Oblicon Cases

CANGCO vs MANILA RAILROAD CO (GR 12191, 14 October 1918) Facts: Petitioner Cangco is employed by defendant Manila Railroad Co. in Manila, and by virtue of his employment, he is entitled free ride from his house in San Mateo to Manila and vice-versa. On a fateful night around 8:00 PM at the station of San Mateo where it was dimly lighted , petitioner while alighting the train (though it was still moving very slowly to the point of stop), not knowing that there are sacks of melon piled at the edge of the platform stepped on the objects, causing him to slip off balance. Plaintiff was drawn under the car in an unconscious condition and as a result seriously injured him. His arm was amputated and he was prevented from working. He spent approx P800 pesos for his medical expenses. Thereupon, he sued Manila Railroad to recover damages on the ground of negligence of the servants and employees of the defendant. The CFI ruled that although there is an apparent negligence on the part of the defendant through its employees but nevertheless, the plaintiff cannot recover because he had failed to use due caution in alighting from the coach. Hence this appeal. Issue: Whether or not Manila Railroad Company is liable to the plaintiff for the negligent acts of its employees, notwithstanding that plaintiff was also negligent? Held: Yes. While the plaintiff may have been negligent, the defendant is also negligent. The case falls under the category that of (1) culpa contractual, that is, contract of carriage by providing the passengers safe travel beginning from the time heIt is important to note that the foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. That is to say, its liability is direct and immediate, differing essentially, in legal viewpoint from that presumptive responsibility for the negligence of its servants, imposed by article 1903 of the Civil Code, which can be rebutted by proof of the exercise of due care in their selection and supervision. Article 1903 of the Civil Code is not applicable to obligations arising ex contractu, but only to extra-contractual obligations — or to use the technical form of expression, that article relates only to culpa aquiliana and not to culpa contractual. Responde at superior - One who places a powerful automobile in the hands of a servant whom he knows to be ignorant of the method of managing such a vehicle, is himself guilty of an act of negligence which makes him liable for all the consequences of his imprudence. Culpa Aquiliana or extra-contractual culpa The liability arising from extra-contractual culpa is always based upon a voluntary act or omission which, without willful intent, but by mere negligence or inattention, has caused damage to another. From this article two things are apparent: (1) That when an injury is caused by the negligence of a servant or employee there instantly arises a presumption of law that there was negligence on the part of the master or employer either in selection of the servant or employee, or in supervision over him after the selection, or both; and (2) that that presumption is juris tantum and not juris et de jure, and consequently, may be rebutted. It follows necessarily that if the employer shows to the satisfaction of the court that in selection and supervision he has exercised the care and diligence of a good father of a family, the presumption is overcome and he is relieved from liability. Distinction between non-contractual and contractual Obligation The fundamental distinction between obligations of this character and those which arise from contract, 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 juris exists independently of the breach of the voluntary duty assumed by the parties when entering into the contractual relation. The mere fact that a person is bound to another by contract does not relieve him from extra-contractual liability to such person. Comparative negligence - if the accident was caused by plaintiff’s own negligence, no liability is imposed upon defendant’s negligence and plaintiff’s negligence merely contributed to his injury, the damages should be apportioned. It is, therefore, important to ascertain if defendant was in fact guilty of negligence. Test on Contributory negligence: Was there anything in the circumstances surrounding the plaintiff at the time he alighted from the train which would have

admonished a person of average prudence that to get off the train under the conditions then existing was dangerous? FULL CASE JOSE CANGCO, plaintiff-appellant, vs. MANILA RAILROAD CO., defendant-appellee. At the time of the occurrence which gave rise to this litigation the plaintiff, Jose Cangco, was in the employment of Manila Railroad Company in the capacity of clerk, with a monthly wage of P25. He lived in the pueblo of San Mateo, in the province of Rizal, which is located upon the line of the defendant railroad company; and in coming daily by train to the company's office in the city of Manila where he worked, he used a pass, supplied by the company, which entitled him to ride upon the company's trains free of charge. Upon the occasion in question, January 20, 1915, the plaintiff arose from his seat in the second class-car where he was riding and, making, his exit through the door, took his position upon the steps of the coach, seizing the upright guardrail with his right hand for support. On the side of the train where passengers alight at the San Mateo station there is a cement platform which begins to rise with a moderate gradient some distance away from the company's office and extends along in front of said office for a distance sufficient to cover the length of several coaches. As the train slowed down another passenger, named Emilio Zuñiga, also an employee of the railroad company, got off the same car, alighting safely at the point where the platform begins to rise from the level of the ground. When the train had proceeded a little farther the plaintiff Jose Cangco stepped off also, but one or both of his feet came in contact with a sack of watermelons with the result that his feet slipped from under him and he fell violently on the platform. His body at once rolled from the platform and was drawn under the moving car, where his right arm was badly crushed and lacerated. It appears that after the plaintiff alighted from the train the car moved forward possibly six meters before it came to a full stop. The accident occurred between 7 and 8 o'clock on a dark night, 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. The explanation of the presence of a sack of melons on the platform where the plaintiff alighted is found in the fact that it was the customary season for harvesting these melons and a large lot had been brought to the station for the shipment to the market. They were contained in numerous sacks which has been piled on the platform in a row one upon another. The testimony shows that this row of sacks was so placed of melons and the edge of platform; and it is clear that the fall of the plaintiff was due to the fact that his foot alighted upon one of these melons at the moment he stepped upon the platform. His statement that he failed to see these objects in the darkness is readily to be credited. The plaintiff was drawn from under the car in an unconscious condition, and it appeared that the injuries which he had received were very serious. He was therefore brought at once to a certain hospital in the city of Manila where an examination was made and his arm was amputated. The result of this operation was unsatisfactory, and the plaintiff was then carried to another hospital where a second operation was performed and the member was again amputated higher up near the shoulder. It appears in evidence that the plaintiff expended the sum of P790.25 in the form of medical and surgical fees and for other expenses in connection with the process of his curation.

Upon August 31, 1915, he instituted this proceeding in the Court of First Instance of the city of Manila to recover damages of the defendant company, founding his action upon the negligence of the servants and employees of the defendant in placing the sacks of melons upon the platform and leaving them so placed as to be a menace to the security of passenger alighting from the company's trains. At the hearing in the Court of First Instance, his Honor, the trial judge, found the facts substantially as above stated, and drew therefrom his conclusion to the effect that, although negligence was attributable to the defendant by reason of the fact that the sacks 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 form recovering. Judgment was accordingly entered in favor of the defendant company, and the plaintiff appealed. It can not be doubted that the employees of the railroad company were guilty of negligence in piling these sacks on the platform in the manner above stated; that their presence caused the plaintiff to fall as he alighted from the train; and that they therefore constituted an effective legal cause of the injuries sustained by the plaintiff. It necessarily follows that the defendant company is liable for the damage thereby occasioned unless recovery is barred by the plaintiff's own contributory negligence. In resolving this problem it is necessary that each of these conceptions of liability, to-wit, the primary responsibility of the defendant company and the contributory negligence of the plaintiff should be separately examined. It is important to note that the foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. That is to say, its liability is direct and immediate, differing essentially, in legal viewpoint from that presumptive responsibility for the negligence of its servants, imposed by article 1903 of the Civil Code, which can be rebutted by proof of the exercise of due care in their selection and supervision. Article 1903 of the Civil Code is not applicable to obligations arising ex contractu, but only to extra-contractual obligations — or to use the technical form of expression, that article relates only to culpa aquiliana and not to culpa contractual. Manresa (vol. 8, p. 67) in his commentaries upon articles 1103 and 1104 of the Civil Code, clearly points out this distinction, which was also recognized by this Court in its decision in the case of Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil. rep., 359). In commenting upon article 1093 Manresa clearly points out the difference between "culpa, substantive and independent, which of itself constitutes the source of an obligation between persons not formerly connected by any legal tie" and culpa considered as an accident in the performance of an obligation already existing . . . ." In the Rakes case (supra) the decision of this court was made to rest squarely upon the proposition that article 1903 of the Civil Code is not applicable to acts of negligence which constitute the breach of a contract. Upon this point the Court said: The acts to which these articles [1902 and 1903 of the Civil Code] are applicable are understood to be those not growing out of pre-existing duties of the parties to one another. But where relations already formed give rise to duties, whether springing from contract or quasicontract, then breaches of those duties are subject to article 1101, 1103, and 1104 of the same code. (Rakes vs. Atlantic, Gulf and Pacific Co., 7 Phil. Rep., 359 at 365.)

This distinction is of the utmost importance. The liability, which, under the Spanish law, is, in certain cases imposed upon employers with respect to damages occasioned by the negligence of their employees to persons to whom they are not bound by contract, is not based, as in the English Common Law, upon the principle of respondeat superior — if it were, the master would be liable in every case and unconditionally — but upon the principle announced in article 1902 of the Civil Code, which imposes upon all persons who by their fault or negligence, do injury to another, the obligation of making good the damage caused. One who places a powerful automobile in the hands of a servant whom he knows to be ignorant of the method of managing such a vehicle, is himself guilty of an act of negligence which makes him liable for all the consequences of his imprudence. 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. But, if the master has not been guilty of any negligence whatever in the selection and direction of the servant, he is not liable for the acts of the latter, whatever done within the scope of his employment or not, if the damage done by the servant does not amount to a breach of the contract between the master and the person injured. It is not accurate to say that proof of diligence and care in the selection and control of the servant relieves the master from liability for the latter's acts — on the contrary, that proof shows that the responsibility has never existed. As Manresa says (vol. 8, p. 68) the liability arising from extra-contractual culpa is always based upon a voluntary act or omission which, without willful intent, but by mere negligence or inattention, has caused damage to another. A master who exercises all possible care in the selection of his servant, taking into consideration the qualifications they should possess for the discharge of the duties which it is his purpose to confide to them, and directs them with equal diligence, thereby performs his duty to third persons to whom he is bound by no contractual ties, and he incurs no liability whatever if, by reason of the negligence of his servants, even within the scope of their employment, such third person suffer damage. True it is that under article 1903 of the Civil Code the law creates a presumption that he has been negligent in the selection or direction of his servant, but the presumption is rebuttable and yield to proof of due care and diligence in this respect. The supreme court of Porto Rico, in interpreting identical provisions, as found in the Porto Rico Code, has held that these articles are applicable to cases of extra-contractual culpa exclusively. (Carmona vs. Cuesta, 20 Porto Rico Reports, 215.) This distinction was again made patent by this Court in its decision in the case of Bahia vs. Litonjua and Leynes, (30 Phil. rep., 624), which was an action brought upon the theory of the extra-contractual liability of the defendant to respond for the damage caused by the carelessness of his employee while acting within the scope of his employment. The Court, after citing the last paragraph of article 1903 of the Civil Code, said: From this article two things are apparent: (1) That when an injury is caused by the negligence of a servant or employee there instantly arises a presumption of law that there was negligence on the part of the master or employer either in selection of the servant or employee, or in supervision over him after the selection, or both; and (2) that that presumption is juris tantum and not juris et de jure, and consequently, may be rebutted. It follows necessarily that if the employer shows to the satisfaction of the court that in selection and supervision he has exercised the care and diligence of a good father of a family, the presumption is overcome and he is relieved from liability.

This theory bases the responsibility of the master ultimately on his own negligence and not on that of his servant. This is the notable peculiarity of the Spanish law of negligence. It is, of course, in striking contrast to the American doctrine that, in relations with strangers, the negligence of the servant in conclusively the negligence of the master. The opinion there expressed by this Court, to the effect that in case of extra-contractual culpa based upon negligence, it is necessary that there shall have been some fault attributable to the defendant personally, and that the last paragraph of article 1903 merely establishes a rebuttable presumption, is in complete accord with the authoritative opinion of Manresa, who says (vol. 12, p. 611) that the liability created by article 1903 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, when such acts or omissions cause damages which amount to the breach of a contact, is not based upon a mere presumption of the master's negligence in their selection or control, and proof of exercise of the utmost diligence and care in this regard does not relieve the master of his liability for the breach of his contract. Every legal obligation must of necessity be extra-contractual or contractual. Extracontractual obligation has its source in the breach or omission of those mutual duties which civilized society imposes upon it members, or which arise from these relations, other than contractual, of certain members of society to others, generally embraced in the concept of status. The legal rights of each member of society constitute the measure of the corresponding legal duties, mainly negative in character, which the existence of those rights imposes upon all other members of society. The breach of these general duties whether due to willful intent or to mere inattention, if productive of injury, give rise to an obligation to indemnify the injured party. The fundamental distinction between obligations of this character and those which arise from contract, 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, it is competent for the legislature to elect — and our Legislature has so elected — whom such an obligation is imposed is morally culpable, or, on the contrary, for reasons of public policy, to extend that liability, without regard to the lack of moral culpability, so as to include responsibility for the negligence of those person who acts or mission are imputable, by a legal fiction, to others who are in a position to exercise an absolute or limited control over them. The legislature which adopted our Civil Code has elected to limit extra-contractual liability — with certain well-defined exceptions — to cases in which moral culpability can be directly imputed to the persons to be charged. This moral responsibility may consist in having failed to exercise due care in the selection and control of one's agents or servants, or in the control of persons who, by reason of their status, occupy a position of dependency with respect to the person made liable for their conduct. The position of a natural or juridical person who has undertaken by contract to render service to another, is wholly different from that to which article 1903 relates. When the sources of the obligation upon which plaintiff's cause of action depends is a negligent act or omission, the

burden of proof rests upon plaintiff to prove the negligence — if he does not his action fails. But when the facts averred show a contractual undertaking by defendant for the benefit of plaintiff, and it is alleged that plaintiff has failed or refused to perform the contract, it is not necessary for plaintiff to specify in his pleadings whether the breach of the contract is due to willful fault or to negligence on the part of the defendant, or of his servants or agents. Proof of the contract and of its nonperformance is sufficient prima facie to warrant a recovery. As a general rule . . . it is logical that in case of extra-contractual culpa, a suing creditor should assume the burden of proof of its existence, as the only fact upon which his action is based; while on the contrary, in a case of negligence which presupposes the existence of a contractual obligation, if the creditor shows that it exists and that it has been broken, it is not necessary for him to prove negligence. (Manresa, vol. 8, p. 71 [1907 ed., p. 76]). As it is not necessary for the plaintiff in an action for the breach of a contract to show that the breach was due to the negligent conduct of defendant or of his servants, even though such be in fact the actual cause of the breach, it is obvious that proof on the part of defendant that the negligence or omission of his servants or agents caused the breach of the contract would not constitute a defense to the action. If the negligence of servants or agents could be invoked as a means of discharging the liability arising from contract, the anomalous result would be that person acting through the medium of agents or servants in the performance of their contracts, would be in a better position than those acting in person. If one delivers a valuable watch to watchmaker who contract to repair it, and the bailee, by a personal negligent act causes its destruction, he is unquestionably liable. Would it be logical to free him from his liability for the breach of his contract, which involves the duty to exercise due care in the preservation of the watch, if he shows that it was his servant whose negligence caused the injury? If such a theory could be accepted, juridical persons would enjoy practically complete immunity from damages arising from the breach of their contracts if caused by negligent acts as such juridical persons can of necessity only act through agents or servants, and it would no doubt be true in most instances that reasonable care had been taken in selection and direction of such servants. If one delivers securities to a banking corporation as collateral, and they are lost by reason of the negligence of some clerk employed by the bank, would it be just and reasonable to permit the bank to relieve itself of liability for the breach of its contract to return the collateral upon the payment of the debt by proving that due care had been exercised in the selection and direction of the clerk? This distinction between culpa aquiliana, as the source of an obligation, and culpa contractual as a mere incident to the performance of a contract has frequently been recognized by the supreme court of Spain. (Sentencias of June 27, 1894; November 20, 1896; and December 13, 1896.) In the decisions of November 20, 1896, it appeared that plaintiff's action arose ex contractu, but that defendant sought to avail himself of the provisions of article 1902 of the Civil Code as a defense. The Spanish Supreme Court rejected defendant's contention, saying: These are not cases of injury caused, without any pre-existing obligation, by fault or negligence, such as those to which article 1902 of the Civil Code relates, but of damages caused by the defendant's failure to carry out the undertakings imposed by the contracts . . . . A brief review of the earlier decision of this court involving the liability of employers for damage done by the negligent acts of their servants will show that in no case has the court ever decided that the negligence of the defendant's servants has been held to constitute a defense to an action for damages for breach of contract.

