 10, 1966,
and in finally filing an answer on June 20, 1966 were already late.
The fact that Atty. Chavez committed suicide on June 17, 1966 does not necessarily
prove that he was abnormal, incompetent or insane on May 50, 1966. Although there is a
judicial declaration that a sane man would not commit suicide, cognizance is nevertheless
taken of the fact that circumstances at some given time may impel a person to commit
suicide. 4 The probative value of suicide in determining the sanity of a person is
dependent on the factual situation in each case. Such matters as the reasons for the act of
self-destruction, the circumstances indicating the person's state of mind at the time, and
other pertinent facts must be considered. The appellants had not indicated to the trial
court any circumstance from which the trial court could form an opinion of the mental
condition of Atty. Chavez before he committed suicide. The trial court, therefore, did not
err when it did not favorably consider the claim of the appellant that their failure to file
their answer to the complaint was due to accident or mistake, as contemplated in Section
3 of Rule 18 of the Rules of Court.
3. In support of the third assignment of error, appellants argue that acting on the wrong
information given by Atty. Chavez, Atty. Romulo de Castro filed on June 10, 1966 a
motion for an extension of 20 days within which to file an answer and that he did file the
answer with good, valid and meritorious defenses on June 20, 1966; that on June 27,
1966 when appellees were allowed to present their evidence ex-parte, the motion for
extension of time and the answer already formed part of the records of the case; that
inasmuch as the late filing of the answer was due to accident and mistake, and appellants
had good, valid, and meritorious defenses, the motion to lift the order of default and for
new trial should have been favorably considered by the court. 5
Let it be noted that the lower court rendered its decision on July 1, 1966, and the
appellees received notice of said decision on August 23, 1966. The decision would have
become final on September 22, 1966. On September 21, 1966 the appellants filed their
motion to lift the order of default and for new trial. The motion of the appellants
therefore, was in the nature of a motion for a new trial based on fraud, accident, mistake
or excusable negligence under paragraph (a) of Section 1 of Rule 37 of the Rules of
Court. Under Section 2 of said Rule 37 the moving party must show that he has a
meritorious defense. The facts constituting the movant's good and substantial defense,
which he may prove if the petition were granted, must be shown in the affidavit which
should accompany the motion for a new trial. 6 In the instant case, the motion to lift the
order of default and for new trial as well as the affidavit of merits accompanying the
motion did not contain clear statements of the facts constituting a good and valid defense
which the appellants might prove if they were given a chance to introduce evidence. The
allegations in the motion that defendants have good and valid defenses, namely: that the
accident which gave rise to the case was force majeure; that defendant Ernesto Labsan is
absolutely without fault in the accident that gave rise to the case; and that defendant Lily
Lim Tan has exercised due diligence required of a good father of a family to prevent
damage, 7 are mere conclusions which did not provide the court with any basis for
determining the nature and merit of the probable defense. An affidavit of merit should
state facts, and not mere opinion or conclusions of law.
Hence the trial court correctly denied the motion to set aside order of default and for new
trial.
We must, however, point out a flaw in the decision of the lower court. It is stated in the
decision appealed from that the driver, Ernesto Labsan, was primarily liable for the
payment of damages adjudged therein, and the appellant Lily Lim Tan, being the owner
and operator of the gasoline tanker that figured in the accident, is subsidiarily liable, that
is, liable only in case Ernesto Labsan was not able to pay. This is not correct. The action
in the instant case was brought not to demand civil liability arising from a crime. The
complaint makes no mention of a crime having been committed, much less of the driver
Ernesto Labsan having been convicted of a crime. But there is an allegation in the
complaint that Ernesto Labsan was the authorized driver of the truck that figured in the
accident, which truck was operated by appellant Lily Lim Tan in connection with her
gasoline business. The prayer in the complaint, furthermore, sought to hold appellants
jointly and solidarily liable for damages. The instant action, therefore, was based, as the
complaint shows, on quasi delict. Under Article 2180 of the Civil Code, which treats of
quasi delicts, the liability of the owners and managers of an establishment or enterprise
for damages caused by their employees is primary and direct, not subsidiary. 9 The
employer, however, can demand from his employee reimbursement of the amount which
he paid under his liability. 10 The employer, appellant Lily Lim Tan, must be held
primarily and directly, not subsidiarily, liable for damages awarded in the decision of the
lower court. This is, of course, without prejudice to the right of appellant Lily Lim Tan to
demand from her co-appellant Ernesto Labsan reimbursement of the damages that she
would have to pay to appellees.

WHEREFORE, the decision of the Court of First Instance of Batangas, dated July 1,
1966, as modified in accordance with the observations We made in the preceding
paragraph, and the order, dated October 10, 1966, denying appellants' motion for the
lifting of the order of default and for new trial, in Civil Case No. 1732, are affirmed.
Costs against defendants-appellees.
It is so ordered.
Fernando, Barredo, Antonio and Aquino, JJ ., concur.
Separate Opinions
FERNANDEZ, J ., concurring and dissenting:
I agree with the dispositive part of the decision and the correctness of its premise that the
liability of appellant Lily Lim Tan is primary and direct, and that her motion to set aside
the order of default and the decision rendered thereafter as a result of an ex parte hearing
is in the nature of a motion for new trial which must be denied for insufficiency of the
affidavit of merit accompanying said motion.
Lawyers preparing an affidavit of merit should be reminded that it must contain facts
which if believed by the court would support a valid defense, because a motion for new
trial should not be granted if it would be a mere exercise in futility in so far as the
attainment of justice is concerned.
However, I am not ready to join the majority in its pronouncements in connection with
the negligence involved in this case. The provisions of the Rules of Court should be
interpreted liberally to afford every litigant his day in court. Under this principle, I
consider the negligence of appellant Lily Lim Tan and her first lawyer Atty. Daniel
Chavez to be excusable. Said appellant had a right to rely upon Atty. Chavez when she
indorsed her case to him that he would be able to prepare and file the answer for her
during the remaining four days of the fifteen-day period which commenced on May 19,
1966, or otherwise file a motion to extend the time to file the same. After all, it is a
simple case for damages due to reckless imprudence of appellant's driver, resulting in the
death of the victim.
Considering that Atty. Chavez committed suicide on June 17, 1966, his troubled mind
which probably led to his tragic end should be a sufficient explanation of his negligence
in misinforming Atty. Romulo R. de Castro, the lawyer to whom he indorsed the case of
Lily Lim Tan on June 10, 1966 that Lily Lim Tan received the summons on May 30,
1966, and not on May 19, 1966.
I am not ready to attribute to Atty. Romulo R. de Castro any negligence. He had a right to
rely on the information given him by Atty. Chavez that summons was received for the
filing of the answer only on May 30, 1966. Atty. Castro, to gain enough time, filed on the
same day the case was indorsed to him by Atty. Chavez a motion for extension of time
within which to file the answer which was actually filed on June 20, 1966.
All these, notwithstanding, this is a time as good as any to impress upon litigants and
lawyers alike the necessity of stamping or writing on any pleading, process, order or
decision in any court case the time and date of its receipt, and the affixing thereon of the
initials of the person receiving the same. For, human memory once in a while for some
and very often for others, fails in the correct remembrance of dates and events. If this had
been done by Lily Lim Tan and Atty. Chavez in this case with respect to the summons,
the late filing of the answer which resulted in default and a decision rendered after an ex-
parte hearing, could have been avoided.


