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FIRST DIVISION

[G.R. No. L-12858. January 22, 1918.]

THE UNITED STATES, plaintiff and appellee, vs. SANTIAGO

PINEDA, defendant-appellant.

Francisco & Lualhati for appellant.

Acting Attorney-General Paredes for appellee.

SYLLABUS

1.EVINDENCE; "RES INTER ALIOS ACTA."As general rule, theevidence of other offenses committed by a defendant is inadmissible. As oneexception, however, it is permissible to ascertain defendant's knowledge and intentand to fix his negligence. If the defendant has on more than one occasion performedsimilar acts, accident in good faith is possibly excluded, negligence is intensified, andfraudulent intent may even be established. There is no better evidence of negligencethan the frequency of accidents.

2.ID; DISCRETION OF TRIAL JUDGE. On the trial of a criminal casewhere the question relates to the tendency of certain testimony to throw light upon a

particular fact, or to explain the conduct of a particular person, there is a certaindiscretion on the part of the trial judge which a court of error will not interfere with,unless it manifestly appear that the testimony has no legitimate bearing upon thequestion at issue, and is calculated to prejudice the accused. (Moore vs. U.S. [1893],150 U.S., 57.)

3.ID; CIRCUMSTANTIAL EVIDENCE. Whenever the necessity arises fora resort to circumstantial evidence, either from the nature of the inquiry or the failureof direct proof, objections to the testimony on the ground of irrelevancy are notfavored. (Moore vs. U. S. [1893], 150 U.S 57.)

4.ID; MOTIVE.

Evidence is admissible in a criminal action which tends toshow motive, although it tends to prove the commission of another offense by thedefendant. (Moore vs. U.S. [1893], 150 U.S. , 57.)

5.ID; ID. A druggist filled a prescription calling for protassium chloratewith barium chlorate, a poison, causing the death of two horses. After analyzing thepackages, two chemists went to the drug store of the defendant and bought potassiumchlorate, which when analyzed was found to be barium chlorate. Held: That the


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testimony of the chemist was admissible in order to demonstrate defendant's motiveand negligence.

6.DRUGGISTS; RESPONSIBILITY.The profession of pharmacy is onedemanding care and skill. The responsibility of the druggist to use care can bequalified as the highest degree of care known to practical men. The skill required ofthe druggist can be qualified as high or ample. In order words, the care required mustbe commensurate with the danger involved, and the skill employed must correspondwith the superior knowledge of the business which the law demands.

7.ID; IDThe rule of caveat emptor cannot be applied to the purchase andsale of drugs. An imperative duty is on the druggist to take precautions to preventdeath or serious injury to any one who relies on his absolute honesty and peculiarlearning. The nature of drugs is such that examination will not avail the purchaseranything, Consequently, it must be that the druggist warrant that he will deliver thedrug called for.

8.ID; ID.

In civil cases, the druggist is made liable for any injuryapproximately resulting from his negligence. "Pharmacists or apothecaries whocompound or sell medicines, if they carelessly label a poison as a harmless medicine,and send it so labeled into the market are liable to all persons, who, without fault ontheir part, are injured by using it as such medicine, in consequence of the false label;the rule being that the liability in such a case arises, not out of any contract or directprivity between the wrongdoer and the person injured, but out of the duty which thelaw imposes on him to avoid acts in their nature dangerous to the lives of others."(Nat. Savings Bank vs. Ward [1879], 100 U.S. 195, following Thomas vs. Winchester[1852], 2 Seld. [N.Y.], 397.)

9.PHARMACY LAW; "FRAUDULENT" CONSTRUED.

The PharmacyLaw makes it unlawful for any person to sell any drug under any "fraudulent name."The word "fraudulent" is not here used in all of its strictness. Rather considering theresponsibility for the equality of drug which the law imposes on druggists and theposition of the word "fraudulent" in juxtaposition to "name" what is made unlawful isthe giving of a false name to the drug asked for.

10.PENALTY. The Law penalizes any druggist who shall sell one drug foranother whether it be through negligence or mistake.

11.ID.; ID. A druggist in filling a prescription calling for potassium chlorategave instead to the customer barium chlorate, a poison, and placed this poison in apackage of the prescription to two of his sick horses with the result that they diedshortly afterwards.Held: That the druggist is guilty of a violation of the PharmacyLaw.

D E C I S I O N


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MALCOLM, Jp:

This appeal requires a construction and an application, for the first time, of thepenal provisions of the Pharmacy Law.

Santiago Pineda, the defendant, is a registered pharmacist of long standing and

the owner of a drug store located at Nos. 442, 444, Calle Santo Cristo, city of Manila.One Feliciano Santos, having some sick horses, presented a copy of a prescriptionobtained from Dr. Richardson, and which on other occasions Santos had given to hishorses with good results, at Pineda's drug store for filling. The prescription read "clorato de potasa 120 gramosen seis papelitos de 20 gramos, para caballo."Under the supervision of Pineda, the prescription was prepared and returned to Santosin the form of six papers marked, "Botica PinedaClorato potasa120.00seispapelespara caballoSto. Cristo 442, 444, Binondo, Manila." Santos, under thebelief that he had purchased the potasium chlorate which he had asked for, put two ofhis sick packages in water and gave the doses to two of his sick horses. Another

package was mixed with water for another horse, but was not used. The two horses, towhich had been given the preparation, died shortly afterwards. Santos, thereupon,took the three remaining packages to the Bureau of Science for examination. Drs.Pea and Darjuan, of the Bureau of Science, on analysis found that the packagescontained to potassium chlorate but barium chlorate. At the instance of Santos, thetwo chemists also went to the drug store of the defendant and bought potassiumchlorate, which when analyzed was found to be barium chlorate. (Barium chlorate, itshould be noted, is a poison; potassium chlorate is not.) Dr. Buencamino, aveterinarian, performed an autopsy on the horse, and found that death was the resultof poisoning.

Four assignments of error are made. The first is that the lower court inadmitting the testimony of the chemist Pea and Darjuan as to their purchase ofpotassium chlorate at the drug store of the accused, which substance proved onanalysis to be barium chlorate. What appellant is here relying on is the maxim resinter alois acta. As a general rule, the evidence of other offenses committed by adefendant is inadmissible. But appellant has confused this maxim and this rule withcertain exceptions thereto. The effort is not to convict the accused of a second offense.Nor is there an attempt to draw the mind away from the point at issue and thus toprejudice defendant's case. The purpose is to ascertain defendant's knowledge andintent, and to fix his negligence is intensified, and fraudulent intent may even be

evidence of negligence than the frequency of accidents. (See 10 R. C. L. pp. 938 940.)The United States Supreme Court has held that:

"On the trial of a criminal case where the question relates to thetendency of certain testimony to throw light upon a particular fact, or to explainthe conduct of a particular person, there is a certain discretion on the part of thetrial judge which a court of errors will not interfere with, unless it manifestlyappear that the testimony has no legitimate bearing upon the question at issue,and is calculated to prejudice the accused.


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"Whenever the necessity arises for a resort to circumstancial evidence,either from the nature of the inquiry or the failure of direct proof, objections tothe testimony on the ground of irrelevancy are not favored.

"Evidence is admissible in a criminal action which tends to showmotive, although it tends to prove the commission of another offense by the

defendant."(Moore vs. U.S. [1893], 150 U.S., 57.)

The second assignment of error is that the lower court erred in finding that thesubstance sold by the accused to Feliciano Santos on the 22d of June, 1916, wasbarium chlorate and not potassium chlorate. The proof demonstrates the contrary.

The third and fourth assignments of error are that the lower court erred infinding that the accused has been proved quality beyond a reasonable doubt of aninfraction of Act No. 597, section 17, as amended. The third assignment contains thepoints we should consider, including, we may remark, a somewhat difficult questionconcerning which the briefs have given little assistance.

