8/8/2019 caseciv

1/16

G.R. No. L-57642 March 16, 1989

BALIWAG TRANSIT, INC., petitioner,

vs.

HON. BLAS F. OPLE, Minister of Labor and Employment, and ROMEO HUGHES, respondents.

Agapito S. Mendoza for petitioner.

The Solicitor General for public respondent.

Lucas Sugui for private respondent.

CRUZ, J.:

Even before security of tenure for the laborer was dignified into a constitutional right in 1973, it

was already recognized as one of the great guarantees of the worker against arbitrary dismissal

by his employer. Pursuant to the social justice policy, the government has consistently

emphasized and strengthened this right, which in a less enlightened age not far from ours was

scornfully dismissed as an unspeakable heresy.

This is not to say that once invoked, the right is automatically granted because of our

compassionate concern for the worker. That is not exactly correct. While security of tenure

stands faithful vigil over his interests, it will be extended to him for his protection only when it

is shown that he deserves it. This is also part of social justice.

In the case at bar, the petitioner contends that its employee, the private respondent, did not

have that right or has lost or abandoned it by his own omissions. It therefore asks us to reverse

the decision of the then Minister of Labor ordering the reinstatement of the employee and the

payment to him of back wages.

The petitioner is a duly organized corporation with a valid authorization from the Board of

Transportation to operate a bus line. The private respondent was hired by it in 1966 and

continued serving therein as a bus driver until the incident in question, when he was relieved of

his duties. He has not been reinstated to date.

The incident occurred on August 10, 1974, at about 2:30 in the afternoon. Romeo Hughes wasdriving Baliwag Transit Bus No. 1066 when it was stalled at the railroad crossing in Calumpit,

Bulacan, because the vehicle ahead of it had stopped owing to a jeep that was making its way

into a garage. As thus positioned, the bus was hit at its rear end by an onrushing train of the

Philippine National Railways that dragged it several meters and flung it on its side at a nearby

ditch. Eighteen passengers died and fifty six others suffered serious physical injuries. The bus

itself sustained extensive damage. According to the petitioner, it spent P 436,642.03 for the

8/8/2019 caseciv

2/16

settlement of the claims of the deceased and injured passengers and another P 179,511.52 for

the repair of the bus. 1

The petitioner filed a complaint for damages against the Philippine National Railways, which

was held liable for its negligence in a decision rendered on April 6, 1977, by Judge Benigno

Puno. 2 The private respondent was absolved of any contributory negligence. 3 The decisionwas elevated to the Court of Appeals, which had not yet resolved the same at the time this

petition was filed with this Court. The private respondent was also prosecuted for multiple

homicide and multiple serious physical injuries, but the case was provisionally dismissed by the

trial court on March 19, 1980. The reason was failure of the prosecution witness to appear at

the scheduled hearing. 4

The private respondent claims that soon after the decision against the PNR, he had his driver's

license renewed and then sought reinstatement with Baliwag Transit. He was advised to wait

until termination of the criminal case against him. He repeated his request several times

thereafter but with the same result, even after the dismissal of the criminal case. He then

decided to seek the assistance of Minister Ople, who wrote the petitioner on April 24, 1980,

and "implored" the private respondent's re- employment. 5 As this request was also ignored,

Hughes finally demanded his reinstatement on May 2, 1980, in a letter signed by his counsel. 6

On May 10, 1980, the petitioner replied to say he could not be reinstated because his driver's

license had already been revoked and his driving was extremely dangerous to the riding public."

7

The private respondent's reaction to this rejection was to file on July 29, 1980, a formal

complaint with the Ministry of Labor and Employment for illegal dismissal against the

petitioner, with a prayer for his reinstatement with back wages from May 10, 1980, plus

emergency cost of living allowance. 8

On January 22, 1981, the complaint was dismissed by Director Francisco L. Estrella, National

Capital Region, on the ground of prescription, "it appearing that although the private

respondent was separated from the service on 10 August 1974 (date of the accident), or in

1975 when his suspension had presumably metamorphosed into a dismissal, it was not until 29

July 1980, or a little less than 6 years thereafter, when he filed the complaint." The decision also

said, he was guilty of criminal negligence. 9

The regional director was, however, reversed by Minister Ople in his order dated May 21, 1981,

calling for the reinstatement of Hughes with full back wages and without loss of seniority rights.

The finding of the public respondent was that Hughes was not guilty of criminal or civil

negligence nor was it correct to say that his action had prescribed. 10

In challenging this order, the petitioner contends that the private respondent is not entitled to

reinstatement because he had abandoned his work; that he is guilty of laches in not asserting

his right sooner; and that in any case his cause of action had long prescribed. Moreover, it bad

8/8/2019 caseciv

3/16

lost confidence in the private respondent, a circumstance that by itself alone was sufficient to

justify his dismissal.

