SECOND DIVISION

[G.R. No. 116100. February 9, 1996.]

SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES

LITO and MARIA CRISTINA SANTOS, petitioners, vs. COURT OF

APPEALS, HEIRS OF PACIFICO C. MABASA and REGIONAL

TRIAL COURT OF PASIG, METRO MANILA, BRANCH 181,

respondents.

Maria T . M. Leviste for petitioners.

Roberto B. Arca for private respondents.

SYLLABUS

1. REMEDIAL LAW; ACTIONS; APPEALS; PARTY WHO DID NOT APPEAL

FROM THE DECISION OF THE COURT A QUO GRANTING PRIVATE

RESPONDENT THE RIGHT OF WAY, BARRED FROM RAISING THE SAME. With respect to the first issue, herein petitioners are already barred from raising the same.

Petitioners did not appeal from the decision of the court a quo granting private

respondents the right of way, hence they are presumed to be satisfied with the

adjudication therein. With the finality of the judgment of the trial court as to petitioners,

the issue of propriety of the grant of right of way has already been laid to rest. For failure

to appeal the decision of the trial court to the Court of Appeals, petitioners cannot obtain

any affirmative relief other than those granted in the decision of the trial court. That

decision of the court below has become final as against them and can no longer be

reviewed, much less reversed, by this Court. The rule in this jurisdiction is that whenever

an appeal is taken in a civil case, an appellee who has not himself appealed may not

obtain from the appellate court any affirmative relief other than what was granted in the

decision of the lower court. The appellee can only advance an argument that he may

deem necessary to defeat the appellant's claim or to uphold the decision that is being

disputed, and he can assign errors in his brief if such is required to strengthen the views

expressed by the court a quo. These assigned errors, in turn, may be considered by the

appellate court solely to maintain the appealed decision on other grounds, but not for the

purpose of reversing or modifying the judgment in the appellee's favor and giving him

other affirmative reliefs.

2. CIVIL LAW DAMAGES; RECOVERY OF DAMAGES; REQUISITES. The mere fact that the plaintiff suffered losses does not give rise to a right to recover damages. To

warrant the recovery of damages, there must be both a right of action for a legal wrong

inflicted by the defendant, and damage resulting to the plaintiff therefrom. Wrong

without damage, or damage without wrong, does not constitute a cause of action, since

damages are merely part of the remedy allowed for the injury caused by a breach or

wrong. In order that a plaintiff may maintain an action for the injuries of which he

complains, he must establish that such injuries resulted from a breach of duty which the

defendant owed to the plaintiff a concurrence of injury to the plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort

damages is the premise that an individual was injured in contemplation of law. Thus,

there must first be the breach of some duty and the imposition of liability for that breach

before damages may be awarded, it is not sufficient to state that there should be tort

liability merely because the plaintiff suffered some pain and suffering. In other words, in

order that the law will give redress for an act causing damage, that act must be not only

hurtful, but wrongful. There must be damnum et injuria. If, as may happen in many cases,

a person sustains actual damage, that is, harm or loss to his person or property, without

sustaining any legal injury, that is, an act or omission which the law does not deem an

injury, the damage is regarded as damnum absque injuria.

3. ID.; ID.; DAMAGES DISTINGUISHED FROM INJURY. There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right;

damage is the loss, hurt, or harm which results from the injury; and damages are the

recompense or compensation awarded for the damage suffered. Thus, there can be

damage without injury in those instances in which the loss or harm was not the result of a

violation of a legal duty. These situations are often called damnum absque injuria.

4. ID.; ID.; DAMAGE OR LOSS WHICH VIOLATE NO LEGAL DUTY TO OTHER

PERSON, BORNE BY THE INJURED PERSON. Many accidents occur and many injuries are inflicted by acts or omissions which cause damage or loss to another but

which violate no legal duty to such other person, and consequently create no cause of

action in his favor. In such cases, the consequences must be borne by the injured person

alone. The law affords no remedy for damages resulting from an act which does not

amount to a legal injury or wrong. cdll

5. ID.; PRINCIPLE OF ABUSE OF RIGHTS; REQUISITES. Contrary to the claim of private respondents, petitioners could not be said to have violated the principle of abuse

of right. In order that the principle of abuse of right provided in Article 21 of the Civil

Code can be applied, it is essential that the following requisites concur: (1) The defendant

should have acted in a manner that is contrary to morals, good customs or public policy,

(2) The acts should be willful; and (3) There was damage or injury to the plaintiff.

6. ID.; ID.; RIGHT NOT VIOLATED WHERE OWNERS ENCLOSE AND FENCE

THEIR PROPERTY. The act of petitioners in constructing a fence within their lot is a

valid exercise of their right as owners, hence not contrary to morals, good customs or

public policy. The law recognizes in the owner the right to enjoy and dispose of a thing,

without other limitations than those established by law. It is within the right of

petitioners, as owners, to enclose and fence their property. Article 430 of the Civil Code

provides that "(e)very owner may enclose or fence his land or tenements by means of

walls, ditches, live or dead hedges, or by any other means without detriment to servitudes

constituted thereon." cdll

7. REMEDIAL LAW; ACTIONS; NO CAUSE OF ACTION FOR LAWFUL ACTS

DONE BY PERSON ON HIS PROPERTY. At the time of the construction of the fence, the lot was not subject to any servitudes. It was only that decision which gave

private respondents the right to use the said passageway after payment of the

compensation and imposed a corresponding duty on petitioners not to interfere in the

exercise of said right. Hence, prior to said decision, petitioners had an absolute right over

their property and their act of fencing and enclosing the same was an act which they may

lawfully perform in the employment and exercise of said right. To repeat, whatever injury

or damage may have been sustained by private respondents by reason of the rightful use