The Pharmacy Law was first enacted as Act No. 597, was later amended byAct Nos. 1921, 2236, and 2382, and is now found as Chapter 30 of the Administrativeexaminers, and the examination and registration of pharmacists, and finally containssundry provisions relative to the practice of pharmacy. High qualifications forapplicants for the pharmaceutical examination are established. The program ofsubjects for the examination in wide. Responsibility for the quality of drugs is fixedby section 17 of the Pharmacy Law, as amended (now Administrative Code [1917],section 751), in the following term:

"Every pharmacist shall be responsible for the quality of all drugs,chemicals, medicines, and poisons he may sell or keep for sale; and it shall be

unlawful for any person whomsoever to manufacture, prepare,sell, oradministerany prescription, drug, chemical, medicine, or poison under anyfraudulent name, direction, or pretense, or to adulterate any drug, chemical, orpoison so used, sold , or offered for sale. Any drug, chemical, medicine, orpoison shall be held to be adultered or deteriorated within the meaning of thissection if it differs from the standard of quality or purity given in the UnitedStates Pharmacopoeia."

The same action of the Pharmacy Law also contains the following penalprovision: "Any person violating the provisions of this Act shall, upon conviction, be

punished by a fine not more than five hundred dollars." The Administrative Code,section 2676, changes the penalty somewhat by providing that:

"Any person engaging in the practice of pharmacy in the PhilippineIslands contrary to any provision of the Pharmacy Law or violating anyprovisions of said law for which no specific penalty is provided shall, for eachoffense, be punished by a fine not to exceed two hundred pesos, or byimprisonment for not more than ninety days, or both, in the direction of thecourt."


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These are the provisions of law, pursuant to which prosecution has beeninitiated and which it is now incumbent upon us to construe.

Turning to the law, certain points therein as bearing on our present facts mustbe admitted. Thus, defendant is a pharmacist. As a pharmacist, he is made responsiblefor the quality of all drugs and poisons which he sells. And finally it is provided that itshall be unlawful for him to sell any drug or poison under any "fraudulent name." It isthe one word "fraudulent" which has given the court trouble. What did the Legislatureintend to convey by this restrictive adjective?

Were we to adhere to the technical definition of fraud, which appellantvigorously insists upon, it would be difficult, if not impossible, to convict anydruggist of a violation of the law. The prosecution would have to prove to areasonable degree of certainly that the druggist made a material representation; that itwas false; that when he made it he knew that it was false of made it recklessly withoutany knowledge of its truth and as a positive assertion; that he made it with the

intention that it should be acted upon by the purchaser; that the purchaser acted inreliance upon it, and that the purchaser thereby suffered injury. Such a constructionwith a literal following of well-known principles on the subject of fraud would stripthe law of at least much of its force. It would leave the innocent purchaser of drugs,who must blindly trust in the good faith and vigilance of the pharmacist, at the mercyof any unscrupulous vendor. We should not, therefore, without good reason sodevitalize the law.

The profession of pharmacy, it has been said again and again, is onedemanding care and skill. The responsibility of the druggist to use care has beenvariously qualified as "ordinary care," "care of a specially high degree," "the highest

degree of care known to practical men." Even under the first conservative expression,"ordinary care" with reference to the business of a druggist, the Supreme Court ofConnecticut has said must be held to signify "the highest practicable degree ofprudence, thoughtfulness, and vigilance, and the most exact and reliable safeguardsconsistent with the reasonable conduct of the business, in order that human life maynot constantly be exposed to the danger flowing from the substitution of deadlypoisons for harmless medicine." (Tombari vs. Connor [1912], 85 Conn., 235. See alsoWillson vs. Atkins [1907] 81 N. E., 600.) The "skill " required of a druggist isdenominated as "high" or "ample." (Petervs. Jackson [1902], 50 W. Va., 644; 57 L.R.A., 428.) In order words, the care required must be commensurate with the dangerinvolved, and the skill employed must correspond with the superior knowledge of thebusiness which the law demands.

Under one conception, and it should not be forgotten that the cases we considerare civil in nature, the question of negligence or ignorance is irrelevant. The druggistis responsible as an absolute guarantor of what he sells. In a decision which standsalone, the Supreme Court of Kentucky said:


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"As applicable to the owners of drug stores, or persons engaged invending drugs and medicines by retail, the legal maxim should be reversed.Instead ofcaveat emptor, it should be caveat venditor. That is to say, let him becertain that he does not sell to a purchaser or send to a patient one drug foranother, as arsenic for calomel, cartharides for or mixed with snakeroot and

Peruvian bark, or even on innocent drug, calculated to produce a certain effect,in place of another sent for and designed to produce a different effect. If he doesthese things, he cannot escape civil responsibility, upon the alleged pretexts thatit was an accidental or an innocent mistake; that he had been very careful andparticular, and had used extraordinary care and diligence in preparing orcompounding the medicines as required, etc. Such excuses will not availhim."(Fleet vs Hollenkemp [1852], 56 Am. Dec., 563.)

Under the other conception, in which proof of negligence is considered asmaterial, where a customer calls upon a druggist for a harmless remedy, delivery of apoisonous drug by mistake by the druggist isprima facie negligence, placing theburden on him to show that the mistake was under the circumstances consistent with

the exercise of due care. (See Knoefel vs. Atkins,supra.) The druggist cannot, forexample in filling a prescription calling for potassium chlorate give instead to thecustomer barium chlorate, a poison, place this poison in a package labeled "potassiumchlorate" , and expect to escape responsibility on a plea of mistake. His mistake,under the most favorable aspect for himself, was negligence. So in a case where adruggist filled an order for calomel tablets with morphine and placed the morphine ina box labeled calomel, it was said:

"It is not suggested, nor can we apprehend that it is in any wise probable,that the act of furnishing the wrong drug in this case was willful. If it wasfurnished by the clerk, it was undoubtedly a mistake and unintentional.

However, it was a mistake of the gravest kind, and of the most disastrous effect.We cannot say that one holding himself out as competent to handle such drugs,and who does so, having rightful access to them, and relied upon by thosedealing with him to exercise that high degree of caution and care called for bythe peculiarly dangerous nature of this business, can be heard to say that hismistakes by which he furnishes a customer the most deadly of drugs for thosecomparatively harmless is not, in and of itself, gross negligence, and that of anaggravated form." (Smith's Admix. vs. Middelton [1902], 56 L. R., 484.)

The rule ofcaveat emptorcannot apply to the purchase and sale of drugs. Thevendor and the vendee do not stand at arms length as in ordinary transactions. An

imperative duty is on the druggist to take precautions to prevent death or seriousinjury to anyone who relies on his absolute honesty and peculiar learning. The natureof drugs is such that examination would not avail the purchaser anything. It would beidle mockery for the customer to make an examination of a compound of which hecan know nothing. Consequently, it must be that the druggist warrants that he willdeliver the drug called for.


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In civil cases, the druggist is made liable for any injury approximately resultingfrom his negligence. If B negligently sells poison under the guise of a beneficial drugto A, he is liable for the injury done to A. In a case, which has repeatedly beenfollowed by the United States Supreme Court, it was said, "Pharmacists orapothecaries who compound or sell medicines, if they carelessly label a poison as a

harmless medicine, and send it so labeled into the market, are liable to all personswho, without fault on their part, are injured by using it as such medicine, inconsequence of the false label; the rule being that the liability in such a case arises notout of any contract or direct privity between the wrong-doer and the person injured,but out of the duty which the law imposes on him to avoid acts in their naturedangerous to the lives of others." (Nat. Savings Bank vs. Ward [1879], 100 U.S., 195,following Thomas vs. Winchester [1852], 2 Seld. [N.Y.] 397.) In reality, for thedruggist, mistake is negligence and care is no defense. Throughout the criminal law,run the same rigorous rules. For, example, apothecaries or apothecary clerks, who arequality of negligence in the sale of medicine when death ensues in consequence, have

been held guilty of manslaughter. (See Tessymond's Case {1828}, 1 Lewin, C. C.,169.)

