Torts 28 June
negligence or inattention, has caused damage to another. This Court has ruled that in
BOOK 1 – TORTS
CHAPTER 1 GENERAL CONSIDERATIONS AND PRINCIPLES
A. Tort defined
B. Etymology and Historical Origins of the Law
C. Main functions of Tort Law
D. Major Purposes of Tort Law
E. Tort distinguished from breach of contract
Cangco v. Manila Railroad Co.
Facts: Jose Cangco, herein plaintiff, was a clerk in the Manila Railroad Company. By
virtue of a pass issued to him, he would come to work daily through the company’s
trains free of charge. On January 20, 1915, while he was returning home by rail, an
accident occurred. When the plaintiff alighted when the train was barely moving, one
or both of his feet came in contact with a sack of watermelons. As a result, he fell
violently on the platform and was drawn under the moving car. As the train moved
possibly six meters before it came to a full stop, his right arm was badly crushed and
lacerated. Considering that the accident occurred between 7-8pm and as the railroad
station was lighted dimly by a single light located some distance away, objects on the
platform where the accident occurred were difficult to discern, especially to a person
emerging from a lighted car. His arm had to be amputated in two operations. Thus, he
eventually filed a complaint in the CFI of the City of Manila to recover damages. The
lower court ruled that although negligence was attributable to the defendant by reason
of the fact that the sack of melons were so placed as to obstruct passengers passing to
and from the cars, nevertheless, the plaintiff himself had failed to use due caution in
alighting from the coach and was therefore precluded from recovering.
Issue: WON defendant railroad company is liable
Decision: The decision of the lower court is reversed and judgment is hereby rendered
in favor of the plaintiff.
There are two kinds of culpa: 1) extra-contractual culpa, substantive and independent,
w/c of itself constitutes the source of an obligation between persons not formerly
connected by any legal tie (Art.1903) and 2) contractual culpa considered as “an
accident in the performance of an obligation already existing. On the first, the
obligation to make good the damage arises at the very instant that the unskillful
servant, while acting within the scope of his employment, causes the injury. The
liability of the master is personal and direct. There is a juris tantum presumption which
may be rebutted by proof that the master has not been guilty of any negligence
whatever in the selection and supervision of the servant. The proof of diligence and
care in the selection and control of the servant does not relieve the master from
liability, in fact, it prevents the birth of the said liability. This kind of culpa is always
based upon a voluntary act or omission which, without willful intent, but by mere
cases of extra-contractual culpa based upon negligence, it is necessary that there shall
have been some fault attributable to the defendant personally. The liability in this case
is imposed by reason of the breach of the duties inherent in the special relations of
authority or superiority existing between the person called upon to repair the damage
and the one who, by his act or omission, was the cause of it. On the other hand, the
liability of masters and employers for the negligent acts or omissions of their servants
or agents in cases of contractual culpa is not based upon a mere presumption of the
master’s negligence in their selection or control, and proof of exercise of utmost
diligence and care in this regard does not relieve the master of his liability for the
breach of his contract. Proof of the contract and of its non-performance is sufficient
prima facie to warrant a recovery.
The fundamental distinction between these two kinds of culpa, rests upon the fact that
in cases of non-contractual obligation it is the wrongful or negligent act or omission
itself which creates the vinculum juris, whereas in contractual relations, the vinculum
exists independently of the breach of the voluntary duty assumed by the parties when
entering into the contractual relation.
With respect to extra-contractual obligation arising from negligence, whether of act or
omission, the liability is limited to persons who are morally culpable and for reasons
of public policy, to extend the said liability, without regard to the lack of moral
culpability, to others who are in a position to exercise an absolute or limited control
over persons whose acts or omissions are imputable.
The contract of defendant to transport plaintiff carried with it, by implication, the duty
to carry him in safety and to provide safe means of entering and leaving its trains (Civil
Code, Art.1258). That duty, being contractual, was direct and immediate, and its non-
performance could not be excused by proof that the fault was morally imputable to
defendant’s servants. As to the defendant’s defense of the plaintiff’s contributory
negligence, it has been settled that the test to determine whether the passenger has
been guilty of negligence in attempting to alight from a moving railway train, is that
of ordinary or reasonable care. Thus, taking into consideration, the age, sex and
physical condition of Cangco, this Court held that he has not been negligent for the
following reasons: first, the circumstances of the location of accident barred him from
clearly noticing the sacks of watermelon; second, he was possessed of the vigor and
agility of young manhood, and it was by no means so risky for him to get off while the
train was yet moving as the same act would have been in an aged or feeble person;
third, the place was perfectly familiar to the plaintiff, as it was his daily custom to get
on and off the train at this station and last, there are other passengers who were able to
alight safely from the train while it is slowly moving.
Japan Airlines v. Simangan
Facts: In 1991, Jesus Simangan decided to donate a kidney to his cousin, Loreto
Simangan, after tests proved that their blood and tissue types matched. Simangan
needed to go to the United States to complete his preliminary work-up and donation
surgery. Having obtained an emergency U.S. visa, Simangan purchased a round trip
plane ticket from JAL bound to Los Angeles via Narita, Japan.
Simangan was allowed to board the plane on July 29, 1992, but while inside, the crew
suspected that he was carrying falsified visa and travel documents to work illegally in
Japan. The stewardess asked him to show his travel documents. Shortly after, the
stewardess ordered him out of the plane and it was only when the plane left that he
was informed that his papers were in order. JAL refunded his ticket, but it was
deducted $500, and his emergency US visa was subsequently cancelled.
Displeased by the turn of events, Simangan filed an action for damages against JAL
with RTC in Valenzuela. He claimed he was not able to donate his kidney to Loreto;
and that he suffered terrible embarrassment and mental anguish. The RTC rendered a
decision in favor of respondent Simangan. JAL appealed to the CA contending that it
is not guilty of breach of contract of carriage, hence, not liable for damages. CA
affirmed the decision of RTC with modification as to the amount of damages. Hence,
this petition.
Issues:
1) WON JAL is guilty of breach of contract of carriage?
2) WON respondent is entitled to moral and exemplary damages?
Decision: JAL is guilty of breach of contract of carriage.
In an action for breach of contract of carriage, all that is required of plaintiff is to prove
the existence of such contract and its non-performance by the carrier through the
latter's failure to carry the passenger safely to his destination. Respondent has
complied with these requisites. Damage was made by JAL when respondent was
bumped off despite his protestations and valid travel documents and notwithstanding
his contract of carriage with JAL.
Respondent is entitled to moral and exemplary damages.
As a general rule, moral damages are not recoverable in actions for damages predicated
on a breach of contract for it is not one of the items enumerated under Article 2219 of
the Civil Code. As an exception, such damages are recoverable: (1) in cases in which
the mishap results in the death of a passenger, as provided in Article 1764, in relation
to Article 2206(3) of the Civil Code; and (2) in the cases in which the carrier is guilty
of fraud or bad faith, as provided in Article 2220.
The acts committed by JAL against respondent amounts to bad faith. As found by the
RTC, JAL breached its contract of carriage with respondent in bad faith. JAL
personnel summarily and insolently ordered respondent to disembark while the latter
was already settled in his assigned seat. He was ordered out of the plane under the
alleged reason that the genuineness of his travel documents should be verified.
JAL is also liable for exemplary damages as its above- mentioned acts constitute
wanton, oppressive and malevolent acts against respondent. Exemplary damages,
which are awarded by way of
example or correction for the public good, may be recovered in contractual obligations,
as in this case, if defendant acted in wanton, fraudulent, reckless, oppressive, or
malevolent manner.
Radio Communications of the Phil. Inc. v. CA
Facts: A telegram was sent through the Manila office of Radio Communications of the
Philippines (RCPI) to the offended party. Loreto Dionela, reading as follows:
LORETO DIOMELA-CABANGAN-WIRE ARRIVAL OF CHECK-PER 115 PM
SA IYO WALANG PAKINABANG DUMATING KA DIYAN—WALA KANG
PADALA BULBUL MO”
Dionela alleges that the defamatory words sent to him not only wounded his feelings
but also caused him undue embarrassment and affected his business. A carbon copy
of the telegram is readily available to the public as part of RCPI’s files, making it
possible for third persons to read the message. Both the lower courts and the Court of
Appeals ruled in favor of Dionela.
RCPI as a defense, alleges the following; (1) the additional words were a private joke
between the sending and receiving operators. It was never intended for Dionela; (2)
RCPI as a petitioner- employer should not be directly and primarily liable for the civil
liability arising from the criminal act of its employee; (3) there was no sufficient
publication of the telegram as to constitute libel and (4) RCPI is not liable under art
19 and 20 of the NCC.
Issue: WON the petitioner is liable for breach of contract
Decision: Petition DENIED. Decision of Court of Appeals affirmed. Petitioner’s
contentions do not merit our consideration. The action for damages was filed in the
lower court directly against respondent corporation not as an employer subsidiarily
liable under the provisions of Article 1161 of the New Civil Code. The cause of action
of the private respondent is based on Arts. 19 and 20 of the New Civil Code (supra).
As well as on respondent’s breach of contract thru the negligence of its own
employees.
There is a clear case of breach of contract by the petitioner in adding extraneous and
libelous matters in the message sent to the private respondent. As a corporation, the
petitioner can act only through its employees. Hence the acts of its employees in
receiving and transmitting messages are the acts of the petitioner. In most cases,
negligence must be proved in order that plaintiff may recover, However, since
negligence may be hard to substantiate in some cases, we may apply the doctrine of
RES IPSA LOQUITUR (the thing speaks for itself), by considering the presence of
facts or circumstances surrounding the injury.
WHEREFORE, premises considered, the judgment of the appellate court is hereby
AFFIRMED.
Syquia v. CA
Facts: Juan Syquia, father of the deceased Vicente Syquia, entered in a contract of
Deed of Sale and Interment Order with Manila Memorial Park Cemetery Inc
(MMPCI). In the contract, there contained a provision which stated that the coffin
would be placed in a sealed concrete vault to protect the remains of the deceased from
the elements.
During the preparation for the transfer of Vicente’s remains in the newly bought lot in
Manila Memorial, it was discovered that there was a hole in the concrete vault which
caused total flooding inside, damaged the coffin as well as the body of the deceased
and covered the same with filth.
Syquia filed a complaint for recovery of damages arising from breach of contract
and/or quasi-delict against the MMPCI for failure to deliver a defect-free concrete
vault to protect the remains of the deceased. In its defense, MMPCI claimed that the
boring of the hole was necessary in order to prevent the vault from floating when water
fills the grave. The trial court dismissed the complaint holding that there was no quasi-
delict because the defendant is not guilty of any fault or negligence and because there
was a pre-existing contract between the parties. The CA affirmed the decision of the
trial court. Hence, the present petition.
Issue: WON the private respondent is guilty of tort
Decision: Denied. Decision of the CA affirmed.
We are more inclined to answer the foregoing questions in the negative. There is not
enough ground, both in fact and in law, to justify a reversal of the decision of the
respondent Court and to uphold the pleas of the petitioners. Although a pre -existing
contractual relation between the parties does not preclude the existence of a culpa
aquiliana, We find no reason to disregard the respondent’s Court finding that there was
no negligence.
“Article 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 x x
x.”
In this case, it has been established that the Syquias and the Manila Memorial Park
Cemetery, Inc., entered into a contract entitled “Deed of Sale and Certificate of
Perpetual Care” on August 27, 1969. That agreement governed the relations of the
parties and defined their respective rights and obligations. Hence, had there been actual
negligence on the part of the Manila Memorial Park Cemetery, Inc., it would be held
liable not for a quasi-delict or culpa aquiliana, but for culpa contractual as provided by
Article 1170 of the Civil Code, to wit: “Those who in the performance of their
obligations are guilty of fraud, negligence, or delay, and those who in any manner
contravene the tenor thereof, are liable for damages.”
FEBTC v. CA
Some time in October 1986, private respondent Luis A. Luna applied for, and was
accorded, a FAREASTCARD issued by petitioner Far East Bank and Trust Company
("FEBTC") at its Pasig Branch. The bank also issued a supplemental card to private
respondent Clarita S. Luna.In August 1988, Clarita lost her credit card. FEBTC was
forthwith informed. In order to replace the lost card, Clarita submitted an affidavit of
loss. In cases of this nature, the bank's internal security procedures and policy would
appear to be to meanwhile so record the lost card, along with the principal card, as a
"Hot Card" or "Cancelled Card" in its master file. Luis tendered lunch for a close
friend, at Hotel Intercontinental Manila, Luis presented his FAREASTCARD. Since
the card was not honored, Luis was forced to pay in cash the bill amounting to P588.13.
Naturally, Luis felt embarrassed by this incident. In a letter, Luis Luna, through
counsel, demanded from FEBTC the payment of damages. Adrian V. Festejo, a vice-
president of the bank, expressed the bank's apologies to Luis. On 05 December 1988,
filed a complaint for damages with the Regional Trial Court ("RTC") of Pasig against
FEBTC.
Trial Court’s Ruling: On 30 March 1990, the RTC of Pasig, given the foregoing factual
settings, rendered a decision ordering FEBTC to pay private respondents (a)
P300,000.00 moral damages; (b) P50,000.00 exemplary damages; and (c) P20,000.00
attorney's fees.
CA: The appellate court affirmed the decision of the trial court.
MR: Its motion for reconsideration having been denied by the appellate court, FEBTC
has come to this Court with this petition for review.
Issue: WON FEBTC can be held liable for moral damages?
Decision: There is merit in this appeal. The appealed decision is MODIFIED by
deleting the award of moral and exemplary damages to private respondents; in its
stead, petitioner is ordered to pay private respondent Luis A. Luna an amount of
P5,000.00 by way of nominal damages.
RATIO: Inculpa contractual, moral damages may be recovered where the defendant is
shown to have acted in bad faith or with malice in the breach of the contract. 2 The
Civil Code provides:
Art. 2220. Willful injury to property may be a legal ground for awarding
moral damages if the court should find that, under the circumstances, such
damages are justly due. The same rule applies to breaches of contract where
the defendant acted fraudulently or in bad faith. (Emphasis supplied)
Bad faith, in this context, includes gross, but not simple, negligence. Exceptionally, in
a contract of carriage, moral damages are also allowed in case of death of a passenger
attributable to the fault (which is presumed) of the common carrier.
Concededly, the bank was remiss in indeed neglecting to personally inform Luis of his
own card's cancellation. Nothing in the findings of the trial court and the appellate
court, however, can sufficiently indicate any deliberate intent on the part of FEBTC to
cause harm to private respondents. Neither could FEBTC's negligence in failing to
give personal notice to Luis be considered so gross as to amount to malice or bad faith.
Malice or bad faith implies a conscious and intentional design to do a wrongful act for
a dishonest purpose or moral obliquity; it is different from the negative idea of
negligence in that malice or bad faith contemplates a state of mind affirmatively
operating with furtive design or ill will. 6
“Art. 21. Any person who wilfully causes loss or injury to another in a manner
that is contrary to morals, good customs or public policy shall compensate
the latter for the damage.” Article 21 of the Code, it should be observed,
contemplates a conscious act to cause harm. Thus, even if we are to assume
that the provision could properly relate to a breach of contract, its application
can be warranted only when the defendant's disregard of his contractual
obligation is so deliberate as to approximate a degree of misconduct certainly
no less worse than fraud or bad faith. Most importantly, Article 21 is a mere
 declaration of a general principle in human relations that clearly must, in any
case, give way to the specific provision of Article 2220 of the Civil Code
authorizing the grant of moral damages in culpa contractual solely when the
breach is due to fraud or bad faith.
By contrasting the provisions of these two articles it immediately becomes apparent
that:
(a) In case of breach of contract (including one of transportation) proof of bad faith or
fraud (dolus), i.e., wanton or deliberately injurious conduct, is essential to justify an
award of moral damages; and
(b) That a breach of contract can not be considered included in the descriptive term
"analogous cases" used in Art. 2219; not only because Art. 2220 specifically provides
for the damages that are caused contractual breach, but because the definition of quasi-
delict in Art. 2176 of the Code expressly excludes the cases where there is a
"preexisitng contractual relations between the parties."
The Court finds, therefore, the award of moral damages made by the court a quo,
affirmed by the appellate court, to be inordinate and substantially devoid of legal basis.
Exemplary or corrective damages, in turn, are intended to serve as an example or as
correction for the public good in addition to moral, temperate, liquidated or
compensatory. In criminal offenses, exemplary damages are imposed when the crime
is committed with one or more aggravating circumstance. In quasi-delicts, such
damages are granted if the defendant is shown to have been so guilty of gross
negligence as to approximate malice. In contracts and quasi-contracts, the court may
award exemplary damages if the defendant is found to have acted in a wanton,
fraudulent, reckless, oppressive, or malevolent manner.
Nevertheless, the bank's failure, even perhaps inadvertent, to honor its credit card
issued to private respondent Luis should entitle him to recover a measure of nominal
damages.
Art. 2221. 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.