The charge of abandonment must fail for shallowness and proven falsity. In the first place, the

petitioner's allegation that it never heard from the private respondent again for six years after

the collision is obviously untrue for it is a matter of record that he was in fact its principalwitness in its civil complaint for damages against the PNR. 11 In the second place, it is not

disputed that after the decision of Judge Puno absolving Hughes of contributory negligence, the

private respondent requested his reinstatement but the request was rejected as many times as

it was made, and even when it was reiterated by Minister Ople himself. 12 In the third place, it

is plain that if the private respondent did not demand his reinstatement earlier, it was because

the petitioner deceived him into believing he would be eventually reinstated, although he never

was, even after he had renewed his driver's license and, still later, after the criminal charge

against him had been dropped. 13 Never at any time did the private respondent manifest loss

of interest in recovering his work nor did he make any waiver, express or implied, of his right to

be reinstated. In fact, when his demand was finally rejected on May 10, 1980, he lost no time in

asserting his security of tenure and filed his complaint for reinstatement less than three months

later.

Incidentally, the jurisprudence cited by the petitioner on this point refers to public office, title

to which is deemed abandoned if not asserted within one year from divestment. Public interest

requires that all conflicting claims are resolved as soon as possible, to stabilize the title to such

office. 14 No similar urgency applies to private positions, which is the reason why a longer

period is allowed for the vindication of one's right to such employment.

The claim of prescription deserves a more extended examination if only because this was the

principal basis of the decision rendered by the regional director. According to him, thecomplaint should be dismissed because it was filed late under Article 291 ** of the Labor Code

providing that all claims accruing before the effectivity of the Code on November 1, 1974

should be filed within one year thereafter. The decision continued to say that even assuming

that the indefinite suspension developed into a dismissal only in 1975, after the effectivity of

the Code, the action should still be deemed prescribed and also forever barred because it was

not filed within three years from such dismissal, conformably to the same article.

The said article reads in material part as follows:

ART. 291. Money claims- All money claims arising from employer- employee relations accruing

during the effectivity of this Code shall be filed within three (3) years from the time the cause of

action accrued; otherwise they shall be forever barred.

All money claims accruing prior to the effectivity of this Code shall be filed with the appropriate

entities established under this Code within one (1) year from the date of effectivity, and shall be

processed or determined in accordance with implementing rules and regulations of the Code;

otherwise, they shall be forever barred.

8/8/2019 caseciv

4/16

Echoing the regional director, the petitioner contends that the private respondent's complaint

was filed tardily on July 29, 1980, as this was way beyond the prescriptive periods prescribed in

Article 291 as counted from August 10, 1974, the date when the collision occurred.

It is important to observe that another prescriptive period must also be considered, to wit, that

established under Article 1146 of the Civil Code, providing as follows:

ART. 1146. The following actions must be instituted within four years:

(1) Upon an injury to the rights of the plaintiff,

(2) Upon a quasi-delict.

The Court, in applying this period in Callanta v. Carnation Philippines, Inc., 15 gave the following

rationale:

One's employment or profession is a 'property right' and the wrongful interference therewith is

an actionable wrong. The right is considered to be property within the protection of the

constitutional guarantee of due process of law. Clearly then, when one is arbitrarily and

unjustly deprived of his job or means of livelihood, the action instituted to contest the legality

of one's dismissal from employment constitutes, in essence, an action predicated 'upon an

injury to the rights of the plaintiff as contemplated under Article 1146 of the New Civil Code,

which must be brought within 4 years.

The doctrine was recently affirmed in Pan-Fil Co. v. Agujar, 16 albeit with several dissents.

Whatever prescriptive period is applicable, the antecedent question that has to be settled is thedate when the cause of action accrued and from which the period shall commence to run. The

parties disagree on this date. The contention of the petitioner is that it should be August 10,

1974, when the collision occurred. The private respondent insists it is May 10, 1980, when his

demand for reinstatement was rejected by the petitioner.

It is settled jurisprudence that a cause of action has three elements, to wit, (1) a right in favor of

the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation

on the part of the named defendant to respect or not to violate such right; and (3) an act or

omission on the part of such defendant violative of the right of the plaintiff or constituting a

breach of the obligation of the defendant to the plaintiff. 17

The problem in the case at bar is with the third element as the first two are deemed

established.