Bearing these general principles in mind, and remembering particularly thecare and skill which are expected of druggists, that in some jurisdictions they areliable even for their mistake and in others have the burden placed upon them toestablish that they were not negligent, it cannot be that the Philippine Legislatureintended to use the word "fraudulent" in all its strictness. A plea of accident andmistake cannot excuse for they cannot take place unless there be wanton and criminalcarelessness and neglect. How the misfortune occurs in unimportant, if under all thecircumstances the fact of occurrence is attributable to the druggist as a legal fault.

Rather considering the responsibility for the quality of drugs which the law imposeson druggist and the position of the made unlawful is the giving of a false name to thedrug asked for. This view is borne out by the Spanish translation, which we arepermitted to consult to explain the English text. In the Spanish "supuesto" is used, andthis word is certainly not synonymous with "fraudulent." The usual badges of fraud,falsity, deception, and injury must be present but not scienter.

In view of the tremendous and imminent danger to the public from the carelesssale of poisons and medicines, we do not deem it too rigid a rule to hold that the lawpenalizes any druggist who shall sell one drug for another whether it be throughnegligence or mistake.

The judgment of the lower court, sentencing the defendant to pay a fine ofP100, with subsidiary imprisonment in case of insolvency, and to pay the costs, isaffirmed with the costs of this instance against the appellant, without prejudice to anycivil action which may be instituted. So ordered.

Arellano, C.J., Torres, Johnson, Carson, Araullo, and Street, JJ.., concur.


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FIRST DIVISION

[G.R. No. 112392. February 29, 2000.]

BANK OF THE PHILIPPINE ISLANDS, petitioner,vs

. COURT OFAPPEALS and BENJAMIN C. NAPIZA, respondents.

Benedicto Tale & Associates for petitioner.

Renato M. Coronado for private respondent.

SYNOPSIS

By way of accommodation and only for the purpose of clearing, Benjamin Napiza(private respondent herein), deposited a check in the amount of $2,500.00 in his dollardeposit with the petitioner Bank of the Philippine Islands. This check belongs to HenryChan. Napiza delivered to Chan a signed blank withdrawal slip, with the understandingthat as soon as the check is cleared, both of them would go to the bank to withdraw theamount of the check upon private respondent's presentation to the bank of his passbook.However, using the same blank withdrawal slip, a bank employee was able to withdrawthe amount of $2,541.67, which was made payable to Ramon A. de Guzman and AgnesC. de Guzman. Later, the bank received a communication that the deposited check was acounterfeit. The bank informed respondent Napiza that the check bounced, hence, thelatter tried to locate Chan. Since Napiza was unable to locate Chan, the bank demandedpayment from him. Napiza refused to pay on the ground that the check was deposited forclearing purposes only to accommodate Chan. As a result, petitioner bank filed acomplaint against private respondent for the return of the amount of $2,500.00 or theprevailing peso equivalent plus interest, attorney's fees, and litigation costs. The lowercourt dismissed the complaint. The lower court held that having committed a mistake ofnot waiting for the clearance of the check before authorizing the withdrawal of its value,petitioner should suffer the resultant loss. The Court of Appeals affirmed the lowercourt's decision and stressed that the mere deposit of the check did not mean that it wasalready the property of the depositor. The check had to be cleared and its proceeds canonly be withdrawn upon presentation of a passbook in accordance with the bank's rules

and regulations. Hence, this petition. SCaITA

The Supreme Court denied the petition. The Court of Appeals correctly held that indepositing the check in his name, private respondent did not become the outright ownerof the amount stated therein. Under petitioner bank's own rule, by depositing the check,private respondent was merely designating petitioner as the collecting bank. This is in


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consonance with the rule that a negotiable instrument, such as a check, is not a legaltender.

SYLLABUS

1.COMMERCIAL LAW; NEGOTIABLE INSTRUMENTS LAW; WARRANTIES OFA PERSON NEGOTIATING AN INSTRUMENT; APPLICATION IN CASE AT BAR.Section 65, on the other hand, provides for the following warranties of a personnegotiating an instrument by delivery or by qualified indorsement: (a) that the instrumentis genuine and in all respects what it purports to be; (b) that he has a good title to it; and(c) that all prior parties had capacity to contract. InPeople vs. Maniego, this Courtdescribed the liabilities of an indorser as follows: "Appellant's contention that as mereindorser, she may not be liable on account of the dishonor of the checks indorsed by her,is likewise untenable. Under the law, the holder or last indorsee of a negotiable

instrument has the right 'to enforce payment of the instrument for the full amount thereofagainst all parties liable thereon.' Among the 'parties liable thereon' is an indorser of theinstrument, i.e., 'a person placing his signature upon an instrument otherwise than as amaker, drawer or acceptor ** unless he clearly indicated by appropriate words hisintention to be bound in some other capacity.' Such an indorser 'who indorses withoutqualification,' inter alia 'engages that on due presentment, ** (the instrument) shall beaccepted or paid, or both, as the case may be, according to its tenor, and that if it bedishonored, and the necessary proceedings on dishonor be duly taken, he will pay theamount thereof to the holder, or any subsequent indorser who may be compelled to payit.' Maniego may also be deemed an 'accommodation party' in the light of the facts, i.e., aperson 'who has signed the instrument as maker, drawer, acceptor, or indorser, withoutreceiving value therefor, and for the purpose of lending his name to some other person.'As such, she is under the law 'liable on the instrument to a holder for value,notwithstanding such holder at the time of taking the instrument knew ** (her) to be onlyan accommodation party,' although she has the right, after paying the holder, to obtainreimbursement from the party accommodated, 'since the relation between them is ineffect that of principal and surety, the accommodation party being the surety.'" It is thusclear that ordinarily private respondent may be held liable as an indorser of the check oreven as an accommodation party. However, to hold private respondent liable for theamount of the check he deposited by the strict application of the law and withoutconsidering the attending circumstances in the case would result in an injustice and in the

erosion of the public trust in the banking system. The interest of justice thus demandslooking into the events that led to the encashment of the check.

2.ID.; ID.; CHECK DEPOSIT; COLLECTING BANK OR LAST ENDORSERSUFFERS THE LOSS, AS A GENERAL RULE; RATIONALE; CASE AT BAR. Ascorrectly held by the Court of Appeals, in depositing the check in his name, privaterespondent did not become the outright owner of the amount stated therein. Under the


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above rule, by depositing the check with petitioner, private respondent was, in a way,merely designating petitioner as the collecting bank. This is in consonance with the rulethat a negotiable instrument, such as a check, whether a manager's check or ordinarycheck, is not legal tender. As such, after receiving the deposit, under its own rules,petitioner shall credit the amount in private respondent's account or infuse value thereon

only after the drawee bank shall have paid the amount of the check or the check has beencleared for deposit. Again, this is in accordance with ordinary banking practices and withthis Court's pronouncement that "the collecting bank or last endorser generally suffers theloss because it has the duty to ascertain the genuineness of all prior endorsementsconsidering that the act of presenting the check for payment to the drawee is an assertionthat the party making the presentment has done its duty to ascertain the genuineness ofthe endorsements." The rule finds more meaning in this case where the check involved isdrawn on a foreign bank and therefore collection is more difficult than when the draweebank is a local one even though the check in question is a manager's check. Said rulingbrings to light the fact that the banking business is affected with public interest. By the

nature of its functions, a bank is under obligation to treat the accounts of its depositors"with meticulous care, always having in mind the fiduciary nature of their relationship."