of the said land by petitioners is damnum absque injuria. A person has a right to the

natural use and enjoyment of his own property, according to his pleasure, for all the

purposes to which such property is usually applied. As a general rule, therefore, there is

no cause of action for acts done by one person upon his own property in a lawful and

proper manner, although such acts incidentally cause damage or an unavoidable loss to

another, as such damage or loss is damnum absque injuria. When the owner of property

makes use thereof in the general and ordinary manner in which the property is used, such

as fencing or enclosing the same as in this case, nobody can complain of having been

injured, because the inconvenience arising from said use can be considered as a mere

consequence of community life. The proper exercise of a lawful right cannot constitute a

legal wrong for which an action will lie, although the act may result in damage to

another, for no legal right has been invaded. One may use any lawful means to

accomplish a lawful purpose and though the means adopted may cause damage to

another, no cause of action arises in the latter's favor. Any injury or damage occasioned

thereby is damnum absque injuria. The courts can give no redress for hardship to an

individual resulting from action reasonably calculated to achieve a lawful end by lawful

means.

D E C I S I O N

REGALADO, J p:

This petition for review on certiorari assails the decision of respondent Court

of Appeals in CA-G.R. CV No. 29115, promulgated on November 10, 1993, which

affirmed with modification the decision of the trial court, as well as its resolution

dated July 8, 1994 denying petitioner's motion for reconsideration. 1

On August 26, 1982, Civil Case No. 47466 for the grant of an easement of

right of way was filed by Pacifico Mabasa against Cristino Custodio, Brigida R.

Custodio, Rosalina R. Morato, Lito Santos and Maria Cristina C. Santos before the

Regional Trial Court of Pasig and assigned to Branch 22 thereof. 2

The generative facts of the case, as synthesized by the trial court and adopted by the

Court of Appeals, are as follows:

Perusing the record, this Court finds that the original plaintiff Pacifico Mabasa

died during the pendency of this case and was substituted by Ofelia Mabasa, his

surviving spouse [and children].

The plaintiff owns a parcel of land with a two-door apartment erected thereon

situated at Interior P. Burgos St., Palingon, Tipas, Tagig, Metro Manila. The

plaintiff was able to acquire said property through a contract of sale with

spouses Mamerto Rayos and Teodora Quintero as vendors last September 1981.

Said property may be described to be surrounded by other immovables

pertaining to defendants herein. Taking P. Burgos Street as the point of

reference, on the left side, going to plaintiff's property, the row of houses will be

as follows: That of defendants Cristino and Brigida Custodio, then that of Lito

and Maria Cristina Santos and then that of Ofelia Mabasa. On the right side (is)

that of defendant Rosalina Morato and then a Septic Tank (Exhibit "D"). As an

access to P. Burgos Street from plaintiff's property, there are two possible

passageways. The first passageway is approximately one meter wide and is

about 20 meters distan(t) from Mabasa's residence to P. Burgos Street. Such

path is passing in between the previously mentioned row of houses. The second

passageway is about 3 meters in width and length from plaintiff Mabasa's

residence to P. Burgos Street; it is about 26 meters. In passing thru said

passageway, a less than a meter wide path through the septic tank and with 5-6

meters in length has to be traversed.

When said property was purchased by Mabasa, there were tenants occupying

the premises and who were acknowledged by plaintiff Mabasa as tenants.

However, sometime in February, 1982, one of said tenants vacated the

apartment and when plaintiff Mabasa went to see the premises, he saw that

there had been built an adobe fence in the first passageway making it narrower

in width. Said adobe fence was first constructed by defendants Santoses along

their property which is also along the first passageway. Defendant Morato

constructed her adobe fence and even extended said fence in such a way that the

entire passageway was enclosed (Exhibit "I-Santoses and Custodios, Exh. "D"

for plaintiff, Exhs. "1-C", "1-D" and "1-E") And it was then that the remaining

tenants of said apartment vacated the area. Defendant Ma. Cristina Santos

testified that she constructed said fence because there was an incident when her

daughter was dragged by a bicycle pedalled by a son of one of the tenants in

said apartment along the first passageway. She also mentioned some other

inconveniences of having (at) the front of her house a pathway such as when

some of the tenants were drunk and would bang their doors and windows. Some

of their footwear were even lost. . . . 3 (Italics in original text; corrections in parentheses supplied)

On February 27, 1990, a decision was rendered by the trial court, with this dispositive

part:

Accordingly, judgment is hereby rendered as follows:

1) Ordering defendants Custodios and Santoses to give plaintiff permanent

access ingress and egress, to the public street;

2) Ordering the plaintiff to pay defendants Custodios and Santoses the sum of

Eight Thousand Pesos (P8,000) as indemnity for the permanent use of the

passageway.

The parties to shoulder their respective litigation expenses. 4

Not satisfied therewith, therein plaintiff represented by his heirs, herein private

respondents, went to the Court of Appeals raising the sole issue of whether or not the

lower court erred in not awarding damages in their favor. On November 10, 1993, as

earlier stated, the Court of Appeals rendered its decision affirming the judgment of the

trial court with modification, the decretal portion of which disposes as follows:

WHEREFORE, the appealed decision of the lower court is hereby

AFFIRMED WITH MODIFICATION only insofar as the herein grant of

damages to plaintiffs-appellants. The Court hereby orders defendants-appellees

to pay plaintiffs-appellants the sum of Sixty Five Thousand (P65,000) Pesos as

Actual Damages, Thirty Thousand (P30,000) Pesos as Moral Damages, and

Ten Thousand (P10,000) Pesos as Exemplary Damages. The rest of the

appealed decision is affirmed to all respects. 5

On July 8, 1994, the Court of Appeals denied petitioner's motion for reconsideration. 6

Petitioners then took the present recourse to us, raising two issues, namely, whether or

not the grant of right of way to herein private respondents is proper, and whether or not

the award of damages is in order. prLL

With respect to the first issue, herein petitioners are already barred from raising the same.