We hold that the private respondent's right of action could not have accrued from the mere

fact of the occurrence of the mishap on August 10, 1974, as he was not considered

automatically dismissed on that date. At best, he was deemed suspended from his work, and

8/8/2019 caseciv

5/16

not even by positive act of the petitioner but as a result of the suspension of his driver's license

because of the accident. There was no apparent disagreement then between Hughes and his

employer. As the private respondent was the petitioner's principal witness in its complaint for

damages against the Philippine National Railways, we may assume that Baliwag Transit and

Hughes were on the best of terms when the case was being tried. Hence, there existed no

justification at that time for the private respondent to demand reinstatement and noopportunity warrant either for the petitioner to reject that demand.

We agree with the private respondent that May 10, 1980, is the date when his cause of action

accrued, for it was then that the petitioner denied his demand for reinstatement and so

committed the act or omission "constituting a breach of the obligation of the defendant to the

plaintiff." The earlier requests made by him having been warded off with indefinite promises,

and the private respondent not yet having decided to assert his right, his cause of action could

not be said to have then already accrued. The issues had not yet been joined, so to speak. This

happened only when the private respondent finally demanded his reinstatement on May

2,1980, and his demand was categorically rejected by the petitioner on May 10, 1980.

We have held in earlier cases that:

Since a cause of action requires, as essential elements, not only a legal right of the plaintiff and

a correlative obligation of the defendant but also an act or omission of the defendant in

violation of said legal right the cause of action does not accrue until the party obligated refuses,

expressly or impliedly, to comply with its duty. 18

x x x

The one-year period should instead be counted from the date of rejection by the insurer as thisis the time when the cause of action accrues. Since in these cases there has yet been no accrual

of cause of action. We hold that prescription has not yet set in. 19

x x x

It follows that appellants cause of action arose only when the appellees made known their

intention, by overt acts, not to abide by the true agreement and the allegations of the

complaint establish that this happened when the appellees executed the affidavit of

consolidation of the title allegedly acquired by appellees under the fictitiouspacto de retro sale.

It was then, and only then, that the appellant's cause of action arose to enforce the true

contract and have the apparent one reformed or disregarded, and the period of extinctive

prescription began to run against her. 20

As the private respondent's complaint was filed not later than three months only after such

rejection, there is no question that his action has not prescribed, whatever prescriptive period

is applied.

8/8/2019 caseciv

6/16

This should also dispose of the claim of laches, for equally obvious reasons.

The last contention of the petitioner is that it had lost confidence in the private respondent and

so was justified in dismissing him. On this matter, the petitioner is clearly hoist with its own

petard.

We assume that the loss of confidence invoked by the petitioner is in the private respondent's

driving skill, not in his character or other personal attributes. Otherwise, the claim must be

dismissed outright as the position of driver is not primarily confidential in nature like that of a

cashier or a private secretary. This alleged loss of confidence is based, as the petitioner said in

its letter of May 10, 1980, on the collision between the PNR train and the Baliwag Transit bus

the private respondent was driving at the time. The implication in that letter is that the mishap

was due to his negligence and that it was for this reason that he had been dismissed.

This is a clear volte face if there ever was one. The petitioner is contending with itself. Earlier, in

its complaint for damages against the Philippine National Railways, Baliwag Transit was singing

an entirely different tune and was loud in defending the private respondent from the charge

that he was responsible for the accident. Thus, in its answer to the counterclaim, the petitioner

declared in no uncertain terms:

4.--That the driver of the passenger bus of the plaintiff exercised due care in approaching the

said railroad crossing at Calumpit, Bulacan, and thereafter passed over the railroad track

because there was no train in sight, and said passenger bus stopped while its rear portion was

on the railroad track due to a stopped vehicle ahead of it, so that said driver cannot remove the

passenger bus before the appreach of the train of the defendants, which was coming very fast,

imprudently and negligently, in wanton disregard of danger to human lives and properties

considering that the stopped passenger bus of the plaintiff at the railroad track was visible tolocomotive engineer Honorio Cirbado at a great distance sufficient for him to reduce his speed

and finally stop to avoid the collision, but that notwithstanding he failed to exercise due care in

reducing his speed and stopping the train to avoid hitting and bumping the rear portion of

plaintiff's passenger bus, thereby resulting in the fatal collision, all of which was due to the fault

and wanton negligence of defendants. (Emphasis supplied.). 21

The trial court accepted this assertion and rendered judgment against the PNR, at the same

time also absolving the private respondent from even contributory negligence, thus:

Contributory negligence may not be ascribed to the driver, it was evident that he

had taken the necessary precautions before passing over the railway track; if the

bus was hit, it was for reasons beyond the control of the driver because he had no

place to go; there were vehicles to his left which prevented him in swerving

towards that direction; his bus stalled in view of the obstructions in his front-

where a sand and gravel truck stopped because of a jeep maneuvering into a

garage up front. (Emphasis supplied). 22

8/8/2019 caseciv

7/16

If it is also remembered that Hughes had never been involved in any traffic accident during his

entire period of employment with Baliwag Transit, from 1965 until 1974-and indeed even

before that-the conclusion must follow that the petitioner had no basis for its alleged loss of

confidence in the private respondent.