Regino v. Pangasinan Colleges of Science and Technology
Facts: Khristine Rea M. Regino was a first year computer science student at
Pangasinan Colleges of Science and Technology (PCST). Reared in a poor family,
Regino went to college mainly through the financial support of her relatives. During
the second semester of school year 2001-2002, she enrolled in logic and statistics
under Rachelle A. Gamurot and Elissa Baladad, respectively, as teachers. Sometime
in February, PCST held a fund raising campaign dubbed the “Rave Part and Dance
Revolution,” the proceeds of which were to go to the construction of the school’s
tennis and volleyball courts. Each student was required to pay for two tickets at the
price of P100.00 each. The project was allegedly implemented by recompensing
students who purchased tickets with additional points in their test scores; those who
refused to pay were denied the opportunity to take the final examinations. Financially
strapped and prohibited by her religion from attending dance parties and celebrations,
Regino refused to pay for the tickets. On the scheduled dates of the final examinations
in logic and statistics, her teachers disallowed her from taking the tests. Regino’s pleas
ostensibly went unheeded by Gamurot and Baladad, who unrelentingly defended their
positions as compliance with PCST’s policy.
As a result, Regino filed, as a pauper litigant, a Complaint for damages against PCST,
Gamurot and Baladad (PCST et al.). In her complaint, she prayed from P500,000 as
nominal damages, P500,000 as moral damages; at least P1,000,000 as exemplary
damages; P250,000 as actual damages; plus the costs of litigation and attorney’s fees.
PCST et al. filed a Motion to Dismiss on the ground of failure to exhaust administrative
remedies, contending that the complaint should have been lodged with the
Commission of Higher Education (CHED). The RTC dismissed the complaint for lack
of cause of action. Aggrieved, Regino filed the present Petition on pure questions of
law.
Issue: Whether PCST et al. can be made liable for damages
Decision: Court ruled in favor of Regino. PCST et al. can be made liable for damages.
In her Complaint, Regino also charged that PCST et al. “inhumanly punish students x
x x by reason only of their poverty, religious practice or lowly station in life, which
inculcated upon [petitioner] the feelings of guilt, disgrace and unworthiness”; as a
result of such punishment, she was allegedly unable to finish any of her subjects for
the second semester of that school year and had to lag behind in her studies by a full
year. The acts of respondents supposedly caused her extreme humiliation, mental
agony and “demoralization of unimaginable proportions” in violation of Articles 19,
21 and 26 of the Civil Code. These provisions of the law state thus:
“Article 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe
honesty and good faith.”
“Article 21. Any person who willfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage.”
“Article 26. Every person shall respect the dignity, personality, privacy and
peace of mind of his neighbors and other persons. The following and similar
acts, though they may not constitute a criminal offense, shall produce a cause
of action for damages, prevention and other relief:
(1) Prying into the privacy of another’s residence;
(2) Meddling with or disturbing the private life or family relations of another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his beliefs, lowly station in
life, place of birth, physical defect, or other personal condition.”
Generally, liability for tort arises only between parties not otherwise bound by a
contract. An academic institution, however, may be held liable for tort even if it has
an existing contract with its students, since the act that violated the contract may also
be a tort. We ruled thus in PSBA vs. CA, from which we quote:
“x x x A perusal of Article 2176 [of the Civil Code] shows that obligations arising
from quasidelicts or tort, also known as extracontractual obligations, arise only
between parties not otherwise bound by contract, whether express or implied.
However, this impression has not prevented this Court from determining the existence
of a tort even when there obtains a contract. In Air France v. Carrascoso (124 Phil.
722; 18 SCRA 155), the private respondent was awarded damages for his unwarranted
expulsion from a firstclass seat aboard the petitioner airline. It is noted, however, that
the Court referred to the petitionerairline’s liability as one arising from tort, not one
arising form a contract of carriage. In effect, Air France is authority for the view that
liability from tort may exist even if there is a contract, for the act that breaks the
contract may be also a tort. x x x This view was not all that revolutionary, for even as
early as 1918, this Court was already of a similar mind. In Cangco v. Manila Railroad
(38 Phil. 780), Mr. Justice Fisher elucidated thus: ‘x x x. When such a contractual
relation exists the obligor may break the contract under such conditions that the same
act which constitutes a breach of the contract would have constituted the sou rce of an
extracontractual obligation had no contract existed between the parties.’
“Immediately what comes to mind is the chapter of the Civil Code on Human
Relations, particularly Article 21 x x x.”
F. Tort distinguished from civil liability arising from crime
People v. Ligon
Facts: On October 23, 1983, the accused, Fernando Gabat (Gabat), was riding in a
1978 Volkswagen Kombi owned by his father, Antonio Gabat, and driven by the other
accused, Rogelio Ligon (Ligon). The Kombi was coming from Espana Street going
towards the direction of Quiapo. Fernando Gabat was seated beside the driver, in the
front seat by the window on the right side of the Kombi. At the intersection of Quezon
Boulevard and Lerma Street before turning left towards the underpass at C.M. Recto
Avenue, the Kombi had to stop as the traffic light was red. While waiting for the traffic
light to change, Fernando Gabat beckoned a cigarette vendor, Jose Rosales y Ortiz
(Rosales), the victim, to buy some cigarettes from him. Rosales approached the Kombi
and handed Gabat two sticks of cigarettes. While this transaction was occurring, the
traffic light changed to green, and the Kombi driven by Rogelio Ligon suddenly moved
forward. Rosales clung to the window of the Kombi but apparently lost his grip and
fell down on the pavement. Rosales was rushed by some bystanders to the Philippine
General Hospital, where he was treated for multiple physical injuries and was confined
thereat until his death on October 30, 1983. In an autopsy, it was stated that the cause
of death of Rosales was "pneumonia hypostatic, bilateral, secondary to traumatic
injuries of the head."
The prosecution claimed that Gabat grabbed the box of cigarettes from Rosales and
moved loose the latter's hand from the window of the Kombi, resulting in the latter
falling down and hitting the pavement. The defense, however, claims that as the
vehicle sped onward, the cigarette box which was squeezed between the right arm of
Gabat and the window frame fell inside the Kombi. Rosales then ran beside the vehicle
and clung to the windowsill of the moving vehicle. Gabat testified that when he saw
the cigarette vendor clinging on the side of the front door, he told Ligon to veer to the
right in order that Rosales could get off at the sidewalk. However, Gabat declared, that
Ligon said that it could not be done because of the moving vehicular traffic. Then,
while the vehicle slowed down and Ligon was maneuvering to the right in an attempt
to go toward the sidewalk, Rosales lost his grip on the window frame and fell to the
pavement of Quezon Boulevard. Gabat allegedly shouted at Ligon to stop but Ligon
replied that they should go on to Las Pinas and report the incident to the parents of
Gabat, and later they would come back to the scene of the incident. However, while
the Kombi was speeding along Dewey Boulevard, it was blocked by the taxi of
Prudencio Castillo and a jeep driven by policemen. Gabat and Ligon were brought to
police headquarters, but neither of them executed any written statement.
Issue: WO N the accused who was acquitted from any criminal liability is free from
any civil liability.
Decision: It does not follow that a person who is not criminally liable is also free from
civil liability.
While the guilt of the accused in a criminal prosecution must be established beyond
reasonable doubt, only a preponderance of evidence is required in a civil action for
damages. The judgment of acquittal extinguishes the civil liability of the accused only
when it includes a declaration that the facts from which the civil liability might arise
did not exist.
The reason for the provisions of Article 29 of the Civil Code, which provides that the
acquittal of the accused on the ground that his guilt has not been proved beyond
reasonable doubt does not necessarily exempt him from civil liability for the same act
or omission, has been explained by the Code Commission as follows:
The old rule that the acquittal of the accused in a criminal case also releases him from
civil liability is one of the most serious flaws in the Philippine legal system. It has
given rise to numberless instances of miscarriage of justice, where the acquittal was
due to a reasonable doubt in the mind of the court as to the guilt of the accused. The
reasoning followed is that inasmuch as the civil responsibility is derived from the
criminal offense, when the latter is not proved, civil liability cannot be demanded.
This is one of those cases where confused thinking leads to unfortunate and deplorable
consequences. Such reasoning fails to draw a clear line of demarcation between
criminal liability and civil responsibility, and to determine the logical result of the
distinction. The two liabilities are separate and distinct from each other. One affects
the social order and the other, private rights. One is for the punishment or correction
of the offender while the other is for reparation of damages suffered by the aggrieved
party. The two responsibilities are so different from each other that article 1813 of the
present (Spanish) Civil Code reads thus: "There may be a compromise upon the civil
action arising from a crime; but the public action for the imposition of the legal penalty
shall not thereby be extinguished." It is just and proper that, for the purposes of the
imprisonment of or fine upon the accused, the offense should be proved beyond
reasonable doubt. But for the purpose of indemnifying the complaining party, why
should the offense also be proved beyond reasonable doubt? Is not the invasion or
violation of every private right to be proved only by a preponderance of evidence? Is
the right of the aggrieved person any less private because the wrongful act is also
punishable by the criminal law?
For these reasons, the Commission recommends the adoption of the reform under
discussion. It will correct a serious defect in our law. It will close up an inexhaustible
source of injustice a cause for disillusionment on the part of the innumerable persons
injured or wronged.
In the instant case, we find that a preponderance of evidence exists sufficient to
establish the facts from which the civil liability of Gabat arises. On the basis of the
trial court's evaluation of the testimonies of both prosecution and defense witnesses at
the trial and applying the quantum of proof required in civil cases, we find that a
preponderance of evidence establishes that Gabat by his act and omission with fault
and negligence caused damage to Rosales and should answer civilly for the damage
done. Gabat's wilfull act of calling Rosales, the cigarette vendor, to the middle of a
busy street to buy two sticks of cigarettes set the chain of events which led to the death
of Rosales. Through fault and negligence, Gabat (1) failed to prevent the driver from
moving forward while the purchase was completed; (2) failed to help Rosales while
the latter clung precariously to the moving vehicle, and (3) did not enforce his order
to the driver to stop. Finally, Gabat acquiesced in the driver's act of speeding away,
instead of stopping and picking up the injured victim. These proven facts taken
together are firm bases for finding Gabat civilly liable under the Civil Code for the
damage done to Rosales.
Rufo Mauricio Const. v. IAC
Facts: On September 20, 1979, Illustre Cabiliza, driver of Izusu dump truck owned by
RUFO MAURICIO CONSTRUCTIONS, was charged before the RTC of Legazpi
City with homicide and damage to property through reckless imprudence. The dump
truck that he was driving sideswipe and hit a Colt Gallant driven and owned by the
late Judge Arsenio Solidum, thereby inflicting injuries upon him which directly caused
his untimely death and further causing damage to the said vehicle and likewise causing
damage to the house owned by Pablo Navarro.
Cabiliza filed a Notice of Appeal but he died and did not live to pursue his appeal.
Hence, the lower court issued an Order requiring the heirs of Cabiliza to appear and to
substitute him with respect to the civil aspect of the case. However, Cabiliza was found
insolvent evidenced by a certificate of insolvency. The victim’s widow Mrs. Aurora
Solidum filed a motion for issuance of a subsidiary writ of execution to be enforced
against the employer, Rufo Mauricio, which was granted.
Petitioner filed MR but it was denied for lack of merit. Petitioner contends that ---
1. The dismissal of the criminal case against the accused- employee wipes out not only
the employee’s primary civil liability, bu also the employer’s subsidiary liability
because:
a. The criminal case is based on Article 100 of RPC wherein criminal liability
and exemption of criminal liability implies exemption from civil liability
arising from crime.
b. The civil liability of the employer is based, if any, on quasi- delict, since
the accused was exempted from criminal liability.
2. Exemplary damages cannot be imposed upon employer who at the time of the
alleged incident was not present nor inside the vehicle.
3. The petitioner-employer cannot be condemned to pay an exorbitant amount of
damages without giving him opportunity to cross examine the witness and opportunity
to adduce evidence to resist the claim.
4. The IAC misapplied the facts contrary to the physical evidence relied on conjectures
that depicted a different picture of the accident when the evidence shows that it was
the victim who was negligent at the time of the accident. (by invading the proper lane
of the dump truck)
Issue: WON Rufo Mauricio Construction is subsidiarily liable
Decision: The first contention of petitioner that the death of the accused- employee
wipes out not only the employee's primary civil liability but also his employer's
subsidiary liability is without merit. The death of the accused during the pendency of
his appeal or before the judgment of conviction (rendered against him by the lower
court) became final and executory extinguished his criminal liability meaning his
obligation to serve the imprisonment imposed and his pecuniary liability for fines, but
not his civil liability should the liability or obligation arise (not from a crime, for here,
no crime was committed, the accused not having been convicted by final judgment,
and therefore still regarded as innocent) but from a quasi-delict (See Arts. 2176 and
2177, Civil Code), as in this case. The liability of the employer here would not be
subsidiary but solidary with his driver (unless said employer can prove there was no
negligence on his part at all, that is, if he can prove due diligence in the selection and
supervision of his driver).
Inasmuch as the employer (petitioner herein) was not a party in the criminal case, and
to grant him his day in court for the purpose of cross-examining the prosecution
witnesses on their testimonies on the driver's alleged negligence and the amount of
damages to which the heirs of the victim are entitled, as well as to introduce any
evidence or witnesses he may care to present in his defense, the hearing on the motion
to quash the subsidiary writ of execution must be reopened precisely for the purpose
adverted to hereinabove.
PREMISES CONSIDERED, the assailed decision of the appellate court is hereby SET
ASIDE, and this case is REMANDED to the trial court for the hearing adverted to in
the next preceding paragraph.
Dulay v. CA
Facts: An altercation between Benigno Torzuela and Atty. Napoleon Dulay occurred
at the "Big Bang Sa Alabang," Alabang Village, Muntinlupa as a result of which
Benigno Torzuela, the security guard on duty at the said carnival, shot and killed Atty.
Napoleon Dulay.
Maria Benita A. Dulay, widow of the deceased filed an action for damages against
Benigno Torzuela and herein private respondents Safeguard Investigation and Security
Co., Inc., ("SAFEGUARD") and/or Superguard Security Corp. ("SUPERGUARD"),
alleged employers of defendant Torzuela. An information was also filed by the
petitioners charging Torzuela with homicide.
Petitioners prayed for actual, compensatory, moral and exemplary damages, and
attorney's fees. Private respondent SUPERGUARD filed a Motion to Dismiss on the
ground that the complaint does not state a valid cause of action, alleging that Torzuela's
act of shooting Dulay was beyond the scope of his duties, and that since the alleged
act of shooting was committed with deliberate intent (dolo), the civil liability therefor
is governed by Article 100 of the Revised Penal Code, which states:
Art. 100. Civil liability of a person guilty of a felony. — Every person
criminally liable for a felony is also civilly liable.
Respondent SUPERGUARD further alleged that a complaint for damages based on
negligence under Article 2176 of the New Civil Code cannot lie, since the civil liability
under Article 2176 applies only to quasi-offenses under Article 365 of the Revised
Penal Code.
While respondent SAFEGUARD also filed a motion praying that it be excluded as
defendant on the ground that defendant Torzuela is not one of its employees.
RTC- Respondent Judge Regino ruled in favour of SUPERGUARD'S motion to
dismiss and SAFEGUARD'S motion for exclusion as defendant.
CA- Affirmed the lower court’s ruling.
Issue: WON quasi-delicts cover acts that are intentional and voluntary not just acts of
negligence under Article 2176 of the New Civil Code.
Decision: We find for petitioners.
It is undisputed that Benigno Torzuela is being prosecuted for homicide for the fatal
shooting of Napoleon Dulay. Rule 111 of the Rules on Criminal Procedure provides:
Sec. 1. Institution of criminal and civil actions. When a criminal action is
instituted, the civil action for the recovery of civil liability is impliedly
instituted with the criminal action, unless the offended party waives the civil
action, reserves his right to institute it separately or institutes the civil action
prior to the criminal action.
Such civil action includes recovery of indemnity under the Revised Penal
Code, and damages under Articles 32, 33, 34, and 2176 of the Civil Code of
the Philippines arising from the same act or omission of the accused.
(Emphasis supplied)
It is well-settled that the filing of an independent civil action before the prosecution in
the criminal action presents evidence is even far better than a compliance with the
requirement of express reservation (Yakult Philippines v. Court of Appeals, 190
SCRA 357 [1990]). This is precisely what the petitioners opted to do in this case.
However, the private respondents opposed the civil action on the ground that the same
is founded on a delict and not on a quasi-delict as the shooting was not attended by
negligence. What is in dispute therefore is the nature of the petitioner's cause of action.
The nature of a cause of action is determined by the facts alleged in the complaint as
constituting the cause of action (Republic v. Estenzo, 158 SCRA 282 [1988]). The
purpose of an action or suit and the law to govern it is to be determined not by the
claim of the party filing the action, made in his argument or brief, but rather by the
complaint itself, its allegations and prayer for relief. (De Tavera v. Philippine
Tuberculosis Society, 112 SCRA 243 [1982]). An examination of the complaint in the
present case would show that the plaintiffs, petitioners herein, are invoking their right
to recover damages against the private respondents for their vicarious responsibility
for the injury caused by Benigno Torzuela's act of shooting and killing Napoleon
Dulay, as stated in paragraphs 1 and 2 of the complaint.
Article 2176 of the New Civil Code provides:
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.
Contrary to the theory of private respondents, there is no justification for limiting the
scope of Article 2176 of the Civil Code to acts or omissions resulting from negligence.
Well-entrenched is the doctrine that article 2176 covers not only acts committed with
negligence, but also acts which are voluntary and intentional. As far back as the
definitive case of Elcano v. Hill (77 SCRA 98 [1977]), this Court already held that:
. . . Article 2176, where it refers to "fault or negligence," covers not only acts "not
punishable by law" but also acts criminal in character; whether intentional and
voluntary or negligent. ...Briefly stated, We here hold, in reiteration of Garcia, that
culpa aquiliana includes voluntary and negligent acts which may be punishable by law.