Petitioners did not appeal from the decision of the court a quo granting private

respondents the right of way, hence they are presumed to be satisfied with the

adjudication therein. With the finality of the judgment of the trial court as to petitioners,

the issue of propriety of the grant of right of way has already been laid to rest.

For failure to appeal the decision of the trial court to the Court of Appeals, petitioners

cannot obtain any affirmative relief other than those granted in the decision of the trial

court. That decision of the court below has become final as against them and can no

longer be reviewed, much less reversed, by this Court. The rule in this jurisdiction is that

whenever an appeal is taken in a civil case, an appellee who has not himself appealed

may not obtain from the appellate court any affirmative relief other than what was

granted in the decision of the lower court. The appellee can only advance any argument

that he may deem necessary to defeat the appellant's claim or to uphold the decision that

is being disputed, and he can assign errors in his brief if such is required to strengthen the

views expressed by the court a quo. These assigned errors, in turn, may be considered by

the appellate court solely to maintain the appealed decision on other grounds, but not for

the purpose of reversing or modifying the judgment in the appellee's favor and giving

him other affirmative reliefs.7

However, with respect to the second issue, we agree with petitioners that the Court of

Appeals erred in awarding damages in favor of private respondents. The award of

damages has no substantial legal basis. A reading of the decision of the Court of Appeals

will show that the award of damages was based solely on the fact that the original

plaintiff, Pacifico Mabasa, incurred losses in the form of unrealized rentals when the

tenants vacated the leased premises by reason of the closure of the passageway.

However, the mere fact that the plaintiff suffered losses does not give rise to a right to

recover damages. To warrant the recovery of damages, there must be both a right of

action for a legal wrong inflicted by the defendant, and damage resulting to the plaintiff

therefrom. Wrong without damage, or damage without wrong, does not constitute a cause

of action, since damages are merely part of the remedy allowed for the injury caused by a

breach or wrong. 8

There is a material distinction between damages and injury. Injury is the illegal invasion

of a legal right; damage is the loss, hurt, or harm which results from the injury, and

damages are the recompense or compensation awarded for the damage suffered. Thus,

there can be damage without injury in those instances in which the loss or harm was not

the result of a violation of a legal duty. These situations are often called damnum absque

injuria. 9

In order that a plaintiff may maintain an action for the injuries of which he complains, he

must establish that such injuries resulted from a breach of duty which the defendant owed

to the plaintiff a concurrence of injury to the plaintiff and legal responsibility by the person causing it. 10 The underlying basis for the award of tort damages is the premise

that an individual was injured in contemplation of law. Thus, there must first be the

breach of some duty and the imposition of liability for that breach before damages may

be awarded; it is not sufficient to state that there should be tort liability merely because

the plaintiff suffered some pain and suffering. 11

Many accidents occur and many injuries are inflicted by acts or omissions which cause

damage or loss to another but which violate no legal duty to such other person, and

consequently create no cause of action in his favor. In such cases, the consequences must

be borne by the injured person alone. The law affords no remedy for damages resulting

from an act which does not amount to a legal injury or wrong. 12

In other words, in order that the law will give redress for an act causing damage, that act

must be not only hurtful, but wrongful. There must be damnum et injuria. 13 If, as may

happen in many cases, a person sustains actual damage, that is, harm or loss to his person

or property, without sustaining any legal injury, that is, an act or omission which the law

does not deem an injury, the damage is regarded as damnum absque injuria. 14

In the case at bar, although there was damage, there was no legal injury. Contrary to the

claim of private respondents, petitioners could not be said to have violated the principle

of abuse of right. In order that the principle of abuse of right provided in Article 21 of the

Civil Code can be applied, it is essential that the following requisites concur: (1) The

defendant should have acted in a manner that is contrary to morals, good customs or

public policy; (2) The acts should be willful; and (3) There was damage or injury to the

plaintiff. 15

The act of petitioners in constructing a fence within their lot is a valid exercise of their

right as owners, hence not contrary to morals, good customs or public policy. The law

recognizes in the owner the right to enjoy and dispose of a thing, without other

limitations than those established by law. 16 It is within the right of petitioners, as

owners, to enclose and fence their property. Article 430 of the Civil Code provides that

"(e)very owner may enclose or fence his land or tenements by means of walls, ditches,

live or dead hedges, or by any other means without detriment to servitudes constituted

thereon."

At the time of the construction of the fence, the lot was not subject to any servitudes.

There was no easement of way existing in favor of private respondents, either by law or

by contract. The fact that private respondents had no existing right over the said

passageway is confirmed by the very decision of the trial court granting a compulsory

right of way in their favor after payment of just compensation. It was only that decision

which gave private respondents the right to use the said passageway after payment of the

compensation and imposed a corresponding duty on petitioners not to interfere in the

exercise of said right. LLcd

Hence, prior to said decision, petitioners had an absolute right over their property and

their act of fencing and enclosing the same was an act which they may lawfully perform

in the employment and exercise of said right. To repeat, whatever injury or damage may

have been sustained by private respondents by reason of the rightful use of the said land

by petitioners is damnum absque injuria. 17

A person has a right to the natural use and enjoyment of his own property, according to

his pleasure, for all the purposes to which such property is usually applied. As a general

rule, therefore, there is no cause of action for acts done by one person upon his own

property in a lawful and proper manner, although such acts incidentally cause damage or

an unavoidable loss to another, as such damage or loss is damnum absque injuria. 18

When the owner of property makes use thereof in the general and ordinary manner in

which the property is used, such as fencing or enclosing the same as in this case, nobody

can complain of having been injured, because the inconvenience arising from said use

can be considered as a mere consequence of community life. 19

The proper exercise of a lawful right cannot constitute a legal wrong for which an action

will lie, 20 although the act may result in damage to another, for no legal right has been

invaded. 21 One may use any lawful means to accomplish a lawful purpose and though

the means adopted may cause damage to another, no cause of action arises in the latter's

favor. Any injury or damage occasioned thereby is damnum absque injuria. The courts

can give no redress for hardship to an individual resulting from action reasonably

calculated to achieve a lawful end by lawful means. 22

WHEREFORE, under the compulsion of the foregoing premises, the appealed decision of

respondent Court of Appeals is hereby REVERSED and SET ASIDE and the judgment

of the trial court is correspondingly REINSTATED.