As the Court sees it, the private respondent simply had the misfortune of being at the wheel ofthe Baliwag Transit bus when, through no fault of his, it was hit and wrecked by the PNR train

due to the negligence of its driver. The happenstance that Hughes was then driving the bus is

certainly no justification for his dismissal on the specious ground that the petitioner had lost

confidence in him.

The collision of August 10, 1974, victimized not only the dead and injured passengers but the

private respondent as well. For reasons not imputable to him, he has been unable to resume his

work as a bus driver with the petitioner since that tragic day almost fifteen years ago when the

speeding train crashed into his life. It is time we made things right. Accordingly, we sustain the

order requiring his reinstatement by the petitioner and approve the award of civil damages to

him except as to the back wages, which are hereby limited to three years only in accordance

with existing policy. By this decision, we affirm anew the worker's right to security of tenure,

recognizing it once again as a vigilant sentinel of labor in the protection of its interests.

WHEREFORE, subject to the modification of the challenged order of May 21, 1981 as to the

backwages, the petition is DISMISSED, with costs against the petitioner. This decision is

immediately executory.

SO ORDERED.

G.R. No. L-83524 October 13, 1989

ERNESTO KRAMER, JR. and MARIA KRAMER, petitioners,

vs.

HON. COURT OF APPEALS and TRANS-ASIA SHIPPING LINES, INC., respondents.

Rodolfo D. Mapile for petitioners.

Jose Al. Perez for private respondent.

GANCAYCO, J.:

The principal issue in this Petition for Review is whether or not a Complaint for damages

instituted by the petitioners against the private respondent arising from a marine collision is

barred by the statute of limitations.

8/8/2019 caseciv

8/16

The record of the case discloses that in the early morning of April 8, 1976, the F/B Marjolea, a

fishing boat owned by the petitioners Ernesto Kramer, Jr. and Marta Kramer, was navigating its

way from Marinduque to Manila. Somewhere near Maricabon Island and Cape Santiago, the

boat figured in a collision with an inter-island vessel, the M/V Asia Philippines owned by the

private respondent Trans-Asia Shipping Lines, Inc. As a consequence of the collision, the F/B

Marjolea sank, taking with it its fish catch.

After the mishap, the captains of both vessels filed their respective marine protests with the

Board of Marine Inquiry of the Philippine Coast Guard. The Board conducted an investigation

for the purpose of determining the proximate cause of the maritime collision.

On October 19, 1981, the Board concluded that the loss of the F/B Marjolea and its fish catch

was attributable to the negligence of the employees of the private respondent who were on

board the M/V Asia Philippines during the collision. The findings made by the Board served as

the basis of a subsequent Decision of the Commandant of the Philippine Coast Guard dated

April 29, 1982 wherein the second mate of the M/V Asia Philippines was suspended from

pursuing his profession as a marine officer.1

On May 30, 1985, the petitioners instituted a Complaint for damages against the private

respondent before Branch 117 of the Regional Trial Court in Pasay City.2

The suit was docketed

as Civil Case No. 2907-P.

The private respondent filed a Motion seeking the dismissal of the Complaint on the ground of

prescription. He argued that under Article 1146 of the Civil Code,3

the prescriptive period for

instituting a Complaint for damages arising from a quasi-delict like a maritime collision is four

years. He maintained that the petitioners should have filed their Complaint within four years

from the date when their cause of action accrued, i.e., from April 8, 1976 when the maritimecollision took place, and that accordingly, the Complaint filed on May 30, 1985 was instituted

beyond the four-year prescriptive period.

For their part, the petitioners contended that maritime collisions have peculiarities and

characteristics which only persons with special skill, training and experience like the members

of the Board of Marine Inquiry can properly analyze and resolve. The petitioners argued that

the running of the prescriptive period was tolled by the filing of the marine protest and that

their cause of action accrued only on April 29, 1982, the date when the Decision ascertaining

the negligence of the crew of the M/V Asia Philippines had become final, and that the four-year

prescriptive period under Article 1146 of the Civil Code should be computed from the said date.

The petitioners concluded that inasmuch as the Complaint was filed on May 30, 1985, the same

was seasonably filed.