3.CIVIL LAW; QUASI-DELICTS; NEGLIGENCE; DEFINED; WHEN PRESENT;CASE AT BAR.As such, in dealing with its depositors, a bank should exercise itsfunctions not only with the diligence of a good father of a family but it should do so withthe highest degree of care. In the case at bar, petitioner, in allowing the withdrawal ofprivate respondent's deposit, failed to exercise the diligence of a good father of a family.In total disregard of its own rules, petitioner's personnel negligently handled privaterespondent's account to petitioner's detriment. As this Court once said on this matter:

"Negligence is the omission to do something which a reasonable man, guided by thoseconsiderations which ordinarily regulate the conduct of human affairs, would do, or thedoing of something which a prudent and reasonable man would do. The seventy-eight(78)-year-old, yet still relevant, case ofPicart vs. Smith, provides the test by which todetermine the existence of negligence in a particular case which may be stated as follows:Did the defendant in doing the alleged negligent act use that reasonable care and cautionwhich an ordinarily prudent person would have used in the same situation? If not, then heis guilty of negligence. The law here in effect adopts the standard supposed to be suppliedby the imaginary conduct of the discreet pater-familias of the Roman law. The existenceof negligence in a given case is not determined by reference to the personal judgment ofthe actor in the situation before him. The law considers what would be reckless,blameworthy, or negligent in the man of ordinary intelligence and prudence anddetermines liability by that."

4.ID.; ID.; ID.; PROXIMATE CAUSE, DEFINED; PRESENCE THEREOF IN CASEAT BAR.While it is true that private respondent's having signed a blank withdrawalslip set in motion the events that resulted in the withdrawal and encashment of thecounterfeit check, the negligence of petitioner's personnel was the proximate cause of the


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loss that petitioner sustained. Proximate cause, which is determined by a mixedconsideration of logic, common sense, policy and precedent, is that cause, which, innatural and continuous sequence, unbroken by any efficient intervening cause, producesthe injury, and without which the result would not have occurred." The proximate causeof the withdrawal and eventual loss of the amount of $2,500.00 on petitioner's part was

its personnel's negligence in allowing such withdrawal in disregard of its own rules andthe clearing requirement in the banking system. In so doing, petitioner assumed the riskof incurring a loss on account of a forged or counterfeit foreign check and hence, itshould suffer the resulting damage.

D E C I S I O N

YNARES-SANTIAGO, Jp:

This is a petition for review on certiorari of the Decision1of the Court of Appeals inCA-G.R. CV No. 37392 affirming in toto that of the Regional Trial Court of Makati,Branch 139,2which dismissed the complaint filed by petitioner Bank of the PhilippineIslands against Benjamin C. Napiza for sum of money.

On September 3, 1987, private respondent deposited in Foreign Currency Deposit Unit(FCDU) Savings Account No. 028-1873which he maintained in petitioner bank's

Buendia Avenue Extension Branch, Continental Bank Manager's Check No. 000147574dated August 17, 1984, payable to "cash" in the amount of Two Thousand Five HundredDollars ($2,500.00) and duly endorsed by private respondent on its dorsal side.5Itappears that the check belonged to a certain Henry Chan who went to the office of privaterespondent and requested him to deposit the check in his dollar account by way ofaccommodation and for the purpose of clearing the same. Private respondent acceded,and agreed to deliver to Chan a signed blank withdrawal slip, with the understanding thatas soon as the check is cleared, both of them would go to the bank to withdraw theamount of the check upon private respondent's presentation to the bank of his passbook.

Using the blank withdrawal slip given by private respondent to Chan, on October 23,1984, one Ruben Gayon, Jr. was able to withdraw the amount of $2,541.67 from FCDUSavings Account No. 028-187. Notably, the withdrawal slip shows that the amount waspayable to Ramon A. de Guzman and Agnes C. de Guzman and was duly initialed by thebranch assistant manager, Teresita Lindo.6

On November 20, 1984, petitioner received communication from the Wells Fargo BankInternational of New York that the said check deposited by private respondent was a
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counterfeit check7because it was "not of the type or style of checks issued byContinental Bank International."8Consequently, Mr. Ariel Reyes, the manager ofpetitioner's Buendia Avenue Extension Branch, instructed one of its employees,Benjamin D. Napiza IV, who is private respondent's son, to inform his father that thecheck bounced.9Reyes himself sent a telegram to private respondent regarding the

dishonor of the check. In turn, private respondent's son wrote to Reyes stating that thecheck had been assigned "for encashment" to Ramon A. de Guzman and/or Agnes C. deGuzman after it shall have been cleared upon instruction of Chan. He also said that uponlearning of the dishonor of the check, his father immediately tried to contact Chan but thelatter was out of town.10

Private respondent's son undertook to return the amount of $2,500.00 to petitioner bank.On December 18, 1984, Reyes reminded private respondent of his son's promise andwarned that should he fail to return that amount within seven (7) days, the matter wouldbe referred to the bank's lawyers for appropriate action to protect the bank's interest.11

This was followed by a letter of the bank's lawyer dated April 8, 1985 demanding thereturn of the $2,500.00.12

In reply, private respondent wrote petitioner's counsel on April 20, 198513stating that hedeposited the check "for clearing purposes" only to accommodate Chan. He added:

"Further, please take notice that said check was deposited on September 3, 1984and withdrawn on October 23, 1984, or a total period of fifty (50) days hadelapsed at the time of withdrawal. Also, it may not be amiss to mention here thatI merely signed an authority to withdraw said deposit subject to its clearing, thereason why the transaction is not reflected in the passbook of the account.

Besides, I did not receive its proceeds as may be gleaned from the withdrawalslip under the captioned signature of recipient.

"If at all, my obligation on the transaction is moral in nature, which (sic) I havebeen and is (sic) still exerting utmost and maximum efforts to collect from Mr.Henry Chan who is directly liable under the circumstances.

xxx xxx xxx"

On August 12, 1986, petitioner filed a complaint against private respondent, praying forthe return of the amount of $2,500.00 or the prevailing peso equivalent plus legal interest

from date of demand to date of full payment, a sum equivalent to 20% of the total amountdue as attorney's fees, and litigation and/or costs of suit.

Private respondent filed his answer, admitting that he indeed signed a "blank" withdrawalslip with the understanding that the amount deposited would be withdrawn only after thecheck in question has been cleared. He likewise alleged that he instructed the party towhom he issued the signed blank withdrawal slip to return it to him after the bank draft's
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clearance so that he could lend that party his passbook for the purpose of withdrawing theamount of $2,500.00. However, without his knowledge, said party was able to withdrawthe amount of $2,541.67 from his dollar savings account through collusion with one ofpetitioner's employees. Private respondent added that he had "given the plaintiff fifty-one(51) days with which to clear the bank draft in question." Petitioner should have

disallowed the withdrawal because his passbook was not presented. He claimed thatpetitioner had no one to blame except itself "for being grossly negligent"; in fact, it hadallegedly admitted having paid the amount in the check "by mistake" . . . "if notaltogether due to collusion and/or bad faith on the part of (its) employees." Chargingpetitioner with "apparent ignorance of routine bank procedures," by way of counterclaim,private respondent prayed for moral damages of P100,000.00, exemplary damages ofP50,000.00 and attorney's fees of 30% of whatever amount that would be awarded to himplus an honorarium of P500.00 per appearance in court.

Private respondent also filed a motion for admission of a third party complaint against

Chan. He alleged that "thru statagem and/or manipulation," Chan was able to withdrawthe amount of $2,500.00 even without private respondent's passbook. Thus, privaterespondent prayed that third party defendant Chan be made to refund to him the amountwithdrawn and to pay attorney's fees of P5,000.00 plus P300.00 honorarium perappearance.