FRANCISCA VILUAN, petitioner, vs. THE COURT OF
APPEALS, PATRICIO HUFANA AND GREGORIO
HUFANA, respondents.
Jose A. Solomon for petitioner.
Lourdes M. Garcia for respondents
SYLLABUS
1. PLEADING AND PRACTICE; AMENDMENT OF COMPLAINT TO ASSERT
CLAIM AGAINST THIRD-PARTY DEFENDANT. While Section 5 of Rule 12 of
the Old Rules of Court has been held to preclude a judgment in favor of a plaintiff and
against a third-party defendant where the plaintiff has not amended his complains to
assert a certain claim against a third- party defendant, (See e.g., Thompson vs. Granston,
Brown vs. Granston, 2 F.R.D. 270 [1942] yet, as held in subsequent decisions, this rule
applied only to cases where the third-party defendant is brought in on an allegation of
liability to the defendants. The rule does not apply where a third-party defendant is
impleaded on the ground of direct liability to the plaintiff, in which case no amendment
of the plaintiff's complaint is necessary. (Atlantic Coast Line R. Co. vs. United States
Fidelity & Guaranty Co., 52 F. Supp. 177 [1943]; Lommer vs. Scranton-Spring Brook
Water Service Co., 4 F.R.D. 104 [1944.]
2. ID.; ID.; WHEN AMENDMENT OF COMPLAINT TO ASSERT LIABILITY A
MATTER OF FORM. Where the liability of the third-party defendant was already
asserted in the third-party complaint, the amendment of the complaint to assert such
liability would merely be a matter of form, to insist on which would not be in keeping
with the liberal spirit of the Rules of Court. (I Moran, Comments on the Rules of Court,
205 [1957].)
3. COMMON CARRIERS; LIABILITY FOR INJURY TO PASSENGERS WHERE
DRIVERS OF BOTH VEHICLES ARE NEGLIGENT. In case of injury to a
passenger due to the negligence of the driver of the bus on which he was riding and of the
driver of another vehicle, the drivers as well as the owners of the two vehicles are jointly
and severally liable for damages. (Gutierrez vs. Gutierrez, 56 Phil., 177.)
D E C I S I O N
REGALA, J p:
Seven persons were killed and thirteen others were injured in Bangar, La
Union, on February 16, 1958, when a passenger bus on which they were riding
caught fire after hitting a post and crashing against a tree. The bus, owned by
petitioner and driven by Hermenegildo Aquino, came from San Fernando, La Union
and was on its way to Candon, Ilocos Sur. It appears that, as the bus neared the gate
of the Gabaldon school building in the municipality of Bangar, another passenger
bus owned by Patricio Hufana and driven by Gregorio Hufana tried to overtake it
but that instead of giving way, Aquino increased the speed of his bus and raced with
the overtaking bus. Aquino lost control of his bus as a result of which it hit a post,
crashed against a tree and then burst into flames.
Among those who perished were Timoteo Mapanao, Francisca Lacsamana , Narcisa
Mendoza and Gregorio Sibayan, whose heirs sued petitioner and the latter's driver,
Hermenegildo Aquino, for damages for breach of contract of carriage. Carolina Sabado,
one of those injured, also sued petitioner and the driver for damages. The complaints
were filed in the Court of First Instance of La Union.
In their answer, petitioner and her driver blamed respondent Gregorio Hufana for the
accident. With leave of court, they filed third party complaints against Hufana and the
latter's employer, Patricio Hufana.
After trial, the court found that the accident was due to the concurrent negligence of the
drivers of the two buses and held both, together with their respective employers, jointly
and severally liable for damages.
The dispositive portion of its decision reads:
"IN VIEW OF ALL THE FOREGOING,
judgment is hereby rendered, declaring the plaintiffs
entitled to damages to be paid jointly and severally by the
defendants and third-party defendants as follows:
(1) For plaintiff Juliana C. Vda. de Mapanao for
the death of her son Timotheo Mapanao, the sum of
P5,000.00 for actual damages, P1,000.00 as moral damages
and P250.00 as attorney's fees;
(2) For plaintiff Leon Lacsamana for the death of
his daughter Francisca Lacsamana, the sum of P4,000.00 as
actual damages, P1,000.00 as moral damages and P250.00
as attorney's fees;
(3) For plaintiff Juan Mendoza and Magdalena
Mendoza for the death of their mother Narcisa Mendoza,
the sum of P4,000.00 as actual damages, P1,000.00 for
moral damages and P250.00 as attorney's fees.
(4) For plaintiffs Agustina Sabado, Quintin
Sibayan, Julita Sibayan, Primitivo Sibayan and Avelina
Sibayan, the sum of P4,000.00 for actual damages,
P1,500.00 for moral damages and P250.00 as attorney's
fees.
(5) For the injured passenger Carolina Sabado,
P649.00 for actual damages, P1,500.00 for moral damages
and P250.00 for attorney's fees.
All such amounts awarded as damages shall bear
interest at the legal rate of six per cent (6) per annum from
the date of this decision until the same shall have been duly
paid in full. Defendants and third-party defendants are
further ordered to pay proportionate costs."
Both petitioner and her driver and the respondents herein appealed to the Court of
Appeals. While affirming the finding that the accident was due to the concurrent
negligence of the drivers of both the Viluan and the Hufana buses, the Court of Appeals
differed with the trial court in the assessment of liabilities of the parties. In its view only
petitioner Francisca Viluan, as operator of the bus, is liable for breach of contract of
carriage. The driver, Hermenegildo Aquino cannot be made jointly and severally liable
with petitioner because he is merely the latter's employee and is in no way a party to the
contract of carriage. The court added, however
"Hermenegildo Aquino is not entirely free from
liability. He may be held liable, criminally and civilly,
under the Revised Penal Code (Articles 100 and 103), but
not in a civil suit for damages predicated upon a breach of
contract, such as this one (Aguas, et al. vs. Vargas, et al.,
CA G.R. No. 27161-R, January 22, 1963). furthermore, the
common carrier, Francisca Viluan, could recover from
Aquino any damages that she might have suffered by
reason of the latter's negligence."
Neither may respondents Patricio Hufana and Gregorio Hufana be held liable in the
opinion of the appellate court because the plaintiffs did not amend complaints in the main
action so as to assert a claim against respondents as third party defendants.
The appellate court likewise disallowed the award of moral damages for P1,000.00 to
Carolina Sabado, there being no showing that the common carrier was guilty of fraud or
bad faith in the performance of her obligation. Accordingly, it rendered judgment as
follows:
"IN VIEW OF ALL THE FOREGOING, we
hereby find defendant-appellant Francisca Viluan solely
liable to the plaintiffs-appellees for the damages and
attorney's fees awarded to them by the court below and
further declare null and void the lower court's award of
moral damages in the amount of P1,000.00 in favor of
plaintiff Carolina Sabado. Thus modified, the judgment
appealed from is affirmed in all other respects, with costs
in this instance against defendant-appellant Francisca
Viluan."
From this judgment petitioner brought this appeal. In brief, her position is that since the
proximate cause of the accident was found to be the concurrent negligence of the drivers
of the two buses, then she and respondents Patricio and Gregorio Hufana should have
been held equally liable to the plaintiffs in the damage suits. The fact that the respondents
were not sued as principal defendants but were brought into the cases as third party
defendants should not preclude a finding of their liability.
We agree with petitioner's contention. To begin with, the Court of Appeal's ruling is
based on section 5 of Rule 12 of the former Rules of Court,1 which was adopted from
Rule 14-A of the Federal Rules of Civil Procedure. While the latter provision has indeed
been helpful to preclude a judgment in favor of a plaintiff and against a third party
defendant where the plaintiff has not amended his complaint to assert a claim against a
third party defendant,2 yet, as held in subsequent decisions, this rule applies only to cases
where the third party defendant is brought in on an allegation of liability to the
defendants. The rule does not apply where a third party defendant is impleaded on the
ground of direct liability to the plaintiffs, in which case no amendment of the plaintiff's
complaint is necessary.3 As explained in the Atlantic Coast Line R. Co. vs. U.S. Fidelity
and Guaranty Co., 52 F. Supp. 177 (1943):
"From the sources of Rule 14 and the decisions
herein cited, it is clear that this rule, like the admiralty rule,
'covers two distinct subjects, the addition of parties
defendant to the main cause of action, and the bringing in
of a third party for a defendant's remedy over.'. . .
"If the third party complaint alleged facts
showing a third party's direct liability to plaintiff on the
claim set out in plaintiff's petition, then third party "shall"
make his defenses as provided in Rule 12 and his
counterclaims against plaintiff as provided in Rule 13. In
the case of alleged direct liability, no amendment is
necessary or required. The subject-matter of the claim is
contained in plaintiff's complaint, the ground of third
party's liability on that claim is alleged in third party
complaint, and third party's defense to his alleged liability
on the claim is set up in his answer to plaintiff's complaint.
At that point and without amendment, the plaintiff and
third party are at issue as to their rights respecting the
claim.
"The provision in the rule that, "The third-party
defendant may assert any defense which the third-party
plaintiff may assert to the plaintiff's claim,' applies to the
other subject, namely, the alleged liability of third party
defendant. The next sentence in the rule, "The third-party
defendant is bound by the adjudication of the third- party
plaintiff's liability to the plaintiff, as well as of his own to
the plaintiff or to the third-party plaintiff,' applies to both
subjects. If third party is brought in as liable only to
defendant and judgment is rendered adjudicating plaintiff's
right to recover against defendant and defendant's right to
recover against third party, he is bound by both
adjudications. That part of the sentence refers to the second
subject. If third party is brought in as liable to plaintiff,
then third party is bound by the adjudication as between
him and plaintiff. That refers to the first subject. If third
party is brought in as liable to plaintiff and also over to
defendant, then third party is bound by both adjudications.
The next sentence in the rule, `The plaintiff may amend his
pleadings to assert against the third-party defendant any
claim which the plaintiff might have asserted against the
third-party defendant had he been joined originally as a
defendant,' refers to the second subject, that is, to bringing
in third party as liable to defendant only, and does not
apply to the alleged liability of third party directly to
plaintiff."

In this case the third party complaints filed by petitioner and her driver charged
respondents with direct liability to the plaintiffs. It was contended that the accident was
due "to the fault, negligence, carelessness and imprudence of the third party defendant
Gregorio Hufana" and, in petitioner's motion for leave to file a third party complaint, it
was stated that "Patricio Hufana and Gregorio Hufana were not made parties to this
action, although the defendants are entitled to indemnify and/or subrogation against them
in respect of plaintiff's claim."
It should make no difference therefore whether the respondents were brought in as
principal defendants or as third-party defendants. As Moran points out, since the liability
of the third-party defendant is already asserted in the third-party complaint, the
amendment of the complaint to assert such liability is merely a matter of form, to insist
on which would not be in keeping with the liberal spirit of the Rules of Court.4
Nor should it make any difference that the liability of petitioner springs from contract
while that of respondents arises from quasi-delict. As early as 1931, we already ruled in
Gutierrez vs. Gutierrez, 56 Phil., 177,5 that in case of injury to a passenger due to the
negligence of the driver of the bus on which he was riding and of the driver of another
vehicle, the drivers as well as the owners of the two vehicles are jointly and severally
liable for damages. Some members of the Court, though are of the view that under the
circumstances they are liable on quasi-delict.
Wherefore, the decision appealed from is hereby modified in the sense that petitioner as
well as respondents Patricio Hufana and Gregorio Hufana are jointly and severally liable
for the damages awarded by the trial court. The disallowance of moral damages in the
amount of P1,000.00 is correct and should be affirmed. No costs.
DELFIN LIM and JIKIL TAHA, plaintiffs-appellants, vs.
FRANCISCO PONCE DE LEON AND ORLANDO
MADDELA, defendants-appellees.
Ricardo L. Manalilig for plaintiffs-appellants.
Iigo R. Pea for defendants-appellees.
SYNOPSIS
A complaint was filed against Jikil Taha alleging that a year after he sold his motor
launch, he forcibly took the same. After the preliminary investigation, Fiscal Ponce de
Leon filed an information for robbery with force and intimidation filed an information for
robbery with force and intimidation upon person and directed the Provincial Commander
of Palawan to impound the motor launch subject of the criminal offense. The Provincial
Commander in turn directed Detachment Commander Orlando Maddela to seize the
motor launch from Delfin Lim, a subsequent vendee, Jikil Taha and Delfin Lim filed a
complaint for damages against Fiscal Ponce de Leon and Orlando Maddela alleging,
among others, that the motor launch was seized without a search warrant. The trial court
upheld the validity of the seizure and ordered plaintiffs to pay jointly and severally actual
and exemplary damages plus attorney's fees. Hence, this appeal.
The Supreme Court reversed the ruling holding that the seizure without a warrant was
illegal and violative of the constitutional provision against unreasonable searches and
seizure even if the thing seized was the corpus delicti of a crime; and ordered fiscal
Ponce de Leon to pay Delfin Lim actual and moral damages plus attorney's fees.
SYLLABUS
1. CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHT AGAINST
UNREASONABLE SEARCHES AND SEIZURE; REQUISITES OF A VALID
SEARCH WARRANT. A search and seizure to be reasonable, must be effected by
means of a valid search warrant. And for a search warrant to be valid: (1) it must be
issued upon probable cause; (2) the probable cause must be determined by the judge
himself and not by the applicant or any other person; (3) in the determination of probable
cause , the judge must examine, under oath or affirmation, the complainant and such
witnesses as the latter may produce; and (4) the warrant issued must particularly describe
the place to be searched and persons or things to be seized.
2. ID.; ID.; ID.; SECTIONS 2 and 3 OF RULE 122, RULES OF COURT. Under
Section 2 and 3 of Rule 122 of the Rules of Court which complement the constitutional
provision on unreasonable search and seizure, two principles are made clear, namely: (1)
that in the seizure of a stolen property search warrant is still necessary; and (2) that in
issuing a search warrant, the judge alone determines whether or not there is a probable
cause. The fact that a thing is a corpus delicti of a crime does not justify its seizure
without a warrant
3. ID.; ID.; ID.; CASE AT BAR. Where entrance into the premises and impounding of
the motor launch were effected without a valid search warrant and without the consent of
the owner, said seizure is illegal and violative of the constitutional rights against
unreasonable search and seizure, for no public official has the right to enter the premises
of another without his consent for the purpose of search and seizure.
4. ID.; ID.; ID.; FISCAL MAY NOT ISSUE SEARCH WARRANT. Under the 1935
Constitution the power to issue a search warrant is vested in a judge or magistrate and in
no other officer and no search and seizure can be made without a proper warrant. There is
nothing in Republic Act No. 732, which amended Section 1674 and 1687 of the Revised
Administrative Code, which confers upon the provincial fiscals the authority to issue
warrants, much less to order without warrant the seizure of a personal property even if it
is the corpus delicti of a crime. Although Republic Act No. 732 has broadened the power
of provincial fiscals to conduct preliminary investigation, said law did not divest the
judge or magistrate of the power to determine, before the corresponding warrant, whether
or not probable cause exists therefor.
5. ID.; ID.; ID.; LACK OF TIMES DOES JUSTIFY UNREASONABLE SEARCH AND
SEIZURE. Where there is sufficient time to procure a search warrant and there is no
basis for the apprehension that the object of search and seizure might be moved out of
place, lack of time cannot justify a search without a search warrant.
6. ID.; ID.; ID.; LEGALITY OF SEIZURE MUST BE RAISED BY ONE WHOSE
RIGHTS HAVE BEEN IMPAIRED. The legality of seizure can be contested only by
the party whose rights have been impaired thereby, and the objection to an unlawful
search and seizure is purely personal and cannot be availed of by third parties.
Consequently, one who is not the owner, lessees, or lawful occupant of the premises
searched cannot raise the question of validity of the search and seizure.
7. DAMAGES; AWARD OF ACTUAL AND MORAL DAMAGES FOR VIOLATION
OF CONSTITUTIONAL RIGHT. Under Article 32 and 2219 of the New Civil Code,
a person whose constitutional rights have been violated or impaired is entitled to actual
and moral damages from the public officer or employee responsible therefore. In
addition, exemplary damages may also be awarded.
8. ID.; ID.; MALICE AND BAD FAITH, NOT REQUIRED TO BE LIABLE UNDER
ARTICLE 32 NEW CIVIL CODE. To be liable under Article 32 of the New Civil
Code it is enough that there is a violation of the constitutional rights of the plaintiffs and
it is not required that defendants should have acted with malice or bad faith.
9. ID.; ID.; REASONS. Public officials in the past have abused their powers on the
pretext of justifiable motives or good faith in the performance of their duties. Precisely,
the object of Article 32 of the Civil Code is to put an end to official abuse by the plea of
good faith.
10. ID.; SUBORDINATE OFFICER MAY BE HELD LIABLE FOR EXECUTING
UNLAWFUL ORDER; EXCEPTION. While a subordinate officer may be held liable
for executing an unlawful order of his superior officer, there are certain circumstances
which would warrant exculpation from liability. Thus, where it is shown that the motor
launch was impounded by a subordinate officer only after repeated request by the fiscal,
after being shown a letter justifying the necessity of seizure, and after he was made to
explain the delay of the seizure by his superior, he cannot be held liable for damages.
D E C I S I O N
MARTIN, J p:
Appeal on a question of law from the decision of the Court of First Instance of Palawan
in Civil Case No. 416, entitled "Delfin Lim and Jikil Taha vs. Francisco Ponce de Leon
and Orlando Maddela, dismissing the complaint of the plaintiffs and ordering them to pay
each of the defendants jointly and severally the sum of P500.00 by way of actual
damages; P500.00 by way of attorney's fees; and P1,000.00 by way of exemplary
damages.
On April 29, 1961, plaintiff-appellant Jikil Taha sold to a certain Alberto Timbangcaya of
Brooke's Point, Palawan a motor launch named M/L "SAN RAFAEL". A year later or on
April 9, 1962 Alberto Timbangcaya filed a complaint with the Office of the Provincial
Fiscal of Palawan alleging that after the sale Jikil Taha forcibly took away the motor
launch from him.
On May 14, 1962, after conducting a preliminary investigation, Fiscal Francisco Ponce
de Leon, in his capacity as Acting Provincial Fiscal of Palawan, filed with the Court of
First Instance of Palawan the corresponding information for Robbery with Force and
Intimidation upon Persons against Jikil Taha. The case was docketed as Criminal Case
No. 2719.
On June 15, 1962, Fiscal Francisco Ponce de Leon, upon being informed that the motor
launch was in Balabac, Palawan, wrote the Provincial Commander of Palawan requesting
him to direct the detachment commander in Balabac to impound and take custody of the
motor launch. 1
On June 26, 1962, Fiscal Ponce de Leon reiterated his request to the Provincial
Commander to impound the motor launch, explaining that its subsequent sale to a third
party, plaintiff-appellant Delfin Lim, cannot prevent the court from taking custody of the
same. 2 So, on July 6, 1962 upon order of the Provincial Commander, defendant-appellee
Orlando Maddela, Detachment Commander of Balabac, Palawan, seized the motor
launch "SAN RAFAEL" from plaintiff-appellant Delfin Lim and impounded it.
On July 15, 1962 plaintiff-appellant Delfin Lim pleaded with Orlando Maddela to return
the motor launch but the latter refused. Likewise, on September 20, 1962, kill Taha
through his counsel made representations with Fiscal Ponce de Leon to return the seized
property to plaintiff-appellant Delfin Lim but Fiscal Ponce de Leon refused, on the
ground that the same was the subject of a criminal offense.
All efforts to recover the motor launch going to naught, plaintiffs-appellants Delfin Lim
and Jikil Taha, on November 19, 1962, filed with the Court of First Instance of Palawan a
complaint for damages against defendants-appellees Fiscal Francisco Ponce de Leon and
Orlando Maddela, alleging that on July 6, 1962 Orlando Maddela entered the premises of
Delfin Lim without a search warrant and then and there took away the hull of the motor
launch without his consent; that he effected the seizure upon order of Fiscal Ponce de
Leon who knew fully well that his office was not vested with authority to order the
seizure of a private property; that said motor launch was purchased by Delfin Lim from
Jikil Taha in consideration of Three Thousand Pesos (P3,000.00), Two Thousand Pesos
(P,000.00) of which has been given to Jikil Taha as advance payment; that as a
consequence of the unlawful seizure of the motor launch, its sale did not materialize; and
that since July 6, 1962, the said motor launch had been moored at the Balabac Bay,
Palawan and because of exposure to the elements it had become worthless and beyond
repair. For the alleged violation of their constitutional rights, plaintiffs-appellants prayed
that defendants-appellees be ordered to pay jointly and severally each of them the sum of
P5,750.00 representing actual, moral and exemplary damages and attorney's fees.