In an Order dated September 25, 1986,4

the trial court denied the Motion filed by the private

respondent. The trial court observed that in ascertaining negligence relating to a maritime

collision, there is a need to rely on highly technical aspects attendant to such collision, and that

the Board of Marine Inquiry was constituted pursuant to the Philippine Merchant Marine Rules

8/8/2019 caseciv

9/16

and Regulations, which took effect on January 1, 1975 by virtue of Letter of Instruction No. 208

issued on August 12, 1974 by then President Ferdinand E. Marcos, precisely to answer the

need. The trial court went on to say that the four-year prescriptive period provided in Article

1146 of the Civil Code should begin to run only from April 29, 1982, the date when the

negligence of the crew of the M/V Asia Philippines had been finally ascertained. The pertinent

portions of the Order of the trial court are as follows

Considering that the action concerns an incident involving a collision at sea of

two vehicles and to determine negligence for that incident there is an absolute

need to rely on highly technical aspects attendant to such collisions. It is

obviously to answer such a need that the Marine Board of Inquiry (Sic) was

constituted pursuant to the Philippine Merchant Marine Rules and Regulations

which became effective January 1, 1975 under Letter of Instruction(s) No. 208

dated August 12, 1974. The relevant section of that law (Art. XVI/b/ provided as

follow(s):

1. Board of Marine Inquiry (BMI) Shall have the

jurisdiction to investigate marine accidents or

casualties relative to the liability of shipowners and

officers, exclusive jurisdiction to investigate

cases/complaints against the marine officers; and

to review all proceedings or investigation

conducted by the Special Boards of Marine Inquiry.

2. Special Board of Marine Inquiry. Shall have

original jurisdiction to investigate marine casualties

and disasters which occur or are committed withinthe limits of the Coast Guard District concerned or

those referred by the Commandant.

The Court finds reason in the argument of the plaintiff that marine incidents

have those 'peculiarities which only persons of special skill, training and

exposure can rightfully decipher and resolve on the matter of the negligence and

liabilities of parties involved and inasmuch as the report of the Board of Inquiry

(sic) admittedly came out only on April 29, 1982, the prescriptive period

provided x x x under Art. 1146 of the Civil Code should begin to run only from

that date. The complaint was filed with this Court on May 10, 1985, hence the

statute of limitations can not constitute a bar to the filing of this case.5

The private respondent elevated the case to the Court of Appeals by way of a special civil action

for certiorariand prohibition, alleging therein that the trial court committed a grave abuse of

discretion in refusing to dismiss the Complaint filed by the petitioners. The case was assigned to

the Second Division of the appellate court and was docketed as Case No. CA-G.R. SP No. 12032.

6

8/8/2019 caseciv

10/16

In a Decision dated November 27, 1987,7and clarified in a Resolution dated January 12, 1988,

8

the Court of Appeals granted the Petition filed by the private respondent and ordered the trial

court to dismiss the Complaint. The pertinent portions of the Decision of the appellate court

are as follows

It is clear that the cause of action of private respondent (the herein petitionersErnesto Kramer, Jr. and Marta Kramer) accrued from the occurrence of the

mishap because that is the precise time when damages were inflicted upon and

sustained by the aggrieved party and from which relief from the court is

presently sought. Private respondents should have immediately instituted a

complaint for damages based on a quasi-delict within four years from the said

marine incident because its cause of action had already definitely ripened at the

onset of the collision. For this reason, he (sic) could cite the negligence on the

part of the personnel of the petitioner to exercise due care and lack of (sic)

diligence to prevent the collision that resulted in the total loss of their x x x boat.

We can only extend scant consideration to respondent judge's reasoning that in

view of the nature of the marine collision that allegedly involves highly technical

aspects, the running of the prescriptive period should only commence from the

finality of the investigation conducted by the Marine Board of Inquiry (sic) and

the decision of the Commandant, Philippine Coast Guard, who has original

jurisdiction over the mishap. For one, while it is true that the findings and

recommendation of the Board and the decision of the Commandant may be

helpful to the court in ascertaining which of the parties are at fault, still the

former (court) is not bound by said findings and decision. Indeed, the same

findings and decision could be entirely or partially admitted, modified, amended,

or disregarded by the court according to its lights and judicial discretion. Foranother, if the accrual of a cause of action will be made to depend on the action

to be taken by certain government agencies, then necessarily, the tolling of the

prescriptive period would hinge upon the discretion of such agencies. Said

alternative it is easy to foresee would be fraught with hazards. Their

investigations might be delayed and lag and then witnesses in the meantime

might not be available or disappear, or certain documents may no longer be

available or might be mislaid. ...9

The petitioners filed a Motion for the reconsideration of the said Decision but the same was

denied by the Court of Appeals in a Resolution dated May 27, 1988.10

Hence, the instant Petition wherein the arguments raised by the petitioner before the trial

court are reiterated.11

In addition thereto, the petitioner contends that the Decision of the

Court of Appeals12

The private respondent filed its Comment on the Petition seeking therein

the dismissal of the same.13

It is also contended by the private respondent that the ruling of the

Court in Vasquez is not applicable to the case at bar because the said case involves a maritime

collision attributable to a fortuitous event. In a subsequent pleading, the private respondent