In the case of Johnson vs. David (5 Phil. Rep., 663), the court held that the owner of a carriage was not liable for the damages caused by the negligence of his driver. In that case the court commented on the fact that no evidence had been adduced in the trial court that the defendant had been negligent in the employment of the driver, or that he had any knowledge of his lack of skill or carefulness. In the case of Baer Senior & Co's Successors vs. Compania Maritima (6 Phil. Rep., 215), the plaintiff sued the defendant for damages caused by the loss of a barge belonging to plaintiff which was allowed to get adrift by the negligence of defendant's servants in the course of the performance of a contract of towage. The court held, citing Manresa (vol. 8, pp. 29, 69) that if the "obligation of the defendant grew out of a contract made between it and the plaintiff . . . we do not think that the provisions of articles 1902 and 1903 are applicable to the case." In the case of Chapman vs. Underwood (27 Phil. Rep., 374), plaintiff sued the defendant to recover damages for the personal injuries caused by the negligence of defendant's chauffeur while driving defendant's automobile in which defendant was riding at the time. The court found that the damages were caused by the negligence of the driver of the automobile, but held that the master was not liable, although he was present at the time, saying: . . . unless the negligent acts of the driver are continued for a length of time as to give the owner a reasonable opportunity to observe them and to direct the driver to desist therefrom. . . . The act complained of must be continued in the presence of the owner for such length of time that the owner by his acquiescence, makes the driver's acts his own. In the case of Yamada vs. Manila Railroad Co. and Bachrach Garage & Taxicab Co. (33 Phil. Rep., 8), it is true that the court rested its conclusion as to the liability of the defendant upon article 1903, although the facts disclosed that the injury complaint of by plaintiff constituted a breach of the duty to him arising out of the contract of transportation. The express ground of the decision in this case was that article 1903, in dealing with the liability of a master for the negligent acts of his servants "makes the distinction between private individuals and public enterprise;" that as to the latter the law creates a rebuttable presumption of negligence in the selection or direction of servants; and that in the particular case the presumption of negligence had not been overcome. It is evident, therefore that in its decision Yamada case, the court treated plaintiff's action as though founded in tort rather than as based upon the breach of the contract of carriage, and an examination of the pleadings and of the briefs shows that the questions of law were in fact discussed upon this theory. Viewed from the standpoint of the defendant the practical result must have been the same in any event. The proof disclosed beyond doubt that the defendant's servant was grossly negligent and that his negligence was the proximate cause of plaintiff's injury. It also affirmatively appeared that defendant had been guilty of negligence in its failure to exercise proper discretion in the direction of the servant. Defendant was, therefore, liable for the injury suffered by plaintiff, whether the breach of the duty were to be regarded as constituting culpa aquiliana or culpa contractual. As Manresa points out (vol. 8, pp. 29 and 69) whether negligence occurs an incident in the course of the performance of a contractual undertaking or its itself the source of an extra-contractual undertaking obligation, its essential characteristics are identical. There is always an act or omission productive of damage due to carelessness or inattention on the part of the defendant. Consequently, when the court holds that a defendant is liable in damages for having failed to exercise due care, either directly, or in failing to exercise proper care in the selection and direction of his servants, the practical result is identical in either

case. Therefore, it follows that it is not to be inferred, because the court held in the Yamada case that defendant was liable for the damages negligently caused by its servants to a person to whom it was bound by contract, and made reference to the fact that the defendant was negligent in the selection and control of its servants, that in such a case the court would have held that it would have been a good defense to the action, if presented squarely upon the theory of the breach of the contract, for defendant to have proved that it did in fact exercise care in the selection and control of the servant. The true explanation of such cases is to be found by directing the attention to the relative spheres of contractual and extra-contractual obligations. The field of non- contractual obligation is much more broader than that of contractual obligations, comprising, as it does, the whole extent of juridical human relations. These two fields, figuratively speaking, concentric; that is to say, the mere fact that a person is bound to another by contract does not relieve him from extracontractual liability to such person. When such a contractual relation exists the obligor may break the contract under such conditions that the same act which constitutes the source of an extra-contractual obligation had no contract existed between the parties. 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, article 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. The railroad company's defense involves the assumption that even granting that the negligent conduct of its servants in placing an obstruction upon the platform was a breach of its contractual obligation to maintain safe means of approaching and leaving its trains, the direct and proximate cause of the injury suffered by plaintiff was his own contributory negligence in failing to wait until the train had come to a complete stop before alighting. Under the doctrine of comparative negligence announced in the Rakes case (supra), if the accident was caused by plaintiff's own negligence, no liability is imposed upon defendant's negligence and plaintiff's negligence merely contributed to his injury, the damages should be apportioned. It is, therefore, important to ascertain if defendant was in fact guilty of negligence. It may be admitted that had plaintiff waited until the train had come to a full stop before alighting, the particular injury suffered by him could not have occurred. Defendant contends, and cites many authorities in support of the contention, that it is negligence per se for a passenger to alight from a moving train. We are not disposed to subscribe to this doctrine in its absolute form. We are of the opinion that this proposition is too badly stated and is at variance with the experience of every-day life. In this particular instance, that the train was barely moving when plaintiff alighted is shown conclusively by the fact that it came to stop within six meters from the place where he stepped from it. Thousands of person alight from trains under these conditions every day of the year, and sustain no injury where the company has kept its platform free from dangerous obstructions. There is no reason to believe that plaintiff would have suffered any injury whatever in alighting as he did had it not been for defendant's negligent failure to perform its duty to provide a safe alighting place. We are of the opinion that the correct doctrine relating to this subject is that expressed in Thompson's work on Negligence (vol. 3, sec. 3010) as follows: The test by which 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. It is to be considered whether an ordinarily prudent person, of the age, sex and condition of the passenger,

would have acted as the passenger acted under the circumstances disclosed by the evidence. This care has been defined to be, not the care which may or should be used by the prudent man generally, but the care which a man of ordinary prudence would use under similar circumstances, to avoid injury." (Thompson, Commentaries on Negligence, vol. 3, sec. 3010.) Or, it we prefer to adopt the mode of exposition used by this court in Picart vs. Smith (37 Phil. rep., 809), we may say that the test is this; Was there anything in the circumstances surrounding the plaintiff at the time he alighted from the train which would have admonished a person of average prudence that to get off the train under the conditions then existing was dangerous? If so, the plaintiff should have desisted from alighting; and his failure so to desist was contributory negligence.1awph!l.net As the case now before us presents itself, the only fact from which a conclusion can be drawn to the effect that plaintiff was guilty of contributory negligence is that he stepped off the car without being able to discern clearly the condition of the platform and while the train was yet slowly moving. In considering the situation thus presented, it should not be overlooked that the plaintiff was, as we find, ignorant of the fact that the obstruction which was caused by the sacks of melons piled on the platform existed; and as the defendant was bound by reason of its duty as a public carrier to afford to its passengers facilities for safe egress from its trains, the plaintiff had a right to assume, in the absence of some circumstance to warn him to the contrary, that the platform was clear. The place, as we have already stated, was dark, or dimly lighted, and this also is proof of a failure upon the part of the defendant in the performance of a duty owing by it to the plaintiff; for if it were by any possibility concede that it had right to pile these sacks in the path of alighting passengers, the placing of them adequately so that their presence would be revealed. As pertinent to the question of contributory negligence on the part of the plaintiff in this case the following circumstances are to be noted: The company's platform was constructed upon a level higher than that of the roadbed and the surrounding ground. The distance from the steps of the car to the spot where the alighting passenger would place his feet on the platform was thus reduced, thereby decreasing the risk incident to stepping off. The nature of the platform, constructed as it was of cement material, also assured to the passenger a stable and even surface on which to alight. Furthermore, the plaintiff 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. In determining the question of contributory negligence in performing such act — that is to say, whether the passenger acted prudently or recklessly — the age, sex, and physical condition of the passenger are circumstances necessarily affecting the safety of the passenger, and should be considered. Women, it has been observed, as a general rule are less capable than men of alighting with safety under such conditions, as the nature of their wearing apparel obstructs the free movement of the limbs. Again, it may be noted that the place was perfectly familiar to the plaintiff as it was his daily custom to get on and of the train at this station. There could, therefore, be no uncertainty in his mind with regard either to the length of the step which he was required to take or the character of the platform where he was alighting. Our conclusion is that the conduct of the plaintiff in undertaking to alight while the train was yet slightly under way was not characterized by imprudence and that therefore he was not guilty of contributory negligence. The evidence shows that the plaintiff, at the time of the accident, was earning P25 a month as a copyist clerk, and that the injuries he has suffered have permanently disabled him from continuing that employment. Defendant has not shown that any other gainful occupation is

open to plaintiff. His expectancy of life, according to the standard mortality tables, is approximately thirty-three years. We are of the opinion that a fair compensation for the damage suffered by him for his permanent disability is the sum of P2,500, and that he is also entitled to recover of defendant the additional sum of P790.25 for medical attention, hospital services, and other incidental expenditures connected with the treatment of his injuries. The decision of lower court is reversed, and judgment is hereby rendered plaintiff for the sum of P3,290.25, and for the costs of both instances. So ordered. Arellano, C.J., Torres, Street and Avanceña, JJ., concur.

Separate Opinions MALCOLM, J., dissenting: With one sentence in the majority decision, we are of full accord, namely, "It may be admitted that had plaintiff waited until the train had come to a full stop before alighting, the particular injury suffered by him could not have occurred." With the general rule relative to a passenger's contributory negligence, we are likewise in full accord, namely, "An attempt to alight from a moving train is negligence per se." Adding these two points together, should be absolved from the complaint, and judgment affirmed. Johnson, J., concur.

ARANETA vs DE JOYA Facts: Respondent De Joya, general manager, proposed to the board of Ace Advsertising Corp., to send Ricardo Taylor to the US to take up special studies in television. The Board did not act upon the proposal. Nevertheless, sent Taylor to the US. Respondent assured Antonio Araneta, a company director, that expenses will be handled by other parties which later was confirmed through a memorandum. While abroad, Taylor continued to receive his salaries. The items corresponding to his salaries appeared in vouchers prepared upon orders of, and approved by, the respondent. Petitioner Luis Araneta, signed three of the vouchers, others signed by either respondent or Vicente Araneta, the company treasurer. All told, Ace Advertising disbursed P5, 043.20 on account of Taylor’s travel and studies. Then a year after, Ace Advertising filed a complaint before the CFI against respondent for the recovery of the total sum disbursed to Taylor alleging that the trip was made without its knowledge, authority or ratification. The respondent in his answer denied the charge and claimed that the trip was nonetheless ratified by the company’s board and at any event he had the discretion as general manager to authorize the trip which was for the company’s benefit. A third party complaint was filed by respondent against, Vicente and Luis and Taylor. Respondent proved that some of the checks to cover the expenses of Taylor were signed by Vicente and Luis. In their defense, Luis and Vicente claimed that they signed the checks in good faith as they were approved by respondent. The CFI rendered judgment ordering the respondent to pay Ace for the amount disbursed with interest at a legal rate until full payment and dismissed the third party complaint. Respondent appealed to CA. CA affirmed the decision of trial court with regard to its decision in favor of Ace but reversed

the dismissal of the 3rd party complaint. CA found as a fact that Taylor’s trip had neither been authorized nor ratified by Ace. It held that Luis and Vicente were also privy to the authorized disbursement of corporate monies with the respondent. That when they approved signed the checks, they have given their stamp of approval. As it is established that corporate funds were disbursed unauthorized, the case is of a simple quasi-delict committed by them against the corporation. Hence, this appeal. Issue: Whether or not petitioner is guilty of quasi-delict, notwithstanding that he was occupying a contractual position at Ace? Otherwise stated, whether or not quasi-delict (tort) may be committed a party in a contract?

Held: Yes. The existence of a contract between the parties constitutes no bar to the commission of a tort by one against the other and the consequent recovery of damages. His guilt is manifest on account of, in spite of his being a vice-president and director of Ace, petitioner remained passive, throughout the period of Taylor’s trip and to the payment of the latter’s salary. As such he neglected to perform his duties properly to the damage of the firm of which he was an officer. FULL CASE Petition for review of the decision of the Court of Appeals in CA-G.R. 34277-R ordering Luis Ma. Araneta (hereinafter referred to as the petitioner) to indemnify Antonio R. de Joya (hereinafter referred to as the respondent) for one-third of the sum of P5,043.20 which the latter was adjudged to pay the Ace Advertising Agency, Inc., the plaintiff in the recovery suit below. Sometime in November 1952 the respondent, then general manager of the Ace Advertising, proposed to the board of directors 1 that an employee, Ricardo Taylor, be sent to the United States to take up special studies in television. The board, however, failed to act on the proposal. Nevertheless, in September 1953 the respondent sent Taylor abroad. J. Antonio Araneta, a company director, inquired about the trip and was assured by the respondent that Taylor's expenses would be defrayed not by the company but by other parties. This was thereafter confirmed by the respondent in a memorandum. While abroad, from September 1, 1953 to March 15, 1954, Taylor continued to receive his salaries. The items corresponding to his salaries appeared in vouchers prepared upon the orders of, and approved by, the respondent and were included in the semi-monthly payroll checks for the employees of the corporation. The petitioner signed three of these checks on November 27, December 15 and December 29, 1953. The others were signed by either the respondent, or Vicente Araneta (company treasurer) who put up part of the bill connected with Taylor's trip and also handed him letters for delivery in the United States. The Ace Advertising disbursed P5,043.20, all told, on account of Taylor's travel and studies. On August 23, 1954 the Ace Advertising filed a complaint with the court of first instance of Manila against the respondent for recovery of the total sum disbursed to Taylor, alleging that the trip was made without its knowledge, authority or ratification. The respondent, in his answer, denied the charge and claimed that the trip was nonetheless ratified by the company's board of directors, and that in any event under the by-laws he had the discretion, as general manager, to authorize the trip which was for the company's benefit..

A 3rd-party complaint was also filed by the respondent against Vicente Araneta, the petitioner and Ricardo Taylor. The respondent proved that Vicente Araneta, as treasurer of the firm, signed a check representing the company's share of the transportation expense of Taylor to the United States, and that a series of payroll checks from September 15, 1953 to December 31, 1953, inclusive, which included the salaries of Taylor, was signed by Vicente Araneta and the petitioner who is a vice-president of the company. Both Aranetas disowned any personal liability, claiming that they signed the checks in good faith as they were approved by the respondent.. On April 13, 1964 the trial court rendered judgment ordering the respondent to pay the Ace Advertising "the sum of P5,043.20 with interest at the legal rate from August 23, 1954 until full payment," and dismissing the 3rd-party complaint. The respondent appealed to the Court of Appeals, which on August 2, 1965, rendered a decision affirming the trial court's judgment in favor of the Ace Advertising but reversing the dismissal of the 3rd-party complaint. The appellate court found as a fact that Taylor's trip had been neither authorized nor ratified by the company. The appellate court's full statement of its categorical and unequivocal findings of fact on the nature and extent of the participation of the petitioner as well as Vicente Araneta is hereunder quoted: The evidence not only is clear, but is even not disputed at all by Vicente and Luis Araneta who neither of them took the witness stand to refute appellant's evidence, that as to Vicente it was to him that appellant first broached the subject-matter of sending Taylor to America, that Vicente Araneta evinced unusual interest, and went to the extent of entrusting Taylor with letters for delivery to certain principals of Gregorio Araneta, Inc. in the United States, and he even signed the check for P105.20 to cover expenses for his tax clearance, documentary stamps and passport fees, in connection with the trip, on 8 September, 1953, and then on 5 October, 1953, still another check for P868.00 which was half the amount for his plane ticket; and as to Luis Araneta, it not at all being disputed that when Taylor was already in America, his salaries while abroad were paid on vouchers and checks signed either by him or by Vicente, or by appellant himself; because of all these, the conclusion is forced upon this Court that it could not but have been but that both Vicente and Luis were informed and gave their approval to Taylor's trip, and to the payment of his trip expenses and salaries during his absence, from corporate funds; if this was the case as it was, there can be no question but that they two were also privy to the unauthorized disbursement of the corporate moneys jointly with the appellant; what had happened was in truth and in fact a venture by them given their stamp of approval; and as it was an unauthorized act of expenditure of corporate funds, and it was these three without whose acts the same could not have happened, the juridical situation was a simple quasi-delict by them committed upon the corporation, for which solidary liability should have been imposed upon all in the first place, Art. 2194, New Civil Code; and only De Joya having been sued and made liable by the corporation, it was the right of the latter to ask that his two joint tortfeasors be made to shoulder their proportional responsibility. (emphasis supplied) The basic legal issue is whether the petitioner is guilty of a quasi-delict as held below. It is our view, and we so hold, that the judgment of the Court of Appeals should be upheld. The petitioner's assertion that he signed the questioned payroll checks in good faith has not been substantiated, he in particular not having testified or offered testimony to prove such claim. Upon the contrary, in spite of his being a vice-president and director of the Ace Advertising, the petitioner remained passive, throughout the period of Taylor's stay abroad, concerning the

unauthorized disbursements of corporate funds for the latter. This plus the fact that he even approved thrice payroll checks for the payment of Taylor's salary, demonstrate quite distinctly that the petitioner neglected to perform his duties properly, to the damage of the firm of which he was an officer. The fact that he was occupying a contractual position at the Ace Advertising is of no moment. The existence of a contract between the parties, as has been repeatedly held by this Court, constitutes no bar to the commission of a tort by one against the other and the consequent recovery of damages. 2 ACCORDINGLY, the judgment of the Court of Appeals is affirmed, at petitioner's cost.

BARREDO vs GARCIA The case of Barredo v. Garcia (73 Phil. 607 (1942)) involves a 16-year old boy, one of the passengers of a caretela, who died as a result of a collision with a recklessly driven taxi. In the criminal action, the parents of the victim reserved their right to file a separate civil action. After conviction of the driver with the charge of homicide thru reckless imprudence, they proceeded to file a separate civil action against the taxi-owner based on Article 2180 of the New Civil Code. The taxi-driver met this with the argument that the driver having been convicted of criminal negligence, Article 100 in relation to Articles 102-o3 of the Revised Penal Code should govern his liability, which, pursuant to said provisions is only subsidiary, but since the driver has not been sued in a civil action and his property not yet exhausted, the plaintiffs have no recourse against him. The Court, in said case, ruled in favor of the plaintiff, holding that a quasi-delict is “a separate legal institution under the Civil Code, with a substantivity all its own, and individuality that is entirely apart and independent from a delict or crime.” The Comment thus analyzes related decisions on the matter of interpreting and applying Barredo and Article 2177 of the New Civil Code, which include: Diana v. Batangas (93 Phil. 391 (1953)), Jocson v. Glorioso (22 SCRA 316 (1968)), Mendoza v. La Mallorca (82 SCRA 243 (1978)), and Padua v. Robles (66 SCRA 485 (1975)) on the one hand, and Tactaquin v. Palileo (21 SCRA 346 (1967)) on the other. The Author concludes by stating that the doctrine in Barredo is meritorious but is susceptible to improvement, in effect, posing a challenge to legislators Facts: On May 3, 1936, there was a head-on collision between a taxi of the Malate taxicab driven by Fontanilla and a carretela guided by Dimapilis. The carretela was over-turned, and a passenger, a 16-year old boy, Garcia, suffered injuries from which he died. A criminal action was filed against Fontanilla, and he was convicted. The court in the criminal case granted the petition to reserve the civil action. Garcia and Almario, parents of the deceased, on March 7, 1939, filed a civil action against Barredo, the proprietor of the Malate Taxicab and employer of Fontanilla, making him primarily and directly responsible under culpa acquiliana of Article 2180 of the Civil Code of the Philippines. It is undisputed that Fontanilla’s negligence was the cause of the accident, as he was driving on the wrong side of the road at high speed, and there was no showing that Barredo exercised the diligence of a good father of a family, a defense to Article

2180 of the said Code. Barredo’s theory of defense is that Fontanilla’s negligence being punished by the Revised Penal Code, his liability as employer is only subsidiary, but Fontanilla, was not sued for civil liability. Hence, Barredo claims that he cannot be held liable. Issue: Whether or not Barredo, as employer is civilly liable for the acts of Fontanilla, his employee. Held: Quasi-delict or culpa acquiliana is a separate legal institution under the Civil Code of the Philippines is entirely distinct and independent from a delict or crime under the Revised Penal Code. In this jurisdiction, the same negligent act causing damage may produce civil liability (subsidiary) arising from a crime under Article 103 of the Revised Penal Code of the Philippines; or create an action for quasi-delicto or culpa aquiliana under Articles 2179 and 2180 of the Civil Code and the parties are free to choose which course to take. And in the instant case, the negligent act of Fontanilla produces two (2) liabilities of Barredo: First, a subsidiary one because of the civil liability of Fontanilla arising from the latter’s criminal negligence under Article 103 of the Revised Penal Code, and second, Barredo’s primary and direct responsibility arising from his presumed negligence as an employer under Article 2180 of the Civil Code. Since the plaintiffs are free to choose what remedy to take, they preferred the second, which is within their rights. This is the more expedious and effective method of relief because Fontanilla was either in prison or just been released or had no property. Barredo was held liable for damages. Difference bet Crime and Quasi-delict 1) crimes – public interest; quasi-delict – only private interest; 2) Penal code punishes or corrects criminal acts; Civil Code by means of indemnification merely repairs the damage; 3) delicts are not as broad as quasi-delicts; crimes are only punished if there is a penal law; quasi-delicts include any kind of fault or negligence intervenes NOTE: not all violations of penal law produce civil responsibility. e.g. contravention of ordinances, violation of game laws, infraction of rules of traffic when nobody is hurt4) crime – guilt beyond reasonable doubt; civil – mere preponderance of evidence- Presumptions: 1) injury is caused by servant or employee, there instantly arises presumption of negligence of master or employer in selection, in supervision or both 2) presumption is juris tantum not juris et de jure TF may be rebutted by proving exercise of diligence of a good father of the family- basis of civil law liability: not respondent superior but the relationship of paterfamilias- motor accidents – need of stressing and accentuating the responsibility of owners of motor vehicles.