(Emphasis supplied)
The same doctrine was echoed in the case of Andamo v. Intermediate Appellate Court
(191 SCRA 195 [1990]), wherein the Court held:
Article 2176, whenever it refers to "fault or negligence," covers not only acts criminal
in character, whether intentional and voluntary or negligent. Consequently, a civil
action lies against the offender in a criminal act, whether or not he is prosecuted or
found guilty or acquitted, provided that the offended party is not allowed, (if the
tortfeasor is actually also charged criminally), to recover damages on both scores, and
would be entitled in such eventuality only to the bigger award of the two, assuming
the awards made in the two cases vary. [citing Virata v. Ochoa, 81 SCRA 472]
(Emphasis supplied)
Private respondents further aver that Article 33 of the New Civil Code applies only to
injuries intentionally committed pursuant to the ruling in Marcia v. CA (120 SCRA
193 [1983]), and that the actions for damages allowed thereunder are ex-delicto.
However, the term "physical injuries" in Article 33 has already been construed to
include bodily injuries causing death (Capuno v. Pepsi-Cola Bottling Co. of the
Philippines, 121 Phil. 638 [1965); Carandang v. Santiago, 97 Phil. 94 [1955]). It is not
the crime of physical injuries defined in the Revised Penal Code. It includes not only
physical injuries but also consummated, frustrated, and attempted homicide (Madeja
v. Caro,
126 SCRA 293 [1983]). Although in the Marcia case (supra), it was held that no
independent civil action may be filed under Article 33 where the crime is the result of
criminal negligence, it must be noted however, that Torzuela, the accused in the case
at bar, is charged with homicide, not with reckless imprudence, whereas the defendant
in Marcia was charged with reckless imprudence. Therefore, in this case, a civil action
based on Article 33 lies.
Private respondents also contend that their liability is subsidiary under the Revised
Penal Code; and that they are not liable for Torzuela's act which is beyond the scope
of his duties as a security guard. It having been established that the instant action is
not ex- delicto, petitioners may proceed directly against Torzuela and the private
respondents. Under Article 2180 of the New Civil Code as aforequoted, when an injury
is caused by the negligence of the employee, there instantly arises a presumption of
law that there was negligence on the part of the master or employer either in the
selection of the servant or employee, or in supervision over him after selection or both
(Layugan v. Intermediate Appellate Court, 167 SCRA 363 [1988]). The liability of the
employer under Article 2180 is direct and immediate; it is not conditioned upon prior
recourse against the negligent employee and a prior showing of the insolvency of such
employee (Kapalaran Bus Lines v. Coronado, 176 SCRA 792 [1989]). Therefore, it is
incumbent upon the private respondents to prove that they exercised the diligence of
a good father of a family in the selection and supervision of their employee.
Since Article 2176 covers not only acts of negligence but also acts which are
intentional and voluntary, it was therefore erroneous on the part of the trial court to
dismiss petitioner's complaint simply because it failed to make allegations of attendant
negligence attributable to private respondents.
Chua v. CA
Facts: Lydia Hao, treasurer of Siena Realty Corporation, filed a complaint charging
Francis Chua and his wife, Elsa Chua, of four counts of falsification of public
documents pursuant to Article 172 in relation to Article 171 of the Revised Penal
Code. It was alleged that Chua falsified the Minutes of the Annual Stockholders
meeting of the Board of Directors of the Siena Realty Corporation by making or
causing it to appear in said Minutes of the Annual Stockholders Meeting that one
LYDIA HAO CHUA was present in said proceedings, when in truth and in fact, said
person was never present during the Annual Stockholders Meeting. During the trial,
Atty. Evelyn Sua-Kho and Atty. Ariel Bruno Rivera appeared as private prosecutors.
Chua moved to exclude complainant’s counsels as private prosecutors in the case on
the ground that Hao failed to allege and prove any civil liability in the case. The court
granted Chua’s motion. Hao moved for reconsideration but it was denied. Hence, Hao
filed a petition for certiorari. The RTC gave due course to the petition. Dissatisfied,
Chua filed before the Court of Appeals a petition for certiorari but was denied. He
filed a petition for review on certiorari assailing the decision of the CA.
Issue: Did the Court of Appeals and the lower court err in allowing private prosecutors
to actively participate in the trial of Criminal Case?
Decision: Generally, the basis of civil liability arising from crime is the fundamental
postulate that every man criminally liable is also civilly liable. When a person commits
a crime he offends two entities namely (1) the society in which he lives in or the
political entity called the State whose law he has violated; and (2) the individual
member of the society whose person, right, honor, chastity or property has been
actually or directly injured or damaged by the same punishable act or omission. An act
or omission is felonious because it is punishable by law, it gives rise to civil liability
not so much because it is a crime but because it caused damage to another.
Additionally, what gives rise to the civil liability is really the obligation and the moral
duty of everyone to repair or make whole the damage caused to another by reason of
his own act or omission, whether done intentionally or negligently. The indemnity
which a person is sentenced to pay forms an integral part of the penalty imposed by
law for the commission of the crime. The civil action involves the civil liability arising
from the offense charged which includes restitution, reparation of the damage caused,
and indemnification for consequential damages.
Under the Rules, where the civil action for recovery of civil liability is instituted in the
criminal action pursuant to Rule 111, the offended party may intervene by counsel in
the prosecution of the offense. Rule 111(a) of the Rules of Criminal Procedure
provides that, “[w]hen a criminal action is instituted, the civil action arising from the
offense charged shall be deemed instituted with the criminal action unless the offended
party waives the civil action, reserves the right to institute it separately, or institutes
the civil action prior to the criminal action.”
Lumantas v. Calapiz
FACTS: In 1995, Spouses Hilario Calapiz, Jr. and Herlita Calapiz brought their 8-
year-old son, Hanz Calapiz (Hanz), to the Misamis Occidental Provincial Hospital,
Oroquieta City, for an emergency appendectomy. Hanz was attended to by the
petitioner, who suggested to the parents that Hanz also undergo circumcision at no
added cost to spare him the pain. With the parents’ consent, the petitioner performed
the coronal type of circumcision on Hanz after his appendectomy. On the following
day, Hanz complained of pain in his penis, which exhibited blisters. His testicles were
swollen. The parents noticed that the child urinated abnormally after the petitioner
forcibly removed the catheter, but the petitioner dismissed the abnormality as normal.
Hanz was discharged from the hospital over his parents’ protestations, and was
directed to continue taking antibiotics. After a few days, Hanz was confined in a
hospital because of the abscess formation between the base and the shaft of his penis.
Presuming that the ulceration was brought about by Hanz’s appendicitis, the petitioner
referred him to Dr. Henry Go, an urologist, who diagnosed the boy to have a damaged
urethra. Thus, Hanz underwent cystostomy, and thereafter was operated on three times
to repair his damaged urethra.
When his damaged urethra could not be fully repaired and reconstructed, Hanz’s
parents brought a criminal charge against the petitioner for reckless imprudence
resulting to serious physical injuries. In his defense, the petitioner denied the charge.
He contended that at the time of his examination of Hanz, he had found an
accumulation of pus at the vicinity of the appendix two to three inches from the penis
that had required immediate surgical operation; that after performing the
appendectomy, he had circumcised Hanz with his parents’ consent by using a congo
instrument, thereby debunking the parents’ claim that their child had been cauterized;
that he had then cleared Hanz once his fever had subsided; that he had found no
complications when Hanz returned for his follow up check-up; and that the abscess
formation between the base and the shaft of the penis had been brought about by
Hanz’s burst appendicitis.
The RTC acquitted the petitioner of the crime charged for insufficiency of the
evidence. It held that the Prosecution’s evidence did not show the required standard of
care to be observed by other members of the medical profession under similar
circumstances. Nonetheless, the RTC ruled that the petitioner was liable for moral
damages because there was a preponderance of evidence showing that Hanz had
received the injurious trauma from his circumcision by the petitioner. The Petitioner
appealed his case to the CA contending that he could not be held civilly liable because
there was no proof of his negligence. The CA affirmed the RTC, sustaining the award
of moral damages.
ISSUE: Whether the CA erred in affirming the petitioner’s civil liability despite his
acquittal of the crime of reckless imprudence resulting in serious physical injuries.
HELD: NO.
It is axiomatic that every person criminally liable for a felony is also civilly liable. xxx
Our law recognizes two kinds of acquittal, with different effects on the civil liability
of the accused. First is an acquittal on the ground that the accused is not the author of
the act or omission complained of. This instance closes the door to civil liability, for a
person who has been found to be not the perpetrator of any act or omission cannot and
can never be held liable for such act or omission. There being no delict, civil liability
ex delicto is out of the question, and the civil action, if any, which may be instituted
must be based on grounds other than the delict complained of. This is the situation
contemplated in Rule 111 of the Rules of Court. The second instance is an acquittal
based on reasonable doubt on the guilt of the accused. In this case, even if the guilt of
the accused has not been satisfactorily established, he is not exempt from civil liability
which may be proved by preponderance of evidence only.
The petitioner’s contention that he could not be held civilly liable because there was
no proof of his negligence deserves scant consideration. The failure of the Prosecution
to prove his criminal negligence with moral certainty did not forbid a finding against
him that there was preponderant evidence of his negligence to hold him civilly liable.
With the RTC and the CA both finding that Hanz had sustained the injurious trauma
from the hands of the petitioner on the occasion of or incidental to the circumcision,
and that the trauma could have been avoided, the Court must concur with their uniform
findings. In that regard, the Court need not analyze and weigh again the evidence
considered in the proceedings a quo. The Court, by virtue of its not being a trier of
facts, should now accord the highest respect to the factual findings of the trial court as
affirmed by the CA in the absence of a clear showing by the petitioner that such
findings were tainted with arbitrariness, capriciousness or palpable error.
Every person is entitled to the physical integrity of his body. Although we have long
advocated the view that any physical injury, like the loss or diminution of the use of
any part of one’s body, is not equatable to a pecuniary loss, and is not susceptible of
exact monetary estimation, civil damages should be assessed once that integrity has
been violated. The assessment is but an imperfect estimation of the true value of one’s
body. The usual practice is to award moral damages for the physical injuries sustained.
In Hanz’s case, the undesirable outcome of the circumcision performed by the
petitioner forced the young child to endure several other procedures on his penis in
order to repair his damaged urethra. Surely, his physical and moral sufferings properly
warranted the amount of P50,000.00 awarded as moral damages.
Many years have gone by since Hanz suffered the injury. Interest of 6% per annum
should then be imposed on the award as a sincere means of adjusting the value of the
award to a level that is not only reasonable but just and commensurate. Unless we
make the adjustment in the permissible manner by prescribing legal interest on the
award, his sufferings would be unduly compounded. For that purpose, the reckoning
of interest should be from the filing of the criminal information on April 17, 1997, the
making of the judicial demand for the liability of the petitioner.
a. Independent Civil Actions, Rationale and prejudicial question
CIVIL CODE – ARTS. 31, 32, 33, 34, and 2176
Article 31. When the civil action is based on an obligation not arising from the act or
omission complained of as a felony, such civil action may proceed independently of
the criminal proceedings and regardless of the result of the latter.
Article 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 of law;
(7) The right to a just compensation when private property is taken for public use;
(8) The right to the equal protection of the laws;
(9) The right to be secure in one's person, house, papers, and effects against
unreasonable searches and seizures;
(10) The liberty of abode and of changing the same;
(11) The privacy of communication and correspondence;
(12) The right to become a member of associations or societies for purposes not
contrary to law;
(13) The right to take part in a peaceable assembly to petition the Government for
redress of grievances;
(14) The right to be a free from involuntary servitude in any form;
(15) The right of the accused against excessive bail;
(16) The right of the accused 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 his behalf;
(17) 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 such confession, except when the person confessing becomes a State witness;
(18) 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
(19) 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 aggrieved 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.
Article 33. In cases of defamation, fraud, and physical injuries a civil action for
damages, entirely separate and distinct from the criminal action, may be brought by
the injured party. Such civil action shall proceed independently of the criminal
prosecution, and shall require only a preponderance of evidence.
Article 34. When a member of a city or municipal police force refuses or fails to render
aid or protection to any person in case of danger to life or property, such peace officer
shall be primarily liable for damages, and the city or municipality shall be subsidiarily
responsible therefor. The civil action herein recognized shall be independent of any
criminal proceedings, and a preponderance of evidence shall suffice to support such
action.
Article 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. (1902a)
RULES OF COURT – RULE 111 – Prosecution of Civil Action
Section 1. Institution of criminal and civil actions. — (a) When a criminal action is
instituted, the civil action for the recovery of civil liability arising from the offense
charged shall be deemed instituted with the criminal action unless the offended party
waives the civil action, reserves the right to institute it separately or institutes the civil
action prior to the criminal action.
The reservation of the right to institute separately the civil action shall be made before
the prosecution starts presenting its evidence and under circumstances affording the
offended party a reasonable opportunity to make such reservation.
When the offended party seeks to enforce civil liability against the accused by way of
moral, nominal, temperate, or exemplary damages without specifying the amount
thereof in the complaint or information, the filing fees thereof shall constitute a first
lien on the judgment awarding such damages.
Where the amount of damages, other than actual, is specified in the complaint or
information, the corresponding filing fees shall be paid by the offended party upon the
filing thereof in court.
Except as otherwise provided in these Rules, no filing fees shall be required for actual
damages.
No counterclaim, cross-claim or third-party complaint may be filed by the accused in
the criminal case, but any cause of action which could have been the subject thereof
may be litigated in a separate civil action. (1a)
(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to
include the corresponding civil action. No reservation to file such civil action
separately shall be allowed.
Upon filing of the aforesaid joint criminal and civil actions, the offended party shall
pay in full the filing fees based on the amount of the check involved, which shall be
considered as the actual damages claimed. Where the complaint or information also
seeks to recover liquidated, moral, nominal, temperate or exemplary damages, the
offended party shall pay additional filing fees based on the amounts alleged therein. If
the amounts are not so alleged but any of these damages are subsequently awarded by
the court, the filing fees based on the amount awarded shall constitute a first lien on
the judgment.
Where the civil action has been filed separately and trial thereof has not yet
commenced, it may be consolidated with the criminal action upon application with the
court trying the latter case. If the application is granted, the trial of both actions shall
proceed in accordance with section 2 of this Rule governing consolidation of the civil
and criminal actions. (cir. 57-97)
Section 2. When separate civil action is suspended. — After the criminal action has
been commenced, the separate civil action arising therefrom cannot be instituted until
final judgment has been entered in the criminal action.
If the criminal action is filed after the said civil action has already been instituted, the
latter shall be suspended in whatever stage it may be found before judgment on the
merits. The suspension shall last until final judgment is rendered in the criminal action.
Nevertheless, before judgment on the merits is rendered in the civil action, the same
may, upon motion of the offended party, be consolidated with the criminal action in
the court trying the criminal action. In case of consolidation, the evidence already
adduced in the civil action shall be deemed automatically reproduced in the criminal
action without prejudice to the right of the prosecution to cross-examine the witnesses
presented by the offended party in the criminal case and of the parties to present
additional evidence. The consolidated criminal and civil actions shall be tried and
decided jointly.
During the pendency of the criminal action, the running of the period of prescription
of the civil action which cannot be instituted separately or whose proceeding has been
suspended shall be tolled. (n)
The extinction of the penal action does not carry with it extinction of the civil action.
However, the civil action based on delict shall be deemed extinguished if there is a
finding in a final judgment in the criminal action that the act or omission from which
the civil liability may arise did not exist. (2a)
Section 3. When civil action may proceed independently. — In the cases provided for
in Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent
civil action may be brought by the offended party. It shall proceed independently of
the criminal action and shall require only a preponderance of evidence. In no case,
however, may the offended party recover damages twice for the same act or omission
charged in the criminal action. (3a)
Section 4. Effect of death on civil actions. — The death of the accused after
arraignment and during the pendency of the criminal action shall extinguish the civil
liability arising from the delict. However, the independent civil action instituted under
section 3 of this Rule or which thereafter is instituted to enforce liability arising from
other sources of obligation may be continued against the estate or legal representative
of the accused after proper substitution or against said estate, as the case may be. The
heirs of the accused may be substituted for the deceased without requiring the
appointment of an executor or administrator and the court may appoint a guardian ad
litem for the minor heirs.
The court shall forthwith order said legal representative or representatives to appear
and be substituted within a period of thirty (30) days from notice.
A final judgment entered in favor of the offended party shall be enforced in the manner
especially provided in these rules for prosecuting claims against the estate of the
deceased.
If the accused dies before arraignment, the case shall be dismissed without prejudice
to any civil action the offended party may file against the estate of the deceased. (n)
Section 5. Judgment in civil action not a bar. — A final judgment rendered in a civil
action absolving the defendant from civil liability is not a bar to a criminal action
against the defendant for the same act or omission subject of the civil action. (4a)
Section 6. Suspension by reason of prejudicial question. — A petition for suspension
of the criminal action based upon the pendency of a prejudicial question in a civil
action may be filed in the office of the prosecutor or the court conducting the
preliminary investigation. When the criminal action has been filed in court for trial,
the petition to suspend shall be filed in the same criminal action at any time before the
prosecution rests. (6a)
Section 7. Elements of prejudicial question. — The elements of a prejudicial question
are: (a) the previously instituted civil action involves an issue similar or intimately
related to the issue raised in the subsequent criminal action, and (b) the resolution of
such issue determines whether or not the criminal action may proceed. (5a)
Santos v. Pizarro
Facts: In April 1994, Viron Transit driver Dionisio Sibayan was charged with reckless
imprudence resulting to multiple homicide and multiple physical injuries in
connection with a collision between a bus driven by Sibayan and a lite ace van, for
which Sibayan was convicted on December 1998.