SO ORDERED.

Romero andPuno, JJ., concur.

Mendoza, J., took no part.

||| (Spouses Custodio v. Court of Appeals, G.R. No. 116100, [February 9, 1996], 323 PHIL

575-589)

EN BANC

[G.R. No. 12191. October 14, 1918.]

JOSE CANGCO, plaintiff-appellant, vs. MANILA RAILROAD CO.,

defendant-appellee.

Ramon Sotelo, for appellant.

Kincaid & Hartigan, for appellee.

SYLLABUS

1. MASTER AND SERVANT; CONTRACT; NEGLIGENCE. Failure to perform a contract cannot be excused upon the ground that the breach was due to the

negligence of a servant of the obligor, and that the latter exercised due diligence in the

selection and control of the servant.

2. CONTRACTS; NEGLIGENCE:; CULPA AQUILIANA; CULPA

CONTRACTUAL. The distinction between negligence as the source of an obligation (culpa aquiliana) and negligence in the performance of a contract (culpa

contractual ) pointed out.

3. CARRIERS; PASSENGERS; NEGLIGENCE; ALIGHTING FROM

MOVING TRAIN. It is not negligence per se for a traveler to alight from a slowly moving train.

D E C I S I O N

FISHER, J p:

At the time of the occurrence which gave rise to this litigation the plaintiff,

Jose Cangco, was in the employment of the 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 was returning home by rail from his daily labors; and as the train drew up to

the station in San Mateo 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 Zuniga, 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 shipment to the

market. They were contained in numerous tow sacks which had been piled on the

platform in a row one upon another. The testimony shows that this row of sacks was

so placed that there was a space of only about two feet between the sacks of melons

and the edge of the 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 in 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 from 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 follow s 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 the 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 Cc. (7 Phil.

Rep., 359). In commenting upon article 1093 (vol. 8, p. 30) 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 quasi-contract, then breaches of those duties

are subject to articles 1101, 1103 and 1104 of the same code." (Rakes vs.

Atlantic, Gulf and Pacific Co., 7 Phil. Rep., 359 at p. 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

respondent 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, whether

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

persons 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 yields 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 Rican Civil 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 the selection of the servant or employee, or in supervision

over him after the selection, or both; and (2) 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 is

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 contract, 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.

Extra-contractual obligation has its source in the breach or omission of those mutual

duties which civilized society imposes upon its 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, gives 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 to limit such liability to cases in which the person upon whom such an obligation is imposed is morally culpable or, on the contrary, for reasons of public

policy, to extend that liability, without regard to the lack of moral culpability, so as to

include responsibility for the negligence of those persons whose acts or omissions 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 one's own

acts, or 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 source 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 the 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 persons 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 a

watchmaker who contracts 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 of omission or commission on the part of

their servants, 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 the 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 decision 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. Compaia 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 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 such 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 a 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 Rachrach 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

complained 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 the servants; and that in the particular case the presumption of

negligence had not been overcome.

It is evident, therefore, that in its decision in the 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 aquilina or culpa contractual. As Manresa points out

(vol. 8, pp. 29 and 69) whether negligence occurs as an incident in the course of the

performance of a contractual undertaking or is itself the source of an extra-contractual

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 ease. Therefore, it follows that it is not to be inferred, because the court held in

the Yamada ease that the defendant was liable for the damages negligently caused by

its servant 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 obligation,

comprising, as it does, the whole extent of juridical human relations. These two fields,

figuratively speaking, concentric; that is to say, the mere fact that a person is bound to

another by contract does not relieve him from extra-contractual 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 a breach of the contract

would have constituted 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, whereas if the accident was caused by 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 n its absolute form. We are of the opinion that this

proposition is too broadly stated and is at variance with the experience of every-day

life. In this particular instance, tat 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 persons 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, if we prefer to adopt the mode of exposition used by this court in Picart vs.

Snith (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.

As the case now before us presents itself, the only fact from which a

conclusion can be drawn to the effect that the 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 conceded that it had a right to pile these sacks in the path of alighting

passengers, the placing of them in that position gave rise to the duty to light the

premises 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 off 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 the 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 Avancea, JJ., concur.

Separate Opinions

||| (Cangco v. Manila Railroad Co., G.R. No. 12191, [October 14, 1918], 38 PHIL 768-

785)

SECOND DIVISION

[G.R. No. 84698. February 4, 1992.]

PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION, JUAN

D. LIM, BENJAMIN P. PAULINO, ANTONIO M. MAGTALAS,

COL. PEDRO SACRO, AND LT. M. SORIANO, petitioners, vs.

COURT OF APPEALS, HON. REGINA ORDOEZ-BENITEZ, in

her capacity as Presiding Judge of Branch 47, Regional Trial Court,

Manila, SEGUNDA R. BAUTISTA, and ARSENIA D. BAUTISTA,

respondents.

Balgos and Perez for petitioners.

Collantes, Ramirez & Associates for private respondents.