Petitioner filed a comment on the motion for leave of court to admit the third partycomplaint, wherein it asserted that per paragraph 2 of the Rules and Regulationsgoverning BPI savings accounts, private respondent alone was liable "for the value of thecredit given on account of the draft or check deposited." It contended that private

respondent was estopped from disclaiming liability because he himself authorized thewithdrawal of the amount by signing the withdrawal slip. Petitioner prayed for the denialof the said motion so as not to unduly delay the disposition of the main case asserting thatprivate respondent's claim could be ventilated in another case.

Private respondent replied that for the parties to obtain complete relief and to avoidmultiplicity of suits, the motion to admit third party complaint should be granted.Meanwhile, the trial court issued orders on August 25, 1987 and October 28, 1987directing private respondent to actively participate in locating Chan. After privaterespondent failed to comply, the trial court, on May 18, 1988, dismissed the third partycomplaint without prejudice.

On November 4, 1991, a decision was rendered dismissing the complaint. The lowercourt held petitioner could not hold private respondent liable based on the check's facevalue alone. To so hold him liable "would renderinutile the requirement of 'clearance'from the drawee bank before the value of a particular foreign check or draft can becredited to the account of a depositor making such deposit." The lower court further heldthat "it was incumbent upon the petitioner to credit the value of the check in question to


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the account of the private respondent only upon receipt of the notice of final paymentandshould nothave authorized the withdrawal from the latter's account of the value orproceeds of the check." Having admitted that it committed a "mistake" in not waiting forthe clearance of the check before authorizing the withdrawal of its value or proceeds,petitioner should suffer the resultant loss.

On appeal, the Court of Appeals affirmed the lower court's decision. The appellate courtheld that petitioner committed "clear gross negligence" in allowing Ruben Gayon, Jr. towithdraw the money without presenting private respondent's passbook and, before thecheck was cleared and in crediting the amount indicated therein in private respondent'saccount. It stressed that the mere deposit of a check in private respondent's account didnot mean that the check was already private respondent's property. The check still had tobe cleared and its proceeds can only be withdrawn upon presentation of a passbook inaccordance with the bank's rules and regulations. Furthermore, petitioner's contention thatprivate respondent warranted the check's genuineness by endorsing it is untenable for it

would render useless the clearance requirement. Likewise, the requirement ofpresentation of a passbook to ascertain the propriety of the accounting reflected would bea meaningless exercise. After all, these requirements are designed to protect the bankfrom deception or fraud.

The Court of Appeals cited the case ofRoman Catholic Bishop of Malolos, Inc. v. IAC,14where this Court stated that a personal check is not legal tender or money, and held thatthe check deposited in this case must be cleared before its value could be properlytransferred to private respondent's account.

Without filing a motion for the reconsideration of the Court of Appeal's Decision,petitioner filed this petition for review on certiorari, raising the following issues:

1.WHETHER OR NOT RESPONDENT NAPIZA IS LIABLE UNDERHIS WARRANTIES AS A GENERAL INDORSER.

2.WHETHER OR NOT A CONTRACT OF AGENCY WAS CREATEDBETWEEN RESPONDENT NAPIZA AND RUBEN GAYON.

3.WHETHER OR NOT PETITIONER WAS GROSSLY NEGLIGENTIN ALLOWING THE WITHDRAWAL.

Petitioner claims that private respondent, having affixed his signature at the dorsal side ofthe check, should be liable for the amount stated therein in accordance with the followingprovision of the Negotiable Instruments Law (Act No. 2031):
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"SECTION 66.Liability of general indorser.Every indorser who indorseswithout qualification, warrants to all subsequent holders in due course

(a)The matters and things mentioned in subdivisions (a), (b), and (c) of the nextpreceding section; and

(b)That the instrument is at the time of his indorsement, valid and subsisting.

And, in addition, he engages that on due presentment, it shall be accepted orpaid, or both, as the case may be, according to its tenor, and that if it bedishonored, and the necessary proceedings on dishonor be duly taken, he willpay the amount thereof to the holder, or to any subsequent indorser who may becompelled to pay it."

Section 65, on the other hand, provides for the following warranties of a personnegotiating an instrument by delivery or by qualified indorsement: (a) that the instrument

is genuine and in all respects what it purports to be; (b) that he has good title to it, and (c)that all prior parties had capacity to contract.15InPeople v. Maniego,16this Courtdescribed the liabilities of an indorser as follows:

"Appellant's contention that a mere indorser, she may not be liable on accountof the dishonor of the checks indorsed by her, is likewise untenable. Under thelaw, the holder or last indorsee of a negotiable instrument has the right 'toenforce payment of the instrument for the full amount thereof against all partiesliable thereon.' Among the 'parties liable thereon' is an indorser of theinstrument, i.e., 'a person placing his signature upon an instrument otherwisethan as maker, drawer or acceptor ** unless he clearly indicated by appropriate

words his intention to be bound in some other capacity.' Such an indorser 'whoindorses without qualification,' inter alia 'engages that on due presentment, **(the instrument) shall be accepted or paid, or both, as the case may be,according to its tenor, and that if it be dishonored, and the necessaryproceedings on dishonor be duly taken, he will pay the amount thereof to theholder, or any subsequent indorser who may be compelled to pay it.' Maniegomay also be deemed an 'accommodation party' in the light of the facts, i.e., aperson 'who has signed the instrument as maker, drawer, acceptor, or indorser,without receiving value therefor, and for the purpose of lending his name tosome other person.' As such, she is under the law 'liable on the instrument to aholder for value, notwithstanding such holder at the time of taking the

instrument knew ** (her) to be only an accommodation party,' although she hasthe right, after paying the holder, to obtain reimbursement from the partyaccommodated, 'since the relation between them is in effect that of principal andsurety, the accommodation party being the surety."

It is thus clear that ordinarily private respondent may be held liable as an indorser of thecheck or even as an accommodation party.17However, to hold private respondent liablefor the amount of the check he deposited by the strict application of the law and without
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considering the attending circumstances in the case would result in an injustice and in theerosion of the public trust in the banking system. The interest of justice thus demandslooking into the events that led to the encashment of the check.

Petitioner asserts that by signing the withdrawal slip, private respondent "presented the

opportunity for the withdrawal of the amount in question." Petitioner relied "on thegenuine signature on the withdrawal slip, the personality of private respondent's son andthe lapse of more than fifty (50) days from date of deposit of the Continental Bank draft,without the same being returned yet."18We hold however, that the propriety of thewithdrawal should be gauged by compliance with the rules thereon that both petitionerbank and its depositors are duty-bound to observe.

In the passbook that petitioner issued to private respondent, the following rules onwithdrawal of deposits appear:

"4.Withdrawals must be made by the depositor personally but in someexceptional circumstances, the Bank may allow withdrawal by another upon thedepositor's written authority duly authenticated; and neither a deposit nor awithdrawal will be permitted except upon the presentation of the depositor'ssavings passbook, in which the amount deposited withdrawn shall be enteredonly by the Bank.

5.Withdrawals may be made by draft, mail or telegraphic transfer in currency ofthe account at the request of the depositor in writing on the withdrawal slip orby authenticated cable. Such request must indicate the name of the payee/s,amount and the place where the funds are to be paid. Any stamp, transmission

and other charges related to such withdrawals shall be for the account of thedepositor and shall be paid by him/her upon demand. Withdrawals may also bemade in the form of travelers checks and in pesos. Withdrawals in the form ofnotes/bills are allowed subject however, to their (availability).