As there was a reservation to file a separate civil action, no pronouncement of civil
liability was made by the Municipal Circuit Trial Court (MCTC).
In October 20, 2000, Santos filed a complaint for damages against Sibayan, Viron
Transit and Rondaris, president and chairman of Viron Transit with the RTC of
Quezon City, pursuant to their reservation to file a separate civil action. They cited the
judgment convicting Sibayan.
Viron Transit moved to dismiss the complaint citing prescription alleging that actions
based on quasi delict prescribe in 4years from the accrual of the cause of action.
RTC: Dismissed the complaint on the ground that the cause of action had already
prescribed.
CA: Petitioners filed a petition for certiorari which was dismissed for error in the
choice or mode of appeal.
Issue: WON the trial court committed a grave abuse of discretion when it insisted that
the cause of action is based on quasi delict and concluded that the action had prescribed
Decision: Our RPC provides that every person criminally liable for a felony is also
civilly liable. Such civil liability may consist of restitution, reparation of the damage
caused and indemnification of consequential damages.
Petitioners expressly made a reservation of their right to file a separate civil action as
a result of the crime committed by Sibayan. The reason why MCTC did not make any
pronouncement as to the latter's civil liability.
The complaint reveals that the allegations are consistent with petitioners claim that the
action was brought to recover civil liability arising from a crime. Even if there were
allegations of negligence on the part of Sibayan and Viron Transit, it does not mean
that petitioners were pursuing a cause of action based on quasi delict, considering that
at the time of the filing of the complaint, the cause of action ex quasi delicto had
already prescribed.
In cases of negligence, the offended party has the choice between an action to enforce
liability arising from crime under the Revised Penal Code and an action for quasi delict
under the Civil Code.
An act or omission causing damage to another may give rise to 2 separate civili
liabilities on the part of the offender:
1. Civil liability ex delicto, under Article 100 of the RPC
2. Independent civil liabilities
a) not arising from an act or omission complained of as a felony, ( culpa contractual
or obligations arising from law under Art. 31 of the Civil Code, intentional torts under
Art. 32 and 34, and culpa aquiliana under Art. 2176
b) where the injured party is granted a right to file an action independent and distinct
from the criminal proceedings.
While the cause of action ex quasi delicto had already prescribed, petitioners can still
pursue the remaining avenue opened for them by their reservation. The surviving cause
of action ex delicto.
This is so because the prescription of the action ex quasi delicto does not operate as a
bar to an action to enforce the civil liability arising from crime especially as the latter
action had been expressly reserved.
We held that the dismissal of the action based on culpa aquiliana is not a bar to the
enforcement of the subsidiary liability of the employer.
Once there is a conviction for felony, final in character, the employer becomes
subsidiarily liable if the commission of the crime was in the discharge of the duties of
the employees.
Article 103 of the RPC is the controlling force to obviate the possibility of the
aggrieved party being deprived of indemnity even after the rendition of a final
judgment convicting the employee.
LG Foods Corp. v. Pagapong-Agraviador
Facts: On Feb. 26, 1996, Charles Vallejera, a 7-yr old son of the spouses Florentino
Vallejera and Theresa Vallejera, died as he was hit by a Ford Fiera van owned by the
petitioners and driven at the time by their employee, Vincent Norman Ferrer.
Eventually, an information for Reckless Imprudence Resulting to Homicide was filed
against the driver before the MTCC Bacolod City. However, as the accused driver
committed suicide, the case was dismissed. Claiming that the petitioners should be
held civilly liable as they failed to exercise the necessary diligence required of a good
father of a family in the selection and supervision of their employee, the spouses
Vallejera later on filed a complaint for damages against them. For their part, the
petitioners prayed, by way of an Answer w/ Compulsory Counterclaim, for the
dismissal of the complaint. They argued that they had exercised the required due
diligence and maintained that for their liability to attach their driver must first be
convicted. Thus, since the driver died during the pendency of the criminal action, the
sine qua non condition for their subsidiary liability was not fulfilled. Hence, they
argued that there is lack of cause of action on the part of the Spouses. They also argued
that since the Spouses Vallejera did not make a reservation to institute a separate action
for damages when the criminal case was filed, the damage suit in question is thereby
deemed instituted with the criminal action w/c was already dismissed. The RTC and
the CA both denied petitioner’s motion to dismiss. Hence, this petition for review on
certiorari.
Issue: Whether the spouses Vallejeras’ cause of action in the Civil Case for Damages
is founded on Art. 103 of the RPC, as maintained by the petitioners, or derived from
Art. 2180 of the Civil Code, as decided by the lower courts.
Decision: PETITION Denied.
From the allegations of their complaint, it is clear that quasi- delict was the spouses’
choice of remedy against the petitioners. An act or omission causing damage to another
may give rise to 2 separate civil liabilities on the part of the offender: 1) civil liability
ex delicto and 2) independent civil liabilities, such as those a) not arising from an act
or omission complained of as felony (culpa contractual or obligations arising from
law, intentional torts and culpa aquiliana) or b) where the injured party is granted a
right to file an action independent and distinct from the criminal action. Either of these
two possible liabilities may be enforced against the offender. The victims of
negligence or their heirs have a choice between an action to enforce the civil liability
arising from culpa criminal under Art. 100 of the RPC, and an action for quasi-delict
(culpa aquiliana) under Arts 2176- 2194 of the Civil Code. If, as in this case, the action
chosen is for quasi-delict, the plaintiff may hold the employer liable for the negligent
act of its employee, subject to the employer’s defense of exercise of the diligence of a
good father of the family. On the other hand, if the action chosen is for culpa criminal,
the plaintiff can hold the employer subsidiarily liable only upon proof of prior
conviction of its employee. According to Art. 2177, these are alternative remedies the
plaintiff may choose from in case the obligation has the possibility of arising indirectly
from the crime or directly from tort. The choice is with the plaintiff who makes known
his cause of action in his initiatory
pleading or complaint and not with the defendant who can not ask for the dismissal of
the plaintiff’s case of action or lack of it based on the defendant’s perception that the
plaintiff should have opted to file a claim under Art. 103, RPC. Under Art. 2180 of the
CC, the liability of the employer is direct/immediate. It is not considered upon prior
recourse against the negligent employee and a prior showing of insolvency of such
employee. Furthermore, the circumstance that no reservation to institute a separate
civil action for damages was made when the criminal case was filed is of no moment
for the simple reason that the criminal case was dismissed w/o any pronouncement
having been made therein. In reality, it is as if there was no criminal case to speak of
in the first place.
Consing, Jr. v. People
Doctrine: An independent civil action based on fraud initiated by the defrauded party
does not raise a prejudicial question to stop the proceedings in a pending criminal
prosecution of the defendant for estafa through falsification. This is because the result
of the independent civil action is irrelevant to the issue of guilt or innocence of the
accused.
Facts: Petitioner negotiated with and obtained for himself and his mother, Cecilia de
la Cruz (de la Cruz) various loans totaling P18,000,000.00 from Unicapital Inc.
(Unicapital). The loans were secured by a real estate mortgage constituted on a parcel
of land registered under the name of de la Cruz. In accordance with its option to
purchase the mortgaged property, Unicapital agreed to purchase one-half of the
property for a total consideration of P21,221,500.00. Payment was effected by off-
setting the amounts due to Unicapital under the promissory notes of de la Cruz and
Consing in the amount of P18,000,000.00 and paying an additional amount of
P3,145,946.50. The other half of the property was purchased by Plus Builders, Inc.
(Plus Builders), a joint venture partner of Unicapital. Before Unicapital and Plus
Builders could develop the property, they learned that the title to the property was
really TCT No. 114708 in the names of Po Willie Yu and Juanito Tan Teng, the parties
from whom the property had been allegedly acquired by de la Cruz. TCT No. 687599
held by De la Cruz appeared to be spurious. On its part, Unicapital demanded the
return of the total amount of P41,377,851.48 as of April 19, 1999 that had been paid
to and received by de la Cruz and Consing, but the latter ignored the demands.
Consing filed Civil Case No. 1759 in the Pasig City RTC for injunctive relief, thereby
seeking to enjoin Unicapital from proceeding against him for the collection of
theP41,377,851.48 on the ground that he had acted as a mere agent of his mother.
On the same date, Unicapital initiated a criminal complaint for estafa through
falsification of public document against Consing and de la Cruz in the Makati City
Prosecutor’s Office.
Unicapital sued Consing in the RTC in Makati City (Civil Case No. 99-1418) for the
recovery of a sum of money and damages, with an application for a writ of preliminary
attachment.
The Office of the City Prosecutor of Makati City filed against Consing and De la Cruz
an information for estafa through falsification of public document in the RTC in
Makati City.
Consing moved to defer his arraignment in the Makati criminal case on the ground of
existence of a prejudicial question due to the pendency of the Pasig and Makati civil
cases. On September 25, 2001, Consing reiterated his motion for deferment of his
arraignment, citing the additional ground of pendency of CA-G.R. SP No. 63712 in
the CA. On November 19, 2001, the Prosecution opposed the motion.
On November 26, 2001, the RTC issued an order suspending the proceedings in the
Makati criminal case on the ground of the existence of a prejudicial question, and on
March 18, 2001, the RTC denied the Prosecution’s motion for reconsideration.
The State thus assailed in the CA the last two orders of the RTC in the Makati criminal
case via petition for certiorari (C.A.-G.R. SP No. 71252).
On May 20, 2003, the CA promulgated its decision in C.A.-G.R. SP No. 71252,
dismissing the petition for certiorari and upholding the RTC’s questioned orders. On
August 18, 2003, the CA amended its decision, reversing itself.
Consing filed a motion for reconsideration, but the CA denied the motion through the
second assailed resolution of December 11, 2003. Hence, this appeal by petition for
review on certiorari.
Issue: Whether or not there is an existence of a prejudicial question that warranted the
suspension of the proceedings in the Makati criminal case
Held: NO
Ruling: Consing has hereby deliberately chosen to ignore the firm holding in the ruling
in G.R. No. 148193 to the effect that the proceedings in Criminal Case No. 00-120
could not be suspended because the Makati civil case was an independent civil action,
while the Pasig civil case raised no prejudicial question. That was wrong for him to do
considering that the ruling fully applied to him due to the similarity between his case
with Plus Builders and his case with Unicapital.
A perusal of Unicapital’s complaint in the Makati civil case reveals that the action was
predicated on fraud. This was apparent from the allegations of Unicapital in its
complaint to the effect that Consing and de la Cruz had acted in a "wanton, fraudulent,
oppressive, or malevolent manner in offering as security and later object of sale, a
property which they do not own, and foisting to the public a spurious title." As such,
the action was one that could proceed independently of Criminal Case No. 00-120
pursuant to Article 33 of the Civil Code.
It is well settled that a civil action based on defamation, fraud and physical injuries
may be independently instituted pursuant to Article 33 of the Civil Code, and does not
operate as a prejudicial question that will justify the suspension of a criminal case.
In the instant case, Civil Case No. 99-95381, for Damages and Attachment on account
of the alleged fraud committed by respondent and his mother in selling the disputed
lot to PBI is an independent civil action under Article 33 of the Civil Code. As such,
it will not operate as a prejudicial question that will justify the suspension of the
criminal case at bar.
Contrary to Consing’s stance, it was not improper for the CA to apply the ruling in
G.R. No. 148193 to his case with Unicapital, for, although the Manila and Makati civil
cases involved different complainants (i.e., Plus Builders and Unicapital), the civil
actions Plus Builders and Unicapital had separately instituted against him were
undeniably of similar mold, i.e., they were both based on fraud, and were thus covered
by Article 33 of the Civil Code. Clearly, the Makati criminal case could not be
suspended pending the resolution of the Makati civil case that Unicapital had filed.
As far as the Pasig civil case is concerned, the issue of Consing’s being a mere agent
of his mother who should not be criminally liable for having so acted due to the
property involved having belonged to his mother as principal has also been settled in
G.R. No. 148193, to wit:
In the case at bar, we find no prejudicial question that would justify the suspension of
the proceedings in the criminal case (the Cavite criminal case). The issue in Civil Case
No. SCA 1759 (the Pasig civil case) for Injunctive Relief is whether or not respondent
(Consing) merely acted as an agent of his mother, Cecilia de la Cruz; while in Civil
Case No. 99-95381 (the Manila civil case), for Damages and Attachment, the question
is whether respondent and his mother are liable to pay damages and to return the
amount paid by PBI for the purchase of the disputed lot. Even if respondent is declared
merely an agent of his mother in the transaction involving the sale of the questioned
lot, he cannot be adjudged free from criminal liability. An agent or any person may be
held liable for conspiring to falsify public documents. Hence, the determination of the
issue involved in Civil Case No. SCA 1759 for Injunctive Relief is irrelevant to the
guilt or innocence of the respondent in the criminal case for estafa through falsification
of public document.
WHEREFORE, the Court AFFIRMS the amended decision promulgated on August
18, 2003; and ORDERS petitioner to pay the costs of suit.
G. Principles
1. Abuse of Rights (Art. 19, NCC)
Article 19. Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good faith.
1.1 Elements
Sea Commercial Co. Inc, v. CA
Facts: SEACOM is a corporation engaged in the business of selling and distributing
agricultural machinery, products and equipment. SEACOM and JII entered into a
dealership agreement whereby SEACOM appointed JII as its exclusive dealer in the
City and Province of Iloilo. The agreement was subsequently amended to include
Capiz in the territorial coverage and to make the dealership agreement on a non-
exclusive basis.
JII allegedly incurred a balance of P18,843.85 for unpaid deliveries. SEACOM
brought action to recover the amount. JII filed an Answer denying the obligation and
interposed a counterclaim for damages representing unrealized profits. In the
counterclaim, JII alleged that as a dealer in Capiz, JII contracted to sell in 1977 twenty-
four (24) units of Mitsubishi power tillers to a group of farmers, which fact JII
allegedly made known to petitioner, but the latter taking advantage of said information
and in bad faith, went directly to FSDC and dealt with it and sold twenty one (21) units
of said tractors, thereby depriving JII of unrealized profits. SEACOM alleges that the
transaction with FSDC was the result of a public bidding. It alleges that it did not know
FSDC’s intent to buy machineries from JII. Moreover, the dealership agreement is a
non-exclusive, therefore, it can still compete in the market against JII.
The trial court rendered a decision ordering JII to pay SEACOM P18,843.85
representing its outstanding obligation. It also granted the JII’s counterclaim for
unrealized profits and for moral and exemplary damages. The Court of Appeals
affirmed the decision of the trial court stating that while there exists no agency
relationship
between SEACOM and JII, SEACOM is liable for damages and unrealized profits to
JII.
Issue: WON there was an abuse of right by SEACOM resulting to bad faith when it
competed with its own dealer, JII, as regards the sale of farm machineries to FSDC
Decision: Petition DENIED. Decision of Court of Appeals affirmed.
The principle of abuse of rights stated in the above article (Art. 19 of NCC), departs
from the classical theory that “he who uses a right injures no one.” The modern
tendency is to depart from the classical and traditional theory, and to grant indemnity
for damages in cases where there is an abuse of rights, even when the act is not illicit.
Article 19 was intended to expand the concept of torts by granting adequate legal
remedy for the untold number of moral wrongs which is impossible for human
foresight to provide specifically in statutory law.
If mere fault or negligence in one’s acts can make him liable for damages for injury
caused thereby, with more reason should abuse or bad faith make him liable. The
absence of good faith is essential to abuse of right. Good faith is an honest intention
to abstain from taking any unconscientious advantage of another, even through the
forms or technicalities of the law, together with an absence of all information or belief
of fact which would render the transaction unconscientious. In business relations, it
means good faith as understood by men of affairs.
While Article 19 may have been intended as a mere declaration of principle,8 the
“cardinal law on human conduct” expressed in said article has given rise to certain
rules, e.g. that where a person exercises his rights but does so arbitrarily or unjustly or
performs his duties in a manner that is not in keeping with honesty and good faith, he
opens himself to liability. The elements of an abuse of rights under Article 19 are: (1)
there is a legal right or duty; (2) which is exercised in bad
faith; (3) for the sole intent of prejudicing or injuring another.
Clearly, the bad faith of SEACOM was established. By appointing JII as a dealer of
its agricultural equipment, SEACOM recognized the role and undertaking of JII to
promote and sell said equipment. Under the dealership agreement, JII was to act as a
middleman to sell SEACOM’s products, in its area of operations, i.e. Iloilo and Capiz
provinces.
Even if the dealership agreement was amended to make it on a nonexclusive basis,19
SEACOM may not exercise its right unjustly or in a manner that is not in keeping with
honesty or good faith;
otherwise it opens itself to liability under the abuse of right rule embodied in Article
19 of the Civil Code above-quoted.
1.2 Test when principle may be invoked
Globe Mackay Cable Radio Corp. v. CA
Facts: Restituto Tobias was employed by Globe Mackay as purchasing agent and
administrative assistant to the engineering operations manager. In 1972, Globe
Mackay discovered fictitious purchases and other fraudulent transactions which
caused significant loss to the company. Tobias claimed that he was the one who
discovered the same which prompted him to report the incident to his immediate
superiors including the petitioner Herbert Hendry, the general manager of Globe
Mackay. Soon after making the report, Tobias was considered as the primary suspect
by Hendry and he was instructed to take a forced leave, leave his office drawers open
and leave his office keys. Upon his return, he was called a crook and a swindler by
Hendry.