In their answer, defendants-appellees denied the material allegations of the complaint and
as affirmative defenses alleged that the motor launch in question which was sold by Jikil
Taha to Alberto Timbangcaya on April 29, 1961 was sometime in April 1962, forcibly
taken with violence upon persons and with intent to gain by Jikil Taha from Alfredo
Timbangcaya without the latter's knowledge and consent, thus giving rise to the filing of
a criminal charge of robbery against Jikil Taha; that Fiscal Ponce de Leon, in his capacity
as Acting Provincial Fiscal of Palawan ordered Orlando Maddela to seize and impound
the motor launch "SAN RAFAEL", for being the corpus delicti of the robbery; and that
Orlando Maddela merely obeyed the orders of his superior officer to impound said
launch. By way of counterclaim, defendants-appellees alleged that because of the
malicious and groundless filing of the complaint by plaintiffs-appellants, they were
constrained to engage the services of lawyers, each of them paying P500.00 as attorney's
fees; and that they suffered moral damages in the amount of P5,000.00 each and actual
damages in the amount of P500.00 each. They also prayed that each of them awarded
exemplary damages in the amount of P1,000.00.
On September 13, 1965, the trial court rendered its decision, upholding the validity of the
seizure of the motor launch on the ground that "the authority to impound evidences or
exhibits or corpus delicti in a case pending investigation is inherent in the Provincial
Fiscal who controls the prosecution and who introduces those exhibits in the court."
Accordingly, the trial court dismissed the complaint of plaintiffs-appellants and ordered
them to pay jointly and severally each of the defendants-appellees the amount of P500.00
by way of actual damages another amount of P500.00 for attorney's fees and P1,000.00 as
exemplary damages.
Hence, this appeal.
Two vital issues call for resolution by this Court. First, whether or not defendant-appellee
Fiscal Ponce de Leon had the power to order the seizure of the motor launch in question
without a warrant of search and seizure even if the same was admittedly the corpus
delicti of the crime. Second, whether or not defendants-appellees are civilly liable to
plaintiffs-appellants for damages allegedly suffered by them granting that the seizure of
the motor launch was unlawful.
The gravamen of plaintiffs-appellants' argument is that the taking of the motor launch on
July 6, 1962 by Orlando Maddela upon the order of Fiscal Ponce de Leon was in
violation of the constitutional guarantee against unreasonable searches and seizures since
it was done without a search warrant.
The pertinent provision of the Constitution then in force reads:
"3) The right of the people to be secure in their persons, houses,
papers and effects against unreasonable searches and seizures shall
not be violated, and no warrants shall issue but upon probable
cause, to be determined by the judge after examination under oath
or affirmation of the complainant and the witnesses he may
produce, and particularly describing the place to be searched, and
the persons or things to be seized." 3
A cursory reading of the above provision easily brings into focus the unreasonableness of
the seizure of the aforementioned motor launch. A search and seizure to be reasonable,
must be effected by means of a valid search warrant. And for a search warrant to be valid:
(1) it must be issued upon probable cause; (2) the probable cause must be determined by
the judge himself and not by the applicant or any other person; (3) in the determination of
probable cause, the judge must examine, under oath or affirmation, the complainant and
such witnesses as the latter may produce; and (4) the warrant issued must particularly
describe the place to be searched and persons or things to be seized. 4 Thus in a long line
of decisions, this Court has declared invalid search warrants which were issued in utter
disregard of the constitutional injunction. 5
Defendant-appellees admitted that when Orlando Maddela entered the premises of Delfin
Lim and impounded the motor launch he was not armed with a search warrant; that he
effected the seizure of the motor launch in the absence of and without the consent of
Delfin Lim. There can be no question that without the proper search warrant, no public
official has the right to enter the premises of another without his consent for the purpose
of search and seizure. 6 And since in the present case defendants-appellees seized the
motor launch without a warrant, they have violated the constitutional right of plaintiffs-
appellants against unreasonable search and seizure.
Defendants-appellees however would want to justify the seizure of the motor launch even
without a warrant because of Fiscal Ponce de Leon's alleged, inherent power to order the
seizure of a personal property which is the corpus delicti of a crime, he being a quasi
judicial officer who has the control of the prosecution and the presentation of the
evidence in the criminal case. They argue that inasmuch as the motor launch in question
was allegedly stolen by Jikil Taha from Timbangcaya, Fiscal Ponce de Leon could order
its seizure even without a search warrant. We cannot agree. Under the old Constitution 7
the power to issue a search warrant is vested in a judge or magistrate and in no other
officer and no search and seizure can be made without a proper warrant. At the time the
act complained of was committed, there was no law or rule that recognized the authority
of Provincial Fiscals to issue a search warrant. In his vain attempt to justify the seizure of
the motor launch in question without a warrant Fiscal Ponce de Leon invoked the
provisions of Republic Act No. 732, which amended Sections 1674 and 1687 of the
Revised Administrative Code. But there is nothing in said law which confers upon the
provincial fiscals the authority to issue warrants, much less to order without warrant the
seizure of a personal property even if it is the corpus delicti of a crime. True, Republic
Act No. 732 has broadened the power of provincial fiscals to conduct preliminary
investigations, but said law did not divest the judge or magistrate of its power to
determine, before issuing the corresponding warrant, whether or not probable cause exists
therefor. 8
Moreover, under Sections 2 and 3 of Rule 122 of the Rules of Court 9 which complement
the constitutional provision earlier cited, two principles are made clear, namely: (1) that
in the seizure of a stolen property search warrant is still necessary; and (2) that in issuing
a search warrant the judge alone determines whether or not there is a probable cause. The
fact that a thing is a corpus delicti of a crime does not justify its seizure without a
warrant. As held in U.S. v. de los Reyes and Esguerra, 10 citing McClurg v. Brenton: 11
"The mere fact that a man is an officer, whether of high or low
degree, gives him no more right than is possessed by the ordinary
private citizen to break in upon the privacy of a home and subject
its occupant to the indignity of a search for the evidence of crime,
without a legal warrant procured for that purpose. No amount of
incriminating evidence, whatever its source, will supply the place
of such warrant. At the closed door of the home be it palace or
hovel, even bloodhounds must wait till the law, by authoritative
process, bids it open." (Emphasis supplied.)
Defendant-appellee Fiscal Ponce de Leon would also invoke lack of time to procure a
search warrant as an excuse for the seizure of the motor launch without one. He claimed
that the motor launch had to be seized immediately in order to preserve it and to prevent
its removal out of the locality, since Balabac, Palawan, where the motor launch was at the
time, could only he reached after three to four days' travel by boat. 12 The claim cannot
be sustained. The records show that on June 15, 1962 13 Fiscal Ponce de Leon made the
first request to the Provincial Commander for the impounding of the motor launch; and
on June 26, 1962 14 another request was made. The seizure was not effected until July 6,
1962. In short, Fiscal Ponce de Leon had all the time to procure a search warrant had he
wanted to and which he could have taken in less than a day, but he did not. Besides, there
is no basis for the apprehension that the motor launch might be moved out of Balabac
because even prior to its seizure the motor launch was already without its engine. 15 In
sum, the fact that there was no time to secure a search warrant would not legally justify a
search without one. 16
As to whether or not they are entitled to damages, plaintiffs-appellants anchor their claim
for damages on Articles 32 and 2219 of the New Civil Code which provide in part as
follows:
"ART. 32. Any public officer or employee, or any private
individual, who directly or indirectly obstructs, defeats, violates or
in any manner impedes or impairs any of the following rights and
liberties of another person shall be liable to the latter for damages.
xxx xxx xxx
"(9) The rights to be secure in one's person, house, papers, and
effects against unreasonable searches and seizures.
xxx xxx xxx
"The indemnity shall include moral damages. Exemplary damages
may also be adjudicated."
"ART. 2219. Moral damages may be recovered in the following
and analogous cases:
xxx xxx xxx
"(6) Illegal search;
xxx xxx xxx
"(1) Acts and action referred to in Articles 21, 26, 27, 28, 29, 30,
32, 34 and 36."
Pursuant to the foregoing provisions, a person whose constitutional rights have been
violated or impaired is entitled to actual and moral damages from the public officer or
employee responsible therefor. In addition, exemplary damages may also be awarded. In
the instant case, plaintiff-appellant Delfin Lim claimed that he purchased the motor
launch from Jikil Taha in consideration of P3,000.00, having given P2,000.00 as
advanced payment; that since its seizure on July 6, 1962 the motor launch had been
moored at Balabac Bay and because of exposure to the elements it has become worthless
at the time of the filing of the present action; that because of the illegality of the seizure
of the motor launch, he suffered moral damages in the sum of P1,000.00; and that
because of the violation of their constitutional rights they were constrained to engage the
services of a lawyer whom they have paid P1,500.00 for attorney's fees. We find these
claims of Delfin Lim amply supported by the evidence and therefore should be awarded
the sum of P3,000.00 as actual damages; P1,000.00 as moral damages and P750.00 for
attorney's fees. However, with respect to plaintiff Jikil Taha, he is not entitled to recover
any damage which he alleged he had suffered from the unlawful seizure of the motor
launch inasmuch as he had already transferred the ownership and possession of the motor
launch to Delfin Lim at the time it was seized and therefore he has no legal standing to
question the validity of the seizure. Well settled is the rule that the legality of a seizure
can be contested only by the party whose rights have been impaired thereby, and that the
objection to an unlawful search and seizure is purely personal and cannot be availed of by
third parties. 17 Consequently, one who is not the owner, lessee, or lawful occupant of
the premises searched cannot raise the question of validity of the search and seizure. 18
Jikil Taha is not without recourse though. He can still collect from his co-plaintiff, Delfin
Lim the unpaid balance of P1,000.00.