8/8/2019 caseciv

11/16

argues that the Philippine Merchant Marine Rules and Regulations cannot have the effect of

repealing the provisions of the Civil Code on prescription of actions.14

On September 19,1988, the Court resolved to give due course to the petition.15

After the

parties filed their respective memoranda, the case was deemed submitted for decision.

The petition is devoid of merit. Under Article 1146 of the Civil Code, an action based upon a

quasi-delict must be instituted within four (4) years. The prescriptive period begins from the

day the quasi-delict is committed. In Paulan vs. Sarabia,16

this Court ruled that in an action for

damages arising from the collision of two (2) trucks, the action being based on a quasi-delict,

the four (4) year prescriptive period must be counted from the day of the collision.

In Espanol vs. Chairman, Philippine Veterans Administration,17

this Court held as follows-

The right of action accrues when there exists a cause of action, which consists of

3 elements, namely: a) a right in favor of the plaintiff by whatever means and

under whatever law it arises or is created; b) an obligation on the part of

defendant to respect such right; and c) an act or omission on the part of such

defendant violative of the right of the plaintiff ... It is only when the last element

occurs or takes place that it can be said in law that a cause of action has arisen ...

.

From the foregoing ruling, it is clear that the prescriptive period must be counted when the last

element occurs or takes place, that is, the time of the commission of an act or omission

violative of the right of the plaintiff, which is the time when the cause of action arises.

It is therefore clear that in this action for damages arising from the collision of two (2) vesselsthe four (4) year prescriptive period must be counted from the day of the collision. The

aggrieved party need not wait for a determination by an administrative body like a Board of

Marine Inquiry, that the collision was caused by the fault or negligence of the other party

before he can file an action for damages. The ruling in Vasquez does not apply in this case.

Immediately after the collision the aggrieved party can seek relief from the courts by alleging

such negligence or fault of the owners, agents or personnel of the other vessel.

Thus, the respondent court correctly found that the action of petitioner has prescribed. The

collision occurred on April 8, 1976. The complaint for damages was filed iii court only on May

30, 1 985, was beyond the four (4) year prescriptive period.

WHEREFORE, the petition is dismissed. No costs.

SO ORDERED.

8/8/2019 caseciv

12/16

G.R. No. L-13159 February 28, 1962

REMEDIOS QUIOGUE, ET AL., plaintiffs-appellees,vs.

JACINTO BAUTISTA, ET AL., defendants-appellants.

T. Silverio for plaintiffs-appellees.J. Serrano Espiritu for defendants-appellants.

BAUTISTA ANGELO, J.:

This is an action to foreclose two deeds of mortgage executed to secure the payment of twoloans, one for P2,000.00 and another for P6,000.00 covering two parcels of land situated in the

City of Manila. The first deed was executed on May 9, 1944 and the second on October 11, 1944and it was stipulated therein as a common provision that the two loans cannot be repaid within

one year from the date of the termination of the last world war.

The defendants set up the defense that the present action is already barred by Civil Case No.11969 filed in the same court between the same parties, and that if there is any amount

recoverable from them the same shall be computed in accordance with the Ballantyne schedule.They also set up a counterclaim for moral damages in the amount of P10,000.00.

On August 27, 1957, the trial court rendered decision in favor of plaintiffs sentencing defendantsto pay the sum of P12,829.81, with interest at the rates of 6% and 3% per annum on the amounts

of P8,000.00 and P4,829.81, respectively, from July 21, 1957, plus costs, and in default ofpayment, it was ordered that the properties mortgaged be sold at public auction and the proceeds

thereof applied to the payment of the judgment.

Defendants have appealed to this Court on purely questions of law.

It appears that prior to the filing of the present complaint plaintiffs had instituted before theCourt of First Instance of Manila an action to foreclose a first mortgage on the same properties

and that on the date said action was filed the two loans covered by the second and thirdmortgages which are herein foreclosed had already matured (Civil Case No. 11969). It likewise

appears that judgment was duly entered in the first case and when a writ of execution was issuedto enforce it, it was fully satisfied by defendants on August 18, 1952 by paying to the sheriff the

sum of P9,000.00.