Two separate investigations by the police were conducted which confirmed Tobias’
non-participation in the incident. Despite the said conclusions made by the police, the
petitioners filed six (6) complaints against Tobias for estafa which were subsequently
dismissed by the fiscal and affirmed by the Secretary of Justice. Tobias tried to protest
the said filing but Hendry ordered him to confess or else the company would file cases
against him until he landed in jail and that Filipinos are not trustworthy. During the
course of the filing of crimina l charges, Tobias’ employme nt was termina ted which
prompted him to file a case for illegal dismissal with the labor arbiter. The labor arbiter
upheld the validity of the dismissal but upon appeal to the NLRC, it was reversed. The
petitioners appealed to the Secretary of Labor which upheld the decision of the labor
arbiter. The respondent then raised the matter to the Office of the President but during
the pendency of the proceedings, the parties entered into a compromise agreement.
Tobias then applied for other employment but Hendry wrote a letter to the prospective
employer, without the latter’s request, that Tobias’ employment was terminated due
to dishonesty. As a result, Tobias was never hired by the said employer which caused
him to file an action for damages for malicious prosecution and abusive acts of the
petitioners. The trial court ruled in favor of Tobias which was affirmed by the CA.
Hence, the present appeal.
Issue: WON the petitioners are liable for damages
Decision: Denied. Decision of the CA affirmed.
One of the more notable innovations of the New Civil Code is the codification of
“some basic principles that are to be observed for the rightful relationship between
human beings and for the stability of the social order.” Foremost among these
principles is that pronounced in Article 19 which provides:
Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe
honesty and good faith.
This article, known to contain what is commonly referred to as the principle of abuse
of rights, sets certain standards which must be observed not only in the exercise of
one’s rights but also in the performance of one’s duties. The law, therefore, recognizes
a primordial limitation on all rights; that in their exercise, the norms of human conduct
set forth in Article 19 must be observed. A right, though by itself legal because
recognized or granted by law as such, may nevertheless become the source of some
illegality. When a right is exercised in a manner which does not conform with the
norms enshrined in Article 19 and results in damage to another, a legal wrong is
thereby committed for which the wrongdoer must be held responsible. But while
Article 19 lays down a rule of conduct for the government of human relations and for
the maintenance of social order, it does not provide a remedy for its violation.
Generally, an action for damages under either Article 20 or Article 21 would be proper.
Article 20, which pertains to damage arising from a violation of law, provides that:
Art. 20. Every person who contrary to law, wilfully or negligently causes
damage to another, shall indemnify the latter for the same.
However, in the case at bar, petitioners claim that they did not violate any provision
of law since they were merely exercising their legal right to dismiss private respondent.
This does not, however, leave private respondent with no relief because Article 21 of
the Civil Code provides that:
Art. 21. Any person who wilfully causes loss or injury to another in a manner
that is contrary to morals, good customs or public policy shall compensate
the latter for the damage.
In determining whether or not the principle of abuse of rights may be invoked, there
is NO RIGID TEST which can be applied. The question of whether or not the principle
of abuse of rights has been violated resulting in damages under Article 20 or Article
21 or other applicable provision of law, depends on the circumstances of each case.
And in the instant case, the Court, after examining the record and considering certain
significant circumstances, finds that petitioners have indeed abused the right that they
invoke, causing damage to private respondent and for which the latter must now be
indemnified.
An employer who harbors suspicions that an employee has committed dishonesty
might be justified in taking the appropriate action such as ordering an investigation
and directing the employee to go on a leave. Firmness and the resolve to uncover the
truth would also be expected from such employer. But the high -handed treatment
accorded Tobias by petitioners was certainly uncalled for. And this reprehensible
attitude of petitioners was to continue when private respondent returned to work. The
imputation of guilt without basis and the pattern of harassment during the
investigations of Tobias
transgress the standards of human conduct set forth in Article 19 of the Civil Code.
The Court has already ruled that the right of the employer to dismiss an employee
should not be confused with the manner in which the right is exercised and the effects
flowing therefrom. If the dismissal is done abusively, then the employer is liable for
damages to the employee. Under the circumstances of the instant case, the petitioners
clearly failed to exercise in a legitimate manner their right to dismiss Tobias, giving
the latter the right to recover damages under Article 19 in relation to Article 21 of the
Civil Code.
1.3 Requisites to be liable for Damagess under the Principle
Heirs of Purisima Nala v. Cabansag
FACTS: Artemio Cabansag filed Civil Case for damages in October 1991. According
to respondent, he bought a 50-square meter property from spouses Eugenio Gomez,
Jr. and Felisa Duyan Gomez on July 23, 1990. Said property is part of a 400-square
meter lot registered in the name of the Gomez spouses. In October 1991, he received
a demand letter from Atty. Alexander del Prado in behalf of Purisima Nala (Nala),
asking for the payment of rentals from 1987 to 1991 until he leaves the premises, as
said property is owned by Nala, failing which criminal and civil actions will be filed
against him. Another demand letter was sent on May 14, 1991. Because of such
demands, respondent suffered damages and was constrained to file the case against
Nala and Atty. Del Prado.
Atty. Del Prado claimed that he sent the demand letters in good faith and that he was
merely acting in behalf of his client, Nala. Nala alleged that said property is part of an
800-square meter property owned by her late husband, Eulogio Duyan, which was
subsequently divided into two parts. The 400-square meter property was conveyed to
spouses Gomez in a fictitious deed of sale, with the agreement that it will be merely
held by them in trust for the Duyan's children. Said property is covered by Transfer
Certificate of Title No. 281115 in the name of spouses Gomez. Nala also claimed that
respondent is only renting the property which he occupies.
RTC RULING: In favor of respondent. P150,000.00 by way of moral damages;
P30,000.00 by way of exemplary damages; P20,000.00 as and for reasonable
attorney's fees and other litigation expenses; and to pay the costs.
CA RULING: Decision dated December 19, 2002 affirmed the RTC Decision with
modification. P30,000.00 by way of moral damages; exemplary damages in the
amount of P10,000.00 and P10,000.00, attorney's fees.
Issue: WON respondent Cabansag is entitled to damages?
Decision: “Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe honesty
and good faith.” The foregoing provision sets the standards which may be observed
not only in the exercise of one’s rights but also in the performance of one’s duties.
When a right is exercised in a manner which does not conform with the norms
enshrined in Article 19 and results in damage to another, a legal wrong is thereby
committed for which the wrongdoer must be held responsible. But a right, though by
itself legal because recognized or granted by law as such, may nevertheless become
the source of some illegality. A person should be protected only when he acts in the
legitimate exercise of his right; that is, when he acts with prudence and in good faith,
but not when he acts with negligence or abuse. There is an abuse of right when it is
exercised only for the purpose of prejudicing or injuring another. The exercise of a
right must be in accordance with the purpose for which it was established, and must
not be excessive or unduly harsh; there must be no intention to injure another.
In order to be liable for damages under the abuse of rights principle, the following
requisites must concur:
(a) the existence of a legal right or duty;
(b) which is exercised in bad faith; and
(c) for the sole intent of prejudicing or injuring another.
It should be stressed that malice or bad faith is at the core of Article 19 of the Civil
Code. Good faith is presumed, and he who alleges bad faith has the duty to prove the
same. Bad faith, on the other hand, does not simply connote bad judgment to simple
negligence, dishonest purpose or some moral obloquy and conscious doing of a wrong,
or a breach of known duty due to some motives or interest or ill will that partakes of
the nature of fraud. Malice connotes ill will or spite and speaks not in response to duty.
It implies an intention to do ulterior and unjustifiable harm.
In the present case, there is nothing on record which will prove that Nala and her
counsel, Atty. Del Prado, acted in bad faith or malice in sending the demand letters to
respondent. In the first place, there was ground for Nala's actions since she believed
that the property was owned by her husband Eulogio Duyan and that respondent was
illegally occupying the same. She had no knowledge that spouses Gomez violated the
trust imposed on them by Eulogio and surreptitiously sold a portion of the property to
respondent. It was only after respondent filed the case for damages against Nala that
she learned of such sale. The bare fact that respondent claims ownership over the
property does not give rise to the conclusion that the sending of the demand letters by
Nala was done in bad
faith. Absent any evidence presented by respondent, bad faith or malice could not be
attributed to petitioner since Nala was only trying to protect their interests over the
property.
Moreover, respondent failed to show that Nala and Atty.
Del Prado's acts were done with the sole intention of prejudicing and injuring him. It
may be true that respondent suffered mental anguish, serious anxiety and sleepless
nights when he received the demand letters; however, there is a material distinction
between damages and injury. Injury is the legal invasion of a legal right while damage
is the hurt, loss or harm which results from the injury. Thus, there can
be damage without injury in those instances in which the loss or harm was not the
result of a violation of a legal duty. In such cases, the consequences must be borne by
the injured person alone; the law affords no remedy for damages resulting from an act
which does not amount to a legal injury or wrong. These situations are often
called damnum absque injuria.
Nikko Hotel Manila Gardens v. Reyes
FACTS: One evening in October 1994, an exclusive party was being held at the Nikko
Hotel Manila Garden. The party was being held for a prominent Japanese national.
The person in charge at the party was Ruby Lim who was also the executive secretary
of the hotel. Later during the party, she noticed Robert Reyes (popularly known as
Amay Bisaya). Reyes was not on the list of exclusive guests. Lim first tried to find out
who invited Reyes to the party. When she ascertained that the host celebrant did not
invite Reyes, Lim approached Reyes and told the latter, in a discreet voice, to finish
his food and leave the party. Reyes however made a scene and began shouting at Lim.
Later, a policeman was called to escort Reyes out of the party.
Reyes then sued Lim and Nikko Hotel Manila Garden for damages. In his version, he
said that he was invited by another party guest, Dr. Violeta Filart. He said that while
he was queuing to get his food, Lim approached him and ordered him in a loud voice
to leave the party immediately. He told Lim he was invited by Dr. Filart however when
he was calling for Dr. Filart the latter ignored him. Later, he was escorted out of the
party like a common criminal.
The trial court ruled in favor of Lim and Nikko Hotel. However, the Court of Appeals
ruled in favor of Reyes as it ruled that Lim abused her right and that Reyes deserved
to be treated humanely and fairly. It is true that Lim had the right to ask Reyes to leave
the party but she should have done it respectfully.
ISSUE: Whether or not Lim acted with abuse of rights.
HELD: No. The Supreme Court found the version of Lim more credible. She has been
employed by the hotel for more than 20 years at that time. Her job requires her to be
polite at all times. It is very unlikely for her to make a scene in the party she was
managing. That would only make her look bad.
Reyes based his complaint on Articles 19 and 21 of the Civil Code. Art. 19 which
provides:
Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good
faith.
was not violated by Lim as it appears that even Reyes testified in court that when Lim
told him to leave, Lim did so very close to him – so close that they could almost kiss.
This only proves that Lim intended that only Reyes shall hear whatever is it that she’s
going to tell Reyes and exclude other guests from hearing.
Article 21 on the other hand is commonly known as contra bonus mores:
Any person who willfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter
for the damage.
This article is likewise not violated. Lim, as proven by evidence on record, did not
demean Reyes. They do not know each other personally. She has no reason to treat
him wrongfully especially so that Reyes himself is a prominent person.
On the other hand, Reyes brought whatever damage he incurred upon himself. Under
the doctrine of volenti non fit injuria, by coming to the party uninvited, Reyes opens
himself to the risk of being turned away, and thus being embarrassed. The injury he
incurred is thus self-inflicted. Evidence even shows that Dr. Filart herself denied
inviting Reyes into the party and that Reyes simply gate-crashed. Reyes did not even
present any supporting evidence to support any of his claims. Since he brought injury
upon himself, neither Lim nor Nikko Hotel can be held liable for damages.
1.4 Factors to be considered whether a case is a Nuisance or Harassment
Suit
Ang v. Ang
FACTS:
• Spouses Alan & Em Ang (respondents) obtained a loan ($300k) from Theodore &
Nancy Ang (petitioners), also, a promissory note was executed in favor of the
petitioners wherein they promised to pay the latter the said amount, with interest at the
rate of 10% per year, upon demand.
• However, despite repeated demands, the respondents failed to pay the petitioners.
• Since the loan already amounted to almost $720k, inclusive of interest, petitioner,
who were then resident in LA, executed their SPA in favor of Atty. Aceron for the
purpose of filing an action in court against the respondents.
• A complaint for collection of sum of money was then filed with the RTC-QC.
• Respondent moved for the dismissal of the complaint in the grounds of improper
venue and prescription asserting that the complaint against them may only be filed in
the court of the place where either they or the petitioners reside. Respondent reside in
Bacolod while petitioner reside in LA.
RTC: denied respondent’s motion to dismiss. Since Atty. Aceron is the duly appointed
attorney-in-fact of petitioners, venue of the action may lie where re resides as provided
in Sec. 2, Rule 4, of the 1997 RoC.
• Respondents claim that Atty. Aceron, being merely a representative of the
petitioners, is not a real party in interest in the case; hence, his residence should not be
considered in determining the proper venue of the said complaint.
CA: Complaint should have been filed in Bacolod City.
ISSUE: WON the complaint must be dismissed on the ground that venue was not
proper.
HELD: Yes.
It is a legal truism that the rules on the venue of personal actions are fixed for the
convenience of the plaintiffs and their witnesses. Equally settled, however, is the
principle that choosing the venue of an action is not left to a plaintiff’s caprice; the
matter is regulated by the Rules of Court. The petitioners’ complaint for collection of
sum of money against the respondents is a personal action as it primarily seeks the
enforcement of a contract. The Rules give the plaintiff the option of choosing where
to file his complaint. He can file it in the place (1) where he himself or any of them
resides, or (2) where the defendant or any of the defendants resides or may be found.
The plaintiff or the defendant must be residents of the place where the action has been
instituted at the time the action is commenced.
If the plaintiff does not reside in the Philippines, the complaint in such case may only
be filed in the court of the place where the defendant resides. In Cohen and Cohen v.
Benguet Commercial Co., Ltd., 34 Phil. 526 (1916), this Court held that there can be
no election as to the venue of the filing of a complaint when the plaintiff has no
residence in the Philippines. In such case, the complaint may only be filed in the court
of the place where the defendant resides.
Interest within the meaning of the Rules of Court means material interest or an interest
in issue to be affected by the decree or judgment of the case, as distinguished from
mere curiosity about the question involved. A real party in interest is the party who,
by the substantive law, has the right sought to be enforced.
At this juncture, it bears stressing that the rules on venue, like the other procedural
rules, are designed to insure a just and orderly administration of justice or the impartial
and even-handed determination of every action and proceeding. Obviously, this
objective will not be attained if the plaintiff is given unrestricted freedom to choose
the court where he may file his complaint or petition. The choice of venue should not
be left to the plaintiff's whim or caprice. He may be impelled by some ulterior
motivation in choosing to file a case in a particular court even if not allowed by the
rules on venue.
1.5 Other illustrative cases
Roque, Jr. v. Torres
Facts: Jose Roque, Jr. (Roque) was the administrator of certain parcels of land in
Antipolo, Rizal, registered in the name of his son Rafael Roque. Sometime before the
incident, Jaime T. Torres (Torres), claiming to be the owner of said property, hired
security guards from Anchor Security and Detective Agency, who allegedly barred
Roque from entering the property and threatened him with physical harm should he
attempt to tend the said land. Roque, then, filed a case for grave threats against said
security guards before the Municipal Trial Court (MTC) ofRizal. Prior to the incident,
Torres instituted an Action for cancellation of Certificate of Titles in the name of
Roque’s son Rafael Roque before the RTC of Antipolo which was dismissed by the
trial court. According to the court a quo, Torres’ action was premature for failure to
exhaust administrative remedies in the Bureau of Lands. Respondent appealed the
dismissal before the Court of Appeals, which later affirmed the decision of the lower
court. Respondent’s appeal to this Court was also dismissed.
Roque visited the said property and was surprised to see seven security guards
guarding the property upon orders of respondent. Three security guards approached
Roque and exchange of words happened. When Roque refused to leave the premises,
Cabos, one of the guards threatened Roque that should he stay inside, Cabos would
shoot him, so Roque immediately left the place. However, Cabos still fired at him but
missed. Roque ran fast to his makeshift hut where Cabos followed him and shot again
hitting petitioner on the back. After a while, the other security guards, namely Sulla,
Betasulo, and Romy Mendoza, came, and together with Cabos mauled and kicked
petitioner all over his body until he lost consciousness. As a result of the incident,
petitioner was hospitalized and placed under continuous treatment and medication.
Due to the multiple gunshot wounds, hematoma, and contusions sustained by
petitioner, his left eye became 90 to 95% blind and his body was paralyzed from the
bustline down. Consequently, petitioner filed a criminal case for frustrated murder
before the RTC of Antipolo against the security guards. Eventually, after suffering for
more than nine years, petitioner died.
Torres admits the existence of the titles in the name of Rafael Roque but denies the
latter’s ownership over the property. He further admits the dismissal of his case for
cancellation of Roque’s titles based on a technical ground. Torres likewise admits to
the posting of the security guards on the property to guard the same from any intruder
but denies that they were his personal security guards, and moreover claimed that they
were security guards of the Antipolo Landowners and Farmers Association, Inc.