Defendant-appellee Fiscal Ponce de Leon wanted to wash his hands of the incident by
claiming that "he was in good faith, without malice and without the slightest intention of
inflicting injury to plaintiff-appellant, Jikil Taha" 19 when he ordered the seizure of the
motor launch. We are not prepared to sustain his defense of good faith. To be liable under
Article 32 of the New Civil Code it is enough that there was a violation of the
constitutional rights of the plaintiffs and it is not required that defendants should have
acted with malice or bad faith. Dr. Jorge Bocobo, Chairman of the Code Commission,
gave the following reasons during the public hearings of the Joint Senate and House
Committees, why good faith on the part of the public officer or employee is immaterial.
Thus:
"DEAN BOCOBO. Article 32, regarding individual rights,
Attorney Cirilo Paredes proposes that Article 32 he so amended as
to make a public official liable for violation of another person's
constitutional rights only if the public official acted maliciously or
in bad faith. The Code Commission opposes this suggestion for
these reasons:
"The very nature of Article 3219 that the wrong may be civil or
criminal. It is not necessary therefore that there should be malice or
bad faith. To make such a requisite would defeat the main purpose
of Article 32 which is the effective protection of individual rights.
Public officials in the past have abused their powers on the pretext
of justifiable motives or good faith in the performance of their
duties. Precisely, the object of the Article is to put an end to
official abuse by the plea of good faith. In the United States this
remedy is in the nature of a tort.
"Mr. Chairman, this article is firmly one of the fundamental
articles introduced in the New Civil Code to implement
democracy. There is no real democracy if a public official is
abusing and we made the article so strong and so comprehensive
that it concludes an abuse of individual rights even if done in good
faith, that official is liable. As a matter of fact, we know that there
are very few public officials who openly and definitely abuse the
individual rights of the citizens. In most cases, the abuse is
justified on a plea of desire to enforce the law to comply with one's
duty. And so, if we should limit the scope of this article, that would
practically nullify the object of the article. Precisely, the opening
object of the article is to put an end to abuses which are justified by
a plea of good faith, which is in most cases the plea of officials
abusing individual rights." 20
But defendant-appellee Orlando Maddela cannot be held accountable because he
impounded the motor launch upon the order of his superior officer. While a subordinate
officer may be held liable for executing unlawful orders of his superior officer, there are
certain circumstances which would warrant Maddela's exculpation from liability. The
records show that after Fiscal Ponce de Leon made his first request to the Provincial
Commander on June 15, 1962 Maddela was reluctant to impound the motor launch
despite repeated orders from his superior officer. 21 It was only after he was furnished a
copy of the reply of Fiscal Ponce de Leon, dated June 26, 1962, to the letter of the
Provincial Commander, justifying the necessity of the seizure of the motor launch on the
ground that the subsequent sale of the launch to Delfin Lim could not prevent the court
from taking custody of the same, 22 that he impounded the motor launch on July 6, 1962.
With said letter coming from the legal officer of the province, Maddela was led to believe
that there was a legal basis and authority to impound the launch. Then came the order of
his superior officer to explain for the delay in the seizure of the motor launch. 23 Faced
with a possible disciplinary action from his commander, Maddela was left with no
alternative but to seize the vessel. In the light of the above circumstances. We are not
disposed to hold Maddela answerable for damages.
IN VIEW OF THE FOREGOING, the decision appealed from is hereby reversed and
another one entered declaring the seizure illegal and ordering defendant-appellee Fiscal
Francisco Ponce de Leon to pay to plaintiff-appellant Delfin Lim the sum of P3,000.00 as
actual damages, plus P1,000.00 moral damages, and, in addition, P750.00 for attorney's
fees. With costs against defendant-appellee Fiscal Ponce de Leon.
SO ORDERED.
||| (Lim v. de Leon, G.R. No. L-22554, August 29, 1975)

MHP GARMENTS, INC., and LARRY C. DE GUZMAN, petitioners, vs. THE
HONORABLE COURT OF APPEALS, AGNES VILLA CRUZ, MIRASOL
LUGATIMAN, and GERTRUDES GONZALES, respondents.
Benjamin M. Dacanay for petitioners.
Emmanuel O. Tansingco for private respondents.

PUNO, J .:
The constitutional protection of our people against unreasonable search and seizure is not
merely a pleasing platitude. It vouchsafes our right to privacy and dignity against
undesirable intrusions committed by any public officer or private individual. An
infringement of this right justifies an award for damages.
On February 22, 1983, petitioner MHP Garments, Inc., was awarded by the Boy Scouts
of the Philippines, the exclusive franchise to sell and distribute official Boy Scouts
uniforms, supplies, badges, and insignias. In their Memorandum Agreement, petitioner
corporation was given the authority to "undertake or cause to be undertaken the
prosecution in court of all illegal sources of scout uniforms and other scouting supplies."
1

Sometime in October 1983, petitioner corporation received information that private
respondents Agnes Villa Cruz, Mirasol Lugatiman, and Gertrudes Gonzales were selling
Boy Scouts items and paraphernalia without any authority. Petitioner de Guzman, an
employee of petitioner corporation, was tasked to undertake the necessary surveillance
and to make a report to the Philippine Constabulary (PC).
On October 25, 1983, at about 10:30 A.M., petitioner de Guzman, Captain Renato M.
Peafiel, and two (2) other constabulary men of the Reaction Force Battalion, Sikatuna
Village, Diliman, Quezon City went to the stores of respondents at the Marikina Public
Market. Without any warrant, they seized the boy and girl scouts pants, dresses, and suits
on display at respondents' stalls. The seizure caused a commotion and embarrassed
private respondents. Receipts were issued for the seized items. The items were then
turned over by Captain Peafiel to petitioner corporation for safekeeping.
A criminal complaint for unfair competition was then filed against private respondents.
2