DIGEST II ISSUE: Whether or not Barredo is just subsidiarily liable. HELD: No. He is primarily liable under Article 1903 which is a separate civil action against negligent employers. Garcia is well within his rights in suing Barredo. He reserved his right to file a separate civil action and this is more expeditious because by the time of the SC judgment Fontanilla is already serving his sentence and has no property. It was also proven that Barredo is negligent in hiring his employees because it was shown that Fontanilla had had multiple traffic infractions already before he hired him – something he failed to overcome during hearing. Had Garcia not reserved his right to file a separate civil action, Barredo would have only been

subsidiarily liable. Further, Barredo is not being sued for damages arising from a criminal act (his driver’s negligence) but rather for his own negligence in selecting his employee (Article 1903).

ELCANO vs HILL 77 SCRA 100 – May 26, 1977 Torts and Damages – Civil Liability from Quasi Delicts vs Civil Liability from Crimes FACTS: Reginald Hill, a minor, caused the death of Agapito (son of Elcano). Elcano filed a criminal case against Reginald but Reginald was acquitted for “lack of intent coupled with mistake.” Elcano then filed a civil action against Reginald and his dad (Marvin Hill) for damages based on Article 2180 of the Civil Code. Hill argued that the civil action is barred by his son’s acquittal in the criminal case; and that if ever, his civil liability as a parent has been extinguished by the fact that his son is already an emancipated minor by reason of his marriage. ISSUE: Whether or not Marvin Hill may be held civilly liable under Article 2180. HELD: Yes. The acquittal of Reginald in the criminal case does not bar the filing of a separate civil action. A separate civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed, if accused is actually charged also criminally, to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. In other words, the extinction of civil liability referred to in Par. (e) of Section 3, Rule 111, refers exclusively to civil liability founded on Article 100 of the Revised Penal Code, whereas the civil liability for the same act considered as a quasi-delict only and not as a crime is not extinguished even by a declaration in the criminal case that the criminal act charged has not happened or has not been committed by the accused. Briefly stated, culpa aquiliana includes voluntary and negligent acts which may be punishable by law. While it is true that parental authority is terminated upon emancipation of the child (Article 327, Civil Code), and under Article 397, emancipation takes place “by the marriage of the minor child”, it is, however, also clear that pursuant to Article 399, emancipation by marriage of the minor is not really full or absolute. Thus “Emancipation by marriage or by voluntary concession shall terminate parental authority over the child’s person. It shall enable the minor to administer his property as though he were of age, but he cannot borrow money or alienate or encumber real property without the consent of his father or mother, or guardian. He can sue and be sued in court only with the assistance of his father, mother or guardian.” Therefore, Article 2180 is applicable to Marvin Hill – the SC however ruled since at the time of the decision, Reginald is already of age, Marvin’s liability should be subsidiary only – as a matter of equity.

DIGEST II Issues: Whether or not quasi-delict is restricted to negligence and cannot apply to voluntary acts or omissions producing injury (or felony)?

Whether or not a father may be held liable for the act of his emancipated child constituting quasi-delict? Held: No. To repeat the Barredo case, under Article 2177, acquittal from an accusation of criminal negligence, whether on reasonable doubt or not, shall not be a bar to a subsequent civil action, not for civil liability arising from criminal negligence, but for damages due to a quasidelict or ‘culpa aquiliana’ although it mentions the word “negligence” but according to Justice Bocobo it must be construed according to “the spirit that giveth lift- rather than that which is literal that killeth the intent of the lawmaker should be observed in applying the same.” Criminal prosecution and civil action are two different things. On the second issue (obsolete), yes, the father may be held liable. While it is true that marriage of a child emancipates him from the parental authority of his parents, what matters really is whether or not such minor is completely emancipated as defined by law. In the case at bar, his emancipation is only partial for as provided by law he can sue and be sued in court with the assistance of his parents, he cannot manage his own properties without the approval of his parents, and third as in the facts, he relies for subsistence from his parents.

FULL CASE G.R. No. L-24803 May 26, 1977 PEDRO ELCANO and PATRICIA ELCANO, in their capacity as Ascendants of Agapito Elcano, deceased, plaintiffs-appellants, vs. REGINALD HILL, minor, and MARVIN HILL, as father and Natural Guardian of said minor, defendants-appellees. Appeal from the order of the Court of First Instance of Quezon City dated January 29, 1965 in Civil Case No. Q-8102, Pedro Elcano et al. vs. Reginald Hill et al. dismissing, upon motion to dismiss of defendants, the complaint of plaintiffs for recovery of damages from defendant Reginald Hill, a minor, married at the time of the occurrence, and his father, the defendant Marvin Hill, with whom he was living and getting subsistence, for the killing by Reginald of the son of the plaintiffs, named Agapito Elcano, of which, when criminally prosecuted, the said accused was acquitted on the ground that his act was not criminal, because of “lack of intent to kill, coupled with mistake.” Actually, the motion to dismiss based on the following grounds: 1. The present action is not only against but a violation of section 1, Rule 107, which is now Rule III, of the Revised Rules of Court; 2. The action is barred by a prior judgment which is now final and or in res-adjudicata; 3. The complaint had no cause of action against defendant Marvin Hill, because he was relieved as guardian of the other defendant through emancipation by marriage. (P. 23, Record [p. 4, Record on Appeal.]) was first denied by the trial court. It was only upon motion for reconsideration of the defendants of such denial, reiterating the above grounds that the following order was issued:

Considering the motion for reconsideration filed by the defendants on January 14, 1965 and after thoroughly examining the arguments therein contained, the Court finds the same to be meritorious and well-founded. WHEREFORE, the Order of this Court on December 8, 1964 is hereby reconsidered by ordering the dismissal of the above entitled case. SO ORDERED. Quezon City, Philippines, January 29, 1965. (p. 40, Record [p. 21, Record on Appeal.) Hence, this appeal where plaintiffs-appellants, the spouses Elcano, are presenting for Our resolution the following assignment of errors: THE LOWER COURT ERRED IN DISMISSING THE CASE BY UPHOLDING THE CLAIM OF DEFENDANTS THAT I THE PRESENT ACTION IS NOT ONLY AGAINST BUT ALSO A VIOLATION OF SECTION 1, RULE 107, NOW RULE 111, OF THE REVISED RULES OF COURT, AND THAT SECTION 3(c) OF RULE 111, RULES OF COURT IS APPLICABLE; II THE ACTION IS BARRED BY A PRIOR JUDGMENT WHICH IS NOW FINAL OR RES-ADJUDICTA; III THE PRINCIPLES OF QUASI-DELICTS, ARTICLES 2176 TO 2194 OF THE CIVIL CODE, ARE INAPPLICABLE IN THE INSTANT CASE; and IV THAT THE COMPLAINT STATES NO CAUSE OF ACTION AGAINST DEFENDANT MARVIN HILL BECAUSE HE WAS RELIEVED AS GUARDIAN OF THE OTHER DEFENDANT THROUGH EMANCIPATION BY MARRIAGE. (page 4, Record.) It appears that for the killing of the son, Agapito, of plaintiffs-appellants, defendant- appellee Reginald Hill was prosecuted criminally in Criminal Case No. 5102 of the Court of First Instance of Quezon City. After due trial, he was acquitted on the ground that his act was not criminal because of “lack of intent to kill, coupled with mistake.” Parenthetically, none of the parties has favored Us with a copy of the decision of acquittal, presumably because appellants do not dispute that such indeed was the basis stated in the court’s decision. And so, when appellants filed their complaint against appellees Reginald and his father, Atty. Marvin Hill, on account of the death of their son, the appellees filed the motion to dismiss above-referred to. As We view the foregoing background of this case, the two decisive issues presented for Our resolution are: 1. Is the present civil action for damages barred by the acquittal of Reginald in the criminal case wherein the action for civil liability, was not reversed? 2. May Article 2180 (2nd and last paragraphs) of the Civil Code he applied against Atty. Hill, notwithstanding the undisputed fact that at the time of the occurrence complained of. Reginald, though a minor, living with and getting subsistenee from his father, was already legally married? The first issue presents no more problem than the need for a reiteration and further clarification of the dual character, criminal and civil, of fault or negligence as a source of obligation which was firmly established in this jurisdiction in Barredo vs. Garcia, 73 Phil. 607. In that case, this Court postulated, on the basis of a scholarly dissertation by Justice Bocobo on the nature of culpa

aquiliana in relation to culpa criminal or delito and mere culpa or fault, with pertinent citation of decisions of the Supreme Court of Spain, the works of recognized civilians, and earlier jurisprudence of our own, that the same given act can result in civil liability not only under the Penal Code but also under the Civil Code. Thus, the opinion holds: The, above case is pertinent because it shows that the same act machinist. come under both the Penal Code and the Civil Code. In that case, the action of the agent killeth unjustified and fraudulent and therefore could have been the subject of a criminal action. And yet, it was held to be also a proper subject of a civil action under article 1902 of the Civil Code. It is also to be noted that it was the employer and not the employee who was being sued. (pp. 615-616, 73 Phil.). 1

It will be noticed that the defendant in the above case could have been prosecuted in a criminal case because his negligence causing the death of the child was punishable by the Penal Code. Here is therefore a clear instance of the same act of negligence being a proper subject matter either of a criminal action with its consequent civil liability arising from a crime or of an entirely separate and independent civil action for fault or negligence under article 1902 of the Civil Code. Thus, in this jurisdiction, the separate individuality of a cuasi-delito or culpa aquiliana, under the Civil Code has been fully and clearly recognized, even with regard to a negligent act for which the wrongdoer could have been prosecuted and convicted in a criminal case and for which, after such a conviction, he could have been sued for this civil liability arising from his crime. (p. 617, 73 Phil.) 2 It is most significant that in the case just cited, this Court specifically applied article 1902 of the Civil Code. It is thus that although J. V. House could have been criminally prosecuted for reckless or simple negligence and not only punished but also made civilly liable because of his criminal negligence, nevertheless this Court awarded damages in an independent civil action for fault or negligence under article 1902 of the Civil Code. (p. 618, 73 Phil.) 3 The legal provisions, authors, and cases already invoked should ordinarily be sufficient to dispose of this case. But inasmuch as we are announcing doctrines that have been little understood, in the past, it might not he inappropriate to indicate their foundations. Firstly, the Revised Penal Code in articles 365 punishes not only reckless but also simple negligence. If we were to hold that articles 1902 to 1910 of the Civil Code refer only to fault or negligence not punished by law, accordingly to the literal import of article 1093 of the Civil Code, the legal institution of culpa aquiliana would have very little scope and application in actual life. Death or injury to persons and damage to property- through any degree of negligence – even the slightest – would have to be Indemnified only through the principle of civil liability arising from a crime. In such a state of affairs, what sphere would remain for cuasi-delito or culpa aquiliana? We are loath to impute to the lawmaker any intention to bring about a situation so absurd and anomalous. Nor are we, in the interpretation of the laws, disposed to uphold the letter that killeth rather than the spirit that giveth life. We will not use the literal meaning of the law to smother and render almost lifeless a principle of such ancient origin and such full-grown development as culpa aquiliana or cuasi-delito, which is conserved and made enduring in articles 1902 to 1910 of the Spanish Civil Code. Secondary, to find the accused guilty in a criminal case, proof of guilt beyond reasonable doubt is required, while in a civil case, preponderance of evidence is sufficient to make the defendant pay in damages. There are numerous cases of criminal negligence which cannot be shown

beyond reasonable doubt, but can be proved by a preponderance of evidence. In such cases, the defendant can and should be made responsible in a civil action under articles 1902 to 1910 of the Civil Code. Otherwise. there would be many instances of unvindicated civil wrongs. “Ubi jus Idemnified remedium.” (p. 620,73 Phil.) Fourthly, because of the broad sweep of the provisions of both the Penal Code and the Civil Code on this subject, which has given rise to the overlapping or concurrence of spheres already discussed, and for lack of understanding of the character and efficacy of the action for culpa aquiliana, there has grown up a common practice to seek damages only by virtue of the civil responsibility arising from a crime, forgetting that there is another remedy, which is by invoking articles 1902-1910 of the Civil Code. Although this habitual method is allowed by, our laws, it has nevertheless rendered practically useless and nugatory the more expeditious and effective remedy based on culpa aquiliana or culpa extra-contractual. In the present case, we are asked to help perpetuate this usual course. But we believe it is high time we pointed out to the harms done by such practice and to restore the principle of responsibility for fault or negligence under articles 1902 et seq. of the Civil Code to its full rigor. It is high time we caused the stream of quasi-delict or culpa aquiliana to flow on its own natural channel, so that its waters may no longer be diverted into that of a crime under the Penal Code. This will, it is believed, make for the better safeguarding or private rights because it realtor, an ancient and additional remedy, and for the further reason that an independent civil action, not depending on the issues, limitations and results of a criminal prosecution, and entirely directed by the party wronged or his counsel, is more likely to secure adequate and efficacious redress. (p. 621, 73 Phil.) Contrary to an immediate impression one might get upon a reading of the foregoing excerpts from the opinion in Garcia that the concurrence of the Penal Code and the Civil Code therein referred to contemplate only acts of negligence and not intentional voluntary acts – deeper reflection would reveal that the thrust of the pronouncements therein is not so limited, but that in fact it actually extends to fault or culpa. This can be seen in the reference made therein to the Sentence of the Supreme Court of Spain of February 14, 1919, supra, which involved a case of fraud or estafa, not a negligent act. Indeed, Article 1093 of the Civil Code of Spain, in force here at the time of Garcia, provided textually that obligations “which are derived from acts or omissions in which fault or negligence, not punishable by law, intervene shall be the subject of Chapter II, Title XV of this book (which refers to quasi-delicts.)” And it is precisely the underline qualification, “not punishable by law”, that Justice Bocobo emphasized could lead to an ultimo construction or interpretation of the letter of the law that “killeth, rather than the spirit that giveth lift- hence, the ruling that “(W)e will not use the literal meaning of the law to smother and render almost lifeless a principle of such ancient origin and such full-grown development as culpa aquiliana orquasi-delito, which is conserved and made enduring in articles 1902 to 1910 of the Spanish Civil Code.” And so, because Justice Bacobo was Chairman of the Code Commission that drafted the original text of the new Civil Code, it is to be noted that the said Code, which was enacted after the Garcia doctrine, no longer uses the term, 11 not punishable by law,” thereby making it clear that the concept of culpa aquiliana includes acts which are criminal in character or in violation of the penal law, whether voluntary or matter. Thus, the corresponding provisions to said Article 1093 in the new code, which is Article 1162, simply says, “Obligations derived from quasi-delicto shall be governed by the provisions of Chapter 2, Title XVII of this Book, (on quasi-delicts) and by special laws.” More precisely, a new provision, Article 2177 of the new code provides:

ART. 2177. Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant. According to the Code Commission: “The foregoing provision (Article 2177) through at first sight startling, is not so novel or extraordinary when we consider the exact nature of criminal and civil negligence. The former is a violation of the criminal law, while the latter is a “culpa aquiliana” or quasi-delict, of ancient origin, having always had its own foundation and individuality, separate from criminal negligence. Such distinction between criminal negligence and “culpa extracontractual” or “cuasi-delito” has been sustained by decision of the Supreme Court of Spain and maintained as clear, sound and perfectly tenable by Maura, an outstanding Spanish jurist. Therefore, under the proposed Article 2177, acquittal from an accusation of criminal negligence, whether on reasonable doubt or not, shall not be a bar to a subsequent civil action, not for civil liability arising from criminal negligence, but for damages due to a quasi-delict or ‘culpa aquiliana’. But said article forestalls a double recovery.”, (Report of the Code) Commission, p. 162.) Although, again, this Article 2177 does seem to literally refer to only acts of negligence, the same argument of Justice Bacobo about construction that upholds “the spirit that giveth liftrather than that which is literal that killeth the intent of the lawmaker should be observed in applying the same. And considering that the preliminary chapter on human relations of the new Civil Code definitely establishes the separability and independence of liability in a civil action for acts criminal in character (under Articles 29 to 32) from the civil responsibility arising from crime fixed by Article 100 of the Revised Penal Code, and, in a sense, the Rules of Court, under Sections 2 and 3 (c), Rule 111, contemplate also the same separability, it is “more congruent with the spirit of law, equity and justice, and more in harmony with modern progress”- to borrow the felicitous relevant language in Rakes vs. Atlantic. Gulf and Pacific Co., 7 Phil. 359, to hold, as We do hold, that Article 2176, where it refers to “fault or negligencia covers not only acts “not punishable by law” but also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a separate civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed, if he is actually charged also criminally, to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. In other words, the extinction of civil liability referred to in Par. (e) of Section 3, Rule 111, refers exclusively to civil liability founded on Article 100 of the Revised Penal Code, whereas the civil liability for the same act considered as a quasidelict only and not as a crime is not extinguished even by a declaration in the criminal case that the criminal act charged has not happened or has not been committed by the accused. Briefly stated, We here hold, in reiteration of Garcia, that culpa aquiliana includes voluntary and negligent acts which may be punishable by law.4 It results, therefore, that the acquittal of Reginal Hill in the criminal case has not extinguished his liability for quasi-delict, hence that acquittal is not a bar to the instant action against him. Coming now to the second issue about the effect of Reginald’s emancipation by marriage on the possible civil liability of Atty. Hill, his father, it is also Our considered opinion that the conclusion of appellees that Atty. Hill is already free from responsibility cannot be upheld. While it is true that parental authority is terminated upon emancipation of the child (Article 327, Civil Code), and under Article 397, emancipation takes place “by the marriage of the minor