SYLLABUS

1. CIVIL LAW; QUASI-DELICTS; DOCTRINE OF IN LOCO PARENTIS. Article 2180, in conjunction with Article 2176 of the Civil Code, establishes the rule in in loco

parentis. This Court discussed this doctrine in the afore-cited cases of Exconde, (101

Phil. 843) Mendoza, (101 Phil. 414), Palisoc (G.R. No. L-29025, 4 October, 1971, 41

SCRA 548) and, more recently, in Amadora vs. Court of Appeals, (G.R. No. L-47745, 15

April 1988, 160 SCRA 315). In all such cases, it had been stressed that the law (Article

2180) plainly provides that the damage should have been caused or inflicted by pupils or

students of the educational institution sought to be held liable for the acts of its pupils or

students while in its custody.

2. ID.; OBLIGATIONS AND CONTRACTS; CONTRACTS RESULTING IN

BILATERAL OBLIGATIONS ESTABLISHED WHEN ACADEMIC INSTITUTION

ACCEPTS STUDENTS FOR ENROLLMENT. When an academic institution accepts students for enrollment, there is established a contract between them, resulting in

bilateral obligations which both parties are bound to comply with. For its part, the school

undertakes to provide the student with an education that would presumably suffice to

equip him with the necessary tools and skills to pursue higher education or a profession.

On the other hand, the student covenants to abide by the school's academic requirements

and observe its rules and regulations. Institutions of learning must also meet the implicit

or "built-in" obligation of providing their students with an atmosphere that promotes or

assists in attaining its primary undertaking of imparting knowledge. Certainly, no student

can absorb the intricacies of physics or higher mathematics or explore the realm of the

arts and other sciences when bullets are flying or grenades exploding in the air or where

there looms around the school premises a constant threat to life and limb. Necessarily, the

school must ensure that adequate steps are taken to maintain peace and order within the

campus premises and to prevent the breakdown thereof.

3. ID.; QUASI-DELICTS; OBLIGATIONS ARISING FROM QUASI-DELICTS OR

TORTS ARISE ONLY BETWEEN PARTIES NOT BOUND BY CONTRACT. Because the circumstances of the present case evince a contractual relation between the

PSBA and Carlitos Bautista, the rules on quasi-delict do not really govern. A perusal of

Article 2176 shows that obligations arising from quasi-delicts or tort, also known as

extra-contractual obligations, arise only between parties not otherwise bound by contract,

whether express or implied.

4. ID.; ID.; VIEW THAT LIABILITY FROM TORT MAY EXIST EVEN IF THERE IS

A CONTRACT. In Air France vs. Carroscoso (124 Phil. 722), the private respondent was awarded damages for his unwarranted expulsion from a first-class seat aboard the

petitioner airline. It is noted, however, that the Court referred to the petitioner-airline's

liability as one arising from tort, not one arising from a contract of carriage. In effect, Air

France is authority for the view that liability from tort may exist even if there is a

contract, for the act that breaks the contract may be also a tort. (Austro-America S.S. Co.

vs. Thomas, 248 Fed. 231).

5. ID.; ID.; AN ACT WHICH BREACHES A CONTRACT IN BAD FAITH AND IN

VIOLATION OF ART. 21 CONSTITUTES QUASI-DELICT. Air France penalized the racist policy of the airline which emboldened the petitioner's employee to forcibly

oust the private respondent to cater to the comfort of a white man who allegedly "had a

better right to the seat." In Austro-American, supra, the public embarrassment caused to

the passenger was the justification for the Circuit Court of Appeals, (Second Circuit), to

award damages to the latter. From the foregoing, it can be concluded that should the act

which breaches a contract be done in bad faith and be violative of Article 21, then there is

a cause to view the act as constituting a quasi-delict.

6. ID.; ID.; CONTRACTUAL RELATION, A CONDITION SINE QUA NON TO

SCHOOL'S LIABILITY. A contractual relation is a condition sine qua non to the school's liability. The negligence of the school cannot exist independently on the

contract, unless the negligence occurs under the circumstances set out in Article 21 of the

Civil Code.

7. ID.; ID.; ID.; SCHOOL MAY STILL AVOID LIABILITY BY PROVING THAT

THE BREACH OF CONTRACTUAL OBLIGATION TO STUDENTS WAS NOT DUE

TO ITS NEGLIGENCE. Conceptually a school, like a common carrier, cannot be an insurer of its students against all risks. It would not be equitable to expect of schools to

anticipate all types of violent trespass upon their premises, for notwithstanding the

security measures installed, the same may still fail against an individual or group

determined to carry out a nefarious deed inside school premises and environs. Should this

be the case, the school may still avoid liability by proving that the breach of its

contractual obligation to the students was not due to its negligence.

8. ID.; ID.; NEGLIGENCE; DEFINED. Negligence is statutorily defined to be the omission of that degree of diligence which is required by the nature of the obligation and

corresponding to the circumstances of persons, time and place.

D E C I S I O N

PADILLA, J p:

A stabbing incident on 30 August 1985 which caused the death of Carlitos Bautista while

on the second-floor premises of the Philippine School of Business Administration

(PSBA) prompted the parents of the deceased to file suit in the Regional Trial Court of

Manila (Branch 47) presided over by Judge (now Court of Appeals justice) Regina

Ordoez-Benitez, for damages against the said PSBA and its corporate officers. At the

time of his death, Carlitos was enrolled in the third year commerce course at the PSBA. It

was established that his assailants were not members of the schools academic community

but were elements from outside the school.

Specifically, the suit impleaded the PSBA and the following school authorities: Juan D.