6.Deposits shall not be subject to withdrawal by check, and may be withdrawnonly in the manner above provided, upon presentation of the depositor's savingspassbook and with the withdrawal form supplied by the Bank at the counter."19

Under these rules, to be able to withdraw from the savings account deposit under thePhilippine foreign currency deposit system, two requisites must be presented to petitioner

bank by the person withdrawing an amount: (a) a duly filled-up withdrawal slip; and (b)the depositor's passbook. Private respondent admits that he signed a blank withdrawalslip ostensibly in violation of Rule No. 6 requiring that the request for withdrawal mustname the payee, the amount to be withdrawn and the place where such withdrawal shouldbe made. That the withdrawal slip was in fact a blank one with only private respondent'stwo signatures affixed on the proper spaces is buttressed by petitioner's allegation in theinstant petition that had private respondent indicated therein the person authorized toreceive the money, then Ruben Gayon, Jr. could not have withdrawn any amount.
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Petitioner contends that "(i)n failing to do so (i.e., naming his authorized agent), hepractically authorized any possessor thereof to write any amount and to collect the same."20

Such contention would have been valid if not for the fact that the withdrawal slip itself

indicates a special instruction that the amount is payable to "Ramon A. de Guzman &/orAgnes C. de Guzman." Such being the case, petitioner's personnel should have been dulywarned that Gayon, who was also employed in petitioner's Buendia Ave. Extensionbranch,21was not the proper payee of the proceeds of the check. Otherwise, eitherRamon or Agnes de Guzman should have issued another authority to Gayon for suchwithdrawal. Of course, at the dorsal side of the withdrawal slip is an "authority towithdraw" naming Gayon the person who can withdraw the amount indicated in thecheck. Private respondent does not deny having signed such authority. However,considering petitioner's clear admission that the withdrawal slip was a blank one exceptfor private respondent's signature, the unavoidable conclusion is that the typewritten

name of "Ruben C. Gayon, Jr." was intercalated and thereafter it was signed by Gayon orwhoever was allowed by petitioner to withdraw the amount. Under these facts, therecould not have been a principal-agent relationship between private respondent and Gayonso as to render the former liable for the amount withdrawn.

Moreover, the withdrawal slip contains a boxed warning that states: "This receipt must besigned and presented with the corresponding foreign currency savings passbook by thedepositor in person. For withdrawals thru a representative, depositor should accomplishthe authority at the back." The requirement of presentation of the passbook whenwithdrawing an amount cannot be given mere lip service even though the person making

the withdrawal is authorized by the depositor to do so. This is clear from Rule No. 6 setout by petitioner so that, for the protection of the bank's interest and as a reminder to thedepositor, the withdrawal shall be entered in the depositor's passbook. The fact thatprivate respondent's passbook was not presented during the withdrawal is evidenced bythe entries therein showing that the last transaction that he made with the bank was onSeptember 3, 1984, the date he deposited the controversial check in the amount of$2,500.00.22

In allowing the withdrawal, petitioner likewise overlooked another rule that is printed inthe passbook. Thus:

"2.All deposits will be received as current funds and will be repaid in the samemanner; provided, however, that deposits ofdrafts, checks, money orders, etc.will be accepted as subject to collection only and credited to the account only

upon receipt of the notice of final payment. Collection charges by the Bank'sforeign correspondent in effecting such collection shall be for the account of thedepositor. If the account has sufficient balance, the collection shall be debitedby the Bank against the account. If, for any reason, the proceeds of thedeposited checks, drafts, money orders, etc., cannot be collected or if the Bank
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is required to return such proceeds, the provisional entry therefor made by theBank in the savings passbook and its records shall be deemed automaticallycancelled regardless of the time that has elapsed, and whether or not thedefective items can be returned to the depositor; and the Bank is herebyauthorized to execute immediately the necessary corrections, amendments or

changes in its record, as well as on the savings passbook at the first opportunityto reflect such cancellation." (Emphasis supplied.)

As correctly held by the Court of Appeals, in depositing the check in his name, privaterespondent did not become the outright owner of the amount stated therein. Under theabove rule, by depositing the check with petitioner, private respondent was, in a way,merely designating petitioner as the collecting bank. This is in consonance with the rulethat a negotiable instrument, such as a check, whether a manager's check or ordinarycheck, is not legal tender.23As such, after receiving the deposit, under its own rules,petitioner shall credit the amount in private respondent's account or infuse value thereononly after the drawee bank shall have paid the amount of the check or the check has been

cleared for deposit. Again, this is in accordance with ordinary banking practices and withthis Court's pronouncement that "the collecting bank or last endorser generally suffers theloss because it has the duty to ascertain the genuineness of all prior endorsementsconsidering that the act of presenting the check for payment to the drawee is an assertionthat the party making the presentment has done its duty to ascertain the genuineness ofthe endorsements."24The rule finds more meaning in this case where the check involvedis drawn on a foreign bank and therefore collection is more difficult than when thedrawee bank is a local one even though the check in question is a manager's check.25

InBanco Atlantico v. Auditor General,26Banco Atlantico, a commercial bank in Madrid,Spain, paid the amounts represented in three (3) checks to Virginia Boncan, the financeofficer of the Philippine Embassy in Madrid. The bank did so without previously clearingthe checks with the drawee bank, the Philippine National Bank in New York, on accountof the "special treatment" that Boncan received from the personnel of Banco Atlantico'sforeign department. The Court held that the encashment of the checks without priorclearance is "contrary to normal or ordinary banking practice specially so where thedrawee bank is a foreign bank and the amounts involved were large." Accordingly, theCourt approved the Auditor General's denial of Banco Atlantico's claim for payment of

the value of the checks that was withdrawn by Boncan.

Said ruling brings to light the fact that the banking business is affected with publicinterest. By the nature of its functions, a bank is under obligation to treat the accounts ofits depositors "with meticulous care, always having in mind the fiduciary nature of theirrelationship."27As such, in dealing with its depositors a bank should exercise itsfunctions not only with the diligence of a good father of a family but it should do so withthe highest degree of care.28
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In the case at bar, petitioner, in allowing the withdrawal of private respondent's deposit,failed to exercise the diligence of a good father of a family. In total disregard of its ownrules, petitioner's personnel negligently handled private respondent's account topetitioner's detriment. As this Court once said on this matter:

"Negligence is the omission to do something which a reasonable man, guidedby those considerations which ordinarily regulate the conduct of human affairs,would do, or the doing of something which a prudent and reasonable man woulddo. The seventy-eight (78)-year-old, yet still relevant, case ofPicart v. Smith,provides the test by which to determine the existence of negligence in aparticular case which may be stated as follows: Did the defendant in doing thealleged negligent act use that reasonable care and caution which an ordinarilyprudent person would have used in the same situation? If not, then he is guiltyof negligence. The law here in effect adopts the standard supposed to besupplied by the imaginary conduct of the discreet pater-familias of the Romanlaw. The existence of negligence in a given case is not determined by reference

to the personal judgment of the actor in the situation before him. The lawconsiders what would be reckless, blameworthy, or negligent in the man ofordinary intelligence and prudence and determines liability by that."29

Petitioner violated its own rules by allowing the withdrawal of an amount that isdefinitely over and above the aggregate amount of private respondent's dollar depositsthat had yet to be cleared. The bank's ledger on private respondent's account shows thatbefore he deposited $2,500.00, private respondent had a balance of only $750.00.30Uponprivate respondent's deposit of $2,500.00 on September 3, 1984, that amount wascredited in his ledger as a deposit resulting in the corresponding total balance of$3,250.00.31On September 10, 1984, the amount of $600.00 and the additional chargesof $10.00 were indicated therein as withdrawn thereby leaving a balance of $2,640.00.On September 30, 1984, an interest of $11.59 was reflected in the ledger and on October23, 1984, the amount of $2,541.67 was entered as withdrawn with a balance of $109.92.32On November 19, 1984 the word "hold" was written beside the balance of $109.92.33That must have been the time when Reyes, petitioner's branch manager, was informedunofficially of the fact that the check deposited was a counterfeit, but petitioner's BuendiaAve. Extension Branch received a copy of the communication thereon from Wells FargoBank International in New York the following day, November 20, 1984.34According toReyes, Wells Fargo Bank International handled the clearing of checks drawn against U.S.banks that were deposited with petitioner.35

From these facts on record, it is at once apparent that petitioner's personnel allowed thewithdrawal of an amount bigger than the original deposit of $750.00 and the value of thecheck deposited in the amount of $2,500.00 although they had not yet received noticefrom the clearing bank in the United States on whether or not the check was funded.Reyes' contention that after the lapse of the 35-day period the amount of a depositedcheck could be withdrawn even in the absence of a clearance thereon, otherwise it could
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take a long time before a depositor could make a withdrawal,36is untenable. Saidpractice amounts to a disregard of the clearance requirement of the banking system.