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

MENDOZA vs ARRIETTA Facts: Petitioner, Edgardo Mendoza, seeks a review on certiorari of the Orders of respondent Judge in Civil Case No. 80803 dismissing his Complaint for Damages based on quasi-delict against respondents Felino Timbol and Rodolfo Salazar. On October 22 a three- way vehicular accident occurred along Mac-Arthur Highway, Marilao, Bulacan, involving a Mercedes Benz owned and driven by petitioner; a private jeep owned and driven by respondent Rodolfo Salazar; and a gravel and sand truck owned by respondent Felipino Timbol and driven by Freddie Montoya. Two separate Information for Reckless Imprudence Causing Damage to Property were filed against Rodolfo Salazar and Freddie Montoya. The cause of action was due to how truck-

driver Montoya was for causing damage to the jeep owned by Salazar, by hitting it at the right rear portion thereby causing said jeep to hit and bump an oncoming car, which happened to be petitioner's Mercedes Benz. The case against jeep-owner-driver Salazar, was for causing damage to the Mercedes Benz. The Court of First Instance rendered judgment finding the accused Freddie Montoya guilty beyond reasonable doubt of the crime of damage to property thru reckless imprudence. The trial Court absolved jeep-owner-driver Salazar of any liability in view of its findings that the collision between Salazar's jeep and petitioner's car was the result of the former having been bumped from behind by the truck driven by Montoya. Neither was petitioner awarded damages as he was not a complainant against truck-driver Montoya but only against jeep-owner. After the termination of the criminal cases, petitioner filed a civil case against respondents jeep-owner-driver Salazar and Felino Timbol, the latter being the owner of the gravel and sand truck driven by Montoya, for identification for the damages sustained by his car as a result of the collision. Jeep-owner-driver Salazar and truck-owner Timbol were joined as defendants, either in the alternative or in solidum. Truck-owner Timbol filed a Motion to Dismiss on the grounds that the Complaint is barred by a prior judgment in the criminal cases and that it fails to state a cause of action. An Opposition thereto was filed by petitioner. In an order respondent Judge dismissed the Complaint against truck-owner Timbol for reasons stated in the aforementioned Motion to Dismiss, petitioner sought before this Court the review of that dismissal, to which petition we gave due course. Upon motion of jeep-owner-driver Salazar, respondent Judge also dismissed the case as against the former. Respondent Judge reasoned out that "while it is true that an independent civil action for liability under Article 2177 of the Civil Code could be prosecutedindependently of the criminal action for the offense from which it arose, the New Rules of Court, which took effect on January 1, 1964, requires an express reservation of the civil action to be made in the criminal action; otherwise, the same would be barred pursuant to Section 2, Rule 111. Petitioner's Motion for Reconsideration thereof was denied in the order dated with respondent Judge suggesting that the issue be raised to a higher Court "for a more decisive interpretation of the rule. Petitioner then filed a Supplemental Petition to review the last two mentioned Orders that required jeep-owner-driver Salazar to file an Answer. Issue: Is the action against respondents barred because of a prior judgment? Held: Petitioner's cause of action being based on quasi-delict, respondent Judge committed reversible error when he dismissed the civil suit against the truck-owner, as said case may proceed independently of the criminal proceedings and regardless of the result of the latter. The court held- it is a well-settled rule that for a prior judgment to constitute a bar to a subsequent case, the following requisites must concur: (1) it must be a final judgment; (2) it must have been rendered by a Court having jurisdiction over the subject matter and over the parties; (3) it must be a judgment on the merits; and (4) there must be, between the first and second actions, Identity of parties, Identity of subject matter and Identity of cause of action. It is conceded that the first three requisites of res judicata are present. However, we agree with petitioner that there is no Identity of cause of action between the criminal case and the civil case. Obvious is the fact that in said criminal case truck-driver Montoya was not prosecuted for damage to petitioner's car but for damage to the jeep. Neither was truck-owner Timbol a party in said case. In fact as the trial Court had put it "the owner of the Mercedes Benz cannot recover any damages from the accused Freddie Montoya, he (Mendoza) being a complainant only against Rodolfo Salazar in the criminal case. And more importantly, in the criminal cases, the cause of action was the enforcement of the civil liability arising from criminal

negligence under Article l of the Revised Penal Code, whereas the civil case is based on quasidelict under Article 2180, in relation to Article 2176 of the Civil Code Petitioner's cause of action against Timbol in the civil case is based on quasi-delict is evident from the recitals in the complaint . The court declare, therefore, that in so far as truck-owner Timbol is concerned, the civil case is not barred by the fact that petitioner failed to reserve, in the criminal action, his right to file an independent civil action based on quasi-delict.

NECESITO vs PARAS G.R. No. L-10606

Facts: In the morning of January 28, 1964, Severina Garces and her one-year old son, Precillano Necesito, carrying vegetables, boarded passenger auto truck or bus No. 199 of the Philippine Rabbit Bus Lines at Agno, Pangasinan. The passenger truck, driven by Francisco Bandonell, then proceeded on its regular run from Agno to Manila. After passing Mangatarem, Pangasinan truck No. 199 entered a wooden bridge, but the front wheels swerved to the right; the driver lost control, and after wrecking the bridge's wooden rails, the truck fell on its right side into a creek where water was breast deep. The mother, Severina Garces, was drowned; the son, Precillano Necesito, was injured, suffering abrasions and fracture of the left femur. Subsequently, actions for damages were brought directly against the operator of the bus. The latter pleaded that the accident was due to "engine or mechanical trouble" independent or beyond the control of the defendants or of the driver Bandonell. After joint trial, the Court of First Instance found that the bus was proceeding slowly due to the bad condition of the road; that the accident was caused by the fracture of the right steering knuckle, which was defective in that its center or core was not compact but "bubbled and cellulous", a condition that could not be known or ascertained by the carrier despite the fact that regular thirty-day inspections were made of the steering knuckle, since the steel exterior was smooth and shiny to the depth of 3/16 of an inch all around; that the knuckles are designed and manufactured for heavy duty and may last up to ten years; that the knuckle of bus No. 199 that broke on January 28, 1954, was last inspected on January 5,1954, and was due to be inspected again on February 5th. Hence, the trial court, holding that the accident was exclusively due to fortuitous event, dismissed both actions. Hence this appeal. Issues: 1. Whether or not the carrier is liable for the injuries and damages sustained by the passengers. 2. Whether or not the cause of the accident is that of fortuitous event. Held: 1. Yes. The Supreme Court held that the preponderance of authority is in favor of the doctrine that a passenger is entitled to recover damages from a carrier for an injury resulting from a defect in an appliance purchased from a manufacturer, whenever it appears that the defect would have been discovered by the carrier if it had exercised the degree of care which under the circumstances was incumbent upon it, with regard to inspection and application of the necessary tests. For the purposes of this doctrine, the manufacturer is considered as being in law the agent

or servant of the carrier, as far as regards the work of constructing the appliance. According to this theory, the good repute of the manufacturer will not relieve the carrier from liability" (10 Am. Jur. 205, s,1324; and cases cited therein). The rationale of the carrier's liability is the fact that the passenger has neither choice nor control over the carrier in the selection and use of the equipment and appliances in use by the carrier. Having no privity whatever with the manufacturer or vendor of the defective equipment, the passenger has no remedy against him, while the carrier usually has. It is but logical, therefore, that the carrier, while not in insurer of the safety of his passengers, should nevertheless be held to answer for the flaws of his equipment if such flaws were at all discoverable. 2. As to the second issue, the record is to the effect that the only test applied to the steering knuckle in question was a purely visual inspection every thirty days, to see if any cracks developed. It nowhere appears that either the manufacturer or the carrier at any time tested the steering knuckle to ascertain whether its strength was up to standard, or that it had no hidden flaws would impair that strength. This periodical visual inspection of the steering knuckle as practiced by the carrier's agents did not measure up to the required legal standard of "utmost diligence of very cautious persons" - "as far as human care and foresight can provide", and therefore that the knuckle's failure cannot be considered a fortuitous event that exempts the carrier from responsibility (Lasam vs. Smith, 45 Phil. 657; Son vs. Cebu Autobus Co., 94 Phil., 892.). FULL CASE GERMAN NECESITO, ET AL., plaintiffs-appellants, vs. NATIVIDAD PARAS, ET AL., defendantsappellees. These cases involve ex contractu against the owners and operators of the common carrier known as Philippine Rabbit Bus Lines, filed by one passenger, and the heirs of another, who injured as a result of the fall into a river of the vehicle in which they were riding. In the morning of January 28, 1964, Severina Garces and her one-year old son, Precillano Necesito, carrying vegetables, boarded passenger auto truck or bus No. 199 of the Philippine Rabbit Bus Lines at Agno, Pangasinan. The passenger truck, driven by Francisco Bandonell, then proceeded on its regular run from Agno to Manila. After passing Mangatarem, Pangasinan truck No. 199 entered a wooden bridge, but the front wheels swerved to the right; the driver lost control, and after wrecking the bridge’s wooden rails, the truck fell on its right side into a creek where water was breast deep. The mother, Severina Garces, was drowned; the son, Precillano Necesito, was injured, suffering abrasions and fracture of the left femur. He was brought to the Provincial Hospital at Dagupan, where the fracture was set but with fragments one centimeter out of line. The money, wrist watch and cargo of vegetables were lost.

Two actions for damages and attorney’s fees totalling over P85,000 having been filed in the Court of First Instance of Tarlac (Cases Nos. 908 and 909) against the carrier, the latter pleaded that the accident was due to “engine or mechanical trouble” independent or beyond the control of the defendants or of the driver Bandonell. After joint trial, the Court of First Instance found that the bus was proceeding slowly due to the bad condition of the road; that the accident was caused by the fracture of the right steering knuckle, which was defective in that its center or core was not compact but “bubbled and

cellulous”, a condition that could not be known or ascertained by the carrier despite the fact that regular thirty-day inspections were made of the steering knuckle, since the steel exterior was smooth and shiny to the depth of 3/16 of an inch all around; that the knuckles are designed and manufactured for heavy duty and may last up to ten years; that the knuckle of bus No. 199 that broke on January 28, 1954, was last inspected on January 5, 1954, and was due to be inspected again on February 5th. Hence, the trial court, holding that the accident was exclusively due to fortuitous event, dismissed both actions. Plaintiffs appealed directly to this Court in view of the amount in controversy. We are inclined to agree with the trial court that it is not likely that bus No. 199 of the Philippine Rabbit Lines was driven over the deeply rutted road leading to the bridge at a speed of 50 miles per hour, as testified for the plaintiffs. Such conduct on the part of the driver would have provoked instant and vehement protest on the part of the passengers because of the attendant discomfort, and there is no trace of any such complaint in the records. We are thus forced to assume that the proximate cause of the accident was the reduced strength of the steering knuckle of the vehicle caused by defects in casting it. While appellants hint that the broken knuckle exhibited in court was not the real fitting attached to the truck at the time of the accident, the records they registered no objection on that ground at the trial below. The issue is thus reduced to the question whether or not the carrier is liable for the manufacturing defect of the steering knuckle, and whether the evidence discloses that in regard thereto the carrier exercised the diligence required by law (Art. 1755, new Civil Code). ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for the all the circumstances. It is clear that the carrier is not an insurer of the passengers’ safety. His liability rests upon negligence, his failure to exercise the “utmost” degree of diligence that the law requires, and by Art. 1756, in case of a passenger’s death or injury the carrier bears the burden of satisfying the court that he has duly discharged the duty of prudence required. In the American law, where the carrier is held to the same degree of diligence as under the new Civil Code, the rule on the liability of carriers for defects of equipment is thus expressed: “The preponderance of authority is in favor of the doctrine that a passenger is entitled to recover damages from a carrier for an injury resulting from a defect in an appliance purchased from a manufacturer, whenever it appears that the defect would have been discovered by the carrier if it had exercised the degree of care which under the circumstances was incumbent upon it, with regard to inspection and application of the necessary tests. For the purposes of this doctrine, the manufacturer is considered as being in law the agent or servant of the carrier, as far as regards the work of constructing the appliance. According to this theory, the good repute of the manufacturer will not relieve the carrier from liability” (10 Am. Jur. 205, s, 1324; see also Pennsylvania R. Co. vs. Roy, 102 U. S. 451; 20 L. Ed. 141; Southern R. Co. vs. Hussey, 74 ALR 1172; 42 Fed. 2d 70; and Ed Note, 29 ALR 788; Ann. Cas. 1916E 929). The rationale of the carrier’s liability is the fact that the passenger has neither choice nor control over the carrier in the selection and use of the equipment and appliances in use by the carrier. Having no privity whatever with the manufacturer or vendor of the defective equipment, the passenger has no remedy against him, while the carrier usually has. It is but logical, therefore, that the carrier, while not in insurer of the safety of his passengers, should nevertheless be held to answer for the flaws of his equipment if such flaws were at all discoverable. Thus Hannen, J., in Francis vs. Cockrell, LR 5 Q. B. 184, said:

In the ordinary course of things, the passenger does not know whether the carrier has himself manufactured the means of carriage, or contracted with someone else for its manufacture. If the carrier has contracted with someone else the passenger does not usually know who that person is, and in no case has he any share in the selection. The liability of the manufacturer must depend on the terms of the contract between him and the carrier, of which the passenger has no knowledge, and over which he can have no control, while the carrier can introduce what stipulations and take what securities he may think proper. For injury resulting to the carrier himself by the manufacturer’s want of care, the carrier has a remedy against the manufacturer; but the passenger has no remedy against the manufacturer for damage arising from a mere breach of contract with the carrier . . . . Unless, therefore, the presumed intention of the parties be that the passenger should, in the event of his being injured by the breach of the manufacturer’s contract, of which he has no knowledge, be without remedy, the only way in which effect can be given to a different intention is by supposing that the carrier is to be responsible to the passenger, and to look for his indemnity to the person whom he selected and whose breach of contract has caused the mischief. (29 ALR 789) And in the leading case of Morgan vs. Chesapeake & O. R. Co. 15 LRA (NS) 790, 16 Ann. Cas. 608, the Court, in holding the carrier responsible for damages caused by the fracture of a car axle, due to a “sand hole” in the course of moulding the axle, made the following observations. The carrier, in consideration of certain well-known and highly valuable rights granted to it by the public, undertakes certain duties toward the public, among them being to provide itself with suitable and safe cars and vehicles in which carry the traveling public. There is no such duty on the manufacturer of the cars. There is no reciprocal legal relation between him and the public in this respect. When the carrier elects to have another build its cars, it ought not to be absolved by that facts from its duty to the public to furnish safe cars. The carrier cannot lessen its responsibility by shifting its undertaking to another’s shoulders. Its duty to furnish safe cars is side by side with its duty to furnish safe track, and to operate them in a safe manner. None of its duties in these respects can be sublet so as to relieve it from the full measure primarily exacted of it by law. The carrier selects the manufacturer of its cars, if it does not itself construct them, precisely as it does those who grade its road, and lay its tracks, and operate its trains. That it does not exercise control over the former is because it elects to place that matter in the hands of the manufacturer, instead of retaining the supervising control itself. The manufacturer should be deemed the agent of the carrier as respects its duty to select the material out of which its cars and locomotive are built, as well as in inspecting each step of their construction. If there be tests known to the crafts of car builders, or iron moulders, by which such defects might be discovered before the part was incorporated into the car, then the failure of the manufacturer to make the test will be deemed a failure by the carrier to make it. This is not a vicarious responsibility. It extends, as the necessity of this business demands, the rule of respondeat superior to a situation which falls clearly within its scope and spirit. Where an injury is inflicted upon a passenger by the breaking or wrecking of a part of the train on which he is riding, it is presumably the result of negligence at some point by the carrier. As stated by Judge Story, in Story on Bailments, sec. 601a: “When the injury or damage happens to the passenger by the breaking down or overturning of the coach, or by any other accident occurring on the ground, the presumption prima facie is that it occurred by the negligence of the coachmen, and onus probandi is on the proprietors of the coach to establish that there has been no negligence whatever, and that the damage or injury has been occasioned by inevitable casualty, or by some cause which human care and foresight could not prevent; for the law will, in tenderness to human life and limb, hold the proprietors liable for the slightest negligence, and will compel them to repel by satisfactory

proofs every imputation thereof.” When the passenger has proved his injury as the result of a breakage in the car or the wrecking of the train on which he was being carried, whether the defect was in the particular car in which he was riding or not, the burden is then cast upon the carrier to show that it was due to a cause or causes which the exercise of the utmost human skill and foresight could not prevent. And the carrier in this connection must show, if the accident was due to a latent defect in the material or construction of the car, that not only could it not have discovered the defect by the exercise of such care, but that the builders could not by the exercise of the same care have discovered the defect or foreseen the result. This rule applies the same whether the defective car belonged to the carrier or not. In the case now before us, the record is to the effect that the only test applied to the steering knuckle in question was a purely visual inspection every thirty days, to see if any cracks developed. It nowhere appears that either the manufacturer or the carrier at any time tested the steering knuckle to ascertain whether its strength was up to standard, or that it had no hidden flaws would impair that strength. And yet the carrier must have been aware of the critical importance of the knuckle’s resistance; that its failure or breakage would result in loss of balance and steering control of the bus, with disastrous effects upon the passengers. No argument is required to establish that a visual inspection could not directly determine whether the resistance of this critically important part was not impaired. Nor has it been shown that the weakening of the knuckle was impossible to detect by any known test; on the contrary, there is testimony that it could be detected. We are satisfied that the periodical visual inspection of the steering knuckle as practiced by the carrier’s agents did not measure up to the required legal standard of “utmost diligence of very cautious persons” – “as far as human care and foresight can provide”, and therefore that the knuckle’s failure can not be considered a fortuitous event that exempts the carrier from responsibility (Lasam vs. Smith, 45 Phil. 657; Son vs. Cebu Autobus Co., 94 Phil. 892.) It may be impracticable, as appellee argues, to require of carriers to test the strength of each and every part of its vehicles before each trip; but we are of the opinion that a due regard for the carrier’s obligations toward the traveling public demands adequate periodical tests to determine the condition and strength of those vehicle portions the failure of which may endanger the safe of the passengers. As to the damages suffered by the plaintiffs, we agree with appellee that no allowance may be made for moral damages, since under Article 2220 of the new Civil Code, in case of suits for breach of contract, moral damages are recoverable only where the defendant acted fraudulently or in bad faith, and there is none in the case before us. As to exemplary damages, the carrier has not acted in a “wanton, fraudulent, reckless, oppressive or malevolent manner” to warrant their award. Hence, we believe that for the minor Precillano Necesito (G. R. No. L-10605), an indemnity of P5,000 would be adequate for the abrasions and fracture of the femur, including medical and hospitalization expenses, there being no evidence that there would be any permanent impairment of his faculties or bodily functions, beyond the lack of anatomical symmetry. As for the death of Severina Garces (G. R. No. L-10606) who was 33 years old, with seven minor children when she died, her heirs are obviously entitled to indemnity not only for the incidental loses of property (cash, wrist watch and merchandise) worth P394 that she carried at the time of the accident and for the burial expenses of P490, but also for the loss of her earnings (shown to average P120 a month) and for the deprivation of her protection, guidance and company. In our judgment, an award of P15,000 would be adequate (cf Alcantara vs. Surro, 49 O.G. 2769; 93 Phil. 472).