Lim (President), Benjamin P. Paulino (Vice-President), Antonio M. Magtalas

(Treasurer/Cashier), Col. Pedro Sacro (Chief of Security) and a Lt. M. Soriano (Assistant

Chief of Security). Substantially, the plaintiffs (now private respondents) sought to

adjudge them liable for the victim's untimely demise due to their alleged negligence,

recklessness and lack of security precautions, means and methods before, during and after

the attack on the victim. During the proceedings a quo, Lt. M. Soriano terminated his

relationship with the other petitioners by resigning from his position in the school.

Defendants a quo (now petitioners) sought to have the suit dismissed, alleging that since

they are presumably sued under Article 2180 of the Civil Code, the complaint states no

cause of action against them, as jurisprudence on the subject is to the effect that academic

institutions, such as the PSBA, are beyond the ambit of the rule in the afore-stated article.

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

dated 8 December 1987, denied their motion to dismiss. A subsequent motion for

reconsideration was similarly dealt with by an order dated 25 January 1988. Petitioners

then assailed the trial court's dispositions before the respondent appellate court which, in

a decision * promulgated on 10 June 1988, affirmed the trial court's orders. On 22 August

1988, the respondent appellate court resolved to deny the petitioners' motion for

reconsideration. Hence, this petition.

At the outset, it is to be observed that the respondent appellate court primarily anchored

its decision on the law of quasi-delicts, as enunciated in Articles 2176 and 2180 of the

Civil Code. 1 Pertinent portions of the appellate court's now assailed ruling state:

"Article 2180 (formerly Article 1903) of the Civil Code is an adoptation from

the old Spanish Civil Code. The comments of Manresa and learned authorities

on its meaning should give way to present day changes. The law is not fixed and

flexible (sic); it must be dynamic. In fact, the greatest value and significance of

law as a rule of conduct in (sic) its flexibility to adopt to changing social

conditions and its capacity to meet the new challenges of progress.

Construed in the light of modern day educational systems, Article 2180 cannot

be construed in its narrow concept as held in the old case of Exconde vs.

Capuno 2 and Mercado vs. Court of Appeals 3 ; hence, the ruling in the Palisoc

4 case that it should apply to all kinds of educational institutions, academic or vocational.

At any rate, the law holds the teachers and heads of the school staff liable unless

they relieve themselves of such liability pursuant to the last paragraph of Article

2180 by 'proving that they observed all the diligence to prevent damage.' This

can only be done at a trial on the merits of the case." 5

While we agree with the respondent appellate court that the motion to dismiss the

complaint was correctly denied and the complaint should be tried on the merits, we do

not however agree with the premises of the appellate court's ruling.

Article 2180, in conjunction with Article 2176 of the Civil Code, establishes the rule of in

loco parentis. This Court discussed this doctrine in the afore-cited cases of Exconde,

Mendoza, Palisoc and, more recently, in Amadora vs. Court of Appeals. 6 In all such

cases, it had been stressed that the law (Article 2180) plainly provides that the damage

should have been caused or inflicted by pupils or students of the educational institution

sought to be held liable for the acts of its pupils or students while in its custody.

However, this material situation does not exist in the present case for, as earlier indicated,

the assailants of Carlitos were not students of the PSBA, for whose acts the school could

be made liable.

However, does the appellate court's failure to consider such material facts mean the

exculpation of the petitioners from liability? It does not necessarily follow.

When an academic institution accepts students for enrollment, there is established a

contract between them, resulting in bilateral obligations which both parties are bound to

comply with. 7 For its part, the school undertakes to provide the student with an

education that would presumably suffice to equip him with the necessary tools and skills

to pursue higher education or a profession. On the other hand, the student covenants to

abide by the school's academic requirements and observe its rules and regulations.

Institutions of learning must also meet the implicit or "built-in" obligation of providing

their students with an atmosphere that promotes or assists in attaining its primary

undertaking of imparting knowledge. Certainly, no student can absorb the intricacies of

physics or higher mathematics or explore the realm of the arts and other sciences when

bullets are flying or grenades exploding in the air or where there looms around the school

premises a constant threat to life and limb. Necessarily, the school must ensure that

adequate steps are taken to maintain peace and order within the campus premises and to

prevent the breakdown thereof.

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

PSBA and Carlitos Bautista, the rules on quasi-delict do not really govern. 8 A perusal of

Article 2176 shows that obligations arising from quasi-delicts or tort, also known as

extra-contractual obligations, arise only between parties not otherwise bound by contract,

whether express or implied. However, this impression has not prevented this Court from

determining the existence of a tort even when there obtains a contract. In Air France vs.

Carroscoso (124 Phil. 722), the private respondent was awarded damages for his

unwarranted expulsion from a first-class seat aboard the petitioner airline. It is noted,

however, that the Court referred to the petitioner-airline's liability as one arising from

tort, not one arising from a contract of carriage. In effect, Air France is authority for the

view that liability from tort may exist even if there is a contract, for the act that breaks the

contract may be also a tort. (Austro-America S.S. Co. vs. Thomas, 248 Fed. 231).

This view was not all that revolutionary, for even as early as 1918, this Court was already

of a similar mind. In Cangco vs. Manila Railroad (38 Phil. 780), Mr. Justice Fisher

elucidated thus:

"The field of non-contractual obligation is much more broader than that of

contractual obligation, comprising, as it does, the whole extent of juridical

human relations. These two fields, figuratively speaking, concentric; that is to

say, the mere fact that a person is bound to another by contract does not relieve

him from extra-contractual 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 a breach of the contract would have constituted the

source of an extra-contractual obligation had no contract existed between the

parties."