During its pendency, petitioner de Guzman exacted from private respondent Lugatiman
the sum of THREE THOUSAND ONE HUNDRED PESOS (P3,100.00) in order to be
dropped from the complaint. On December 6, 1983, after a preliminary investigation, the
Provincial Fiscal of Rizal dismissed the complaint against all the private respondents. On
February 6, 1984, he also ordered the return of the seized items. The seized items were
not immediately returned despite demands.
3
Private respondents had to go personally to
petitioners' place of business to recover their goods. Even then, not all the seized items
were returned. The other items returned were of inferior quality.
Private respondents then filed Civil Case No. 51144 against the petitioners for sums of
money and damages.
4
In its Decision dated January 9, 1987, the trial court ruled for the
private respondents, thus:
WHEREFORE, judgment is hereby rendered in favor of plaintiffs and against defendants,
ordering the latter jointly and severally:
1. To return the amount of P3,100.00 to plaintiff Mirasol Lugatiman with interest at 12%
per annum from January 12, 1984, the date of the last receipt issued, until fully paid;
2. To pay plaintiff Agnes Villa Cruz the sum of P2,000.00 for the 26 pieces of girl scout
items not returned;
3. To pay plaintiffs the amount of P50,000.00 for and as moral damages and P15,000.00
for and as exemplary damages; and
4. P5,000.00 for and as attorney's fees and litigation expenses.
Costs against the defendants.
SO ORDERED.
The decision was appealed to the respondent court. On January 18, 1989, its Fifth
Division,
5
affirmed the Decision with modification, thus:
WHEREFORE, the decision appealed from is AFFIRMED with MODIFICATION; and,
as modified, the dispositive portion thereof now reads as follows:
Judgment is hereby rendered in favor of plaintiffs (private respondents) and against
defendants (petitioners), ordering the latter jointly and severally;
1. To return the amount of P3,100.00 to plaintiff (respondent) Mirasol Lugatiman and
cancel her application for distributor's license;
2. To pay plaintiff (respondent) Agnes Villa Cruz the sum of P2,000.00 for the
unreturned 26 pieces of girl scouts items with interest at 12% per annum from June 4,
1984 (date the complaint was filed) until it is fully paid;
3. To pay plaintiffs (respondents) the amount of P10,000.00 each, or a total of
P30,000.00, for and as moral damages; and P5,000.00 each, or a total of P15,000.00, for
and as exemplary damages; and
4. To pay plaintiffs (respondents) P5,000.00 for and as attorney's fees and litigation
expenses.
Costs of the case a quo and the instant appeal are assessed jointly and severally against
defendants-appellants (petitioners) MHP Garments, Inc. and Larry de Guzman.
SO ORDERED.
In this petition for certiorari, petitioners contend:
FIRST ASSIGNMENT OF ERROR
THE COURT OF APPEALS ERRED IN IMPUTING LIABILITY FOR DAMAGES TO
THE PETITIONERS WHO DID NOT EFFECT THE SEIZURE OF THE SUBJECT
MERCHANDISE.
SECOND ASSIGNMENT OF ERROR
THE COURT OF APPEALS ERRED WHEN IT MADE A FINDING THAT THE
MANNER WITH WHICH THE CONFISCATION OF PRIVATE RESPONDENTS
WAS TORTIOUS BUT PENALIZED INSTEAD THE PETITIONERS WHO DID NOT
COMMIT THE ACT OF CONFISCATION.
THIRD ASSIGNMENT OF ERROR
THE COURT OF APPEALS ERRED WHEN IT FOUND FOR THE PRIVATE
RESPONDENTS AND AGAINST THE PETITIONERS.
We affirm.
Article III, section 2, of the Constitution protects our people from unreasonable search
and seizure. It provides:
The right of the people to be secure in their persons, houses, papers, and effects against
unreasonable searches and seizures of whatever nature for any purpose shall be
inviolable, and no search warrant or warrant of arrest shall issue except upon probable
cause to be determined personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and particularly
describing the place to be searched and the persons or things to be seized.
This provision protects not only those who appear to be innocent but also those who
appear to be guilty but are nevertheless to be presumed innocent until the contrary is
proved.
6
In the case at bench, the seizure was made without any warrant. Under the
Rules of Court,
7
a warrantless search can only be undertaken under the following
circumstance:
Sec. 12. Search incident to a lawful arrest. - A person lawfully arrested may be searched
for dangerous weapons or anything which may be used as proof of the commission of an
offense, without a search warrant.
We hold that the evidence did not justify the warrantless search and seizure of private
respondents' goods. Petitioner corporation received information that private respondents
were illegally selling Boy Scouts items and paraphernalia in October 1983. The specific
date and time are not established in the evidence adduced by the parties. Petitioner de
Guzman then made a surveillance of the stores of private respondents. They reported to
the Philippine Constabulary and on October 25, 1983, the raid was made on the stores of
private respondents and the supposed illicit goods were seized. The progression of time
between the receipt of the information and the raid of the stores of private respondents
shows there was sufficient time for petitioners and the PC raiding party to apply for a
judicial warrant. Despite the sufficiency of time, they did not apply for a warrant and
seized the goods of private respondents. In doing so, they took the risk of a suit for
damages in case the seizure would be proved to violate the right of private respondents
against unreasonable search and seizure. In the case at bench, the search and seizure were
clearly illegal. There was no probable cause for the seizure. Probable cause for a search
has been defined as "such facts and circumstances which would lead a reasonably
discreet and prudent man to believe that an offense has been committed and that the
objects sought in connection with the offense are in the place sought to be searched."
8

These facts and circumstances were not in any way shown by the petitioners to justify
their warrantless search and seizure. Indeed, after a preliminary investigation, the
Provincial Fiscal of Rizal dismissed their complaint for unfair competition and later
ordered the return of the seized goods.
Petitioners would deflect their liability with the argument that it was the Philippine
Constabulary that conducted the raid and their participation was only to report the alleged
illegal activity of private respondents.
While undoubtedly, the members of the PC raiding team should have been included in
the complaint for violation of the private respondents' constitutional rights, still, the
omission will not exculpate petitioners.
In the case of Lim vs. Ponce de Leon,
9
we ruled for the recovery of damages for violation
of constitutional rights and liberties from public officer or private individual, thus:
Art. 32. Any public officer or employee, or any private individual, who directly or
indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the
following rights and liberties of another person shall be liable to the latter for damages.
xxx xxx xxx
(9) The rights to be secure in one's person, house, papers, and effects against
unreasonable searches and seizures.
xxx xxx xxx
The indemnity shall include moral damages. Exemplary damages may also be adjudged.
Art. 2219. Moral damages may be recovered in the following and analogous cases:
xxx xxx xxx
(6) Illegal search;
(1) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.
Pursuant to the foregoing provisions, a person whose constitutional rights have been
violated or impaired is entitled to actual and moral damages from the public officer or
employee responsible therefor. In addition, exemplary damages may also be awarded.
xxx xxx xxx
The very nature of Article 32 is that the wrong may be civil or criminal. It is not
necessary therefore that there should be malice or bad faith. To make such a requisite
would defeat the main purpose of Article 32 which is the effective protection of
individual rights. Public officials in the past have abused their powers on the pretext of
justifiable motives or good faith in the performance of their duties. Precisely, the object
of the Article is to put an end to official abuse by plea of the good faith. In the United
States this remedy is in the nature of a tort. (emphasis supplied)
In the subsequent case of Aberca vs. Ver,
10
the Court En Banc explained the liability of
persons indirectly responsible, viz:
[T]he decisive factor in this case, in our view, is the language of Article 32. The law
speaks of an officer or employee or person "directly or indirectly" responsible for the
violation of the constitutional rights and liberties of another. Thus, it is not the actor alone
(i.e., the one directly responsible) who must answer for damages under Article 32; the
person indirectly responsible has also to answer for the damages or injury caused to the
aggrieved party.
xxx xxx xxx
While it would certainly be too naive to expect that violators of human rights would
easily be deterred by the prospect of facing damages suits, it should nonetheless be made
clear in no uncertain terms that Article 32 of the Civil Code makes the persons who are
directly, as well as indirectly, responsible for the transgression joint tortfeasors.
xxx xxx xxx
[N]either can it be said that only those shown to have participated "directly" should be
held liable. Article 32 of the Civil Code encompasses within the ambit of its provisions
those directly, as well as indirectly, responsible for its violations. (emphasis supplied)
Applying the aforecited provisions and leading cases, the respondent court correctly
granted damages to private respondents. Petitioners were indirectly involved in
transgressing the right of private respondents against unreasonable search and seizure.
Firstly, they instigated the raid pursuant to their covenant in the Memorandum
Agreement to undertake the prosecution in court of all illegal sources of scouting
supplies.
11
As correctly observed by respondent court:
Indeed, the acts committed by the PC soldiers of unlawfully seizing appellees'
(respondents') merchandise and of filing the criminal complaint for unfair competition
against appellees (respondents) were for the protection and benefit of appellant
(petitioner) corporation. Such being the case, it is, thus, reasonably fair to infer from
those acts that it was upon appellant (petitioner) corporation's instance that the PC
soldiers conducted the raid and effected the illegal seizure. These circumstances should
answer the trial court's query posed in its decision now under consideration as to
why the PC soldiers immediately turned over the seized merchandise to appellant
(petitioner) corporation.
12

The raid was conducted with the active participation of their employee. Larry de Guzman
did not lift a finger to stop the seizure of the boy and girl scouts items. By standing by
and apparently assenting thereto, he was liable to the same extent as the officers
themselves.
13
So with the petitioner corporation which even received for safekeeping the
goods unreasonably seized by the PC raiding team and de Guzman, and refused to
surrender them for quite a time despite the dismissal of its complaint for unfair
competition.
Secondly, Letter of Instruction No. 1299 was precisely crafted on March 9, 1983 to
safeguard not only the privilege of franchise holder of scouting items but also the
citizen's constitutional rights, to wit:
TITLE: APPREHENSION OF UNAUTHORIZED MANUFACTURERS AND
DISTRIBUTORS OF SCOUT PARAPHERNALIA AND IMPOUNDING OF SAID
PARAPHERNALIA.
ABSTRACT:
Directs all law enforcement agencies of the Republic of the Philippines, to apprehend
immediately unauthorized manufacturers and distributors of Scout paraphernalia, upon
proper application by the Boy Scouts of the Philippines and/or Girl Scouts of the
Philippines for warrant of arrest and/or search warrant with a judge, or such other
responsible officer as may be authorized by law; and to impound the said paraphernalia to
be used as evidence in court or other appropriate administrative body. Orders the
immediate and strict compliance with the Instructions.
14

Under the above provision and as aforediscussed, petitioners miserably failed to report
the unlawful peddling of scouting goods to the Boy Scouts of the Philippines for the
proper application of a warrant. Private respondents' rights are immutable and cannot be
sacrificed to transient needs.
15
Petitioners did not have the unbridled license to cause the
seizure of respondents' goods without any warrant.
And thirdly, if petitioners did not have a hand in the raid, they should have filed a third-
party complaint against the raiding team for contribution or any other relief,
16
in respect
of respondents' claim for Recovery of Sum of Money with Damages. Again, they did not.
We have consistently ruled that moral damages are not awarded to penalize the defendant
but to compensate the plaintiff for the injuries he may have suffered.
17
Conformably with
our ruling in Lim vs. Ponce de Leon, op. cit., moral damages can be awarded in the case
at bench. There can be no doubt that petitioners must have suffered sleepless nights,
serious anxiety, and wounded feelings due the tortious raid caused by petitioners. Private
respondents' avowals of embarrassment and humiliation during the seizure of their
merchandise were supported by their testimonies. Respondent Cruz declared:
I felt very nervous. I was crying to loss (sic) my goods and capital because I am doing
business with borrowed money only, there was commotion created by the raiding team
and they even stepped on some of the pants and dresses on display for sale. All passersby
stopped to watch and stared at me with accusing expressions. I was trembling and terribly
ashamed, sir.
18

Respondent Lugatiman testified:
I felt very nervous. I was crying and I was very much ashamed because many people
have been watching the PC soldiers hauling my items, and many/I (sic) heard say "nakaw
pala ang mga iyan" for which I am claiming P25,000.00 for damages.
19

While respondent Gonzalez stated thus:
I do not like the way the raid was conducted by the team sir because it looked like that
what I have been selling were stolen items that they should be confiscated by uniformed
soldiers. Many people were around and the more the confiscation was made in a
scandalous manner; every clothes, T-shirts, pants and dresses even those not wrapped
dropped to the ground. I was terribly shamed in the presence of market goers that
morning.
20

Needles to state, the wantonness of the wrongful seizure justifies the award of exemplary
damages.
21
It will also serve as a stern reminder to all and sundry that the constitutional
protection against unreasonable search and seizure is a virile reality and not a mere burst
of rhetoric. The all encompassing protection extends against intrusions directly done both
by government and indirectly by private entities.
IN VIEW WHEREOF, the appealed decision is AFFIRMED WITH MODIFICATION.
We impose a SIX PERCENT (6%) interest from January 9, 1987 on the TWO
THOUSAND PESOS (P2,000.00) for the unreturned twenty-six (26) pieces of girl scouts
items and a TWELVE PERCENT (12%) interest, in lieu of SIX PERCENT (6%), on the
said amount upon finality of this Decision until the payment thereof.
22
Costs against
petitioners.
SO ORDERED.
Narvasa, Padilla, Regalado, and Mendoza, JJ., concur.