The low income of the plaintiffs-appellants makes an award for attorney’s fees just and equitable (Civil Code, Art. 2208, par. 11). Considering that he two cases filed were tried jointly, a fee of P3,500 would be reasonable. In view of the foregoing, the decision appealed from is reversed, and the defendants-appellees are sentenced to indemnify the plaintiffs-appellants in the following amounts: P5,000 to Precillano Necesito, and P15,000 to the heirs of the deceased Severina Garces, plus P3,500 by way of attorney’s fees and litigation expenses. Costs against defendants-appellees. So ordered. Paras, C.J. Bengzon, Reyes, A., Bautista Angelo, Concepcion, and Endencia, JJ., concur. Felix, J., concurs in the result. RESOLUTION September 11, 1958 REYES, J. B. L., J.: Defendants-appellees have Submitted a motion asking this Court to reconsider its decision of June 30, 1958, and that the same be modified with respect to (1) its holding the carrier liable for the breakage of the steering knuckle that caused the autobus No. 199 to overturn, whereby the passengers riding in it were injured; (2) the damages awarded, that appellees argue to be excessive; and (3) the award of attorneys’ fees. (1) The rule prevailing in this jurisdiction as established in previous decisions of this Court, cited in our main opinion, is that a carrier is liable to its passengers for damages caused by mechanical defects of the conveyance. As early as 1924, in Lasam vs. Smith, 45 Phil. 659 this Court ruled: As far as the record shows, the accident was caused either by defects in the automobile or else through the negligence of its driver. That is not caso fortuito. And in Son vs. Cebu Autobus Company, 94 Phil. 892, this Court held a common carrier liable in damages to passenger for injuries cause by an accident due to the breakage of a faulty drag-link spring. It can be seen that while the courts of the United States are at variance on the question of a carrier’s liability for latent mechanical defects, the rule in this jurisdiction has been consistent in holding the carrier responsible. This Court has quoted from American and English decisions, not because it felt bound to follow the same, but merely in approval of the rationale of the rule as expressed therein, since the previous Philippine cases did not enlarge on the ideas underlying the doctrine established thereby. The new evidence sought to be introduced do not warrant the grant of a new trial, since the proposed proof available when the original trial was held. Said evidence is not newly discovered. (2) With regard to the indemnity awarded to the child Precilliano Necesito, the injuries suffered by him are incapable of accurate pecuniary estimation, particularly because the full effect of the injury is not ascertainable immediately. This uncertainty, however, does not preclude the right to an indemnity, since the injury is patent and not denied (Civil Code, Art. 2224). The reasons behind this award are expounded by the Code Commission in its report:

There are cases where from the nature of the case, definite proof of pecuniary loss cannot be offered, although the court is convinced that there has been such loss. For instance, injury to one’s commercial credit or to the goodwill of a business firm is often hard to show with certainty in terms of money. Should damages be denied for that reason? The judge should be empowered to calculate moderate damages in such cases, rather than that the plaintiff should suffer, without redress, from the defendant’s wrongful act.” (Report of the Code Commission, p. 75) In awarding to the heirs of the deceased Severina Garces an indemnity for the loss of her “guidance, protection and company,” although it is but moral damage, the Court took into account that the case of a passenger who dies in the course of an accident, due to the carrier’s negligence constitutes an exception to the general rule. While, as pointed out in the main decision, under Article 2220 of the new Civil Code there can be no recovery of moral damages for a breach of contract in the absence of fraud malice or bad faith, the case of a violation of the contract of carriage leading to a passenger’s death escapes this general rule, in view of Article 1764 in connection with Article 2206, No. 3 of the new Civil Code. ART. 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a comman carrier. ART. 2206. . . . (3) The spouse, legitimate and eligimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased. Being a special rule limited to cases of fatal injuries, these articles prevail over the general rule of Art. 2220. Special provisions control general ones (Lichauco & Co. vs. Apostol, 44 Phil. 138; Sancio vs. Lizarraga, 55 Phil. 601). It thus appears that under the new Civil Code, in case of accident due to a carrier’s negligence, the heirs of a deceased passenger may recover moral damages, even though a passenger who is injured, but manages to survive, is not entitled to them. There is, therefore, no conflict between our main decision in the instant case and that of Cachero vs. Manila Yellow Taxi Cab Co., 101 Phil. 523, where the passenger suffered injuries, but did not lose his life. (3) In the Cachero case this Court disallowed attorneys’ fees to the injured plaintiff because the litigation arose out of his exaggerated and unreasonable deeds for an indemnity that was out of proportion with the compensatory damages to which he was solely entitled. But in the present case, plaintiffs’ original claims can not be deemed a priori wholly unreasonable, since they had a right to indemnity for moral damages besides compensatory ones, and moral damages are not determined by set and invariable bounds. Neither does the fact that the contract between the passengers and their counsel was on a contingent basis affect the former’s right to counsel fees. As pointed out for appellants, the Court’s award is an party and not to counsel. A litigant who improvidently stipulate higher counsel fees than those to which he is lawfully entitled, does not for that reason earn the right to a larger indemnity; but, by parity of reasoning, he should not be deprived of counsel fees if by law he is entitled to recover them. We find no reason to alter the main decision heretofore rendered. Ultimately, the position taken by this Court is that a common carrier’s contract is not to be regarded as a game of chance wherein the passenger stakes his limb and life against the carrier’s property and profits.

Wherefore, the motion for reconsideration is hereby denied. So ordered.

SICAM ET AL vs JORGE G.R. No. 159617, August 8, 2007 FACTS: On different dates, Lulu Jorge pawned several pieces of jewelry with Agencia de R. C. Sicam located in Parañaque to secure a loan. On October 19, 1987, two armed men entered the pawnshop and took away whatever cash and jewelry were found inside the pawnshop vault. On the same date, Sicam sent Lulu a letter informing her of the loss of her jewelry due to the robbery incident in the pawnshop. Respondent Lulu then wrote back expressing disbelief, then requested Sicam to prepare the pawned jewelry for withdrawal on November 6, but Sicam failed to return the jewelry. Lulu, joined by her husband Cesar, filed a complaint against Sicam with the RTC of Makati seeking indemnification for the loss of pawned jewelry and payment of AD, MD and ED as well as AF. The RTC rendered its Decision dismissing respondents’ complaint as well as petitioners’ counterclaim. Respondents appealed the RTC Decision to the CA which reversed the RTC, ordering the appellees to pay appellants the actual value of the lost jewelry and AF. Petitioners MR denied, hence the instant petition for review on Certiorari. ISSUE: are the petitioners liable for the loss of the pawned articles in their possession? (Petitioners insist that they are not liable since robbery is a fortuitous event and they are not negligent at all.) HELD: The Decision of the CA is AFFIRMED. YES. Article 1174 of the Civil Code provides: Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen or which, though foreseen, were inevitable. Fortuitous events by definition are extraordinary events not foreseeable or avoidable. It is therefore, not enough that the event should not have been foreseen or anticipated, as is commonly believed but it must be one impossible to foresee or to avoid. The mere difficulty to foresee the happening is not impossibility to foresee the same. To constitute a fortuitous event, the following elements must concur: (a) the cause of the unforeseen and unexpected occurrence or of the failure of the debtor to comply with obligations must be independent of human will;

(b) it must be impossible to foresee the event that constitutes the caso fortuito or, if it can be foreseen, it must be impossible to avoid; (c) the occurrence must be such as to render it impossible for the debtor to fulfill obligations in a normal manner; and, (d) the obligor must be free from any participation in the aggravation of the injury or loss. The burden of proving that the loss was due to a fortuitous event rests on him who invokes it. And, in order for a fortuitous event to exempt one from liability, it is necessary that one has committed no negligence or misconduct that may have occasioned the loss. Sicam had testified that there was a security guard in their pawnshop at the time of the robbery. He likewise testified that when he started the pawnshop business in 1983, he thought of opening a vault with the nearby bank for the purpose of safekeeping the valuables but was discouraged by the Central Bank since pawned articles should only be stored in a vault inside the pawnshop. The very measures which petitioners had allegedly adopted show that to them the possibility of robbery was not only foreseeable, but actually foreseen and anticipated. Sicam’s testimony, in effect, contradicts petitioners’ defense of fortuitous event. Moreover, petitioners failed to show that they were free from any negligence by which the loss of the pawned jewelry may have been occasioned. Robbery per se, just like carnapping, is not a fortuitous event. It does not foreclose the possibility of negligence on the part of herein petitioners. Petitioners merely presented the police report of the Parañaque Police Station on the robbery committed based on the report of petitioners’ employees which is not sufficient to establish robbery. Such report also does not prove that petitioners were not at fault. On the contrary, by the very evidence of petitioners, the CA did not err in finding that petitioners are guilty of concurrent or contributory negligence as provided in Article 1170 of the Civil Code, to wit: Art. 1170. 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. ** Article 2123 of the Civil Code provides that with regard to pawnshops and other establishments which are engaged in making loans secured by pledges, the special laws and regulations concerning them shall be observed, and subsidiarily, the provisions on pledge, mortgage and antichresis. The provision on pledge, particularly Article 2099 of the Civil Code, provides that the creditor shall take care of the thing pledged with the diligence of a good father of a family. This means that petitioners must take care of the pawns the way a prudent person would as to his own property. In this connection, Article 1173 of the Civil Code further provides: Art. 1173. The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of time and of the place. When negligence shows bad faith, the provisions of Articles 1171 and 2201, paragraph 2 shall apply.

If the law or contract does not state the diligence which is to be observed in the performance, that which is expected of a good father of a family shall be required. We expounded in Cruz v. Gangan that negligence is the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do; or the doing of something which a prudent and reasonable man would not do. It is want of care required by the circumstances. A review of the records clearly shows that petitioners failed to exercise reasonable care and caution that an ordinarily prudent person would have used in the same situation. Petitioners were guilty of negligence in the operation of their pawnshop business. Sicam’s testimony revealed that there were no security measures adopted by petitioners in the operation of the pawnshop. Evidently, no sufficient precaution and vigilance were adopted by petitioners to protect the pawnshop from unlawful intrusion. There was no clear showing that there was any security guard at all. Or if there was one, that he had sufficient training in securing a pawnshop. Further, there is no showing that the alleged security guard exercised all that was necessary to prevent any untoward incident or to ensure that no suspicious individuals were allowed to enter the premises. In fact, it is even doubtful that there was a security guard, since it is quite impossible that he would not have noticed that the robbers were armed with caliber .45 pistols each, which were allegedly poked at the employees. Significantly, the alleged security guard was not presented at all to corroborate petitioner Sicam’s claim; not one of petitioners’ employees who were present during the robbery incident testified in court. Furthermore, petitioner Sicam’s admission that the vault was open at the time of robbery is clearly a proof of petitioners’ failure to observe the care, precaution and vigilance that the circumstances justly demanded. The robbery in this case happened in petitioners’ pawnshop and they were negligent in not exercising the precautions justly demanded of a pawnshop. FULL CASE Before us is a Petition for Review on Certiorari filed by Roberto C. Sicam, Jr. (petitioner Sicam) and Agencia de R.C. Sicam, Inc. (petitioner corporation) seeking to annul the Decision1 of the Court of Appeals dated March 31, 2003, and its Resolution2 dated August 8, 2003, in CA G.R. CV No. 56633. It appears that on different dates from September to October 1987, Lulu V. Jorge (respondent Lulu) pawned several pieces of jewelry with Agencia de R. C. Sicam located at No. 17 Aguirre Ave., BF Homes Parañaque, Metro Manila, to secure a loan in the total amount of P59,500.00. On October 19, 1987, two armed men entered the pawnshop and took away whatever cash and jewelry were found inside the pawnshop vault. The incident was entered in the police blotter of the Southern Police District, Parañaque Police Station as follows: Investigation shows that at above TDPO, while victims were inside the office, two (2) male unidentified persons entered into the said office with guns drawn. Suspects(sic) (1) went straight inside and poked his gun toward Romeo Sicam and thereby tied him with an electric wire while suspects (sic) (2) poked his gun toward Divina Mata and Isabelita Rodriguez and ordered them to lay (sic) face flat on the floor. Suspects asked forcibly the case and assorted pawned jewelries items mentioned above.

Suspects after taking the money and jewelries fled on board a Marson Toyota unidentified plate number.3 Petitioner Sicam sent respondent Lulu a letter dated October 19, 1987 informing her of the loss of her jewelry due to the robbery incident in the pawnshop. On November 2, 1987, respondent Lulu then wrote a letter4 to petitioner Sicam expressing disbelief stating that when the robbery happened, all jewelry pawned were deposited with Far East Bank near the pawnshop since it had been the practice that before they could withdraw, advance notice must be given to the pawnshop so it could withdraw the jewelry from the bank. Respondent Lulu then requested petitioner Sicam to prepare the pawned jewelry for withdrawal on November 6, 1987 but petitioner Sicam failed to return the jewelry. On September 28, 1988, respondent Lulu joined by her husband, Cesar Jorge, filed a complaint against petitioner Sicam with the Regional Trial Court of Makati seeking indemnification for the loss of pawned jewelry and payment of actual, moral and exemplary damages as well as attorney's fees. The case was docketed as Civil Case No. 88-2035. Petitioner Sicam filed his Answer contending that he is not the real party-in-interest as the pawnshop was incorporated on April 20, 1987 and known as Agencia de R.C. Sicam, Inc; that petitioner corporation had exercised due care and diligence in the safekeeping of the articles pledged with it and could not be made liable for an event that is fortuitous. Respondents subsequently filed an Amended Complaint to include petitioner corporation. Thereafter, petitioner Sicam filed a Motion to Dismiss as far as he is concerned considering that he is not the real party-in-interest. Respondents opposed the same. The RTC denied the motion in an Order dated November 8, 1989.5 After trial on the merits, the RTC rendered its Decision6 dated January 12, 1993, dismissing respondents’ complaint as well as petitioners’ counterclaim. The RTC held that petitioner Sicam could not be made personally liable for a claim arising out of a corporate transaction; that in the Amended Complaint of respondents, they asserted that "plaintiff pawned assorted jewelries in defendants' pawnshop"; and that as a consequence of the separate juridical personality of a corporation, the corporate debt or credit is not the debt or credit of a stockholder. The RTC further ruled that petitioner corporation could not be held liable for the loss of the pawned jewelry since it had not been rebutted by respondents that the loss of the pledged pieces of jewelry in the possession of the corporation was occasioned by armed robbery; that robbery is a fortuitous event which exempts the victim from liability for the loss, citing the case of Austria v. Court of Appeals;7 and that the parties’ transaction was that of a pledgor and pledgee and under Art. 1174 of the Civil Code, the pawnshop as a pledgee is not responsible for those events which could not be foreseen. Respondents appealed the RTC Decision to the CA. In a Decision dated March 31, 2003, the CA reversed the RTC, the dispositive portion of which reads as follows: WHEREFORE, premises considered, the instant Appeal is GRANTED, and the Decision dated January 12, 1993,of the Regional Trial Court of Makati, Branch 62, is hereby REVERSED and SET ASIDE, ordering the appellees to pay appellants the actual value of the lost jewelry amounting to P272,000.00, and attorney' fees of P27,200.00.8

In finding petitioner Sicam liable together with petitioner corporation, the CA applied the doctrine of piercing the veil of corporate entity reasoning that respondents were misled into thinking that they were dealing with the pawnshop owned by petitioner Sicam as all the pawnshop tickets issued to them bear the words "Agencia de R.C. Sicam"; and that there was no indication on the pawnshop tickets that it was the petitioner corporation that owned the pawnshop which explained why respondents had to amend their complaint impleading petitioner corporation. The CA further held that the corresponding diligence required of a pawnshop is that it should take steps to secure and protect the pledged items and should take steps to insure itself against the loss of articles which are entrusted to its custody as it derives earnings from the pawnshop trade which petitioners failed to do; that Austria is not applicable to this case since the robbery incident happened in 1961 when the criminality had not as yet reached the levels attained in the present day; that they are at least guilty of contributory negligence and should be held liable for the loss of jewelries; and that robberies and hold-ups are foreseeable risks in that those engaged in the pawnshop business are expected to foresee. The CA concluded that both petitioners should be jointly and severally held liable to respondents for the loss of the pawned jewelry. Petitioners’ motion for reconsideration was denied in a Resolution dated August 8, 2003. Hence, the instant petition for review with the following assignment of errors: THE COURT OF APPEALS ERRED AND WHEN IT DID, IT OPENED ITSELF TO REVERSAL, WHEN IT ADOPTED UNCRITICALLY (IN FACT IT REPRODUCED AS ITS OWN WITHOUT IN THE MEANTIME ACKNOWLEDGING IT) WHAT THE RESPONDENTS ARGUED IN THEIR BRIEF, WHICH ARGUMENT WAS PALPABLY UNSUSTAINABLE. THE COURT OF APPEALS ERRED, AND WHEN IT DID, IT OPENED ITSELF TO REVERSAL BY THIS HONORABLE COURT, WHEN IT AGAIN ADOPTED UNCRITICALLY (BUT WITHOUT ACKNOWLEDGING IT) THE SUBMISSIONS OF THE RESPONDENTS IN THEIR BRIEF WITHOUT ADDING ANYTHING MORE THERETO DESPITE THE FACT THAT THE SAID ARGUMENT OF THE RESPONDENTS COULD NOT HAVE BEEN SUSTAINED IN VIEW OF UNREBUTTED EVIDENCE ON RECORD.9 Anent the first assigned error, petitioners point out that the CA’s finding that petitioner Sicam is personally liable for the loss of the pawned jewelries is "a virtual and uncritical reproduction of the arguments set out on pp. 5-6 of the Appellants’ brief."10 Petitioners argue that the reproduced arguments of respondents in their Appellants’ Brief suffer from infirmities, as follows: (1) Respondents conclusively asserted in paragraph 2 of their Amended Complaint that Agencia de R.C. Sicam, Inc. is the present owner of Agencia de R.C. Sicam Pawnshop, and therefore, the CA cannot rule against said conclusive assertion of respondents; (2) The issue resolved against petitioner Sicam was not among those raised and litigated in the trial court; and (3) By reason of the above infirmities, it was error for the CA to have pierced the corporate veil since a corporation has a personality distinct and separate from its individual stockholders or members.