It is now contended that the trial court erred (1) in not dismissing this case as premature; (2) innot finding that this case is barred by the decision rendered in Civil Case No. 11969; and (3) innot converting the amounts recoverable under the Ballantyne scale of values.

With regard to the first contention, the lower court said: .

Considering that the Japanese Peace Treaty terminating the Second World War between

Japan and the Allied Powers, of which the Philippines was a signatory, was signed on

8/8/2019 caseciv

13/16

September 8, 1951 at San Francisco. U.S.A., the interpretation of counsel for thedefendants that the war did not terminate for the Philippines until July 23, 1956 is not

tenable.

WHEREFORE, defendants' motion to set aside the decision rendered in this case and to

order a new trial is hereby denied.

Counsel for defendants argues that the trial court erred in not dismissing this case as premature

because since it was agreed that the loans cannot be paid within one year from the termination ofthe last world war and according to the treaty between Japan and the Allied Powers the same

should come into force for each State only after its ratification and from date of the deposit of itsinstrument of ratification, it cannot be said that the war has terminated when this action was

brought on June 23, 1956, it appearing that the instrument of ratification was deposited only onJuly 23, 1956.

This contention is untenable. In Navarre v. Barreto, et al., G.R. No. L-8660, promulgated on

May 21, 1956, we said that "in the legal sense, war formally ended in the Philippines the momentPresident Harry S. Truman officially issued a proclamation of peace on December 31, 1946 ....And if counsel meant that there should be a formal treaty of peace, we may say that this purpose

has also been accomplished when the treaty of peace with Japan had been signed in SanFrancisco, California on September 8, 1951 by the United States and the Allied Powers,

including the Philippines." At any rate, even granting that the date of the deposit of theinstrument of ratification of the treaty should be reckoned with to determine when the last world

war should be deemed legally terminated, this point is now moot since said instrument wasdeposited on July 23, 1956.

The contention that his action is already barred by the filing of Civil Case No. 11969 for the

simple reason that the two loans herein involved could have been included in said action becauseat the time it was filed they had already matured, is likewise untenable, considering that the first

case refers to a transaction different from those covered in the present case. Section 3, Rule 2, ofour Rules of Court, invoked by appellants, which provides that a single cause of action cannot be

split up into two or more parts so as to be made the subject of different complaints, does notapply, for here there is not a single cause of action that was split up, but several causes that refer

to different transactions. And it was held that a contract embraces only one cause of actionbecause it may be violated only once even if it contains several stipulations.

1Thus, non-payment

of a loan secured by mortgage constitutes a single cause of action. The creditor cannot split upthis single cause of action into two separate complaints, one for payment of the debt and another

for the foreclosure of the mortgage. If he does so, the filing of the first complaint will bar thesecond complaint. In other words, the complaint filed for the payment of certain debt shall be

considered as a waiver of the right to foreclose the mortgage executed thereon.2 The lower court,therefore, did not err in denying the motion to dismiss on this ground. 1wph1.t

The third contention that the recoverable amounts should be converted into money according tothe Ballantyne scale of values cannot also be sustained it having been agreed between the parties

that said loans shall be payable after the termination of the last world war. The rule is well-settled "that where the obligation incurred during the Japanese occupation was made payable

8/8/2019 caseciv

14/16

after a fixed period, the maturity falling after liberation, the promissor must pay in Philippinecurrency the same amount stated in the obligation, that is, the obligation must be settled peso for

peso in Philippine currency. He cannot discharge his debt by paying only the equivalent inPhilippine currency of the value of the military notes he had received."3

WHEREFORE, the decision appealed from is affirmed, with costs against appellants.

G.R. No. L-24668 July 31, 1968

ANDRES LAPITAN, plaintiff-appellant,vs.

SCANDIA, INC., and GENERAL ENGINEERING CO., defendants-appellees.

Florido andFlorido for plaintiff-appellant.

Ponce Enrile, Siguion Reyna, Montecillo and Belo and Jesus P. Garcia for defendant-appelleeScandia, Inc.Jose R. Limchin for defendant-appellee General Engineering Co.

REYES, J.B.L., J.:

Andres Lapitan has appealed directly to this Court against an order of the Court of First Instanceof Cebu, dismissing, for lack of jurisdiction, his complaint for rescission and damages against

appellees Scandia, Inc., of Manila and General Engineering Co. of Cebu.