ROGELIO ABERCA, RODOLFO BENOSA, NESTOR BODINO NOEL ETABAG
DANILO DE LA FUENTE, BELEN DIAZ-FLORES, MANUEL MARIO
GUZMAN, ALAN JAZMINEZ, EDWIN LOPEZ, ALFREDO MANSOS, ALEX
MARCELINO, ELIZABETH PROTACIO-MARCELINO, JOSEPH OLAYER,
CARLOS PALMA, MARCO PALO, ROLANDO SALUTIN, BENJAMIN
SESGUNDO, ARTURO TABARA, EDWIN TULALIAN and REBECCA
TULALIAN petitioners, vs. MAJ. GEN. FABIAN VER, COL. FIDEL SINGSON,
COL. ROLANDO ABADILLA, COL. GERARDO B. LANTORIA, COL.
GALILEO KINTANAR, 1ST LT. COL. PANFILO M. LACSON, MAJ. RODOLFO
AGUINALDO, CAPT. DANILO PIZARRO, 1ST LT. PEDRO TANGO, 1ST LT.
ROMEO RICARDO, 1ST LT. RAUL BACALSO, MSGT BIENVENIDO BALABA
and REGIONAL TRIAL COURT, National Capital Judicial Region, Branch XCV
(95), Quezon City, respondents.

YAP, J .:
This petition for certiorari presents vital issues not heretofore passed upon by this Court.
It poses the question whether the suspension of the privilege of the writ of habeas corpus
bars a civil action for damages for illegal searches conducted by military personnel and
other violations of rights and liberties guaranteed under the Constitution. If such action
for damages may be maintained, who can be held liable for such violations: only the
military personnel directly involved and/or their superiors as well.
This case stems from alleged illegal searches and seizures and other violations of the
rights and liberties of plaintiffs by various intelligence units of the Armed Forces of the
Philippines, known as Task Force Makabansa (TFM) ordered by General Fabian Ver "to
conduct pre-emptive strikes against known communist-terrorist (CT) underground houses
in view of increasing reports about CT plans to sow disturbances in Metro Manila,"
Plaintiffs allege, among others, that complying with said order, elements of the TFM
raided several places, employing in most cases defectively issued judicial search
warrants; that during these raids, certain members of the raiding party confiscated a
number of purely personal items belonging to plaintiffs; that plaintiffs were arrested
without proper warrants issued by the courts; that for some period after their arrest, they
were denied visits of relatives and lawyers; that plaintiffs were interrogated in violation
of their rights to silence and counsel; that military men who interrogated them employed
threats, tortures and other forms of violence on them in order to obtain incriminatory
information or confessions and in order to punish them; that all violations of plaintiffs
constitutional rights were part of a concerted and deliberate plan to forcibly extract
information and incriminatory statements from plaintiffs and to terrorize, harass and
punish them, said plans being previously known to and sanctioned by defendants.
Plaintiffs sought actual/compensatory damages amounting to P39,030.00; moral damages
in the amount of at least P150,000.00 each or a total of P3,000,000.00; exemplary
damages in the amount of at least P150,000.00 each or a total of P3,000,000.00; and
attorney's fees amounting to not less than P200,000.00.
A motion to dismiss was filed by defendants, through their counsel, then Solicitor-
General Estelito Mendoza, alleging that (1) plaintiffs may not cause a judicial inquiry
into the circumstances of their detention in the guise of a damage suit because, as to
them, the privilege of the writ of habeas corpus is suspended; (2) assuming that the courts
can entertain the present action, defendants are immune from liability for acts done in the
performance of their official duties; and (3) the complaint states no cause of action
against the defendants. Opposition to said motion to dismiss was filed by plaintiffs Marco
Palo, Danilo de la Fuente, Benjamin Sesgundo, Nel Etabag, Alfredo Mansos and Rolando
Salutin on July 8, 1983, and by plaintiffs Edwin Lopez, Manuel Mario Guzman, Alan
Jasminez, Nestor Bodino, Carlos Palma, Arturo Tabara, Joseph Olayer, Rodolfo Benosa,
Belen Diaz, Flores, Rogelio Aberca, Alex Marcelino and Elizabeth Marcelino on July 21,
1983. On November 7, 1983, a Consolidated Reply was filed by defendants' counsel.
Then, on November 8, 1983, the Regional Trial Court, National Capital Region, Branch
95, Judge Willelmo C. Fortun, Presiding,
1
issued a resolution granting the motion to
dismiss. I sustained, lock, stock and barrel, the defendants' contention (1) the plaintiffs
may not cause a judicial inquiry into the circumstances of their detention in the guise of a
damage suit because, as to them, the privilege of the writ of habeas corpus is suspended;
(2) that assuming that the court can entertain the present action, defendants are immune
from liability for acts done in the performance of their official duties; and (3) that the
complaint states no cause of action against defendants, since there is no allegation that
the defendants named in the complaint confiscated plaintiffs' purely personal properties
in violation of their constitutional rights, and with the possible exception of Major
Rodolfo Aguinaldo and Sergeant Bienvenido Balabo committed acts of torture and
maltreatment, or that the defendants had the duty to exercise direct supervision and
control of their subordinates or that they had vicarious liability as employers under
Article 2180 of the Civil Code. The lower court stated, "After a careful study of
defendants' arguments, the court finds the same to be meritorious and must, therefore, be
granted. On the other hand, plaintiffs' arguments in their opposition are lacking in merit."
A motion to set aside the order dismissing the complaint and a supplemental motion for
reconsideration was filed by the plaintiffs on November 18, 1983, and November 24,
1983, respectively. On December 9, 1983, the defendants filed a comment on the
aforesaid motion of plaintiffs, furnishing a copy thereof to the attorneys of all the
plaintiffs, namely, Attys. Jose W. Diokno, Procopio Beltran, Rene Sarmiento, Efren
Mercado, Auguso Sanchez, Antonio L. Rosales, Pedro B. Ella Jr., Arno V. Sanidad,
Alexander Padilla, Joker Arroyo, Rene Saguisag, Ramon Esguerra and Felicitas Aquino.
On December 15, 1983, Judge Fortun issued an order voluntarily inhibiting himself from
further proceeding in the case and leaving the resolution of the motion to set aside the
order of dismissal to Judge Lising, "to preclude any suspicion that he (Judge Fortun)
cannot resolve [the] aforesaid pending motion with the cold neutrality of an impartial
judge and to put an end to plaintiffs assertion that the undersigned has no authority or
jurisdiction to resolve said pending motion." This order prompted plaintiffs to reesolve an
amplificatory motion for reconsideration signed in the name of the Free Legal Assistance
Group (FLAG) of Mabini Legal Aid Committee, by Attys. Joker P. Arroyo, Felicitas
Aquino and Arno Sanidad on April 12, 1984. On May 2,1984, the defendants filed a
comment on said amplificatory motion for reconsideration.
In an order dated May 11, 1984, the trial court, Judge Esteban Lising, Presiding, without
acting on the motion to set aside order of November 8, 1983, issued an order, as follows:
It appearing from the records that, indeed, the following plaintiffs, Rogelio Aberca,
Danilo de la Fuente and Marco Palo, represented by counsel, Atty. Jose W. Diokno, Alan
Jasminez represented by counsel, Atty. Augusta Sanchez, Spouses Alex Marcelino and
Elizabeth Protacio-Marcelino, represented by counsel, Atty. Procopio Beltran, Alfredo
Mansos represented by counsel, Atty. Rene Sarmiento, and Rolando Salutin, represented
by counsel, Atty. Efren Mercado, failed to file a motion to reconsider the Order of
November 8, 1983, dismissing the complaint, nor interposed an appeal therefrom within
the reglementary period, as prayed for by the defendants, said Order is now final against
said plaintiffs.
Assailing the said order of May 11, 1984, the plaintiffs filed a motion for reconsideration
on May 28,1984, alleging that it was not true that plaintiffs Rogelio Aberca, Danilo de la
Fuente, Marco Palo, Alan Jasminez, Alex Marcelino, Elizabeth Protacio-Marcelino,
Alfredo Mansos and Rolando Salutin failed to file a motion to reconsider the order of
November 8, 1983 dismissing the complaint, within the reglementary period. Plaintiffs
claimed that the motion to set aside the order of November 8, 1983 and the amplificatory
motion for reconsideration was filed for all the plaintiffs, although signed by only some
of the lawyers.
In its resolution of September 21, 1984, the respondent court dealt with both motions (1)
to reconsider its order of May 11, 1984 declaring that with respect to certain plaintiffs,
the resolution of November 8, 1983 had already become final, and (2) to set aside its
resolution of November 8, 1983 granting the defendants' motion to dismiss. In the
dispositive portion of the order of September 21, 1984, the respondent court resolved:
(1) That the motion to set aside the order of finality, dated May 11, 1984, of the
Resolution of dismissal of the complaint of plaintiffs Rogelio Aberca, Danilo de la
Fuente, Marco Palo, Alan Jasminez Alex Marcelino, Elizabeth Protacio-Marcelino,
Alfredo Mansos and Rolando Salutin is deed for lack of merit;
(2) For lack of cause of action as against the following defendants, to wit:
1. Gen Fabian Ver
2. Col. Fidel Singson
3. Col. Rolando Abadilla
4. Lt. Col. Conrado Lantoria, Jr.
5. Col. Galileo Montanar
6. Col. Panfilo Lacson
7. Capt. Danilo Pizaro
8. 1 Lt Pedro Tango
9. Lt. Romeo Ricardo
10. Lt. Raul Bacalso
the motion to set aside and reconsider the Resolution of dismissal of the present action or
complaint, dated November 8, 1983, is also denied but in so far as it affects and refers to
defendants, to wit:
1. Major Rodolfo Aguinaldo, and
2. Master Sgt. Bienvenido Balaba
the motion to reconsider and set aside the Resolution of dismissal dated November 3,
1983 is granted and the Resolution of dismissal is, in this respect, reconsidered and
modified.
Hence, petitioners filed the instant petition for certiorari on March 15, 1985 seeking to
annul and set aside the respondent court's resolution of November 8, 1983, its order of
May 11, 1984, and its resolution dated September 21, 1984. Respondents were required
to comment on the petition, which it did on November 9, 1985. A reply was filed by
petitioners on August 26, 1986.
We find the petition meritorious and decide to give it due course.
At the heart of petitioners' complaint is Article 32 of the Civil Code which provides:
ART. 32. Any public officer or employee, or any private individual who directly or
indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the
following rights and liberties of another person shall be liable to the latter for damages:
(1) Freedom of religion;
(2) Freedom of speech;
(3) Freedom to write for the press or to maintain a periodical publication;
(4) Freedom from arbitrary or illegal detention;
(5) Freedom of suffrage;
(6) The right against deprivation of property without due process
(7) of law;
(8) The right to a just compensation when private property is taken for public use;
(9) The right to the equal protection of the laws;
(10) The right to be secure in one's person, house, papers, and effects against
unreasonable searches and seizures;
(11) The liberty of abode and of changing the same;
(12) The privacy of cmmunication and correspondence;
(13) The right to become a member of associations or societies for purposes not contrary
to law;
(14) The right to take part in a peaceable assembly to petition the Government for redress
of grievances;
(15) The right to be free from involuntary servitude in any form;
(16) The rigth of the accused against excessive bail;
(17) The rigth of the aaccused to be heard by himself and counsel, to be informed of the
nature and cause of the accusation against him, to have a speedy and public trial, to meet
the witnesses face to face, and to have compulsory process to secure the attendance of
witness in behalf;
(18) Freedom from being compelled to be a witness against ones self, or from being
forced to confess guilt, or from being induced by a promise of immunity or reward to
make such confession, except when the person confessing becomes a State witness;
(19) Freedom from excessive fines or cruel and unusual punishment, unless the same is
imposed or inflicted in accordance with a statute which has not been judicially declared
unconstitutional; and
(20) Freedom of access to the courts.
In any of the cases referred to in this article, whether or not the defendant's act or
omission constitutes a criminal offense, the against grieved party has a right to commence
an entirely separate and distinct civil action for damages, and for other relief. Such civil
action shall proceed independently of any criminal prosecution (if the latter be instituted),
and may be proved by a preponderance of evidence.
The indemnity shall include moral damages. Exemplary damages may also be
adjudicated.
The responsibility herein set forth is not demandable from a judge unless his act or
omission constitutes a violation of the Penal Code or other penal statute.
It is obvious that the purpose of the above codal provision is to provide a sanction to the
deeply cherished rights and freedoms enshrined in the Constitution. Its message is clear;
no man may seek to violate those sacred rights with impunity. In times of great upheaval
or of social and political stress, when the temptation is strongest to yield borrowing
the words of Chief Justice Claudio Teehankee to the law of force rather than the force
of law, it is necessary to remind ourselves that certain basic rights and liberties are
immutable and cannot be sacrificed to the transient needs or imperious demands of the
ruling power. The rule of law must prevail, or else liberty will perish. Our commitment to
democratic principles and to the rule of law compels us to reject the view which reduces
law to nothing but the expression of the will of the predominant power in the community.
"Democracy cannot be a reign of progress, of liberty, of justice, unless the law is
respected by him who makes it and by him for whom it is made. Now this respect implies
a maximum of faith, a minimum of Idealism. On going to the bottom of the matter, we
discover that life demands of us a certain residuum of sentiment which is not derived
from reason, but which reason nevertheless controls.
2