Anent the second error, petitioners point out that the CA finding on their negligence is likewise an unedited reproduction of respondents’ brief which had the following defects: (1) There were unrebutted evidence on record that petitioners had observed the diligence required of them, i.e, they wanted to open a vault with a nearby bank for purposes of safekeeping the pawned articles but was discouraged by the Central Bank (CB) since CB rules provide that they can only store the pawned articles in a vault inside the pawnshop premises and no other place; (2) Petitioners were adjudged negligent as they did not take insurance against the loss of the pledged jelweries, but it is judicial notice that due to high incidence of crimes, insurance companies refused to cover pawnshops and banks because of high probability of losses due to robberies; (3) In Hernandez v. Chairman, Commission on Audit (179 SCRA 39, 45-46), the victim of robbery was exonerated from liability for the sum of money belonging to others and lost by him to robbers. Respondents filed their Comment and petitioners filed their Reply thereto. The parties subsequently submitted their respective Memoranda. We find no merit in the petition. To begin with, although it is true that indeed the CA findings were exact reproductions of the arguments raised in respondents’ (appellants’) brief filed with the CA, we find the same to be not fatally infirmed. Upon examination of the Decision, we find that it expressed clearly and distinctly the facts and the law on which it is based as required by Section 8, Article VIII of the Constitution. The discretion to decide a case one way or another is broad enough to justify the adoption of the arguments put forth by one of the parties, as long as these are legally tenable and supported by law and the facts on records.11 Our jurisdiction under Rule 45 of the Rules of Court is limited to the review of errors of law committed by the appellate court. Generally, the findings of fact of the appellate court are deemed conclusive and we are not duty-bound to analyze and calibrate all over again the evidence adduced by the parties in the court a quo.12 This rule, however, is not without exceptions, such as where the factual findings of the Court of Appeals and the trial court are conflicting or contradictory13 as is obtaining in the instant case. However, after a careful examination of the records, we find no justification to absolve petitioner Sicam from liability. The CA correctly pierced the veil of the corporate fiction and adjudged petitioner Sicam liable together with petitioner corporation. The rule is that the veil of corporate fiction may be pierced when made as a shield to perpetrate fraud and/or confuse legitimate issues. 14 The theory of corporate entity was not meant to promote unfair objectives or otherwise to shield them.15 Notably, the evidence on record shows that at the time respondent Lulu pawned her jewelry, the pawnshop was owned by petitioner Sicam himself. As correctly observed by the CA, in all the pawnshop receipts issued to respondent Lulu in September 1987, all bear the words "Agencia de R. C. Sicam," notwithstanding that the pawnshop was allegedly incorporated in April 1987. The receipts issued after such alleged incorporation were still in the name of "Agencia de R. C. Sicam," thus inevitably misleading, or at the very least, creating the wrong impression to

respondents and the public as well, that the pawnshop was owned solely by petitioner Sicam and not by a corporation. Even petitioners’ counsel, Atty. Marcial T. Balgos, in his letter16 dated October 15, 1987 addressed to the Central Bank, expressly referred to petitioner Sicam as the proprietor of the pawnshop notwithstanding the alleged incorporation in April 1987. We also find no merit in petitioners' argument that since respondents had alleged in their Amended Complaint that petitioner corporation is the present owner of the pawnshop, the CA is bound to decide the case on that basis. Section 4 Rule 129 of the Rules of Court provides that an admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof. The admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made. Thus, the general rule that a judicial admission is conclusive upon the party making it and does not require proof, admits of two exceptions, to wit: (1) when it is shown that such admission was made through palpable mistake, and (2) when it is shown that no such admission was in fact made. The latter exception allows one to contradict an admission by denying that he made such an admission.17 The Committee on the Revision of the Rules of Court explained the second exception in this wise: x x x if a party invokes an "admission" by an adverse party, but cites the admission "out of context," then the one making the "admission" may show that he made no "such" admission, or that his admission was taken out of context. x x x that the party can also show that he made no "such admission", i.e., not in the sense in which the admission is made to appear. That is the reason for the modifier "such" because if the rule simply states that the admission may be contradicted by showing that "no admission was made," the rule would not really be providing for a contradiction of the admission but just a denial.18 (Emphasis supplied). While it is true that respondents alleged in their Amended Complaint that petitioner corporation is the present owner of the pawnshop, they did so only because petitioner Sicam alleged in his Answer to the original complaint filed against him that he was not the real party-in-interest as the pawnshop was incorporated in April 1987. Moreover, a reading of the Amended Complaint in its entirety shows that respondents referred to both petitioner Sicam and petitioner corporation where they (respondents) pawned their assorted pieces of jewelry and ascribed to both the failure to observe due diligence commensurate with the business which resulted in the loss of their pawned jewelry. Markedly, respondents, in their Opposition to petitioners’ Motion to Dismiss Amended Complaint, insofar as petitioner Sicam is concerned, averred as follows: Roberto C. Sicam was named the defendant in the original complaint because the pawnshop tickets involved in this case did not show that the R.C. Sicam Pawnshop was a corporation. In paragraph 1 of his Answer, he admitted the allegations in paragraph 1 and 2 of the Complaint. He merely added "that defendant is not now the real party in interest in this case."

It was defendant Sicam's omission to correct the pawnshop tickets used in the subject transactions in this case which was the cause of the instant action. He cannot now ask for the dismissal of the complaint against him simply on the mere allegation that his pawnshop business is now incorporated. It is a matter of defense, the merit of which can only be reached after consideration of the evidence to be presented in due course.19 Unmistakably, the alleged admission made in respondents' Amended Complaint was taken "out of context" by petitioner Sicam to suit his own purpose. Ineluctably, the fact that petitioner Sicam continued to issue pawnshop receipts under his name and not under the corporation's name militates for the piercing of the corporate veil. We likewise find no merit in petitioners' contention that the CA erred in piercing the veil of corporate fiction of petitioner corporation, as it was not an issue raised and litigated before the RTC. Petitioner Sicam had alleged in his Answer filed with the trial court that he was not the real party-in-interest because since April 20, 1987, the pawnshop business initiated by him was incorporated and known as Agencia de R.C. Sicam. In the pre-trial brief filed by petitioner Sicam, he submitted that as far as he was concerned, the basic issue was whether he is the real party in interest against whom the complaint should be directed.20 In fact, he subsequently moved for the dismissal of the complaint as to him but was not favorably acted upon by the trial court. Moreover, the issue was squarely passed upon, although erroneously, by the trial court in its Decision in this manner: x x x The defendant Roberto Sicam, Jr likewise denies liability as far as he is concerned for the reason that he cannot be made personally liable for a claim arising from a corporate transaction. This Court sustains the contention of the defendant Roberto C. Sicam, Jr. The amended complaint itself asserts that "plaintiff pawned assorted jewelries in defendant's pawnshop." It has been held that " as a consequence of the separate juridical personality of a corporation, the corporate debt or credit is not the debt or credit of the stockholder, nor is the stockholder's debt or credit that of a corporation.21 Clearly, in view of the alleged incorporation of the pawnshop, the issue of whether petitioner Sicam is personally liable is inextricably connected with the determination of the question whether the doctrine of piercing the corporate veil should or should not apply to the case. The next question is whether petitioners are liable for the loss of the pawned articles in their possession. Petitioners insist that they are not liable since robbery is a fortuitous event and they are not negligent at all. We are not persuaded. Article 1174 of the Civil Code provides: Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen or which, though foreseen, were inevitable.

Fortuitous events by definition are extraordinary events not foreseeable or avoidable. It is therefore, not enough that the event should not have been foreseen or anticipated, as is commonly believed but it must be one impossible to foresee or to avoid. The mere difficulty to foresee the happening is not impossibility to foresee the same. 22 To constitute a fortuitous event, the following elements must concur: (a) the cause of the unforeseen and unexpected occurrence or of the failure of the debtor to comply with obligations must be independent of human will; (b) it must be impossible to foresee the event that constitutes the caso fortuito or, if it can be foreseen, it must be impossible to avoid; (c) the occurrence must be such as to render it impossible for the debtor to fulfill obligations in a normal manner; and, (d) the obligor must be free from any participation in the aggravation of the injury or loss. 23 The burden of proving that the loss was due to a fortuitous event rests on him who invokes it.24 And, in order for a fortuitous event to exempt one from liability, it is necessary that one has committed no negligence or misconduct that may have occasioned the loss. 25 It has been held that an act of God cannot be invoked to protect a person who has failed to take steps to forestall the possible adverse consequences of such a loss. One's negligence may have concurred with an act of God in producing damage and injury to another; nonetheless, showing that the immediate or proximate cause of the damage or injury was a fortuitous event would not exempt one from liability. When the effect is found to be partly the result of a person's participation -- whether by active intervention, neglect or failure to act -- the whole occurrence is humanized and removed from the rules applicable to acts of God. 26 Petitioner Sicam had testified that there was a security guard in their pawnshop at the time of the robbery. He likewise testified that when he started the pawnshop business in 1983, he thought of opening a vault with the nearby bank for the purpose of safekeeping the valuables but was discouraged by the Central Bank since pawned articles should only be stored in a vault inside the pawnshop. The very measures which petitioners had allegedly adopted show that to them the possibility of robbery was not only foreseeable, but actually foreseen and anticipated. Petitioner Sicam’s testimony, in effect, contradicts petitioners’ defense of fortuitous event. Moreover, petitioners failed to show that they were free from any negligence by which the loss of the pawned jewelry may have been occasioned. Robbery per se, just like carnapping, is not a fortuitous event. It does not foreclose the possibility of negligence on the part of herein petitioners. In Co v. Court of Appeals,27 the Court held: It is not a defense for a repair shop of motor vehicles to escape liability simply because the damage or loss of a thing lawfully placed in its possession was due to carnapping. Carnapping per se cannot be considered as a fortuitous event. The fact that a thing was unlawfully and forcefully taken from another's rightful possession, as in cases of carnapping, does not automatically give rise to a fortuitous event. To be considered as such, carnapping entails more than the mere forceful taking of another's property. It must be proved and established that the event was an act of God or was done solely by third parties and that neither the claimant nor the person alleged to be negligent has any participation. In accordance with the Rules of Evidence, the burden of proving that the loss was due to a fortuitous event rests on him who invokes it — which in this case is the private respondent. However, other than the police report of the alleged carnapping incident, no other evidence was presented by private respondent to the effect that the incident was not due to its fault. A police report of an alleged crime, to which only private

respondent is privy, does not suffice to establish the carnapping. Neither does it prove that there was no fault on the part of private respondent notwithstanding the parties' agreement at the pretrial that the car was carnapped. Carnapping does not foreclose the possibility of fault or negligence on the part of private respondent.28 Just like in Co, petitioners merely presented the police report of the Parañaque Police Station on the robbery committed based on the report of petitioners' employees which is not sufficient to establish robbery. Such report also does not prove that petitioners were not at fault. On the contrary, by the very evidence of petitioners, the CA did not err in finding that petitioners are guilty of concurrent or contributory negligence as provided in Article 1170 of the Civil Code, to wit: Art. 1170. 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.29 Article 2123 of the Civil Code provides that with regard to pawnshops and other establishments which are engaged in making loans secured by pledges, the special laws and regulations concerning them shall be observed, and subsidiarily, the provisions on pledge, mortgage and antichresis. The provision on pledge, particularly Article 2099 of the Civil Code, provides that the creditor shall take care of the thing pledged with the diligence of a good father of a family. This means that petitioners must take care of the pawns the way a prudent person would as to his own property. In this connection, Article 1173 of the Civil Code further provides: Art. 1173. The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of time and of the place. When negligence shows bad faith, the provisions of Articles 1171 and 2201, paragraph 2 shall apply. If the law or contract does not state the diligence which is to be observed in the performance, that which is expected of a good father of a family shall be required. We expounded in Cruz v. Gangan30 that negligence is the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do; or the doing of something which a prudent and reasonable man would not do.31 It is want of care required by the circumstances. A review of the records clearly shows that petitioners failed to exercise reasonable care and caution that an ordinarily prudent person would have used in the same situation. Petitioners were guilty of negligence in the operation of their pawnshop business. Petitioner Sicam testified, thus: Court: Q. Do you have security guards in your pawnshop? A. Yes, your honor. Q. Then how come that the robbers were able to enter the premises when according to you there was a security guard? A. Sir, if these robbers can rob a bank, how much more a pawnshop.

Q. I am asking you how were the robbers able to enter despite the fact that there was a security guard? A. At the time of the incident which happened about 1:00 and 2:00 o'clock in the afternoon and it happened on a Saturday and everything was quiet in the area BF Homes Parañaque they pretended to pawn an article in the pawnshop, so one of my employees allowed him to come in and it was only when it was announced that it was a hold up. Q. Did you come to know how the vault was opened? A. When the pawnshop is official (sic) open your honor the pawnshop is partly open. The combination is off. Q. No one open (sic) the vault for the robbers? A. No one your honor it was open at the time of the robbery. Q. It is clear now that at the time of the robbery the vault was open the reason why the robbers were able to get all the items pawned to you inside the vault. A. Yes sir.32 Revealing that there were no security measures adopted by petitioners in the operation of the pawnshop. Evidently, no sufficient precaution and vigilance were adopted by petitioners to protect the pawnshop from unlawful intrusion. There was no clear showing that there was any security guard at all. Or if there was one, that he had sufficient training in securing a pawnshop. Further, there is no showing that the alleged security guard exercised all that was necessary to prevent any untoward incident or to ensure that no suspicious individuals were allowed to enter the premises. In fact, it is even doubtful that there was a security guard, since it is quite impossible that he would not have noticed that the robbers were armed with caliber .45 pistols each, which were allegedly poked at the employees.33 Significantly, the alleged security guard was not presented at all to corroborate petitioner Sicam's claim; not one of petitioners' employees who were present during the robbery incident testified in court. Furthermore, petitioner Sicam's admission that the vault was open at the time of robbery is clearly a proof of petitioners' failure to observe the care, precaution and vigilance that the circumstances justly demanded. Petitioner Sicam testified that once the pawnshop was open, the combination was already off. Considering petitioner Sicam's testimony that the robbery took place on a Saturday afternoon and the area in BF Homes Parañaque at that time was quiet, there was more reason for petitioners to have exercised reasonable foresight and diligence in protecting the pawned jewelries. Instead of taking the precaution to protect them, they let open the vault, providing no difficulty for the robbers to cart away the pawned articles. We, however, do not agree with the CA when it found petitioners negligent for not taking steps to insure themselves against loss of the pawned jewelries. Under Section 17 of Central Bank Circular No. 374, Rules and Regulations for Pawnshops, which took effect on July 13, 1973, and which was issued pursuant to Presidential Decree No. 114, Pawnshop Regulation Act, it is provided that pawns pledged must be insured, to wit: Sec. 17. Insurance of Office Building and Pawns- The place of business of a pawnshop and the pawns pledged to it must be insured against fire and against burglary as well as for the latter(sic), by an insurance company accredited by the Insurance Commissioner. However, this Section was subsequently amended by CB Circular No. 764 which took effect on October 1, 1980, to wit: Sec. 17 Insurance of Office Building and Pawns – The office building/premises and pawns of a pawnshop must be insured against fire. (emphasis supplied).

where the requirement that insurance against burglary was deleted. Obviously, the Central Bank considered it not feasible to require insurance of pawned articles against burglary. The robbery in the pawnshop happened in 1987, and considering the above-quoted amendment, there is no statutory duty imposed on petitioners to insure the pawned jewelry in which case it was error for the CA to consider it as a factor in concluding that petitioners were negligent. Nevertheless, the preponderance of evidence shows that petitioners failed to exercise the diligence required of them under the Civil Code. The diligence with which the law requires the individual at all times to govern his conduct varies with the nature of the situation in which he is placed and the importance of the act which he is to perform.34 Thus, the cases of Austria v. Court of Appeals,35 Hernandez v. Chairman, Commission on Audit36 and Cruz v. Gangan37 cited by petitioners in their pleadings, where the victims of robbery were exonerated from liability, find no application to the present case. In Austria, Maria Abad received from Guillermo Austria a pendant with diamonds to be sold on commission basis, but which Abad failed to subsequently return because of a robbery committed upon her in 1961. The incident became the subject of a criminal case filed against several persons. Austria filed an action against Abad and her husband (Abads) for recovery of the pendant or its value, but the Abads set up the defense that the robbery extinguished their obligation. The RTC ruled in favor of Austria, as the Abads failed to prove robbery; or, if committed, that Maria Abad was guilty of negligence. The CA, however, reversed the RTC decision holding that the fact of robbery was duly established and declared the Abads not responsible for the loss of the jewelry on account of a fortuitous event. We held that for the Abads to be relieved from the civil liability of returning the pendant under Art. 1174 of the Civil Code, it would only be sufficient that the unforeseen event, the robbery, took place without any concurrent fault on the debtor’s part, and this can be done by preponderance of evidence; that to be free from liability for reason of fortuitous event, the debtor must, in addition to the casus itself, be free of any concurrent or contributory fault or negligence.38 We found in Austria that under the circumstances prevailing at the time the Decision was promulgated in 1971, the City of Manila and its suburbs had a high incidence of crimes against persons and property that rendered travel after nightfall a matter to be sedulously avoided without suitable precaution and protection; that the conduct of Maria Abad in returning alone to her house in the evening carrying jewelry of considerable value would have been negligence per se and would not exempt her from responsibility in the case of robbery. However we did not hold Abad liable for negligence since, the robbery happened ten years previously; i.e., 1961, when criminality had not reached the level of incidence obtaining in 1971. In contrast, the robbery in this case took place in 1987 when robbery was already prevalent and petitioners in fact had already foreseen it as they wanted to deposit the pawn with a nearby bank for safekeeping. Moreover, unlike in Austria, where no negligence was committed, we found petitioners negligent in securing their pawnshop as earlier discussed. In Hernandez, Teodoro Hernandez was the OIC and special disbursing officer of the Ternate Beach Project of the Philippine Tourism in Cavite. In the morning of July 1, 1983, a Friday, he went to Manila to encash two checks covering the wages of the employees and the operating expenses of the project. However for some reason, the processing of the check was delayed and was completed at about 3 p.m. Nevertheless, he decided to encash the check because the project employees would be waiting for their pay the following day; otherwise, the workers would