Lapitan's complaint in the court below averred that on April 17, 1963 he purchased from

Scandia, Inc., through its sub-dealer in Cebu City, General Engineering Co., one ABC DieselEngine, of 16 horse power, for P3,735.00, paid in cash; that he bought the engine for running arice and corn mill at Ormoc City, Leyte; that defendants had warranted and assured him that all

spare parts for said engine are kept in stock in their stores, enabling him to avoid loss due to longperiods of waiting, and that defendants would replace any part of the engine that might break

within twelve months after delivery. Plaintiff further charged that on June 28, 1963, the camrocker arm of the engine broke due to faulty material and workmanship and it stopped

functioning; that the sellers were unable to send a replacement until August 29, 1963; that barelysix days after replacement the new part broke again due to faulty casting and poor material, so he

(Lapitan) notified the sellers and demanded rescission of the contract of sale; that he soughtreturn of the price and damages but defendants did not pay. He, therefore, prayed (1) for

rescission of the contract; (2) reimbursement of the price; (3) recovery of P4,000.00 actualdamages plus P1,000.00 attorney's fees; (4) recovery of such moral and exemplary damages as

the court deems just and equitable; and (5) costs and other proper relief.

After filing answers disclaiming liability, Scandia, Inc., moved to dismiss the complaint on the

ground that the total amount claimed was only P8,735.00, and was within the exclusivejurisdiction of the municipal court, under Republic Act 3828, amending the Judiciary Act by

increasing the jurisdiction of municipal courts to civil cases involving P10,000.00 or less.

8/8/2019 caseciv

15/16

After argument, the Court of First Instance of Cebu dismissed the action for lack of jurisdiction,invoking Cruz vs. Judge B. Tan, 48 O.G. 1320, 87 Phil. 527.

Unable to obtain reconsideration, Lapitan appealed directly to this Court, arguing (1) that

rescission was incapable of pecuniary estimation, and (2) that as he claimed moral and

exemplary damages, besides the price of P3,735.00, P4,000.00 actual damages, and P1,000.00attorneys' fees, the value of his demand exceeded the jurisdiction of the municipal court.

A review of the jurisprudence of this Court indicates that in determining whether an action is onethe subject matter of which is not capable of pecuniary estimation, this Court has adopted the

criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarilyfor the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and

whether jurisdiction is in the municipal courts or in the courts of first instance would depend onthe amount of the claim. However, where the basic issue is something other than the right to

recover a sum of money, or where the money claim is purely incidental to, or a consequence of,the principal relief sought, like in suits to have the defendant perform his part of the contract

(specific performance) and in actions for support, or for annulment of a judgment or to foreclosea mortgage, 1 this Court has considered such actions as cases where the subject of the litigation

may not be estimated in terms of money, and are cognizable exclusively by courts of firstinstance. The rationale of the rule is plainly that the second class cases, besides the determination

of damages, demand an inquiry into other factors which the law has deemed to be more withinthe competence of courts of first instance, which were the lowest courts of record at the time that

the first organic laws of the Judiciary were enacted allocating jurisdiction (Act 136 of thePhilippine Commission of June 11, 1901).

Actions for specific performance of contracts have been expressly pronounced to be exclusivelycognizable by courts of first instance:De Jesus vs. Judge Garcia, L-26816, February 28, 1967;

Manufacturers' Distributors, Inc. vs. Yu Siu Liong, L-21285, April 29, 1966. And no cogentreason appears, and none is here advanced by the parties, why an action for rescission (or

resolution) should be differently treated, a rescission being a counterpart, so to speak, of"specific performance". In both cases, the court would certainly have to undertake an

investigation into facts that would justify one act or the other. No award for damages may be hadin an action for rescission without first conducting an inquiry into matters which would justify

the setting aside of a contract, in the same manner that courts of first instance would have tomake findings of fact and law in actions not capable of pecuniary estimation expressly held to be

so by this Court, arising from issues like those raised inArroz v. Alojado, et al., L-22153, March31, 1967 (the legality or illegality of the conveyance sought for and the determination of the

validity of the money deposit made);De Ursua v. Pelayo, L-13285, April 18, 1950 (validity of ajudgment);Bunayog v. Tunas, L-12707, December 23, 1959 (validity of a mortgage);Baito v.

Sarmiento, L-13105, August 25, 1960 (the relations of the parties, the right to support created bythe relation, etc., in actions for support);De Rivera, et al. v. Halili, L-15159, September 30, 1963

(the validity or nullity of documents upon which claims are predicated). Issues of the samenature may be raised by a party against whom an action for rescission has been brought, or by

the plaintiff himself. It is, therefore, difficult to see why a prayer for damages in an action forrescission should be taken as the basis for concluding such action as one capable of pecuniary

estimation a prayer which must be included in the main action if plaintiff is to be

8/8/2019 caseciv

16/16