While it is true that private respondent's having signed a blank withdrawal slip set inmotion the events that resulted in the withdrawal and encashment of the counterfeit

check, the negligence of petitioner's personnel was the proximate cause of the loss thatpetitioner sustained. Proximate cause, which is determined by a mixed consideration oflogic, common sense, policy and precedent, is "that cause, which, in natural andcontinuous sequence, unbroken by any efficient intervening cause produces the injury,and without which the result would not have occurred."37The proximate cause of thewithdrawal and eventual loss of the amount of $2,500.00 on petitioner's part was itspersonnel's negligence in allowing such withdrawal in disregard of its own rules and theclearing requirement in the banking system. In so doing, petitioner assumed the risk ofincurring a loss on account of a forged or counterfeit foreign check and hence, it shouldsuffer the resulting damage.

WHEREFORE, the petition for review on certiorari is DENIED. The Decision of theCourt of Appeals in CA-G.R. CV No. 37392 is AFFIRMED.

SO ORDERED.

EN BANC

[G.R. No. 7760. October 1, 1914.]

E. M. WRIGHT, plaintiff-appellant, vs. MANILA ELECTRIC R. R. &LIGHT CO., defendant-appellant.

W. A. Kincaid, Thomas L. Hartigan, and Jose Robles Lahesa, for plaintiff.

Bruce. Lawrence, Ross & Block, for defendant.

SYLLABUS

1.APPEAL; FINDINGS; INJURY DUE TO INTOXICATION. Where theplaintiff drove home in the nighttime in a calesa, a two-wheeled vehicle, and, incrossing the tracks of a street-car company, the rails and a part of the ties of whichwere above the surface of the ground, the horse stumbled, leaped forward and fellcausing the vehicle to strike one of the rails with such force as to stop it suddenly andto break one of the wheels, thereby causing the plaintiff to pitch forward from thevehicle, striking upon the tracks and to injure himself severely, the plaintiff being at
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the time somewhat intoxicated but able to handle the horse and vehicle with ordinarycare and prudence, it is error for the court to find that, if the plaintiff had not beenintoxicated, he would not have been injured, as the conclusion that a sober man wouldnot have fallen from the vehicle under the same circumstances is founded onspeculation and guesswork. If any conclusion at all can be legitimately drawn from

the facts, it is that the sudden falling of the horse, resulting in the quick and decidedlowering of the thills, thereby giving the body of the vehicle a sharp forwardinclination, together with the sudden stop, would ordinarily be sufficient to throw asober man from the vehicle and cause the injuries which resulted.

2.STREET RAILROADS; DEFECTS IN TRACKS, NEGLIGENCE.Astreet-car company which maintains its tracks in the public highway, at a point wherethey are crossed by travelers, in such condition that the rails and a considerableportion of the ties are above the level of the street, is negligent and is responsible to aperson who, having to pass over said tracks at right angles with a vehicle in thenighttime, is injured by reason of the condition of the tracks, he using ordinary care

and prudence in making the crossing.

3.INTOXICATION IS NOT NEGLIGENCE. Mere intoxication is notnegligence, nor does the mere fact of intoxication establish a want of ordinary care. Ifa person's conduct is characterized by a proper degree of care and prudence, it isimmaterial whether he is drunk or sober.

D E C I S I O N

MORELAND, Jp:

This is an action brought to recover damages for injuries sustained in anaccident which occurred in Caloocan on the night of August 8, 1909.

The defendant is a corporation engaged in operating an electric street railwayin the city of Manila and its suburbs, including the municipality of Caloocan. Theplaintiff's residence in Caloocan fronts on the street along which defendant's tracksrun, so that to enter his premises from the street plaintiff is obliged to crossdefendant's tracks. On the night mentioned plaintiff drove home in a calesa and incrossing the tracks to enter his premises the horse stumbled, leaped forward, and fell,causing the vehicle to strike one of the rails with great force. The fall of the horse andthe collision of the vehicle with the rails, resulting in a sudden stop, threw plaintifffrom the vehicle and caused the injuries complained of.

It is undisputed that at the point where plaintiff crossed the tracks on the nightin question not only the rails were above-ground, but that the ties upon which the rails


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rested projected from one-third to one-half of their depth out of the ground, thusmaking the tops of the rails some 5 or 6 inches or more above the level of the street.

It is admitted that the defendant was negligent in maintaining its tracks asdescribed, but it is contended that the plaintiff was also negligent in that he wasintoxicated to such an extent at the time of the accident that he was unable to take careof himself properly and that such intoxication was the primary cause of the accident.

The trial court held that both parties were negligent, but that the plaintiff'snegligence was not as great as defendant's and under the authority of the case ofRakes vs. A. G. & P. CO. (7 Phil. Rep., 359) apportioned the damages and awardedplaintiff a judgment of P1,000.

The question before us is stated by the defendant thus:

"Accepting the findings of the trial court that both plaintiff anddefendant were guilty of negligence, the only question to be considered iswhether the negligence of plaintiff contributed to the 'principal occurrence' or

'only to his own injury.' If the former, he cannot recover; if the latter, the trialcourt was correct in apportioning the damages."

The question as stated by plaintiff is as follows: "The main question at issue iswhether or not the plaintiff was negligent, and, if so, to what extent. If the negligenceof the plaintiff was the primary cause of the accident then, of course, he cannotrecover; if his negligence had nothing to do with the accident but contributed to hisinjury, then the court was right in apportioning the damages, but if there was nonegligence on the part of the plaintiff, then he should be awarded damages adequateto the injury sustained."

In support of the defendant's contention counsel says:

"Defendant's negligence was its failure properly to maintain the track;plaintiff's negligence was his intoxication; the 'principal occurrence' wasplaintiff's fall from his calesa. It seems clear that plaintiff's intoxicationcontributed to the fall; if he had been sober, it can hardly be doubted that hewould have crossed the track safely, as he had done a hundred times before."

While both parties appealed from the decision, the defendant on the groundthat it was not liable and the plaintiff on the ground that the damages were insufficientaccording to the evidence, and while the plaintiff made a motion for a new trial uponthe statutory grounds and took proper exception to the denial thereof, thus conferringupon this court jurisdiction to determine the questions of fact, nevertheless, not all ofthe testimony taken on the trial, so far as can be gathered from the record, has beenbrought to this court. There seem to have been two hearings, one on the 31st ofAugust and the other on the 28th of September. The evidence taken on the firsthearing is here; that taken on the second is not. Not all the evidence taken on thehearings being before the court, we must refuse, under our rules, to consider even thatevidence which is here; and, in the decision of this case, we are, therefore, relegatedto the facts stated in the opinion of the court and the pleadings filed.


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A careful reading of the decision of the trial court leads us to the conclusionthat there is nothing in the opinion which sustains the conclusion of the court that theplaintiff was negligent with reference to the accident which is the basis of this action.Mere intoxication is not negligence, nor does the mere fact of intoxication establish awant of ordinary care. It is but a circumstance to be considered with the other

evidence tending to prove negligence. It is the general rule that it is immaterialwhether a man is drunk or sober if no want of ordinary care or prudence can beimputed to him, and no greater degree of care is required to be exercised by anintoxicated man for his own protection than by a sober one. If one's conduct ischaracterized by a proper degree of care and prudence, it is immaterial whether he isdrunk or sober. (Ward vs. Chicago etc., R. R. Co., 85 Wis., 601; H. & T. C. R. Co. vs.Reason, 61 Tex., 613; Algervs. Lowell, 3 Allen, Mass., 402; Central R. R. Co. vs.Phinazee, 93 Ga., 488; Maguire vs. Middlesex R. R. Co., 115 Mass., 239; Meyervs.Pacific R. R. Co., 40 Mo., 151; Chicago & N. W. R. R. Co. vs. Drake, 33 Ill. App.,114.)