(ALFAI), of which he was president. Respondent further asserts that being the
President of ALFAI, his instruction to the security guards was to prevent squatters or
intruders from entering the property and to make use of reasonable force to repel
aggression in the event of any untoward incident.
After trial, the lower court rendered judgment in favor of Roque. On appeal, CA
reversed the RTC judgment and rendered a Decision, stating that Art. 2180 does not
apply as there is no question that the security guards involved in the shooting incident
were employed of Anchor Security Detective Agency and not by Torres.
Issue: WON Article 2180 in relation to Article 2176 of the Civil Code is applicable to
the case at bar
Decision: We agree with the Court of Appeals’ finding that respondent cannot be held
liable under Article 2180 of the Civil Code for the damages suffered by petitioner
because respondent is not the employer of the security guards who inflicted the injuries
upon the person of the petitioner. As reiterated in the recent case of Mercury Drug
Corporation v. Libunao:
In Soliman, Jr. v. Tuazon, we held that where the security agency recruits,
hires and assigns the works of its watchmen or security guards to a client, the
employer of such guards or watchmen is such agency, and not the client, since
the latter has no hand in selecting the security guards. Thus, the duty to
observe the diligence of a good father of a family cannot be demanded from
the said client:
x x x [I]t is settled in our jurisdiction that where the security agency, as here,
recruits, hires and assigns the work of its watchmen or security guards, the
agency is the employer of such guards or watchmen. Liability for illegal or
harmful acts committed by the security guards attaches to the employer
agency, and not to the clients or customers of such agency. As a general rule,
a client or customer of a security agency has no hand in selecting who among
the pool of security guards or watchmen employed by the agency shall be
assigned to it; the duty to observe the diligence of a good father of a family
in the selection of the guards cannot, in the ordinary course of events, be
demanded from the client whose premises or property are protected by the
security guards.
x x x [T]he fact that a client company may give instructions or directions to
the security guards assigned to it, does not, by itself, render the client
responsible as an employer of the security guards concerned and liable for
their wrongful acts or omissions.
This conclusion, however, does not necessarily preclude this Court from holding
respondent liable under the law for damages resulting from the injuries inflicted on
petitioner by the unlawful acts of the security guards.
Article 2176 of the Civil Code states that “whoever by act or omission causes damage
to another, there being fault or negligence, is obliged to pay for the damage done.” In
the case at bar, Torres cannot feign ignorance of the fact that at the time of the shooting
incident, the titles to the disputed property were already registered in the name of
Roque’s son, the cancellation for title case filed by Torres having been dismissed. In
fact, during trial, the offer for stipulation of Roque’s counsel that at the time of the
shooting incident, there is a valid and existing title in the name of Roque’s son which
was never cancelled by the court, was accepted by Torres. Therefore, by hiring the
security guards to prevent entry, possibly even by the registered owner, to the subject
property, titles to which he fully knew he did not possess, Torres blatantly acted in bad
faith. Torres’ unwarranted act of posting security guards within the property, which he
clearly knew is registered in the name of another, unduly placed petitioner at harm and
deprived him of his right to fully exercise his privileges and duties as administrator of
said property. Respondent, by his grossly faulty acts, paved the way to the infliction
of injuries by the security guards on petitioner.
Furthermore, respondent’s palpable display of bad faith in claiming a superior right to
the property over petitioner’s son entitles petitioner to damages resulting therefrom.
In order that a plaintiff may maintain an action for the injuries which he sustained, he
must establish that such injuries resulted from a breach of duty which the defendant
owed to the plaintiff – a concurrence of injury to the plaintiff and legal responsibility
by the person causing it. In other words, in order that the law will give redress for an
act causing damage, the act must be not only hurtful, but wrongful.
In the case at bar, it is clear that respondent violated the principle embodied in Article
19 of the Civil Code which mandates that “every person must, in the exercise of his
rights and in the performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.” When a right is exercised in a manner which discards
these norms resulting in damage to another, a legal wrong is committed for which the
actor can be held accountable. As we have stated in a previous case, if mere fault or
negligence in one’s acts can make him liable for damages for injury caused thereby,
with more reason should abuse or bad faith make him liable.
UE v. Jader
Facts: Romeo Jader was a law student enrolled at UE from 1984- 1988. During the
first semester as fourth year law student, he failed to take the regular final examination
in Practice Court I for which he was given an incomplete grade. As he enrolled for the
second semester he filed an application for the removal of the incomplete grade given
by Prof. Carlos Ortega which was approved by Dean Celedonio Tiongson after
payment of the required fee. He took the examination on March 8 and on March 30
Prof Ortega gave him grade of 5.
The Dean and Faculty Members met to deliberate on whom among the fourth year
students should be allowed to graduate and the plaintiff’s name appeared in the
Tentative List of Candidates for graduation. Likewise his name appeared in the
invitation for Investiture & Commencement Ceremonies. Having learned of the
deficiency he dropped his review class and was not able to take the bar examination.
Consequently, respondent sued petitioner for damages alleging that he suffered shock,
mental anguish, serious anxiety, besmirched reputation etc. arising from the latter’s
negligence. Petitioner denied liability arguing mainly that it never led respondent to
believe that he completed the requirements when his name was included in the
tentative list of graduating student. Furthermore, it argued that the proximate and
immediate cause of the alleged damages arose out of respondent’s own negligence in
not verifying from the professor concerned the result of his removal exam.
Lower Court ruled in favor of respondent. CA affirmed with modification. Hence, this
petition.
Issue: May an educational institution be held liable for damages for misleading a
student into believing that the latter had satisfied all the requirements for graduation
when such is not the case?
Decision: The petition lacks merit.
When a student is enrolled in any educational or learning institution, a contract of
education is entered into between said institution and the student. The professors,
teachers or instructors hired by the school are considered merely as agents and
administrators tasked to perform the school's commitment under the contract. Since
the contracting parties are the school and the student, the latter is not duty-bound to
deal with the former's agents, such as the professors with respect to the status or result
of his grades, although nothing prevents either professors or students from sharing
with each other such information. The Court takes judicial notice of the traditional
practice in educational institutions wherein the professor directly furnishes his/her
students their grades. It is the contractual obligation of the school to timely inform and
furnish sufficient notice and information to each and every student as to whether he or
she had already complied with all the requirements for the conferment of a degree or
whether they would be included among those who will graduate. Although
commencement exercises are but a formal ceremony, it nonetheless is not an ordinary
occasion, since such ceremony is the educational institution's way of announcing to
the whole world that the students included in the list of those who will be conferred a
degree during the baccalaureate ceremony have satisfied all the requirements for such
degree. Prior or subsequent to the ceremony, the school has the obligation to promptly
inform the student of any problem involving the latter's grades and performance and
also most importantly, of the procedures for remedying the same.
Petitioner, in belatedly informing respondent of the result of the removal examination,
particularly at a time when he had already commenced preparing for the bar exams,
cannot be said to have acted in good faith.
It is the school that has access to those information and it is only the school that can
compel its professors to act and comply with its rules, regulations and policies with
respect to the computation and the prompt submission of grades. Students do not
exercise control, much less influence, over the way an educational institution should
run its affairs, particularly in disciplining its professors and teachers and ensuring their
compliance with the school's rules and orders. The negligent act of a professor who
fails to observe the rules of the school, for instance by not promptly submitting a
student's grade, is not only imputable to the professor but is an act of the school, being
his employer.
However, while petitioner was guilty of negligence and thus liable to respondent for
the latter's actual damages, we hold that respondent should not have been awarded
moral damages. As a senior law student, respondent should have been responsible
enough to ensure that all his affairs, specifically those pertaining to his academic
achievement, are in order.
WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED with
MODIFICATION.
UST v. Sanchez
FACTS: Respondent Danes B. Sanchez filed a Complaint for Damages against the
University of Santo Tomas (UST) and its Board of Directors, the Dean and the
Assistant Dean of the UST College of Nursing, and the University Registrar for their
alleged unjustified refusal to release the respondent’s Transcript of Records (ToR)
Respondent alleged that he graduated from UST on April 2, 2002 with a Bachelor’s
Degree of Science in Nursing; that he was included in the list of candidates for
graduation and attended graduation ceremonies; that he sought to secure a copy of his
ToR with the UST Registrar’s Office, paid the required fees, but was only given a
Certificate of Graduation by the Registrar; that despite repeated attempts by the
respondent to secure a copy of his ToR, and submission of his class cards as proof of
his enrolment, UST refused to release his records, making it impossible for him to take
the nursing board examinations, and depriving him of the opportunity to make a living;
and that petitioners’ actions violated Arts. 19-21 of the Civil Code. The respondent
prayed that the RTC order UST to release his ToR and hold UST liable for actual,
moral, and exemplary damages, attorney’s fees, and the costs of suit.
Petitioners filed a Motion to Dismiss where they claimed that they refused to release
respondent’s ToR because he was not a registered student, since he had not been
enrolled in the university for the last three semesters prior to graduation. They also
sought the dismissal of the case on the ground that the complaint failed to state a cause
of action as respondent allegedly admitted in paragraph 10 of his complaint that he
was not enrolled in UST in the said semesters.
Petitioners then filed a Supplement to their Motion to Dismiss, alleging that
respondent sought administrative recourse before the Commission on Higher
Education (CHED). Thus, CHED had primary jurisdiction to resolve matters
pertaining to school controversies, and the filing of the instant case was premature.
The RTC denied the Motion to Dismiss on the ground that the issues involved required
an examination of the evidence, which should be threshed out during trial. Petitioners’
MR was also denied. The CA affirmed the denial.
ISSUES:
1) Respondent failed to exhaust administrative remedies as the CHED exercises
quasi-judicial power over controversies involving school matters and has primary
jurisdiction over respondent’s demand for the release of his ToR.
2) Respondent violated the rule against forum-shopping since respondent sought
recourse with both the CHED and the RTC; and
3) The Complaint failed to state a cause of action, since respondent admitted that he
was not enrolled in UST in the last three semesters prior to graduation.
HELD: The petition is denied for lack of merit.
1) The doctrine of exhaustion of administrative remedies does not apply in this case
because petitioners failed to demonstrate that recourse to the CHED is mandatory—or
even possible—in an action such as that brought by the respondent, which is
essentially one for mandamus and damages. The doctrine of exhaustion of
administrative remedies admits of numerous exceptions, one of which is where the
issues are purely legal and well within the jurisdiction of the trial court, as in the
present case. Petitioners’ liability—if any—for damages will have to be decided by
the courts, since any judgment inevitably calls for the application and the interpretation
of the Civil Code. As we held in Regino v. Pangasinan Colleges of Science and
Technology, “the CHED does not have the power to award damages.”
In addition, an essential requisite for this doctrine to apply is the actual existence of
quasi- judicial power. However, petitioners have not shown that the CHED possesses
any such power to “investigate facts or ascertain the existence of facts, hold hearings,
weigh evidence, and draw conclusions.”
2) Respondent is not guilty of forum shopping. Here, there can be no forum shopping
precisely because the CHED is without quasi- judicial power, and cannot make any
disposition of the case— whether favorable or otherwise.
3) The Complaint states a cause of action. A motion to dismiss may be made on the
ground that the pleading asserting the claim states no cause of action. A complaint is
said to assert a sufficient cause of action if, admitting what appears solely on its face
to be correct, the plaintiff would be entitled to the relief prayed for.
The Complaint makes the following essential allegations: that petitioners unjustifiably
refused to release respondent’s ToR despite his having obtained a degree from UST;
that petitioners’ claim that respondent was not officially enrolled is untrue; that as a
result of petitioners’ unlawful actions, respondent has not been able to take the nursing
board exams since 2002; that petitioners’ actions violated Articles 19­21 of the Civil
Code; and that petitioners should be ordered to release respondent’s ToR and held
liable for P400,000.00 as moral damages, P50,000.00 as exemplary damages,
P50,000.00 as attorney’s fees and costs of suit, and P15,000.00 as actual damages.
Clearly, assuming that the facts alleged in the Complaint are true, the RTC would be
able to render a valid judgment in accordance with the prayer in the Complaint.
Petitioners argue that paragraph 10 of the Complaint contains an admission that
respondent was not officially enrolled at UST. Said paragraph reads:
“10. On several occasions, [respondent] went to see the [petitioners] to get his ToR,
but all of these were futile for he was not even entertained at the Office of the Dean.
Worst, he was treated like a criminal forcing him to admit the fact that he did not enroll
for the last three (3) semesters of his schooling. [Petitioner] Dean tried to persuade the
[respondent] to give the original copies of the Class Cards which he has in his
possession. These are the only [bits of] evidence on hand to prove that he was in fact
officially enrolled. [Respondent] did not give the said class cards and instead gave
photo copies to the [Petitioner] Dean. The Office of the Dean of Nursing of [petitioner]
UST became very strict in receiving documents from the [respondent]. [They have] to
be scrutinized first before the same are received. Receiving, as [respondent] believes,
is merely a ministerial function [of] the [petitioners] and the documents presented for
receiving need not be scrutinized especially so when x x x they are not illegal. Copies
of the class cards are hereto attached as “F” hereof.”
This statement certainly does not support petitioners’ claim that respondent admitted
that he was not enrolled. On the contrary, any allegation concerning the use of force
or intimidation by petitioners, if substantiated, can only serve to strengthen
respondent’s complaint for damages.
The petition is DENIED. The Decision and the Resolution of the Court of are
AFFIRMED. The RTC is DIRECTED to continue the proceedings.
Villanueva v. Rosqueta
Facts: This case is about the right to recover damages for alleged abuse of right
committed by a superior public officer in preventing a subordinate from doing her
assigned task and being officially recognized for it.
Respondent Emma M. Rosqueta (Rosqueta), formerly Deputy Commissioner of the
Revenue Collection and Monitoring Group of the Bureau of Customs (the Bureau),
tendered her courtesy resignation but later on withdrew withdrew the same.
Meanwhile Gil Valera was appointed by President Arroyo. Rosqueta challenged the
same by filing a petition for prohibition, quo warranto and injunction against
Villanueva, then Commissioner of Customs, the Secretary of Finance and Valera with
the RTC of Manila. The RTC issued a temporary restraining order (TRO), enjoining
Villanueva and the Finance Secretary3 from implementing Valera’s appointment
which later on was superseded by a writ of preliminary injunction.
Petitioner Villanueva, Valera, and the Secretary of Finance challenged the injunction
order before the Court of Appeals (CA) in CA-G.R. SP 66070. On September 14, 2001
the CA issued its own TRO, enjoining the implementation of the RTC’s injunction
order. But the TRO lapsed after 60 days and the CA eventually dismissed the petition
before it.
During the Bureau’s celebration of its centennial anniversary its special Panorama
magazine edition featured all the customs deputy commissioners, except respondent
Rosqueta. The commemorative billboard also displayed at the Bureau’s main gate
included Valera’s picture but not Rosqueta’s. Rosqueta filed a complaint for damages
before the RTC of Quezon City against petitioner Villanueva alleging that the latter
maliciously excluded her from the centennial anniversary memorabilia. Further, she
claimed that he prevented her from performing her duties as Deputy Commissioner,
withheld her salaries, and refused to act on her leave applications. Thus, she asked the
RTC to award her P1,000,000.00 in moral damages, P500,000.00 in exemplary
damages, and P300,000.00 in attorney’s fees and costs of suit.
RTC- Dismissed6 respondent Rosqueta’s complaint, stating that petitioner Villanueva
committed no wrong and incurred no omission that entitled her to damages. The RTC
found that Villanueva had validly and legally replaced her as Deputy Commissioner
seven months before the Bureau’s centennial anniversary.
CA- Reversed the RTC’s decision, holding instead that petitioner Villanueva’s refusal
to comply with the preliminary injunction order issued in the quo warranto case earned
for Rosqueta the right to recover moral damages from him. Citing the abuse of right
principle, the RTC said that Villanueva acted maliciously when he prevented Rosqueta
from performing her duties, deprived her of salaries and leaves, and denied her official
recognition as Deputy Commissioner by excluding her from the centennial anniversary
memorabilia.
Issue: WON Villanueva is liable for damages to respondent Rosqueta for ignoring the
preliminary injunction order.
Decision: Under the abuse of right principle found in Article 19 of the Civil Code a
person must, in the exercise of his legal right or duty, act in good faith. He would be
liable if he instead acts in bad faith, with intent to prejudice another. Complementing
this principle are Articles 20 and 21 of the Civil Code which grant the latter indemnity
for the injury he suffers because of such abuse of right or duty.
Petitioner Villanueva claims that he merely acted on advice of the Office of the
Solicitor General (OSG) when he allowed Valera to assume the office as Deputy
Commissioner since respondent Rosqueta held the position merely in a temporary
capacity and since she lacked the Career Executive Service eligibility required for the
job.
But petitioner Villanueva cannot seek shelter in the alleged advice that the OSG gave
him. Surely, a government official of his rank must know that a preliminary injunction
order issued by a court of law had to be obeyed, especially since the question of
Valera’s right to replace respondent Rosqueta had not yet been properly resolved.
That petitioner Villanueva ignored the injunction shows bad faith and intent to spite
Rosqueta who remained in the eyes of the law the Deputy Commissioner. His
exclusion of her from the centennial anniversary memorabilia was not an honest
mistake by any reckoning. Indeed, he withheld her salary and prevented her from
assuming the duties of the position. As the Court said in Amonoy v. Spouses Gutierrez,
a party’s refusal to abide by a court order enjoining him from doing an act, otherwise
lawful, constitutes an abuse and an unlawful exercise of right.