Immediately what comes to mind is the chapter of the Civil Code on Human Relations,

particularly Article 21, which provides:

"Any person who wilfully causes loss or injury to another in a manner that is

contrary to morals, good customs or public policy shall compensate the latter

for the damage." (emphasis supplied)

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

employee to forcibly oust the private respondent to cater to the comfort of a white man

who allegedly "had a better right to the seat." In Austro-American, supra, the public

embarrassment caused to the passenger was the justification for the Circuit Court of

Appeals, (Second Circuit), to award damages to the latter. From the foregoing, it can be

concluded that should the act which breaches a contract be done in bad faith and be

violative of Article 21, then there is a cause to view the act as constituting a quasi-delict.

In the circumstances obtaining in the case at bar, however, there is, as yet, no finding that

the contract between the school and Bautista had been breached thru the former's

negligence in providing proper security measures. This would be for the trial court to

determine. And, even if there be a finding of negligence, the same could give rise

generally to a breach of contractual obligation only. Using the test of Cangco, supra, the

negligence of the school would not be relevant absent a contract. In fact, that negligence

becomes material only because of the contractual relation between PSBA and Bautista. In

other words, a contractual relation is a condition sine qua non to the school's liability.

The negligence of the school cannot exist independently on the contract, unless the

negligence occurs under the circumstances set out in Article 21 of the Civil Code.

This Court is not unmindful of the attendant difficulties posed by the obligation of

schools, above-mentioned, for conceptually a school, like a common carrier, cannot be an

insurer of its students against all risks. This is specially true in the populous student

communities of the so-called "university belt" in Manila where there have been reported

several incidents ranging from gang wars to other forms of hooliganism. It would not be

equitable to expect of schools to anticipate all types of violent trespass upon their

premises, for notwithstanding the security measures installed, the same may still fail

against an individual or group determined to carry out a nefarious deed inside school

premises and environs. Should this be the case, the school may still avoid liability by

proving that the breach of its contractual obligation to the students was not due to its

negligence, here statutorily defined to be the omission of that degree of diligence which

is required by the nature of the obligation and corresponding to the circumstances of

persons, time and place. 9

As the proceedings a quo have yet to commence on the substance of the private

respondents' complaint, the record is bereft of all the material facts. Obviously, at this

stage, only the trial court can make such a determination from the evidence still to unfold.

WHEREFORE, the foregoing premises considered, the petition is DENIED. The Court of

origin (RTC, Manila, Br. 47) is hereby ordered to continue proceedings consistent with

this ruling of the Court. Costs against the petitioners.

SO ORDERED.

Melencio-Herrera, Paras, Regalado and Nocon, JJ., concur.

||| (Philippine School of Business Administration v. Court of Appeals, G.R. No. 84698,

[February 4, 1992])

THIRD DIVISION

[G.R. No. 112576. October 26, 1994.]

METROPOLITAN BANK AND TRUST COMPANY, petitioner, vs.

THE HON. COURT OF APPEALS, RURAL BANK OF PADRE

GARCIA, INC. and ISABEL R. KATIGBAK, respondents.

D E C I S I O N

ROMERO, J p:

This petition for certiorari seeks to annul the decision of respondent Court

of Appeals dated October 29, 1992 in CA GR CV No. 26571 affirming the decision of the Regional Trial Court of Lipa, Batangas Branch XIII for damages, and the Resolution dated November 11, 1993 denying petitioner's

motion for reconsideration of the aforesaid decision.

The case emanated from a dispute between the Rural Bank of Padre

Garcia, Inc. (RBPG) and Metropolitan Bank and Trust Company (MBTC)

relative to a credit memorandum dated April 5, 1982 from the Central Bank in

the amount of P304,000.00 in favor of RBPG.

The records show that Isabel Katigbak is the president and director of

RBPG, owning 65% of the shares thereof. Metropolitan Bank and Trust

Company (MBTC) is the rural bank's depository bank, where Katigbak

maintains current accounts with MBTC's main office in Makati as well as its

Lipa City branch. cdrep

On April 6, 1982, MBTC received from the Central Bank a credit memo

dated April 5, 1982 that its demand deposit account was credited with

P304,000.00 for the account of RBPG, representing loans granted by the Central

Bank to RBPG. On the basis of said credit memo, Isabel Katigbak issued several

checks against its account with MBTC in the total amount of P300,000.00, two

(2) of which (Metrobank Check Nos. 0069 and 0070) were payable to Dr. Felipe

C. Roque and Mrs. Eliza Roque for P25,000.00 each. Said checks issued to Dr.

and Mrs. Roque were deposited by the Roques with the Philippine Banking

Corporation, Novaliches Branch in Quezon City. When these checks were

forwarded to MBTC on April 12, 1982 for payment (six (6) days from receipt of

the Credit Memo), the checks were returned by MBTC with the annotations

"DAIF TNC" (Drawn Against Insufficient Funds Try Next Clearing) so they were redeposited on April 14, 1982. These were however again dishonored

and returned unpaid for the following reasons: "DAIF TNC NO ADVICE FROM CB."

After the second dishonor of the two (2) checks, Dr. Felipe Roque, a

member of the Board of Directors of Philippine Banking Corporation, allegedly

went to the Office of Antonio katigbak, an officer of RBPG, chiding him for the

bouncing checks. In order to appease the doctor, RBPG paid Dr. Roque

P50,000.00 in cash to replace the aforesaid checks.

On April 13, 1982, Isabel Katigbak who was in Hongkong on a business-

vacation trip together with her sons Alfredo and Antonio, both of whom were

also officers of RBPG, received overseas phone calls from Mrs. Maris Katigbak-

San Juan at her residence in San Lorenzo Village, Makati, informing Isabel

Katigbak that a certain Mr. Rizal Dungo, Assistant Cashier of MBTC insisted on

talking to her (Mrs. San Juan), berating her about the checks which bounced,

saying "Nag-issue kayo ng tseke, wala namang pondo," even if it was explained

to Mr. Dungo that Mrs. San Juan was not in any way connected with RBPG.