If intoxication is not in itself negligence, what are the facts found by the trialcourt and stated in its opinion upon which may be predicated the finding that theplaintiff did not use ordinary care and prudence and that the intoxication contributedto the injury complained of ? After showing clearly and forcibly the negligence of thedefendant in leaving its tracks in the condition in which they were on the night of theinjury, the court has the following to say and it is all that can be found in its opinion,with reference to the negligence of the plaintiff: "With respect to the condition inwhich Mr. Wright was on returning to his house on the night in question, thetestimony of Doctor Kneedler who was the physician who attended him all hour afterthe accident, demonstrates that he was intoxicated. . . .

"If the defendant or its employees were negligent by reason of havingleft the rails and a part of the ties uncovered in a street where there is a largeamount of travel, the plaintiff was no less negligent, he not having abstainedfrom his custom of taking more wine than he could carry without disturbing hisjudgment and his self-control, he knowing that he had to drive a horse andwagon and to cross railroad tracks which were to a certain extent dangerous byreason of the rails being elevated above the level of the street.

"If the plaintiff had been prudent on the night in question and had notattempted to drive his conveyance while in a drunken condition, he wouldcertainly have avoided the damages which he received, although the company,

on its part, was negligent in maintaining its tracks in a bad condition for travel."Both parties, therefore, were negligent and both contributed to the

damages resulting to the plaintiff, although the plaintiff, in the Judgment of thecourt, contributed in greater proportion to the damages than did the defendant."

As is clear from reading the opinion, no facts are stated therein which warrantthe conclusion that the plaintiff was negligent. The conclusion that if he had beensober he would not have been injured is not warranted by the facts as found. It is


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impossible to say that a sober man would not have fallen from the vehicle under theconditions described. A horse crossing the railroad tracks with not only the rails but aportion of the ties themselves aboveground stumbling by reason of the unsure footingand falling, the vehicle crashing against the rails with such force as to break a wheel,this might be sufficient to throw a person from the vehicle no matter what his

condition; and to conclude that, under such circumstances, a sober man would nothave fallen while a drunken man did, is to draw a conclusion which enters the realmof speculation and guesswork.

It having been found that the plaintiff was not negligent, it is unnecessary todiscuss the question presented by the appellant company with reference to theapplicability of the case of Rakes vs. A. G. & P. Co., above; and we do not find factsin the opinion of the court below which justify a larger verdict than the one found.

The judgment appealed from is affirmed, without special finding as to costs.

Arellano, C.J., Torres andAraullo, JJ., concur.

Johnson, J., dissents.

Separate Opinions

CARSON, J., dissenting:

I dissent. I think, in the first place, that before pronouncing judgment theparties should have an opportunity, if they so desire, to correct the manifestly

accidental omission from the record of a part of the transcript of the record. It is veryclear that when the case was submitted, and the briefs filed, both parties were underthe mistaken impression that all the evidence was in the record.

I think, furthermore, that if the case is to be decided on the findings of fact bythe trial judge, these findings sufficiently establish the negligence of the plaintiff.

The trial judge expressly found that

"If the plaintiff had been prudent on the night in question and had notattempted to drive his conveyance while in a drunken condition, he wouldcertainly have avoided the damages which he received, although the company,on its part, was negligent in maintaining its tracks in a bad condition for travel."

This is a finding of fact the fact of negligence and I know of no rulewhich requires the trial court to set forth not only the ultimate facts found by it, butalso all the evidentiary facts on which such conclusions are based The finding is notin conflict with the other facts found by the trial judge, and though it is not fullysustained thereby, we must assume, if we decline to examine the record, that therewere evidentiary facts disclosed at the trial which were sufficient to sustain thefinding of negligence. "The statement of facts must contain only those facts which are


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essential to a clear understanding of the issues presented and the facts involved." (ActNo. 190, sec. 133.)

"The facts required to be found are the ultimate facts forming the issuespresented by the pleadings, and which constitute the foundation for a judgment,,and not those that are merely evidentiary of them. The court is not required to

find merely evidentiary facts, or to set forth and explain the means or processesby which he arrived at such findings. Neither evidence, argument, nor commenthas any legitimate place in findings of facts." (Conlan vs. Grace, 36 Minn.,276,282.)

EN BANC

[G.R. No. 6659. September 1, 1911.]

THE UNITED STATES, plaintiff-appellee, vs. BAGGAY, JR.,defendant-appellant.

Roman Lacson, for appellant.

Acting Attorney-General Harvey, for appellee.

SYLLABUS

1.CIVIL LIABILITY IN CRIME; INSANE PERSONS.Civil liabilitygenerally accompanies criminal liability, because every person liable criminally isalso liable for reparation of damage and for indemnification for the harm done; but byexpress provision of the penal laws there may be civil liability even when theperpetrator is held to be exempt from criminal liability. Such is the case of a lunatic ordemented person who, in spite of his deranged mind is still-reasonably and justlyliable with his property for the consequences of his acts, even though they be

performed unwittingly. Law and society are under obligation to protect him, and,when so declared liable with his property for reparation and indemnification, he is stillentitled to reservation of what is necessary for his decent maintenance, but thisprotection does not exclude liability for damages caused to those who may have themisfortune to suffer the consequences of his acts.


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D E C I S I O N

TORRES, Jp:

This is an appeal by the defendant from the judgment rendered on April 28,1910, whereby he was declared exempt from criminal liability but was obligated toindemnify the heirs of the murdered woman, Bil-liingan, in the sum of P1,000, to paythe costs in the case and to be confined in an institution for the insane until furtherorder of the court.

About the 4th of October, 1909, several persons were assembled in thedefendant's house in the township of Pearrubia, Abra, Province of Ilocos Sur, for thepurpose of holding a song service called "buni" according to the Tinguian custom,when he, the non-Christian Baggay, without provocation suddenly attacked thewoman Bil-liingan with a bolo, inflicting a serious wound on her head from which she

expired immediately; and with the same bolo he likewise inflicted various wounds onthe women named Calbayan, Agueng, Quisamay, Calapini, and on his own mother,named Dioalan.

For this reason the provincial fiscal filed a complaint in the court of Ilocos Sur,dated February 15, charging the non-Christian Baggay, jr., with murder, because ofthe violent death of the woman Bil-liingan. This cause was instituted separately fromthe other, No. 1109, for lesiones. After trial and proof that the defendant was sufferingfrom mental aberration, the judge on April 28 rendered the judgment cited above,whereupon the defendant's colmsel appealed to this court.

By another writing of June 27, the same counsel asked for immediatesuspension of execution of the judgment, because it had been appealed and had notbecome final. He also requested annulment of the sale at public auction of theproperty attached by the sheriff or his deputy under order of the court, for makingindemnification with the defendant's property in accordance with said judgment, asthe attachment had been executed upon the property of the non-Christian womannamed Dioalan and of other persons and not upon that of the defendant.

In opposition thereto, the provincial fiscal on the 30th of the same monthrequested in writing that the appeal from this judgment filed by the counsel for thedefense be not admitted or carried forward, representing that it was out of order as

having been submitted beyond the time limit; for on the very day said judgment wasrendered, April 28, 1910, the accused's counsel, Sotero Serrano, was verbally notifiedthereof, and it is therefore untrue that he was notified only on June 17 of said year, onwhich date he read and examined the case and without the clerk's knowledge signedthe same, making it appear that he was notified on that d

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