Seeking to justify the dismissal of plaintiffs' complaint, the respondents postulate the
view that as public officers they are covered by the mantle of state immunity from suit for
acts done in the performance of official duties or function In support of said contention,
respondents maintain that
Respondents are members of the Armed Forces of the Philippines. Their primary duty is
to safeguard public safety and order. The Constitution no less provides that the President
may call them "to prevent or supress lawless violence, invasion, insurrection or rebellion,
or imminent danger thereof." (Constitution, Article VII, Section 9).
On January 17, 1981, the President issued Proclamation No. 2045 lifting martial law but
providing for the continued suspension of the privilege of the writ of habeas corpus in
view of the remaining dangers to the security of the nation. The proclamation also
provided "that the call to the Armed Forces of the Philippines to prevent or suppress
lawless violence, insuitection rebellion and subversion shall continue to be in force and
effect."
Petitioners allege in their complaint that their causes of action proceed from respondent
General Ver's order to Task Force Makabansa to launch pre-emptive strikes against
communist terrorist underground houses in Metro Manila. Petitioners claim that this
order and its subsequent implementation by elements of the task force resulted in the
violation of their constitutional rights against unlawful searches, seizures and arrest,
rights to counsel and to silence, and the right to property and that, therefore, respondents
Ver and the named members of the task force should be held liable for damages.
But, by launching a pre-emptive strike against communist terrorists, respondent members
of the armed forces merely performed their official and constitutional duties. To allow
petitioners to recover from respondents by way of damages for acts performed in the
exercise of such duties run contrary to the policy considerations to shield respondents as
public officers from undue interference with their duties and from potentially disabling
threats of hability (Aarlon v. Fitzgerald 102 S. Ct. 2731-1 Forbes v. Chuoco Tiaco, 16
Phil. 634), and upon the necessity of protecting the performance of governmental and
public functions from being harassed unduly or constantly interrupted by private suits
(McCallan v. State, 35 Cal. App. 605; Metran v. Paredes, 79 Phil. 819).
xxx xxx xxx
The immunity of public officers from liability arising from the performance of their
duties is now a settled jurisprudence Alzua v. Johnson, 21 Phil. 308; Zulueta v. Nicolas,
102 Phil. 944; Spalding v. Vilas, 161 US 483; 40 L. Ed. 780, 16 S. Ct. 631; Barr v.
Mateo, 360; Butz v. Economon, 438 US 478; 57 L. Ed. 2d 895, 98 S. Ct. 2894; Scheuer
v. Rhodes, 416 US 232; Forbes v. Chuoco Tiaco, supra; Miller v. de Leune, 602 F. 2d
198; Sami v. US, 617 F. 2d 755).
Respondents-defendants who merely obeyed the lawful orders of the President and his
call for the suppression of the rebellion involving petitioners enjoy such immunity from
Suit.
3

We find respondents' invocation of the doctrine of state immunity from suit totally
misplaced. The cases invoked by respondents actually involved acts done by officers in
the performance of official duties written the ambit of their powers. As held in Forbes,
etc. vs. Chuoco Tiaco and Crossfield:
4

No one can be held legally responsible in damages or otherwise for doing in a legal
manner what he had authority, under the law, to do. Therefore, if the Governor-General
had authority, under the law to deport or expel the defendants, and circumstances
justifying the deportation and the method of carrying it out are left to him, then he cannot
be held liable in damages for the exercise of this power. Moreover, if the courts are
without authority to interfere in any manner, for the purpose of controlling or interferring
with the exercise of the political powers vested in the chief executive authority of the
Government, then it must follow that the courts cannot intervene for the purpose of
declaring that he is liable in damages for the exeercise of this authority.
It may be that the respondents, as members of the Armed Forces of the Philippines, were
merely responding to their duty, as they claim, "to prevent or suppress lawless violence,
insurrection, rebellion and subversion" in accordance with Proclamation No. 2054 of
President Marcos, despite the lifting of martial law on January 27, 1981, and in pursuance
of such objective, to launch pre- emptive strikes against alleged communist terrorist
underground houses. But this cannot be construed as a blanket license or a roving
commission untramelled by any constitutional restraint, to disregard or transgress upon
the rights and liberties of the individual citizen enshrined in and protected by the
Constitution. The Constitution remains the supreme law of the land to which all officials,
high or low, civilian or military, owe obedience and allegiance at all times.
Article 32 of the Civil Code which renders any public officer or employee or any private
individual liable in damages for violating the Constitutional rights and liberties of
another, as enumerated therein, does not exempt the respondents from responsibility.
Only judges are excluded from liability under the said article, provided their acts or
omissions do not constitute a violation of the Penal Code or other penal statute.
This is not to say that military authorities are restrained from pursuing their assigned task
or carrying out their mission with vigor. We have no quarrel with their duty to protect the
Republic from its enemies, whether of the left or of the right, or from within or without,
seeking to destroy or subvert our democratic institutions and imperil their very existence.
What we are merely trying to say is that in carrying out this task and mission,
constitutional and legal safeguards must be observed, otherwise, the very fabric of our
faith will start to unravel. In the battle of competing Ideologies, the struggle for the mind
is just as vital as the struggle of arms. The linchpin in that psychological struggle is faith
in the rule of law. Once that faith is lost or compromised, the struggle may well be
abandoned.
We do not find merit in respondents' suggestion that plaintiffs' cause of action is barred
by the suspension of the privilege of the writ of habeas corpus. Respondents contend that
"Petitioners cannot circumvent the suspension of the privilege of the writ by resorting to
a damage suit aimed at the same purpose-judicial inquiry into the alleged illegality of
their detention. While the main relief they ask by the present action is indemnification for
alleged damages they suffered, their causes of action are inextricably based on the same
claim of violations of their constitutional rights that they invoked in the habeas corpus
case as grounds for release from detention. Were the petitioners allowed the present suit,
the judicial inquiry barred by the suspension of the privilege of the writ will take place.
The net result is that what the courts cannot do, i.e. override the suspension ordered by
the President, petitioners will be able to do by the mere expedient of altering the title of
their action."
We do not agree. We find merit in petitioners' contention that the suspension of the
privilege of the writ of habeas corpus does not destroy petitioners' right and cause of
action for damages for illegal arrest and detention and other violations of their
constitutional rights. The suspension does not render valid an otherwise illegal arrest or
detention. What is suspended is merely the right of the individual to seek release from
detention through the writ of habeas corpus as a speedy means of obtaining his liberty.
Moreover, as pointed out by petitioners, their right and cause of action for damages are
explicitly recognized in P.D. No. 1755 which amended Article 1146 of the Civil Code by
adding the following to its text:
However, when the action (for injury to the rights of the plaintiff or for a quasi-delict)
arises from or out of any act, activity or conduct of any public officer involving the
exercise of powers or authority arising from Martial Law including the arrest, detention
and/or trial of the plaintiff, the same must be brought within one (1) year.
Petitioners have a point in contending that even assuming that the suspension of the
privilege of the writ of habeas corpus suspends petitioners' right of action for damages for
illegal arrest and detention, it does not and cannot suspend their rights and causes of
action for injuries suffered because of respondents' confiscation of their private
belongings, the violation of their right to remain silent and to counsel and their right to
protection against unreasonable searches and seizures and against torture and other cruel
and inhuman treatment.
However, we find it unnecessary to address the constitutional issue pressed upon us. On
March 25, 1986, President Corazon C. Aquino issued Proclamation No. 2, revoking
Proclamation Nos. 2045 and 2045-A and lifting the suspension of the privilege of the writ
of habeas corpus. The question therefore has become moot and academic.
This brings us to the crucial issue raised in this petition. May a superior officer under the
notion of respondent superior be answerable for damages, jointly and severally with his
subordinates, to the person whose constitutional rights and liberties have been violated?
Respondents contend that the doctrine of respondent superior is applicable to the case.
We agree. The doctrine of respondent superior has been generally limited in its
application to principal and agent or to master and servant (i.e. employer and employee)
relationship. No such relationship exists between superior officers of the military and
their subordinates.
Be that as it may, however, the decisive factor in this case, in our view, is the language of
Article 32. The law speaks of an officer or employee or person 'directly' or "indirectly"
responsible for the violation of the constitutional rights and liberties of another. Thus, it is
not the actor alone (i.e. the one directly responsible) who must answer for damages under
Article 32; the person indirectly responsible has also to answer for the damages or injury
caused to the aggrieved party.
By this provision, the principle of accountability of public officials under the Constitution
5
acquires added meaning and asgilrnes a larger dimension. No longer may a superior
official relax his vigilance or abdicate his duty to supervise his subordinates, secure in the
thought that he does not have to answer for the transgressions committed by the latter
against the constitutionally protected rights and liberties of the citizen. Part of the factors
that propelled people power in February 1986 was the widely held perception that the
government was callous or indifferent to, if not actually responsible for, the rampant
violations of human rights. While it would certainly be go naive to expect that violators
of human rights would easily be deterred by the prospect of facing damage suits, it should
nonetheless be made clear in no ones terms that Article 32 of the Civil Code makes the
persons who are directly, as well as indirectly, responsible for the transgression joint
tortfeasors.
In the case at bar, the trial court dropped defendants General Fabian Ver, Col. Fidel
Singson, Col. Rolando Abadilla, Col. Gerardo Lantoria, Jr., Col. Galileo Kintanar, Col.
Panfilo Lacson, Capt. Danilo Pizarro, lst Lt. Pedro Tango, Lt. Romeo Ricardo and Lt.
Ricardo Bacalso from the acts of their subordinates. Only Major Rodolfo Aguinaldo and
Master Sgt. Bienvenido Balaba were kept as defendants on the ground that they alone
'have been specifically mentioned and Identified to have allegedly caused injuries on the
persons of some of the plaintiff which acts of alleged physical violence constitute a delict
or wrong that gave rise to a cause of action. But such finding is not supported by the
record, nor is it in accord with law and jurisprudence.
Firstly, it is wrong to at the plaintiffs' action for damages 5 Section 1, Article 19. to 'acts
of alleged physical violence" which constituted delict or wrong. Article 32 clearly
specifies as actionable the act of violating or in any manner impeding or impairing any of
the constitutional rights and liberties enumerated therein, among others
1. Freedom from arbitrary arrest or illegal detention;
2. The right against deprivation of property without due process of law;
3. The right to be secure in one's person, house, papers and effects against unreasonable
searches and seizures;
4. The privacy of communication and correspondence;
5. Freedom from being compelled to be a witness against one's self, or from being forced
to confess guilt, or from being induced by a promise of immunity or reward to make a
confession, except when the person confessing becomes a state witness.
The complaint in this litigation alleges facts showing with abundant clarity and details,
how plaintiffs' constitutional rights and liberties mentioned in Article 32 of the Civil
Code were violated and impaired by defendants. The complaint speaks of, among others,
searches made without search warrants or based on irregularly issued or substantially
defective warrants; seizures and confiscation, without proper receipts, of cash and
personal effects belonging to plaintiffs and other items of property which were not
subversive and illegal nor covered by the search warrants; arrest and detention of
plaintiffs without warrant or under irregular, improper and illegal circumstances;
detention of plaintiffs at several undisclosed places of 'safehouses" where they were kept
incommunicado and subjected to physical and psychological torture and other inhuman,
degrading and brutal treatment for the purpose of extracting incriminatory statements.
The complaint contains a detailed recital of abuses perpetrated upon the plaintiffs
violative of their constitutional rights.
Secondly, neither can it be said that only those shown to have participated "directly"
should be held liable. Article 32 of the Civil Code encompasses within the ambit of its
provisions those directly, as well as indirectly, responsible for its violation.
The responsibility of the defendants, whether direct or indirect, is amply set forth in the
complaint. It is well established in our law and jurisprudence that a motion to dismiss on
the ground that the complaint states no cause of action must be based on what appears on
the face of the complaint.
6
To determine the sufficiency of the cause of action, only the
facts alleged in the complaint, and no others, should be considered.
7
For this purpose, the
motion to dismiss must hypothetically admit the truth of the facts alleged in the
complaint.
8