That respondent Rosqueta was later appointed Deputy Commissioner for another
division of the Bureau is immaterial. While such appointment, when accepted,
rendered the quo warranto case moot and academic, it did not have the effect of wiping
out the injuries she suffered on account of petitioner Villanueva’s treatment of her.
The damage suit is an independent action.
The CA correctly awarded moral damages to respondent Rosqueta. Such damages may
be awarded when the defendant’s transgression is the immediate cause of the
plaintiff’s anguishin the cases specified in Article 2219 of the Civil Code.
Here, respondent Rosqueta’s colleagues and friends testified that she suffered severe
anxiety on account of the speculation over her employment status. She had to endure
being referred to as a "squatter" in her workplace. She had to face inquiries from family
and friends about her exclusion from the Bureau’s centennial anniversary
memorabilia. She did not have to endure all these affronts and the angst and depression
they produced had Villanueva abided in good faith by the court’s order in her favor.
Clearly, she is entitled to moral damages.
The Court, however, finds the award of P500,000.00 excessive. As it held in Philippine
Commercial International Bank v. Alejandro, moral damages are not a bonanza. They
are given to ease the defendant’s grief and suffering. Moral damages should
reasonably approximate the extent of hurt caused and the gravity of the wrong done.
Here, that would be P200,000.00.
The Court affirms the grant of exemplary damages by way of example or correction
for the public good but, in line with the same reasoning, reduces it to P50,000.00.
Finally, the Court affirms the award of attorney’s fees and litigation expenses but
reduces it to P50,000.00.
MWSS v. Act Theater
FACTS: The CA correctly awarded moral damages to respondent Rosqueta. Such
damages may be awarded when the defendant’s transgression is the immediate cause
of the plaintiff’s anguishin the cases specified in Article 2219 of the Civil Code.
Here, respondent Rosqueta’s colleagues and friends testified that she suffered severe
anxiety on account of the speculation over her employment status.17 She had to endure
being referred to as a "squatter" in her workplace. She had to face inquiries from family
and friends about her exclusion from the Bureau’s centennial anniversary
memorabilia. She did not have to endure all these affronts and the angst and depression
they produced had Villanueva abided in good faith by the court’s order in her favor.
Clearly, she is entitled to moral damages.
The Court, however, finds the award of P500,000.00 excessive. As it held in Philippine
Commercial International Bank v. Alejandro,18 moral damages are not a bonanza.
They are given to ease the defendant’s grief and suffering. Moral damages should
reasonably approximate the extent of hurt caused and the gravity of the wrong done.
Here, that would be P200,000.00.
The Court affirms the grant of exemplary damages by way of example or correction
for the public good but, in line with the same reasoning, reduces it to P50,000.00.
Finally, the Court affirms the award of attorney’s fees and litigation expenses but
reduces it to P50,000.00.
On September 22, 1988, four employees of the respondent Act Theater, Inc., namely,
Rodolfo Tabian, Armando Aguilar, Arnel Concha and Modesto Ruales, were
apprehended by members of the Quezon City police force for allegedly tampering a
water meter in violation of P .D. No. 401, as amended by B.P . Blg. 876. The
respondent’s employees were subsequently criminally charged. On account of the
incident, the respondent’s water service connection was cut off. Consequently, the
respondent filed a complaint for injunction with damages against the petitioner
MWSS.
In the civil case, the respondent alleged in that the petitioner acted arbitrarily,
whimsically and capriciously, in cutting off the respondent’s water service connection
without prior notice. Due to lack of water, the health and sanitation, not only of the
respondent’s patrons but in the surrounding premises as well, were adversely affected.
After due trial, the court acquitted the four employees of Act Theater, Inc. in the
criminal case. In the civil case, the court ordered MWSS to pay Act Theater, Inc. actual
damage in the amount of P25,000 and to return the sum of P200,000.00 deposited by
the plaintiff for the restoration of its water services after its disconnection on
September 23, 1988.
The petitioner appealed the civil aspect of the decision to the CA. The appellate court,
however, dismissed the appeal. According to the CA, the petitioner’s act of cutting off
the respondent’s water service connection without prior notice was arbitrary, injurious
and prejudicial to the latter justifying the award of damages under Article 19 of the
Civil Code.
Issue: WON THE HONORABLE COURT OF APPEAL[S] CORRECTLY APPLIED
THE PROVISION OF ARTICLE 19 OF THE NEW CIVIL CODE WITHOUT
CONSIDERING THE APPLICABLE PROVISION OF ARTICLE 429 OF THE
SAME CODE
Decision: The petition is devoid of merit. Article 429 of the Civil Code, relied upon
by the petitioner in justifying its act of disconnecting the water supply of the
respondent without prior notice, reads:
Art. 429. The owner or lawful possessor of a thing has the right to exclude
any person from the enjoyment and disposal thereof. For this purpose, he may
use such force as may be reasonable to repel or prevent an actual or threatened
unlawful physical invasion or usurpation of his property.
A right is a power, privilege, or immunity guaranteed under a constitution, statute or
decisional law, or recognized as a result of long usage, 6 constitutive of a legally
enforceable claim of one person against the other.
Concededly, the petitioner, as the owner of the utility providing water supply to certain
consumers including the respondent, had the right to exclude any person from the
enjoyment and disposal thereof. However, the exercise of rights is not without
limitations. Having the right should not be confused with the manner by which such
right is to be exercised. Article 19 of the Civil Code sets the norms for the exercise of
one’s rights:
Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe
honesty and good faith.
When a right is exercised in a manner which discards these norms resulting in damage
to another, a legal wrong is committed for which actor can be held accountable. In this
case, the petitioner failed to act with justice and give the respondent what is due to it
when the petitioner unceremoniously cut off the respondent’s water service
connection.
While it is true that MWSS had sent a notice of investigation to plaintiff-appellee prior
to the disconnection of the latter’s water services, this was done only a few hours
before the actual disconnection. Clearly, the plaintiff-appellee was denied due process
when it was deprived of the water services. As a consequence thereof, Act had to
contract another source to provide water for a number of days. Plaintiff-appellee was
also compelled to deposit with MWSS the sum of P200,000.00 for the restoration of
their water services.
Manaloto v. Veloso
FACTS: Petitioners filed an unlawful detainer case against respondent for failure to
pay rentals on the leased property owned by petitioners. MeTC decided in favor of the
petitioners. While the respondent’s appeal of the MeTC’s decision is pending before
the RTC, respondent filed a complaint for breach of contract and damages with the
RTC (another branch). On the complaint for damages, respondent alleged that he
supposedly suffered embarrassment and humiliation when petitioners distributed
copies of the above-mentioned MeTC decision in the unlawful detainer case to the
homeowners of Horseshoe Village while respondent’s appeal was still pending.
ISSUE: WON the respondent is entitled for an award of damages (moral & exemplary)
RULING: No.
Petitioners are obliged to respect respondent’s good name even though they are
opposing parties in the unlawful detainer case. As Article 19 of the Civil Code
requires, “[e]very person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good faith.”
A violation of such principle constitutes an abuse of rights, a tortuous conduct. We
expounded in Sea Commercial Company, Inc. v. Court of Appeals that:
The principle of abuse of rights stated in the above article, departs
from the classical theory that “he who uses a right injures no one.”
The modern tendency is to depart from the classical and traditional
theory, and to grant indemnity for damages in cases where there is
an abuse of rights, even when the act is not illicit.
Article 19 was intended to expand the concept of torts by granting
adequate legal remedy for the untold number of moral wrongs which
is impossible for human foresight to provide specifically in statutory
law. If mere fault or negligence in one’s acts can make him liable
for damages for injury caused thereby, with more reason should
abuse or bad faith make him liable. The absence of good faith is
essential to abuse of right. Good faith is an honest intention to
abstain from taking any unconscientious advantage of another, even
through the forms or technicalities of the law, together with an
absence of all information or belief of fact which would render the
transaction unconscientious. In business relations, it means good
faith as understood by men of affairs.
While Article 19 may have been intended as a mere declaration of
principle, the “cardinal law on human conduct” expressed in said
article has given rise to certain rules, e.g. that where a person
exercises his rights but does so arbitrarily or unjustly or performs
his duties in a manner that is not in keeping with honesty and good
faith, he opens himself to liability. The elements of an abuse of
rights under Article 19 are: (1) there is a legal right or duty; (2)
which is exercised in bad faith; (3) for the sole intent of prejudicing
or injuring another.
Petitioners are also expected to respect respondent’s “dignity, personality, privacy and
peace of mind” under Article 26 of the Civil Code, which provides:
ART. 26. Every person shall respect the dignity, personality,
privacy and peace of mind of his neighbors and other persons. The
following and similar acts, though they may not constitute a criminal
offense, shall produce a cause of action for damages, prevention and
other relief:
(1) Prying into the privacy of another’s residence;
(2) Meddling with or disturbing the private life or
family relations of another;
(3) Intriguing to cause another to be alienated from
his friends;
 (4) Vexing or humiliating another on account of his
religious beliefs, lowly station in life, place of birth, physical defect,
or other personal condition.
Thus, Article 2219(10) of the Civil Code allows the recovery of moral damages for
acts and actions referred to in Article 26, among other provisions, of the Civil Code.
In Concepcion v. Court of Appeals, we explained that:
The philosophy behind Art. 26 underscores the necessity for its
inclusion in our civil law. The Code Commission stressed in no
uncertain terms that the human personality must be exalted. The
sacredness of human personality is a concomitant consideration of
every plan for human amelioration. The touchstone of every system
of law, of the culture and civilization of every country, is how far it
dignifies man. If the statutes insufficiently protect a person from
being unjustly humiliated, in short, if human personality is not
exalted - then the laws are indeed defective. Thus, under this article,
the rights of persons are amply protected, and damages are provided
for violations of a person’s dignity, personality, privacy and peace
of mind.
It is petitioner’s position that the act imputed to him does not
constitute any of those enumerated in Arts. 26 and 2219. In this
respect, the law is clear. The violations mentioned in the codal
provisions are not exclusive but are merely examples and do not
preclude other similar or analogous acts. Damages therefore are
allowable for actions against a person’s dignity, such as profane,
insulting, humiliating, scandalous or abusive language. Under Art.
2217 of the Civil Code, moral damages which include physical
suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and
similar injury, although incapable of pecuniary computation, may
be recovered if they are the proximate result of the defendant’s
wrongful act or omission.
And third, respondent alleged that the distribution by petitioners to Horseshoe Village
homeowners of copies of the MeTC decision in the unlawful detainer case, which was
adverse to respondent and still on appeal before the RTC-Branch 88, had no apparent
lawful or just purpose except to humiliate respondent or assault his character. As a
result, respondent suffered damages – becoming the talk of the town and being
deprived of his political career.
Petitioners reason that respondent has no cause of action against them since the MeTC
decision in the unlawful detainer case was part of public records.
It is already settled that the public has a right to see and copy judicial records and
documents. However, this is not a case of the public seeking and being denied access
to judicial records and documents. The controversy is rooted in the dissemination by
petitioners of the MeTC judgment against respondent to Horseshoe Village
homeowners, who were not involved at all in the unlawful detainer case, thus,
purportedly affecting negatively respondent’s good name and reputation among said
homeowners. The unlawful detainer case was a private dispute between petitioners
and respondent, and the MeTC decision against respondent was then still pending
appeal before the RTC-Branch 88, rendering suspect petitioners’ intentions for
distributing copies of said MeTC decision to non-parties in the case. While petitioners
were free to copy and distribute such copies of the MeTC judgment to the public, the
question is whether they did so with the intent of humiliating respondent and
destroying the latter’s good name and reputation in the community.
Nevertheless, we further declare that the Court of Appeals erred in already awarding
moral and exemplary damages in respondent’s favor when the parties have not yet had
the chance to present any evidence before the RTC-Branch 227. In civil cases, he who
alleges a fact has the burden of proving it by a preponderance of evidence. It is
incumbent upon the party claiming affirmative relief from the court to convincingly
prove its claim. Bare allegations, unsubstantiated by evidence are not equivalent to
proof under our Rules. In short, mere allegations are not evidence.
At this point, the finding of the Court of Appeals of bad faith and malice on the part
of petitioners has no factual basis. Good faith is presumed and he who alleges bad
faith has the duty to prove the same. Good faith refers to the state of the mind which
is manifested by the acts of the individual concerned. It consists of the intention to
abstain from taking an unconscionable and unscrupulous advantage of another. Bad
faith, on the other hand, does not simply connote bad judgment to simple negligence.
It imports a dishonest purpose or some moral obliquity and conscious doing of a
wrong, a breach of known duty due to some motive or interest or ill will that partakes
of the nature of fraud. Malice connotes ill will or spite and speaks not in response to
duty. It implies an intention to do ulterior and unjustifiable harm.
We cannot subscribe to respondent’s argument that there is no more need for the
presentation of evidence by the parties since petitioners, in moving for the dismissal
of respondent’s complaint for damages, hypothetically admitted respondent’s
allegations. The hypothetical admission of respondent’s allegations in the complaint
only goes so far as determining whether said complaint should be dismissed on the
ground of failure to state a cause of action. A finding that the complaint sufficiently
states a cause of action does not necessarily mean that the complaint is meritorious; it
shall only result in the reinstatement of the complaint and the hearing of the case for
presentation of evidence by the parties.
2. Unjust Enrichment (Solutio Indebiti)
2.1 Requisites
HL Carlos Construction, Inc. v. Marina Properties, Corp.
Facts: Marina Properties Corporation (MPC) is engaged in the business of real estate
development.
It entered into a contract with H.L Carlos Construction, inc (HLC) to construct Phase
III of a condominium complex (Marina Bayhomes Condominium Project) consisting
of townhouses and villas for a total consideration of P38, 580, 609 within a period of
365days from receipt of " notice to proceed ".
The original completion date of the project was May 16, 1989, but it was extended to
October 31, 1989 with a grace period until November 30, 1989.
The contract was signed by Jovencio F. Cinco, president of MPC, and Honorio L.
Carlos, president of HLC.
" On December 15, 1989, HLC instituted this case for sum of money against not only
MPC but also against the latter's alleged president, (Respondent) Jesus K. Typoco, Sr.
(Typoco) and (Respondent) Tan Yu (Tan), seeking the payment of various sums with
an aggregate amount of P14 million pesos
RTC: Judgment in favor of (Petitioner) H.L Carlos Construction inc. and as against
Respondent Marina Properties Corporation, Tan Yu and Typoco
CA: Respondents were not liable for escalations in the cost of labor and construction
materials since petitioner failed to show any basis for the award sought. They were
also absolved from paying for change orders and extra work since there was no
supplemental agreement covering them as required in the main construction contract.
Issues:
1.) WON petitioner is entitled to price escalation for labor, cost of change order and
extra work
2.) Whether Typoco and Tan are solidarily liable with MPC
3.) WON H.L Construction is liable for actual and liquidated damages
Decision:
1.) MPC argues that to allow the claim for labor cost escalation would be to reward
petitioner for incurring delay, thereby breaching a contractual obligation. This
contention is untenable. To allow MPC to acquire the partially accomplished project
without paying for labor cost escalation validly incurred would constitute UNJUST
ENRICHMENT at the expense of the petitioner.
There is unjust enrichment under Art. 22 of the Civil Code when (1) a person is
unjustly benefited, and (2) such benefit is derived at the expense of or with damages
to another.
Since petitioner had rendered services that were accepted by MPC, then the former
should be compensated for them. Labor cost escalation, has already been earned by
petitioner.
Evidence on record reveals that MPC approved some change order jobs despite the
absence of any supplementary agreement.
Under the principle of quantum meruit, a contractor is allowed to recover the
reasonable value of the thing or services rendered despite the lack of written contract,
in order to avoid unjust enrichment.
2.) Typoco and Tan are not liable. The records are bereft of any evidence that they
acted in bad faith with gross or inexcusable negligence, or that they acted outside the
scope of his authority.
3.) Yes, petitioner did not fulfill its contractual obligations. It could not totally pass
the blame to MPC for hiring a second contractor, because the latter was allowed to
terminate the services of the contractor.
Either party shall have the right to terminate this contract for reason of violation or
non-compliance by the other party of the terms and condition herein agreed upon.
As of November 1989, petitioner accomplished only approximately 80 percent of the
project. In other words, it was already in delay at the time.
Engr. Miranda testified that it would lose money even if it finished the project;
respondents already suspected that it had no intention of finishing the project at all.
Petitioner was in delay and in breach of contract. Clearly, the obligor is liable for
damages that are the natural and probable consequences of its breach of obligation.
In order to finish the project, the latter had to contract the services of a second
construction firm for P11, 750,000. Hence, MPC suffered actual damages in the
amount of P4,604,579 for the complaint of the project.
Petitioner is also liable for liquidated damages as provided in the Contract.
Liquidated damages are those that the parties agree to be paid in case of a breach. As
worded, the amount agreed upon answers for damages suffered by the owner due to
delays in the completion of the project. Under Philippine laws, these damages take the
nature of penalties.
A penal clause is an accessory undertaking to assume greater liability in case of breach.
It is attached to an obligation in order to ensure performance.
2.2 Manifestations of Unjust Enrichment
Almario v. PAL
Facts: Almario, then about 39 years of age and a Boeing 737 (B-737) First Officer at
PAL, successfully bid for the higher position of Airbus 300 (A-300) First Officer.