Mrs. Katigbak testified that she informed Mrs. San Juan to request

defendant MBTC to check and verify the records regarding the aforementioned

Central Bank credit memo for P304,000.00 in favor of RBPG as she was certain

that the checks were sufficiently covered by the CB credit memo as early as

April 6, 1994, but the following day, Mrs. San Juan received another insulting

call from Mr. Dungo ("Bakit kayo nag-issue ng tseke na wala namang pondo,

Three Hundred Thousand na.") 1 When Mrs. San Juan explained to him the need

to verify the records regarding the Central Bank memo, he merely brushed it

aside, telling her sarcastically that he was very sure that no such credit memo

existed. Mrs. San Juan was constrained to place another long distance call to

Mrs. Katigbak in Hongkong that evening. Tense and angered, the Katigbaks had

to cut short their Hongkong stay with their respective families and flew back to

Manila, catching the first available flight on April 15, 1982.

Immediately upon arrival, Mrs. Katigbak called up MBTC, through a Mr.

Cochico, for a re-examination of the records of MBTC regarding the Central

Bank credit memo dated April 5, 1982 for P304,000.00. Mr. Dungo, to whom

Cochico handed over the phone, allegedly arrogantly said: "Bakit kayo

magagalit, wala naman kayong pondo?" These remarks allegedly so shocked

Mrs. Katigbak that her blood pressure rose to a dangerous level and she had to

undergo medical treatment at the Makati Medical Center for two (2) days.

Metrobank not only dishonored the checks issued by RBPG, the latter

was issued four (4) debit memos representing service and penalty charges for the

returned checks.

RBPG and Isabel Katigbak filed Civil Case No. V-329 in the RTC of

Lipa, Batangas Branch XIII against the Metropolitan Bank and Trust Company for damages on April 26, 1983.

The ultimate facts as alleged by the defendant MBTC in its answer are as

follows: that on April 6, 1982, its messenger, Elizer Gonzales, received from the

Central Bank several credit advices on rural bank accounts, which included that

of plaintiff RBPG in the amount of P304,000.00; that due to the inadvertence of

said messenger, the credit advice issued in favor of plaintiff RBPG was not

delivered to the department in charge of processing the same; consequently,

when MBTC received from the clearing department the checks in question, the

stated balance in RBPG's account was only P5,498.58 which excluded the

unprocessed credit advice of P304,000.00 resulting in the dishonor of the

aforementioned checks; that as regards the P304,000.00 which was a re-

discounting loan from the Central Bank, the same was credited only on April 15,

1982 after the Central Bank finally confirmed that a credit advice was indeed

issued in favor of RBPG; that after the confirmation, MBTC credited the amount

of the credit advice to plaintiff RBPG's account and thru its officers, allegedly

conveyed personally on two occasions its apologies to plaintiffs to show that the

bank and its officers acted with no deliberate intent on their part to cause injury

or damage to plaintiffs, explaining the circumstances that gave rise to the

bouncing checks situation. Metrobank's negligence arising from their

messenger's misrouting of the credit advice resulting in the return of the checks

in question, despite daily reporting of credit memos and a corresponding daily

radio message confirmation, (as shown by Exhibit "I," the Investigation Report

of the bank's Mr. Valentino Elevado) and Mr. Dungo's improper handling of

clients led to the messenger's dismissal from service and Mr. Dungo's transfer

from Metro Manila to Mindoro.

The threshold issue was whether or not, under the facts and circumstances

of the case, plaintiff may be allowed to recover actual, moral and exemplary

damages, including attorney's fees, litigation expenses and the costs of the suit.

On August 25, 1989, the RTC of Lipa City rendered a decision 2 in favor of

plaintiffs and against the defendant MBTC, ordering the latter to:

1. pay plaintiff Isabel Katigbak P50,000.00 as temperate damages;

2. pay P500,000.00 as moral damages, considering that RBPG's credit standing

and business reputation were damaged by the wrongful acts of defendant's

employees, coupled with the rude treatment received by Isabel Katigbak at the

hands of Mr. Dungo, all of which impelled her to seek medical treatment;

3. pay P100,000.00 as attorney's fees and litigation expenses; and

4. pay the costs of suit.

The lower court did not award actual damages in the amount of

P50,000.00 representing the amount of the two (2) checks payable to Dr. Felipe

C. Roque and Mrs. Elisa Roque for P25,000.00 each, as it found no showing that

Mr. Antonio Katigbak who allegedly paid the amount was actually reimbursed

by plaintiff RBPG. Moreover, the court held that no actual damages could have

been suffered by plaintiff RBPG because on April 15, 1982, the Central Bank

credit advice in the amount of P304,000 which included the two (2) checks

issued to the Roque spouses in the sum of P50,000.00 were already credited to

the account of RBPG and the service, as well as penalty charges, were all

reversed.

MBTC appealed from the decision to the Court of Appeals in CA GR CV No. 26571, alleging that the trial court erred in awarding temperate and

moral damages, as well as attorney's fees, plus costs and expenses of litigation

without factual or legal basis therefor.

On October 29, 1992, the Court of Appeals rendered a decision 3

affirming that of the trial court, except for the deletion of the award of temperate

damages, the reduction of moral damages from P500,000.00 to P50,000.00 in

favor of RBPG and P100,000.00 for Isabel Katigbak and P50,000.00, as

attorney's fees. Plaintiffs-appellees filed a motion for reconsideration of the

decision, questioning the deletion of the award of temperate damages and the

reduction of the award of moral damages and attorney's fees. The motion was

denied.

MBTC filed this petition, presenting the following issues for resolution:

1. whether or not private respondents RBPG and Isabel Rodriguez are legally

entitled to moral damages and attorney's fees, and.

2. assuming that they are so entitled, whether or not the amounts awar