Applying this test, it is difficult to justify the trial court's ruling, dismissing for lack of
cause of action the complaint against all the defendants, except Major Rodolfo Aguinaldo
and Master Sgt. Bienvenido Balaba. The complaint contained allegations against all the
defendants which, if admitted hypothetically, would be sufficient to establish a cause or
causes of action against all of them under Article 32 of the Civil Code.
This brings us to the last issue. Was the trial court correct in dismissing the complaint
with respect to plaintiffs Rogelio Aberca, Danilo de la Puente, Marco Palo, Alan
Jazminez, Alex Marcelino, Elizabeth Protacio-Marcelino, Alfredo Mansos and Rolando
Salutin, on the basis of the alleged failure of said plaintiffs to file a motion for
reconsideration of the court's resolution of November 8, 1983, granting the respondent's
motion to dismiss?
It is undisputed that a timely motion to set aside said order of November 8, 1983 was
filed by 'plaintiffs, through counsel. True, the motion was signed only by Atty. Joker P.
Arroyo, counsel for Benjamin Sesgulido; Atty. Antonio Rosales, counsel for Edwin
Lopez and Manuel Martin Guzman; Atty. Pedro B. Ella, Jr., counsel for Nestor Bodino
and Carlos Palma; Atty. Arno V. Sanidad, counsel for Arturo Tabara; Atty. Felicitas S.
Aquino, counsel for Joseph Olayer; and Atty. Alexander Padilla, counsel for Rodolfo
Benosa.
But the body of the motion itself clearly indicated that the motion was filed on behalf of
all the plaintiffs. And this must have been also the understanding of defendants' counsel
himself for when he filed his comment on the motion, he furnished copies thereof, not
just to the lawyers who signed the motion, but to all the lawyers of plaintiffs, to wit:
Attys. Jose Diokno, Procopio Beltran, Rene Sarmiento, Efren Mercado, Augusto
Sanchez, Antonio Rosales, Pedro Efla Jr., Arno Sanidad, Alexander Padilla, Joker
Arroyo, Rene Saguisag, Ramon Esguerra and Felicitas S. Aquino.
In filing the motion to set aside the resolution of November 8, 1983, the signing attorneys
did so on behalf of all the plaintiff. They needed no specific authority to do that. The
authority of an attorney to appear for and in behalf of a party can be assumed, unless
questioned or challenged by the adverse party or the party concerned, which was never
done in this case. Thus, it was grave abuse on the part of respondent judge to take it upon
himself to rule that the motion to set aside the order of November 8, 1953 dismissing the
complaint was filed only by some of the plaintiffs, when by its very language it was
clearly intended to be filed by and for the benefit of all of them. It is obvious that the
respondent judge took umbrage under a contrived technicality to declare that the
dismissal of the complaint had already become final with respect to some of the plaintiffs
whose lawyers did not sign the motion for reconsideration. Such action tainted with legal
infirmity cannot be sanctioned.
Accordingly, we grant the petition and annul and set aside the resolution of the
respondent court, dated November 8, 1983, its order dated May 11, 1984 and its
resolution dated September 21, 1984. Let the case be remanded to the respondent court
for further proceedings. With costs against private respondents.
SO ORDERED.
Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Bidin,
Sarmiento, Cortes and Grio-Aquino, JJ., concur.
Gutierrez, Jr., J., concur in the result.
Padilla, J., took no part.



Separate Opinions

TEEHANKEE, C.J ., concurring:
The Court's judgment at bar makes clear that all persons, be they public officers or
employees, or members of the military or police force or private individuals who directly
or indirectly obstruct, defeat, violate or in any manner impede or impair the constitutional
rights and civil liberties of another person, stand liable and may be sued in court for
damages as provided in Art. 32 of the Civil Code.
The case at bar specifically upholds and reinstates the civil action for damages filed in the
court below by petitioners-plaintiffs for illegal searches conducted by military personnel
and other violations of their constitutional rights and liberties. At the same time it rejects
the automatic application of the principle of respondeat superior or command
responsibility that would hold a superior officer jointly and severally accountable for
damages, including moral and exemplary, with his subordinates who committed such
transgressions. However, the judgment gives the caveat that a superior officer must not
abdicate his duty to properly supervise his subordinates for he runs the risk of being held
responsible for gross negligence and of being held under the cited provision of the Civil
Code as indirectly and solidarily accountable with the tortfeasor.
The rationale for this rule of law was best expressed by Brandeis in wise: "In a
government of laws, existence of the government be imperilled following it fails to
observe the law scrupulously. Our government is the potent omnipresent teacher. For
good or ill, it teaches the whole people by example. Crime is contagious. If the
government becomes the law breaker, it breeds contempt for the law, it invites every man
to become a law unto himself, it invites anarchy. To declare that in the administration of
criminal law the end justifies the means ... would bring terrible retribution."
1

As the writer stress in Hildawa vs. Enrile
2
Which Was an action to enjoin the operations
of the dreaded secret marshals during the past regime, 'In a democratic state, you don't
stoop to the level of criminals. If we stoop to what they do, then we're no better than they
... there would be no difference. ... The Supreme Court stands as the guarantor of the
Constitutional and human rights of all persons within its jurisdiction and cannot abdicate
its basic role under the Constitution that these rights be respected and enforced. The spirit
and letter of the Constitution negates as contrary to the basic precepts of human rights
and freedom that a person's life be snuffed out without due process in a split second even
if he is caught in flagrante delicto unless it was caned for as an act of self-defense by
the law agents using reasonable means to prevent or repel an unlawful aggression on the
part of the deceased.
Needless to say, the criminal acts of the "Sparrow Units" or death squads of the NPA
which have infutrated the cities and suburbs and performed their despicable killings of
innocent civilians and military and police officers constitute an equally perverse violation
of the sanctity of human life and must be severely condemned by all who adhere tothe
Rule of the Law.
It need only be pointed out that one of the first acts of the present government under
President Corazon C. Aquino after her assumption of office in February, 1986 was to file
our government's ratification and access to all human rights instruments adopted under
the auspices of the United Nations, declaring thereby the government's commitment to
observe the precepts of the United Nations Charter and the Universal Declaration of
Human Rights. More than this, pursuant to our Constitution which the people decisively
ratified on February 2, 1987, the independent office of the Commission on Human Rights
hats been created and organized with ample powers to investigate human rights violations
and take remedial measures against all such violations by the military as well as by the
civilian groups.


Separate Opinions
TEEHANKEE, C.J ., concurring:
The Court's judgment at bar makes clear that all persons, be they public officers or
employees, or members of the military or police force or private individuals who directly
or indirectly obstruct, defeat, violate or in any manner impede or impair the constitutional
rights and civil liberties of another person, stand liable and may be sued in court for
damages as provided in Art. 32 of the Civil Code.
The case at bar specifically upholds and reinstates the civil action for damages filed in the
court below by petitioners-plaintiffs for illegal searches conducted by military personnel
and other violations of their constitutional rights and liberties. At the same time it rejects
the automatic application of the principle of respondeat superior or command
responsibility that would hold a superior officer jointly and severally accountable for
damages, including moral and exemplary, with his subordinates who committed such
transgressions. However, the judgment gives the caveat that a superior officer must not
abdicate his duty to properly supervise his subordinates for he runs the risk of being held
responsible for gross negligence and of being held under the cited provision of the Civil
Code as indirectly and solidarily accountable with the tortfeasor.
The rationale for this rule of law was best expressed by Brandeis in wise: "In a
government of laws, existence of the government be imperilled following it fails to
observe the law scrupulously. Our government is the potent omnipresent teacher. For
good or ill, it teaches the whole people by example. Crime is contagious. If the
government becomes the law breaker, it breeds contempt for the law, it invites every man
to become a law unto himself, it invites anarchy. To declare that in the administration of
criminal law the end justifies the means ... would bring terrible retribution."
1

As the writer stress in Hildawa vs. Enrile
2
Which Was an action to enjoin the operations
of the dreaded secret marshals during the past regime, 'In a democratic state, you don't
stoop to the level of criminals. If we stoop to what they do, then we're no better than they
... there would be no difference. ... The Supreme Court stands as the guarantor of the
Constitutional and human rights of all persons within its jurisdiction and cannot abdicate
its basic role under the Constitution that these rights be respected and enforced. The spirit
and letter of the Constitution negates as contrary to the basic precepts of human rights
and freedom that a person's life be snuffed out without due process in a split second even
if he is caught in flagrante delicto unless it was caned for as an act of self-defense by
the law agents using reasonable means to prevent or repel an unlawful aggression on the
part of the deceased.
Needless to say, the criminal acts of the "Sparrow Units" or death squads of the NPA
which have infutrated the cities and suburbs and performed their despicable killings of
innocent civilians and military and police officers constitute an equally perverse violation
of the sanctity of human life and must be severely condemned by all who adhere tothe
Rule of the Law.
It need only be pointed out that one of the first acts of the present government under
President Corazon C. Aquino after her assumption of office in February, 1986 was to file
our government's ratification and access to all human rights instruments adopted under
the auspices of the United Nations, declaring thereby the government's commitment to
observe the precepts of the United Nations Charter and the Universal Declaration of
Human Rights. More than this, pursuant to our Constitution which the people decisively
ratified on February 2, 1987, the independent office of the Commission on Human Rights
hats been created and organized with ample powers to investigate human rights violations
and take remedial measures against all such violations by the military as well as by the
civilian groups.