have to wait until July 5, the earliest time, when the main office would open. At that time, he had two choices: (1) return to Ternate, Cavite that same afternoon and arrive early evening; or (2) take the money with him to his house in Marilao, Bulacan, spend the night there, and leave for Ternate the following day. He chose the second option, thinking it was the safer one. Thus, a little past 3 p.m., he took a passenger jeep bound for Bulacan. While the jeep was on Epifanio de los Santos Avenue, the jeep was held up and the money kept by Hernandez was taken, and the robbers jumped out of the jeep and ran. Hernandez chased the robbers and caught up with one robber who was subsequently charged with robbery and pleaded guilty. The other robber who held the stolen money escaped. The Commission on Audit found Hernandez negligent because he had not brought the cash proceeds of the checks to his office in Ternate, Cavite for safekeeping, which is the normal procedure in the handling of funds. We held that Hernandez was not negligent in deciding to encash the check and bringing it home to Marilao, Bulacan instead of Ternate, Cavite due to the lateness of the hour for the following reasons: (1) he was moved by unselfish motive for his co-employees to collect their wages and salaries the following day, a Saturday, a non-working, because to encash the check on July 5, the next working day after July 1, would have caused discomfort to laborers who were dependent on their wages for sustenance; and (2) that choosing Marilao as a safer destination, being nearer, and in view of the comparative hazards in the trips to the two places, said decision seemed logical at that time. We further held that the fact that two robbers attacked him in broad daylight in the jeep while it was on a busy highway and in the presence of other passengers could not be said to be a result of his imprudence and negligence. Unlike in Hernandez where the robbery happened in a public utility, the robbery in this case took place in the pawnshop which is under the control of petitioners. Petitioners had the means to screen the persons who were allowed entrance to the premises and to protect itself from unlawful intrusion. Petitioners had failed to exercise precautionary measures in ensuring that the robbers were prevented from entering the pawnshop and for keeping the vault open for the day, which paved the way for the robbers to easily cart away the pawned articles. In Cruz, Dr. Filonila O. Cruz, Camanava District Director of Technological Education and Skills Development Authority (TESDA), boarded the Light Rail Transit (LRT) from Sen. Puyat Avenue to Monumento when her handbag was slashed and the contents were stolen by an unidentified person. Among those stolen were her wallet and the government-issued cellular phone. She then reported the incident to the police authorities; however, the thief was not located, and the cellphone was not recovered. She also reported the loss to the Regional Director of TESDA, and she requested that she be freed from accountability for the cellphone. The Resident Auditor denied her request on the ground that she lacked the diligence required in the custody of government property and was ordered to pay the purchase value in the total amount of P4,238.00. The COA found no sufficient justification to grant the request for relief from accountability. We reversed the ruling and found that riding the LRT cannot per se be denounced as a negligent act more so because Cruz’s mode of transit was influenced by time and money considerations; that she boarded the LRT to be able to arrive in Caloocan in time for her 3 pm meeting; that any prudent and rational person under similar circumstance can reasonably be expected to do the same; that possession of a cellphone should not hinder one from boarding the LRT coach as Cruz did considering that whether she rode a jeep or bus, the risk of theft would have also been present; that because of her relatively low position and pay, she was not expected to have her own vehicle or to ride a taxicab; she did not have a government assigned vehicle; that placing the cellphone in a bag away from covetous eyes and holding on to that bag as she did is ordinarily sufficient care of a cellphone while traveling on board the LRT; that the

records did not show any specific act of negligence on her part and negligence can never be presumed. Unlike in the Cruz case, the robbery in this case happened in petitioners' pawnshop and they were negligent in not exercising the precautions justly demanded of a pawnshop. WHEREFORE, except for the insurance aspect, the Decision of the Court of Appeals dated March 31, 2003 and its Resolution dated August 8, 2003, are AFFIRMED. Costs against petitioners.

THE SPOUSES AFRICA et al vs. CALTEX et al G.R. No. L-12986 March 31, 1966 FACTS: A fire broke out at the Caltex service station at the corner of Antipolo street and Rizal Avenue, Manila. It started while gasoline was being hosed from a tank truck into the underground storage, right at the opening of the receiving tank where the nozzle of the hose was inserted (a lighted matchstick was thrown by a stranger near the opening, causing the fire). The fire spread to and burned several neighboring houses. Their owners, among them petitioners here, sued respondents Caltex (Phil.), Inc. and Boquiren, the first as alleged owner of the station and the second as its agent in charge of operation. Negligence on the part of both of them was attributed as the cause of the fire. The trial court and the CA found that petitioners failed to prove negligence and that respondents had exercised due care in the premises and with respect to the supervision of their employees. Hence this petition.

ISSUE: WON, without proof as to the cause and origin of the fire, the doctrine of res ipsa loquitur should apply so as to presume negligence on the part of appellees.

HELD: the decision appealed from is reversed and respondents-appellees are held liable solidarily to appellants, Both the trial court and the appellate court refused to apply the doctrine in the instant case on the grounds that “as to (its) applicability … in the Philippines, there seems to he nothing definite,” and that while the rules do not prohibit its adoption in appropriate cases, “in the case at bar, however, we find no practical use for such doctrine.” The question deserves more than such summary dismissal. The doctrine has actually been applied in this jurisdiction, in the case of Espiritu vs. Philippine Power and Development Co The principle enunciated in the aforequoted case applies with equal force here. The gasoline station, with all its appliances, equipment and employees, was under the control of appellees. A fire occurred therein and spread to and burned the neighboring houses. The persons who knew or could have known how the fire started were appellees and their employees, but they gave no

explanation thereof whatsoever. It is a fair and reasonable inference that the incident happened because of want of care. Even then the fire possibly would not have spread to the neighboring houses were it not for another negligent omission on the part of defendants, namely, their failure to provide a concrete wall high enough to prevent the flames from leaping over it.. Defendants’ negligence, therefore, was not only with respect to the cause of the fire but also with respect to the spread thereof to the neighboring houses. There is an admission on the part of Boquiren in his amended answer to the second amended complaint that “the fire was caused through the acts of a stranger who, without authority, or permission of answering defendant, passed through the gasoline station and negligently threw a lighted match in the premises.” No evidence on this point was adduced, but assuming the allegation to be true — certainly any unfavorable inference from the admission may be taken against Boquiren — it does not extenuate his negligence. A decision of the Supreme Court of Texas, upon facts analogous to those of the present case, states the rule which we find acceptable here. “It is the rule that those who distribute a dangerous article or agent, owe a degree of protection to the public proportionate to and commensurate with a danger involved … we think it is the generally accepted rule as applied to torts that ‘if the effects of the actor’s negligent conduct actively and continuously operate to bring about harm to another, the fact that the active and substantially simultaneous operation of the effects of a third person’s innocent, tortious or criminal act is also a substantial factor in bringing about the harm, does not protect the actor from liability.’ Stated in another way, “The intention of an unforeseen and unexpected cause is not sufficient to relieve a wrongdoer from consequences of negligence, if such negligence directly and proximately cooperates with the independent cause in the resulting injury.” Decision REVERSED. Caltex liable.

FULL CASE

This case is before us on a petition for review of the decision of the Court of Appeals, which affirmed that of the Court of First Instance of Manila dismissing petitioners' second amended complaint against respondents.

The action is for damages under Articles 1902 and 1903 of the old Civil Code. It appears that in the afternoon of March 18, 1948 a fire broke out at the Caltex service station at the corner of Antipolo street and Rizal Avenue, Manila. It started while gasoline was being hosed from a tank truck into the underground storage, right at the opening of the receiving tank where the nozzle of the hose was inserted. The fire spread to and burned several neighboring houses, including the personal properties and effects inside them. Their owners, among them petitioners here, sued respondents Caltex (Phil.), Inc. and Mateo Boquiren, the first as alleged owner of the station and the second as its agent in charge of operation. Negligence on the part of both of them was attributed as the cause of the fire.

The trial court and the Court of Appeals found that petitioners failed to prove negligence and that respondents had exercised due care in the premises and with respect to the supervision of their employees.

The first question before Us refers to the admissibility of certain reports on the fire prepared by the Manila Police and Fire Departments and by a certain Captain Tinio of the Armed Forces of the Philippines. Portions of the first two reports are as follows:

1. Police Department report: —

Investigation disclosed that at about 4:00 P.M. March 18, 1948, while Leandro Flores was transferring gasoline from a tank truck, plate No. T-5292 into the underground tank of the Caltex Gasoline Station located at the corner of Rizal Avenue and Antipolo Street, this City, an unknown Filipino lighted a cigarette and threw the burning match stick near the main valve of the said underground tank. Due to the gasoline fumes, fire suddenly blazed. Quick action of Leandro Flores in pulling off the gasoline hose connecting the truck with the underground tank prevented a terrific explosion. However, the flames scattered due to the hose from which the gasoline was spouting. It burned the truck and the following accessorias and residences.

2. The Fire Department report: —

In connection with their allegation that the premises was (sic) subleased for the installation of a coca-cola and cigarette stand, the complainants furnished this Office a copy of a photograph taken during the fire and which is submitted herewith. it appears in this picture that there are in the premises a coca-cola cooler and a rack which according to information gathered in the neighborhood contained cigarettes and matches, installed between the gasoline pumps and the underground tanks.

The report of Captain Tinio reproduced information given by a certain Benito Morales regarding the history of the gasoline station and what the chief of the fire department had told him on the same subject.

The foregoing reports were ruled out as "double hearsay" by the Court of Appeals and hence inadmissible. This ruling is now assigned as error. It is contended: first, that said reports were admitted by the trial court without objection on the part of respondents; secondly, that with respect to the police report (Exhibit V-Africa) which appears signed by a Detective Zapanta allegedly "for Salvador Capacillo," the latter was presented as witness but respondents waived their right to cross-examine him although they had the opportunity to do so; and thirdly, that in

any event the said reports are admissible as an exception to the hearsay rule under section 35 of Rule 123, now Rule 130.

The first contention is not borne out by the record. The transcript of the hearing of September 17, 1953 (pp. 167-170) shows that the reports in question, when offered as evidence, were objected to by counsel for each of respondents on the ground that they were hearsay and that they were "irrelevant, immaterial and impertinent." Indeed, in the court's resolution only Exhibits J, K, K-5 and X-6 were admitted without objection; the admission of the others, including the disputed ones, carried no such explanation.

On the second point, although Detective Capacillo did take the witness stand, he was not examined and he did not testify as to the facts mentioned in his alleged report (signed by Detective Zapanta). All he said was that he was one of those who investigated "the location of the fire and, if possible, gather witnesses as to the occurrence, and that he brought the report with him. There was nothing, therefore, on which he need be cross-examined; and the contents of the report, as to which he did not testify, did not thereby become competent evidence. And even if he had testified, his testimony would still have been objectionable as far as information gathered by him from third persons was concerned.

Petitioners maintain, however, that the reports in themselves, that is, without further testimonial evidence on their contents, fall within the scope of section 35, Rule 123, which provides that "entries in official records made in the performance of his duty by a public officer of the Philippines, or by a person in the performance of a duty specially enjoined by law, are prima facie evidence of the facts therein stated."

There are three requisites for admissibility under the rule just mentioned: (a) that the entry was made by a public officer, or by another person specially enjoined by law to do so; (b) that it was made by the public officer in the performance of his duties, or by such other person in the performance of a duty specially enjoined by law; and (c) that the public officer or other person had sufficient knowledge of the facts by him stated, which must have been acquired by him personally or through official information (Moran, Comments on the Rules of Court, Vol. 3 [1957] p. 398).

Of the three requisites just stated, only the last need be considered here. Obviously the material facts recited in the reports as to the cause and circumstances of the fire were not within the personal knowledge of the officers who conducted the investigation. Was knowledge of such facts, however, acquired by them through official information? As to some facts the sources thereof are not even identified. Others are attributed to Leopoldo Medina, referred to as an employee at the gas station were the fire occurred; to Leandro Flores, driver of the tank truck from which gasoline was being transferred at the time to the underground tank of the station; and to respondent Mateo Boquiren, who could not, according to Exhibit V-Africa, give any reason as to the origin of the fire. To qualify their statements as "official information" acquired by the

officers who prepared the reports, the persons who made the statements not only must have personal knowledge of the facts stated but must have the duty to give such statements for record.1

The reports in question do not constitute an exception to the hearsay rule; the facts stated therein were not acquired by the reporting officers through official information, not having been given by the informants pursuant to any duty to do so.

The next question is whether or not, without proof as to the cause and origin of the fire, the doctrine of res ipsa loquitur should apply so as to presume negligence on the part of appellees. Both the trial court and the appellate court refused to apply the doctrine in the instant case on the grounds that "as to (its) applicability ... in the Philippines, there seems to he nothing definite," and that while the rules do not prohibit its adoption in appropriate cases, "in the case at bar, however, we find no practical use for such doctrine." The question deserves more than such summary dismissal. The doctrine has actually been applied in this jurisdiction, in the case of Espiritu vs. Philippine Power and Development Co. (CA-G.R. No. 3240-R, September 20, 1949), wherein the decision of the Court of Appeals was penned by Mr. Justice J.B.L. Reyes now a member of the Supreme Court.

The facts of that case are stated in the decision as follows:

In the afternoon of May 5, 1946, while the plaintiff-appellee and other companions were loading grass between the municipalities of Bay and Calauan, in the province of Laguna, with clear weather and without any wind blowing, an electric transmission wire, installed and maintained by the defendant Philippine Power and Development Co., Inc. alongside the road, suddenly parted, and one of the broken ends hit the head of the plaintiff as he was about to board the truck. As a result, plaintiff received the full shock of 4,400 volts carried by the wire and was knocked unconscious to the ground. The electric charge coursed through his body and caused extensive and serious multiple burns from skull to legs, leaving the bone exposed in some parts and causing intense pain and wounds that were not completely healed when the case was tried on June 18, 1947, over one year after the mishap.

The defendant therein disclaimed liability on the ground that the plaintiff had failed to show any specific act of negligence, but the appellate court overruled the defense under the doctrine of res ipsa loquitur. The court said:

The first point is directed against the sufficiency of plaintiff's evidence to place appellant on its defense. While it is the rule, as contended by the appellant, that in case of noncontractual negligence, or culpa aquiliana, the burden of proof is on the plaintiff to establish that the proximate cause of his injury was the negligence of the defendant, it is also a recognized

principal that "where the thing which caused injury, without fault of the injured person, is under the exclusive control of the defendant and the injury is such as in the ordinary course of things does not occur if he having such control use proper care, it affords reasonable evidence, in the absence of the explanation, that the injury arose from defendant's want of care."

And the burden of evidence is shifted to him to establish that he has observed due care and diligence. (San Juan Light & Transit Co. v. Requena, 244, U.S. 89, 56 L. ed. 680.) This rule is known by the name of res ipsa loquitur (the transaction speaks for itself), and is peculiarly applicable to the case at bar, where it is unquestioned that the plaintiff had every right to be on the highway, and the electric wire was under the sole control of defendant company. In the ordinary course of events, electric wires do not part suddenly in fair weather and injure people, unless they are subjected to unusual strain and stress or there are defects in their installation, maintenance and supervision; just as barrels do not ordinarily roll out of the warehouse windows to injure passersby, unless some one was negligent. (Byrne v. Boadle, 2 H & Co. 722; 159 Eng. Reprint 299, the leading case that established that rule). Consequently, in the absence of contributory negligence (which is admittedly not present), the fact that the wire snapped suffices to raise a reasonable presumption of negligence in its installation, care and maintenance. Thereafter, as observed by Chief Baron Pollock, "if there are any facts inconsistent with negligence, it is for the defendant to prove."

It is true of course that decisions of the Court of Appeals do not lay down doctrines binding on the Supreme Court, but we do not consider this a reason for not applying the particular doctrine of res ipsa loquitur in the case at bar. Gasoline is a highly combustible material, in the storage and sale of which extreme care must be taken. On the other hand, fire is not considered a fortuitous event, as it arises almost invariably from some act of man. A case strikingly similar to the one before Us is Jones vs. Shell Petroleum Corporation, et al., 171 So. 447:

Arthur O. Jones is the owner of a building in the city of Hammon which in the year 1934 was leased to the Shell Petroleum Corporation for a gasoline filling station. On October 8, 1934, during the term of the lease, while gasoline was being transferred from the tank wagon, also operated by the Shell Petroleum Corporation, to the underground tank of the station, a fire started with resulting damages to the building owned by Jones. Alleging that the damages to his building amounted to $516.95, Jones sued the Shell Petroleum Corporation for the recovery of that amount. The judge of the district court, after hearing the testimony, concluded that plaintiff was entitled to a recovery and rendered judgment in his favor for $427.82. The Court of Appeals for the First Circuit reversed this judgment, on the ground the testimony failed to show with reasonable certainty any negligence on the part of the Shell Petroleum Corporation or any of its agents or employees. Plaintiff applied to this Court for a Writ of Review which was granted, and the case is now before us for decision.1äwphï1.ñët

In resolving the issue of negligence, the Supreme Court of Louisiana held:

Plaintiff's petition contains two distinct charges of negligence — one relating to the cause of the fire and the other relating to the spreading of the gasoline about the filling station.

Other than an expert to assess the damages caused plaintiff's building by the fire, no witnesses were placed on the stand by the defendant.

Taking up plaintiff's charge of negligence relating to the cause of the fire, we find it established by the record that the filling station and the tank truck were under the control of the defendant and operated by its agents or employees. We further find from the uncontradicted testimony of plaintiff's witnesses that fire started in the underground tank attached to the filling station while it was being filled from the tank truck and while both the tank and the truck were in charge of and being operated by the agents or employees of the defendant, extended to the hose and tank truck, and was communicated from the burning hose, tank truck, and escaping gasoline to the building owned by the plaintiff.

Predicated on these circumstances and the further circumstance of defendant's failure to explain the cause of the fire or to show its lack of knowledge of the cause, plaintiff has evoked the doctrine of res ipsa loquitur. There are many cases in which the doctrine may be successfully invoked and this, we think, is one of them.

Where the thing which caused the injury complained of is shown to be under the management of defendant or his servants and the accident is such as in the ordinary course of things does not happen if those who have its management or control use proper care, it affords reasonable evidence, in absence of explanation by defendant, that the accident arose from want of care. (45 C.J. #768, p. 1193).

This statement of the rule of res ipsa loquitur has been widely approved and adopted by the courts of last resort. Some of the cases in this jurisdiction in which the doctrine has been applied are the following, viz.: Maus v. Broderick, 51 La. Ann. 1153, 25 So. 977; Hebert v. Lake Charles Ice, etc., Co., 111 La. 522, 35 So. 731, 64 L.R.A. 101, 100 Am. St. Rep. 505; Willis v. Vicksburg, etc., R. Co., 115 La. 63, 38 So. 892; Bents v. Page, 115 La. 560, 39 So. 599.

The principle enunciated in the aforequoted case applies with equal force here. The gasoline station, with all its appliances, equipment and employees, was under the control of appellees. A fire occurred therein and spread to and burned the neighboring houses. The persons who knew or could have known how the fire started were appellees and their employees, but they gave no explanation thereof whatsoever. It is a fair and reasonable inference that the incident happened because of want of care.

In the report submitted by Captain Leoncio Mariano of the Manila Police Department (Exh. X-1 Africa) the following appears:

Investigation of the basic complaint disclosed that the Caltex Gasoline Station complained of occupies a lot approximately 10 m x 10 m at the southwest corner of Rizal Avenue and Antipolo. The location is within a very busy business district near the Obrero Market, a railroad crossing and very thickly populated neighborhood where a great number of people mill around t

until

gasoline

tever be theWactjvities of these peopleor lighting a cigarette cannot be excluded and this constitute a secondary hazard to its operation which in turn endangers the entire neighborhood to conflagration.