Since said higher position required additional training, he underwent, at PAL’s
expense, more than five months of training consisting of ground schooling in Manila
and flight simulation in Melbourne, Australia. After completing the training course,
Almario served as A300 First Officer of PAL, but after eight months of service as
such, he tendered his resignation, for “personal reasons”. Almario pushed through with
his resignation.
PAL filed a Complaint against Almario for reimbursement of training costs. PAL
invoked the existence of an innominate contract of do ut facias (I give that you may
do) with Almario in that by spending for his training, he would render service to it
until the costs of training were recovered in at least three (3) years.
Almario denied the existence of any agreement with PAL that he would have to render
service to it for three years after his training failing which he would reimburse the
training costs.
Issue: WON Article 22 of the Civil Code can be applied to recover training costs.
Decision: Article 22 of the Civil Code applies. This provision on unjust enrichment
recognizes the principle that one may not enrich himself at the expense of another. The
enrichment of the defendant must have a correlative prejudice, disadvantage, or injury
to the plaintiff. This prejudice may consist, not only of the loss of property or the
deprivation of its enjoyment, but also of non-payment of compensation for a prestation
or rendered to the defendant without intent to donate on the part of the plaintiff, or the
failure to acquire something which the latter would have obtained.
It bears noting that when Almario took the training course, he was about 39 years old,
21 years away from the retirement age of 60. Hence, with the maturity, expertise, and
experience he gained from the training course, he was expected to serve PAL for at
least three years to offset “the prohibitive costs” thereof.
PAL invested for the training of Almario to enable him to acquire a higher level of
skill, proficiency, or technical competence so that he could efficiently discharge the
position of A-300 First Officer. Given that, PAL expected to recover the training costs
by availing of Almario’s services for at least three years. The expectation of PAL was
not fully realized, however, due to Almario’s resignation after only eight months of
service following the completion of his training course. He cannot, therefore, refuse
to reimburse the costs of training without violating the principle of unjust enrichment.
2.3 Where there is no unjust enrichment
Benguet Corp. v. DENR Mines Adjudication Board
FACTS: On June 1, 1987, Benguet and J.G. Realty entered into a RAWOP, wherein
J.G. Realty was acknowledged as the owner of four mining claims respectively named
as Bonito-I, Bonito-II, Bonito-III, and Bonito-IV, with a total area of 288.8656
hectares, situated in Barangay Luklukam, Sitio Bagong Bayan, Municipality of Jose
Panganiban, Camarines Norte.
Thus, on August 9, 1989, the Executive Vice-President of Benguet, Antonio N.
Tachuling, issued a letter informing J.G. Realty of its intention to develop the mining
claims. However, on February 9, 1999, J.G. Realty, through its President, Johnny L.
Tan, then sent a letter to the President of Benguet informing the latter that it was
terminating the RAWOP on the following grounds:
a. The fact that your company has failed to perform the obligations set forth in the
RAWOP, i.e., to undertake development works within 2 years from the execution of
the Agreement; b. Violation of the Contract by allowing high graders to operate on our
claim. c. No stipulation was provided with respect to the term limit of the RAWOP.
d. Non-payment of the royalties thereon as provided in the RAWOP.
On June 7, 2000, J.G. Realty filed a Petition for Declaration of Nullity/Cancellation of
the RAWOP with the Legaspi City POA, Region V, docketed as DENR Case No.
2000-01 and entitled J.G. Realty v. Benguet.
DECISION OF LOWER COURTS: *POA: declared the RAWOP cancelled. *MAB:
affirmed POA.
ISSUES: (1) Should the controversy have first been submitted to arbitration before the
POA took cognizance of the case?; (2) Was the cancellation of the RAWOP supported
by evidence?; and (3) Did the cancellation of the RAWOP amount to unjust
enrichment of J.G. Realty at the expense of Benguet?
HELD: On correctness of appeal: Petitioner having failed to properly appeal to the
CA under Rule 43, the decision of the MAB has become final and executory. On this
ground alone, the instant petition must be denied.
(1) YES, the case should have first been brought to voluntary arbitration before the
POA.
Secs. 11.01 and 11.02 of the RAWOP pertinently provide:
11.01 Arbitration
Any disputes, differences or disagreements between BENGUET and the OWNER
with reference to anything whatsoever pertaining to this Agreement that cannot be
amicably settled by them shall not be cause of any action of any kind whatsoever in
any court or administrative agency but shall, upon notice of one party to the other, be
referred to a Board of Arbitrators consisting of three (3) members, one to be selected
by BENGUET, another to be selected by the OWNER and the third to be selected by
the aforementioned two arbitrators so appointed.
xxxx
11.02 Court Action
No action shall be instituted in court as to any matter in dispute as hereinabove stated,
except to enforce the decision of the majority of the Arbitrators
A contractual stipulation that requires prior resort to voluntary arbitration before the
parties can go directly to court is not illegal and is in fact promoted by the State.
To reiterate, availment of voluntary arbitration before resort is made to the courts or
quasi-judicial agencies of the government is a valid contractual stipulation that must
be adhered to by the parties.
In other words, in the event a case that should properly be the subject of voluntary
arbitration is erroneously filed with the courts or quasi-judicial agencies, on motion of
the defendant, the court or quasi-judicial agency shall determine whether such
contractual provision for arbitration is sufficient and effective. If in affirmative, the
court or quasi-judicial agency shall then order the enforcement of said provision.
In sum, on the issue of whether POA should have referred the case to voluntary
arbitration, we find that, indeed, POA has no jurisdiction over the dispute which is
governed by RA 876, the arbitration law.
HOWEVER, ESTOPPEL APPLIES. the Court rules that the jurisdiction of POA and
that of MAB can no longer be questioned by Benguet at this late hour. What Benguet
should have done was to immediately challenge the POA's jurisdiction by a special
civil action for certiorari when POA ruled that it has jurisdiction over the dispute. To
redo the proceedings fully participated in by the parties after the lapse of seven years
from date of institution of the original action with the POA would be anathema to the
speedy and efficient administration of justice.
(2) The cancellation of the RAWOP was supported by evidence.
(3) There is no unjust enrichment in the instant case. There is no unjust enrichment
when the person who will benefit has a valid claim to such benefit.
The principle of unjust enrichment under Article 22 requires two conditions: (1) that
a person is benefited without a valid basis or justification, and (2) that such benefit is
derived at another's expense or damage.
Clearly, there is no unjust enrichment in the instant case as the cancellation of the
RAWOP, which left Benguet without any legal right to participate in further
developing the mining claims, was brought about by its violation of the RAWOP.
Hence, Benguet has no one to blame but itself for its predicament.
OBITER DICTA:
(1) Difference between compulsory & voluntary arbitration --
In Reformist Union of R.B. Liner, Inc. vs. NLRC, compulsory arbitration has been
defined both as “the process of settlement of labor disputes by a government agency
which has the authority to investigate and to make an award which is binding on all
the parties, and as a mode of arbitration where the parties are compelled to accept the
resolution of their dispute through arbitration by a third party.” While a voluntary
arbitrator is not part of the governmental unit or labor department's personnel, said
arbitrator renders arbitration services provided for under labor laws.
There is a clear distinction between compulsory and voluntary arbitration. The
arbitration provided by the POA is compulsory, while the nature of the arbitration
provision in the RAWOP is voluntary, not involving any government agency.
2.4 Laws and Cases
Art. 22, NCC
Article 22. Every person who through an act of performance by another, or any other
means, acquires or comes into possession of something at the expense of the latter
without just or legal ground, shall return the same to him.
Chapter 1 (Quasi-Contract), Title XVII, Book IV, NCC
CHAPTER 1 – Quasi-contracts
Article 2142. Certain lawful, voluntary and unilateral acts give rise to the juridical
relation of quasi-contract to the end that no one shall be unjustly enriched or benefited
at the expense of another. (n)
Article 2143. The provisions for quasi-contracts in this Chapter do not exclude other
quasi-contracts which may come within the purview of the preceding article. (n)
SECTION 1 – Negotiorum Gestio
Article 2144. Whoever voluntarily takes charge of the agency or management of the
business or property of another, without any power from the latter, is obliged to
continue the same until the termination of the affair and its incidents, or to require the
person concerned to substitute him, if the owner is in a position to do so. This juridical
relation does not arise in either of these instances:
(1) When the property or business is not neglected or abandoned;
(2) If in fact the manager has been tacitly authorized by the owner.
In the first case, the provisions of articles 1317, 1403, No. 1, and 1404 regarding
unauthorized contracts shall govern.
In the second case, the rules on agency in Title X of this Book shall be applicable.
(1888a)
Article 2145. The officious manager shall perform his duties with all the diligence of
a good father of a family, and pay the damages which through his fault or negligence
may be suffered by the owner of the property or business under management.
The courts may, however, increase or moderate the indemnity according to the
circumstances of each case. (1889a)
Article 2146. If the officious manager delegates to another person all or some of his
duties, he shall be liable for the acts of the delegate, without prejudice to the direct
obligation of the latter toward the owner of the business.
The responsibility of two or more officious managers shall be solidary, unless the
management was assumed to save the thing or business from imminent danger.
(1890a)
Article 2147. The officious manager shall be liable for any fortuitous event:
(1) If he undertakes risky operations which the owner was not accustomed to embark
upon;
(2) If he has preferred his own interest to that of the owner;
(3) If he fails to return the property or business after demand by the owner;
(4) If he assumed the management in bad faith. (1891a)
Article 2148. Except when the management was assumed to save property or business
from imminent danger, the officious manager shall be liable for fortuitous events:
(1) If he is manifestly unfit to carry on the management;
(2) If by his intervention he prevented a more competent person from taking up the
management. (n)
Article 2149. The ratification of the management by the owner of the business
produces the effects of an express agency, even if the business may not have been
successful. (1892a)
Article 2150. Although the officious management may not have been expressly
ratified, the owner of the property or business who enjoys the advantages of the same
shall be liable for obligations incurred in his interest, and shall reimburse the officious
manager for the necessary and useful expenses and for the damages which the latter
may have suffered in the performance of his duties.
The same obligation shall be incumbent upon him when the management had for its
purpose the prevention of an imminent and manifest loss, although no benefit may
have been derived. (1893)
Article 2151. Even though the owner did not derive any benefit and there has been no
imminent and manifest danger to the property or business, the owner is liable as under
the first paragraph of the preceding article, provided:
(1) The officious manager has acted in good faith, and
(2) The property or business is intact, ready to be returned to the owner. (n)
Article 2152. The officious manager is personally liable for contracts which he has
entered into with third persons, even though he acted in the name of the owner, and
there shall be no right of action between the owner and third persons. These provisions
shall not apply:
(1) If the owner has expressly or tacitly ratified the management, or
(2) When the contract refers to things pertaining to the owner of the business. (n)
Article 2153. The management is extinguished:
(1) When the owner repudiates it or puts an end thereto;
(2) When the officious manager withdraws from the management, subject to the
provisions of article 2144;
(3) By the death, civil interdiction, insanity or insolvency of the owner or the officious
manager. (n)
 SECTION 2 – Solutio Indebiti
Article 2154. If something is received when there is no right to demand it, and it was
unduly delivered through mistake, the obligation to return it arises. (1895)
Article 2155. Payment by reason of a mistake in the construction or application of a
doubtful or difficult question of law may come within the scope of the preceding
article. (n)
Article 2156. If the payer was in doubt whether the debt was due, he may recover if
he proves that it was not due. (n)
Article 2157. The responsibility of two or more payees, when there has been payment
of what is not due, is solidary. (n)
Article 2158. When the property delivered or money paid belongs to a third person,
the payee shall comply with the provisions of article 1984. (n)
Article 2159. Whoever in bad faith accepts an undue payment, shall pay legal interest
if a sum of money is involved, or shall be liable for fruits received or which should
have been received if the thing produces fruits.
He shall furthermore be answerable for any loss or impairment of the thing from any
cause, and for damages to the person who delivered the thing, until it is recovered.
(1896a)
Article 2160. He who in good faith accepts an undue payment of a thing certain and
determinate shall only be responsible for the impairment or loss of the same or its
accessories and accessions insofar as he has thereby been benefited. If he has alienated
it, he shall return the price or assign the action to collect the sum. (1897)
Article 2161. As regards the reimbursement for improvements and expenses incurred
by him who unduly received the thing, the provisions of Title V of Book II shall
govern. (1898)
Article 2162. He shall be exempt from the obligation to restore who, believing in good
faith that the payment was being made of a legitimate and subsisting claim, destroyed
the document, or allowed the action to prescribe, or gave up the pledges, or cancelled
the guaranties for his right. He who paid unduly may proceed only against the true
debtor or the guarantors with regard to whom the action is still effective. (1899)
Article 2163. It is presumed that there was a mistake in the payment if something
which had never been due or had already been paid was delivered; but he from whom
the return is claimed may prove that the delivery was made out of liberality or for any
other just cause. (1901)
SECTION 3 – Other Quasi-Contracts *
Article 2164. When, without the knowledge of the person obliged to give support, it
is given by a stranger, the latter shall have a right to claim the same from the former,
unless it appears that he gave it out of piety and without intention of being repaid.
(1894a)
Article 2165. When funeral expenses are borne by a third person, without the
knowledge of those relatives who were obliged to give support to the deceased, said
relatives shall reimburse the third person, should the latter claim reimbursement.
(1894a)
Article 2166. When the person obliged to support an orphan, or an insane or other
indigent person unjustly refuses to give support to the latter, any third person may
furnish support to the needy individual, with right of reimbursement from the person
obliged to give support. The provisions of this article apply when the father or mother
of a child under eighteen years of age unjustly refuses to support him.
Article 2167. When through an accident or other cause a person is injured or becomes
seriously ill, and he is treated or helped while he is not in a condition to give consent
to a contract, he shall be liable to pay for the services of the physician or other person
aiding him, unless the service has been rendered out of pure generosity.
Article 2168. When during a fire, flood, storm, or other calamity, property is saved
from destruction by another person without the knowledge of the owner, the latter is
bound to pay the former just compensation.
Article 2169. When the government, upon the failure of any person to comply with
health or safety regulations concerning property, undertakes to do the necessary work,
even over his objection, he shall be liable to pay the expenses.
Article 2170. When by accident or other fortuitous event, movables separately
pertaining to two or more persons are commingled or confused, the rules on co-
ownership shall be applicable.
Article 2171. The rights and obligations of the finder of lost personal property shall
be governed by articles 719 and 720.
Article 2172. The right of every possessor in good faith to reimbursement for
necessary and useful expenses is governed by article 546.
Article 2173. When a third person, without the knowledge of the debtor, pays the debt,
the rights of the former are governed by articles 1236 and 1237.
Article 2174. When in a small community a majority of the inhabitants of age decide
upon a measure for protection against lawlessness, fire, flood, storm or other calamity,
any one who objects to the plan and refuses to contribute to the expenses but is
benefited by the project as executed shall be liable to pay his share of said expenses.
 [that] should run as golden threads through society to the end that law may approach
Article 2175. Any person who is constrained to pay the taxes of another shall be its supreme ideal which is the sway and dominance of justice.
entitled to reimbursement from the latter. Hence, to allow New World to acquire the finished project at a price far below its
actual construction cost would undoubtedly constitute unjust enrichment for the bank
Advanced Foundation Systems Corp. v. New World Properties & to the prejudice of AFCSC. Such unjust enrichment, as previously discussed, is not
Ventures, Inc. allowed by law.
Facts: New World conducted a bidding for the construction of 69 bored piles which
would form the foundation of the 36-storey World Trade Exchange Building it planned
to erect. New World notified AFCSC of the acceptance of its bid to construct the 69
bored piles.
After the issuance of the Notice to Proceed, but before the signing of the contract,
AFCSC, proposed an amendment to the contract conditions, to wit:
1.6 Excluded in the contractor scope of work shall be as follows:
1.6.2. Removal of Underground Obstruction
xxx
New World did not respond to said proposal but instead directed AFCSC to proceed
with the construction. Both parties signed the contract for the construction of the 69
bored piles. AFCSC’s proposal, however, was not incorporated in said contract.
Included in the billing is the cost of the removal of underground obstructions in the
project site as well as the installation of sonic pipes to be used to conduct load tests on
the bored piling works. AFCSC claimed that these works were not part of the original
contract and should be treated as extra work. New World refused to pay its outstanding
obligations to AFCSC.

Issue: WON the removal of underground obstructions, installation of sonic pipes, build
up of pile test cap, soil investigation, and crane rental constitute additional works
which will entitle AFCSC to its claim of additional pay.

Decision: The removal of the underground obstructions was not covered by the scope
of work in the contract. It is not disputed though that the same was a major work
entailing additional expenses and extra working time. Neither was it denied that such
major work was indeed necessary for the successful completion of the project. Indeed,
to deny AFCSC relief for the expenses it incurred in removing said obstructions would
result in allowing New World to unjustly enrich itself at the expense of AFCSC. Equity
necessarily dictates that New World be held liable for the expenses incurred for the
extra work conducted for its sole benefit.
Article 22 of the Civil Code which embodies the maxim, Nemo ex alterius incommode
debet lecupletari (no man ought to be made rich out of another’s injury) states: Art.
22. Every person who through an act of performance by another, or any other means,
acquires or comes into possession of something at the expense of the latter without
just or legal ground, shall return the same to him. The above-quoted article is part of
the chapter of the Civil Code on Human Relations, the provisions of which were
formulated as “basic principles to be observed for the rightful relationship between
human beings and for the stability of the social order, x x x designed to indicate certain
norms that spring from the fountain of good conscience, x x x guides human conduct