Furthermore, aside from precautions already taken by its operator the concrete walls south and west adjoining the neighborhood are only 2-1/2 meters high at most and cannot avoid the flames from leaping over it in case of fire.

Records show that there have been two cases of fire which caused not only material damages but desperation and also panic in the neighborhood.

Although the soft drinks stand had been eliminated, this gasoline service station is also used by its operator as a garage and repair shop for his fleet of taxicabs numbering ten or more, adding another risk to the possible outbreak of fire at this already small but crowded gasoline station.

The foregoing report, having been submitted by a police officer in the performance of his duties on the basis of his own personal observation of the facts reported, may properly be considered as an exception to the hearsay rule. These facts, descriptive of the location and objective circumstances surrounding the operation of the gasoline station in question, strengthen the presumption of negligence under the doctrine of res ipsa loquitur, since on their face they called for more stringent measures of caution than those which would satisfy the standard of due diligence under ordinary circumstances. There is no more eloquent demonstration of this than the statement of Leandro Flores before the police investigator. Flores was the driver of the gasoline tank wagon who, alone and without assistance, was transferring the contents thereof into the underground storage when the fire broke out. He said: "Before loading the underground tank there were no people, but while the loading was going on, there were people who went to

drink coca-cola (at the coca-cola stand) which is about a meter from the hole leading to the underground tank." He added that when the tank was almost filled he went to the tank truck to close the valve, and while he had his back turned to the "manhole" he, heard someone shout "fire."

Even then the fire possibly would not have spread to the neighboring houses were it not for another negligent omission on the part of defendants, namely, their failure to provide a concrete wall high enough to prevent the flames from leaping over it. As it was the concrete wall was only 2-1/2 meters high, and beyond that height it consisted merely of galvanized iron sheets, which would predictably crumple and melt when subjected to intense heat. Defendants' negligence, therefore, was not only with respect to the cause of the fire but also with respect to the spread thereof to the neighboring houses.

There is an admission on the part of Boquiren in his amended answer to the second amended complaint that "the fire was caused through the acts of a stranger who, without authority, or permission of answering defendant, passed through the gasoline station and negligently threw a lighted match in the premises." No evidence on this point was adduced, but assuming the allegation to be true — certainly any unfavorable inference from the admission may be taken against Boquiren — it does not extenuate his negligence. A decision of the Supreme Court of Texas, upon facts analogous to those of the present case, states the rule which we find acceptable here. "It is the rule that those who distribute a dangerous article or agent, owe a degree of protection to the public proportionate to and commensurate with a danger involved ... we think it is the generally accepted rule as applied to torts that 'if the effects of the actor's negligent conduct actively and continuously operate to bring about harm to another, the fact that the active and substantially simultaneous operation of the effects of a third person's innocent, tortious or criminal act is also a substantial factor in bringing about the harm, does not protect the actor from liability.' (Restatement of the Law of Torts, vol. 2, p. 1184, #439). Stated in another way, "The intention of an unforeseen and unexpected cause, is not sufficient to relieve a wrongdoer from consequences of negligence, if such negligence directly and proximately cooperates with the independent cause in the resulting injury." (MacAfee, et al. vs. Traver's Gas Corporation, 153 S.W. 2nd 442.)

The next issue is whether Caltex should be held liable for the damages caused to appellants. This issue depends on whether Boquiren was an independent contractor, as held by the Court of Appeals, or an agent of Caltex. This question, in the light of the facts not controverted, is one of law and hence may be passed upon by this Court. These facts are: (1) Boquiren made an admission that he was an agent of Caltex; (2) at the time of the fire Caltex owned the gasoline station and all the equipment therein; (3) Caltex exercised control over Boquiren in the management of the state; (4) the delivery truck used in delivering gasoline to the station had the name of CALTEX painted on it; and (5) the license to store gasoline at the station was in the name of Caltex, which paid the license fees. (Exhibit T-Africa; Exhibit U-Africa; Exhibit X-5 Africa; Exhibit X-6 Africa; Exhibit Y-Africa).

In Boquiren's amended answer to the second amended complaint, he denied that he directed one of his drivers to remove gasoline from the truck into the tank and alleged that the "alleged driver, if one there was, was not in his employ, the driver being an employee of the Caltex (Phil.) Inc. and/or the owners of the gasoline station." It is true that Boquiren later on amended his answer, and that among the changes was one to the effect that he was not acting as agent of Caltex. But then again, in his motion to dismiss appellants' second amended complaint the ground alleged was that it stated no cause of action since under the allegations thereof he was merely acting as agent of Caltex, such that he could not have incurred personal liability. A motion to dismiss on this ground is deemed to be an admission of the facts alleged in the complaint.

Caltex admits that it owned the gasoline station as well as the equipment therein, but claims that the business conducted at the service station in question was owned and operated by Boquiren. But Caltex did not present any contract with Boquiren that would reveal the nature of their relationship at the time of the fire. There must have been one in existence at that time. Instead, what was presented was a license agreement manifestly tailored for purposes of this case, since it was entered into shortly before the expiration of the one-year period it was intended to operate. This so-called license agreement (Exhibit 5-Caltex) was executed on November 29, 1948, but made effective as of January 1, 1948 so as to cover the date of the fire, namely, March 18, 1948. This retroactivity provision is quite significant, and gives rise to the conclusion that it was designed precisely to free Caltex from any responsibility with respect to the fire, as shown by the clause that Caltex "shall not be liable for any injury to person or property while in the property herein licensed, it being understood and agreed that LICENSEE (Boquiren) is not an employee, representative or agent of LICENSOR (Caltex)."

But even if the license agreement were to govern, Boquiren can hardly be considered an independent contractor. Under that agreement Boquiren would pay Caltex the purely nominal sum of P1.00 for the use of the premises and all the equipment therein. He could sell only Caltex Products. Maintenance of the station and its equipment was subject to the approval, in other words control, of Caltex. Boquiren could not assign or transfer his rights as licensee without the consent of Caltex. The license agreement was supposed to be from January 1, 1948 to December 31, 1948, and thereafter until terminated by Caltex upon two days prior written notice. Caltex could at any time cancel and terminate the agreement in case Boquiren ceased to sell Caltex products, or did not conduct the business with due diligence, in the judgment of Caltex. Termination of the contract was therefore a right granted only to Caltex but not to Boquiren. These provisions of the contract show the extent of the control of Caltex over Boquiren. The control was such that the latter was virtually an employee of the former.

Taking into consideration the fact that the operator owed his position to the company and the latter could remove him or terminate his services at will; that the service station belonged to the company and bore its tradename and the operator sold only the products of the company; that the equipment used by the operator belonged to the company and were just loaned to the operator and the company took charge of their repair and maintenance; that an employee of the company supervised the operator and conducted periodic inspection of the company's gasoline and service station; that the price of the products sold by the operator was fixed by the company

and not by the operator; and that the receipts signed by the operator indicated that he was a mere agent, the finding of the Court of Appeals that the operator was an agent of the company and not an independent contractor should not be disturbed.

To determine the nature of a contract courts do not have or are not bound to rely upon the name or title given it by the contracting parties, should thereby a controversy as to what they really had intended to enter into, but the way the contracting parties do or perform their respective obligations stipulated or agreed upon may be shown and inquired into, and should such performance conflict with the name or title given the contract by the parties, the former must prevail over the latter. (Shell Company of the Philippines, Ltd. vs. Firemens' Insurance Company of Newark, New Jersey, 100 Phil. 757).

The written contract was apparently drawn for the purpose of creating the apparent relationship of employer and independent contractor, and of avoiding liability for the negligence of the employees about the station; but the company was not satisfied to allow such relationship to exist. The evidence shows that it immediately assumed control, and proceeded to direct the method by which the work contracted for should be performed. By reserving the right to terminate the contract at will, it retained the means of compelling submission to its orders. Having elected to assume control and to direct the means and methods by which the work has to be performed, it must be held liable for the negligence of those performing service under its direction. We think the evidence was sufficient to sustain the verdict of the jury. (Gulf Refining Company v. Rogers, 57 S.W. 2d, 183).

Caltex further argues that the gasoline stored in the station belonged to Boquiren. But no cash invoices were presented to show that Boquiren had bought said gasoline from Caltex. Neither was there a sales contract to prove the same.

As found by the trial court the Africas sustained a loss of P9,005.80, after deducting the amount of P2,000.00 collected by them on the insurance of the house. The deduction is now challenged as erroneous on the ground that Article 2207 of the New Civil Code, which provides for the subrogation of the insurer to the rights of the insured, was not yet in effect when the loss took place. However, regardless of the silence of the law on this point at that time, the amount that should be recovered be measured by the damages actually suffered, otherwise the principle prohibiting unjust enrichment would be violated. With respect to the claim of the heirs of Ong P7,500.00 was adjudged by the lower court on the basis of the assessed value of the property destroyed, namely, P1,500.00, disregarding the testimony of one of the Ong children that said property was worth P4,000.00. We agree that the court erred, since it is of common knowledge that the assessment for taxation purposes is not an accurate gauge of fair market value, and in this case should not prevail over positive evidence of such value. The heirs of Ong are therefore entitled to P10,000.00.

Wherefore, the decision appealed from is reversed and respondents-appellees are held liable solidarily to appellants, and ordered to pay them the aforesaid sum of P9,005.80 and P10,000.00, respectively, with interest from the filing of the complaint, and costs.

REPUBLIC vs LUZON STEVEDORING GR No. L-17411 FACTS: In the early afternoon of August 17, 1960, barge L-1892, owned by the Luzon Stevedoring Corporation was being towed down the Pasig River by two tugboats when the barge rammed against one of the wooden piles of the Nagtahan Bailey bridge, smashing the posts and causing the bridge to list. The river, at the time, was swollen and the current swift, on account of the heavy downpour in Manila and the surrounding provinces on August 15 and 16, 1960. The Republic of the Philippines sued Luzon Stevedoring for actual and consequential damage caused by its employees, amounting to P200,000. Defendant Corporation disclaimed liability on the grounds that it had exercised due diligence in the selection and supervision of its employees that the damages to the bridge were caused by force majeure, that plaintiff has no capacity to sue, and that the Nagtahan Bailey bridge is an obstruction to navigation. After due trial, the court rendered judgment on June 11, 1963, holding the defendant liable for the damage caused by its employees and ordering it to pay plaintiff the actual cost of the repair of the Nagtahan bailey bridge which amounted to P192,561.72, with legal interest from the date of the filing of the complaint. ISSUE: Was the collision of appellant's barge with the supports or piers of the Nagtahan Bridge caused by fortuitous event or force majeure? RULING: Yes. Considering that the Nagtahan bridge was an immovable and stationary object and uncontrovertedly provided with adequate openings for the passage of watercraft, including barges like of appellant's, it was undeniable that the unusual event that the barge, exclusively controlled by appellant, rammed the bridge supports raises a presumption of negligence on the part of appellant or its employees manning the barge or the tugs that towed it. For in the ordinary course of events, such a thing will not happen if proper care is used. In Anglo American Jurisprudence, the inference arises by what is known as the "res ipsa loquitur" rule. The appellant strongly stressed the precautions taken by it on the day in question: that it assigned two of its most powerful tugboats to tow down river its barge L-1892; that it assigned to the task the more competent and experienced among its patrons, had the towlines, engines and equipment double-checked and inspected' that it instructed its patrons to take extra precautions; and concludes that it had done all it was called to do, and that the accident, therefore, should be held due to force majeure or fortuitous event. These very precautions, however, completely destroyed the appellant's defense. For caso fortuito or force majeure (which in law are identical in so far as they exempt an obligor from liability) by definition, are extraordinary events not foreseeable or avoidable, "events that could not be foreseen, or which, though foreseen, were inevitable" (Art. 1174, Civ. Code of the Philippines). It was, therefore, not enough that the event should not have been foreseen or anticipated, as was commonly believed but it must be one impossible to foresee or to avoid. The mere difficulty to foresee the happening was not impossibility to foresee the same. The very measures adopted by appellant prove that the possibility of danger was not only foreseeable, but actually foreseen, and was not caso fortuito. FULL CASE Petitioner Lusteveco Employees Association-CCLU (LEA) moved for reconsideration of our decision of December 31, 1965. It also filed a motion — which we granted that all exhibits in Case 21-IPA Incident 4 (L 18681) be forwarded to this Court for perusal in resolving the motion for reconsideration. Said exhibits have now been elevated to Us. Respondent Luzon Stevedoring

Corporation (LUZON) filed an opposition to the motion for reconsideration. And a reply to said opposition was likewise filed. 1. It is movant's view that the nature of its strike underwent, a change from economic to unfair labor practice strike from the moment respondent LUZON refused its alleged unconditional offer to return to work for 300 workers, dated June 2, 1959, and thereby committed unfair labor practice. After the first strike staged in June, 1958, LUZON gave LEA up to January 6, 1959 to return to work. None returned to work within that period. Four strikers, however, were allowed to return to work on January 26, 1959. Subsequently, on June 2, 1959, LEA, through a letter of its President, offered to return to work "under the status quo as directed by the Court of Industrial Relations in its order of June 21, 1958 without prejudice to whatever the decision of said Court may make on the issues involved in the second strike". (Exh. Q-1, Case 21-IPA[4]; emphasis supplied). In a letter dated June 9, 1959 (Exh. Q-2, Case 21-IPA [4] LUZON through its General Manager replied "We feel that inasmuch as the question of the legality or illegality of the second strike is now before that Court [CIR], and the Secretary of Labor has taken the initiative of conciliating the labor dispute between the parties, your aforesaid offer should be held in abeyance." In his letter of June 12, 1959, LEA's President reiterated the afore-stated offer to return to work. In this Court's view LEA's return-to-work offer was not unconditional. It provided for a return to work "as directed by the Court of Industrial Relations in its order of June 21, 1958". And said CIR order in turn provided, among other things, for payment of strike-duration pay. (See p. 11 of CIR Record, Vol. I, 21-IPA.) As the records disclose, LEA's return-to-work offer, therefore, imposed as a condition, among others, the payment of strike-duration pay. Accordingly, LEA, cannot invoke Consolidated Labor Association of the Philippines vs. Marsman & Co. Inc., L-17038 and L-17057, July 31, 1964 and similar cases to the effect that refusal of the company to accept an unconditional offer of the strikers to return to work constitutes unfair labor practice so as to convert the strike into a lawful one. And as regards the four strikers allowed to return to work, their acceptance cannot be deemed an act of discrimination, it not having been shown in the records that their offer to return to work imposed any condition as did that of LEA with respect to the 300 other strikers. 2. Anent the reduction of Christmas bonus, LEA contends that there is no evidence on decrease in percentage of profit as of December 31, 1958 to justify said reduction. This point was already passed upon in the decision. The Christmas bonus not having been included in the Collective Bargaining Agreement, it cannot be demanded by the union. And even assuming that Christmas bonus is a concession within the purview of Article 10 of the Collective Bargaining Agreement, providing that "the Company agrees to maintain in effect all concessions presently being extended to its employees, whenever practicable," still the same cannot demanded in view of the phrase "whenever practicable." Furthermore, the Collective Bargaining Agreement expired sometime in September 1958 whereas the Christmas bonus in question was granted in December 1958, three months after. Philippine Education Co. vs. CIR, 92 Phil. 385 is not in point for there the bonus had already been previously set aside. 3. Regarding the Exhibits A, A-1 and A-2, LEA maintains that the CIR erred in discrediting them under the impression that they were found on top of the table of the union Secretary after office hours. It is claimed that they were found inside the log book which was on the table of the information police. This really makes no difference. It is just as improbable, if not more so, for company officials to put inside said log book, notes confidential and damaging as Exhibits A, A-1 and A-2, the log book being accessible to all the guards, who were the persons concerned.

4. As to the reasons for the strike, this Court, contrary to LEA's impression, considered not only the suspension of the 7 security guards; in fact, our decision stated the acts complained against by the union. 5. Regarding the charge that the CIR did not view the over-all attitude of the company towards the union, this too is not correct. The CIR even discussed the factual background of the strike in page 2 of its decision. 6. LEA would again press the argument in its brief that it could legally declare a strike even as the causes for it were pending in the CIR. We still find it unnecessary to discuss the question whether LEA could have thus legally gone on strike. The fact is that in view of other circumstances, apart from the above question, its strike was illegal. 7. The necessity of a strike notice is again challenged. Suffice it to reiterate that, as the CIR found, LUZON not having engaged in unfair labor practice, the strike was but an economic one, requiring a strike notice. 8. Seeking to exclude from those whose dismissals were authorized by the CIR, strikers with pending criminal cases, movant states anew its contention that what was involved were isolated acts of violence imputable to both the company and the strikers. We find no reason, however to disturb the CIR's finding that the violence Committed during the strike was not provoked by LUZON. 9. LEA further contends that the CIR decision dismisses 13 LEA members for having been "active unionists" and thus is discriminatory and illegal. Said dismissals, authorized by the CIR's decision, however, are not for lawful union activity but precisely for participation in an illegal strike. They are therefore in order. 10. Similarly, the CIR rightly held the strike of the Lusteveco Bulk Oil Union (LBOU) illegal, as a sympathetic strike to LEA's illegal strike. It was not in adjudication of the pending suit in the CIR as to the legality of the certification election in the Sta. Mesa Slipways and Engineering Company and the inclusion of the Bulk Oil Terminal at Pandacan in said election. 11. As to the notices sent by LUZON to the strikers, the same were not threats of dismissal levelled directly at the strikers, but a publication calling all strikers to return to work by January 6, 1959 or an offer to accept the strikers back to their jobs. 12. Anent the alleged permission by the CIR for the Secretary of Labor to intervene in the case while the same was pending in court, the same has no relevance to the legality or illegality of LEA's strike. 13. It is asserted that the strike should be deemed as one against an unfair labor practice in view of LEA's "good faith" that LUZON's acts constituted unfair labor practice. In Interwood Employees Association vs. International Hardwood & Veneer Co., L-7409, May 18, 1956. 52 O.G. 3936, 3941, the Court has ruled that if the strikers act from an unlawful, illegitimate, unjust, unreasonable, or trivial ground, reason or motive, even if they do so in good faith, and the Court of Industrial Relations so finds, the strike may be declared illegal notwithstanding their good faith. 14. Finally, LEA insists that the CIR misapprehended facts and arbitrarily thrust aside the evidence presented by the union. This argument has been raised in the brief and was already passed upon by us in the decision. Substantial evidence supports the findings and conclusions of facts of the CIR, and for this reason the same are affirmed. Preponderance of evidence, invoked

by LEA, is not the criterion in these cases (National Fastener Corporation of the Philippines vs. CIR, L-15834, January 20, 1961). Wherefore, the motion for reconsideration is hereby denied for lack of merit. So ordered.