Insurance Case Digest: Saura Import & Export Co., Inc. v. Philippine International Surety Co., Inc. (1963)

G.R. No. L-15184   May 31, 1963

Lessons Applicable: Mortgagor (Insurance)

Laws Applicable: 

FACTS:

• Saura Import & Export Co Inc., mortgaged to the Phil. National Bank, a parcel of land.
• The mortgage was amended to guarantee an increased amount, bringing the total mortgaged debt to P37,000
• On the land mortgage is a building owned by Saura Import & Export Co Inc. which was insured with Philippine International Surety (Insurer) even before the mortgage contract so it was required to endorse to mortgagee PNB
• October 15, 1954: Barely 13 days after the issuance of the fire insurance policy, the insurer cancelled it.  Notice of the cancellation was given to PNB (mortgagee). But Saura (insured) was not informed. 
• April 6, 1955: The building and all its contents worth P40,685.69 were burned so Saura filed a claim with the Insurer and mortgagee Bank
• RTC: dismissed

ISSUE: W/N Philippine International Surety should be held liable for the claim because notice to only the mortgagee is not substantial

HELD:YES. Appealed from is hereby reversed.  Philippine International Surety Co., Inc., to pay Saura Import & Export Co., Inc., P29,000

• It was the primary duty of Philippine International Surety to notify the insured, but it did not
• If a mortgage or lien exists against the property insured, and the policy contains a clause stating that loss, if any, shall be payable to such mortgagee or the holder of such lien as interest may appear, notice of cancellation to the mortgagee or lienholder alone is ineffective as a cancellation of the policy to the owner of the property.
• liability attached principally the insurance company, for its failure to give notice of the cancellation of the policy to Saura
• it is unnecessary to discuss the errors assigned against appellee bank

Jurisprudence: G.R. No. L-15184

EN BANC

DECISION

G.R. No. L-15184   May 31, 1963

SAURA IMPORT & EXPORT CO., INC., plaintiff-appellant,

vs.

PHILIPPINE INTERNATIONAL SURETY CO., INC., and PHILIPPINE NATIONAL BANK, defendants-appellees.

Saura, Magno & Associates for plaintiff-appellant.

Tolentino, Garcia and D. R. Cruz for defendant-appellee Philippine International Surety Co., Inc.

Paredes, J.:

Instant case was certified by the Court of Appeals to Us, it appearing that the issues involved are purely of law.

On December 26, 1952, the Saura Import & Export Co Inc., mortgaged to the Phil. National Bank, a parcel of land covered by T.C.T. No. 40445 of the Registry of Deeds of Davao, issued in its name, to secure the payment of promissory note of P27,000.00 (Exhs. P, B-2). On April 30, 1953, the mortgage was amended to guarantee an increased amount, bringing the total mortgaged debt to P37,000.00 (Exhs. P-2, B-3). The provisions of the mortgaged contact, pertinent to the resolution of the present case, provide as follows —

2. . . . he shall insure the mortgaged property at all times against fire and earthquake for an amount and with such company satisfactory to the Mortgagee, indorsing to the latter the corresponding policies; he shall keep the mortgaged property in good condition, making repairs and protecting walls that may be necessary; . . .

x x x x x x x x x

Erected on the land mortgaged, was a building of strong materials owned by the mortgagor Saura Import & Export Co., Inc., which had always been covered by insurance, many years prior to the mortgage contract. Pursuant to the requirement, Saura insured the building and its contents with the Philippine International Surety, an insurance firm acceptable to mortgagee Bank, for P29,000.00 against fire for the period of one year from October 2, 1954. As required therefor, the insurance policy was endorsed to the mortgagee PNB, in a Memo which states —

Loss if any, payable to the Philippine National Bank as their interest may appear, subject to the terms, conditions and warranties of this policy (Exh. A).

The policy was delivered to the mortgagee Bank by Saura. On October 15, 1954, barely thirteen (13) days after the issuance of the fire insurance policy (October 2, 1954), the insurer cancelled the same, effective as of the date of issue (Exh. A-2). Notice of the cancellation was given to appellee bank in writing, sent by Registered Mail and personally addressed to Fortunato Domingo, Branch Manager of the appellee Bank's Davao Branch, and was received by the Bank on November 8, 1954. On April 6, 1955, the building and its contents, worth P40,685.69 were burned. On April 11, 1955, Saura filed a claim with the Insurer and mortgagee Bank. Upon the presentation of notice of loss with the PNB, Saura learned for the first time that the policy had previously been cancelled on October 2, 1954, by the insurer, when Saura's folder in the Bank's filed was opened and the notice of cancellation (original and duplicate) sent by the Insurer to the Bank, was found. Upon refusal of the Insurer Philippine International Surety to pay the amount of the insurance, Civil Case No. 26847 was filed with the Manila CFI against the Insurer, and the PNB was later included as party defendant, after it had refused to prosecute the case jointly with Saura Import & Export Co., Inc.

At the trial, it was established that neither the Insurer nor the mortgagee Bank informed the plaintiff Saura of the cancellation of the policy. On April 30, 1957, the court a quo rendered the following judgment —

. . . IN VIEW WHEREOF, complaint dismissed; costs against the plaintiff; but as there is no proof on the counterclaim of the Philippines International Surety, the same is also dismissed.Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of facts.

A motion to reconsider the above judgment, seasonably presented on May 14, 1957, was subsequently denied. The decision rendered and the resolution denying the motion for reconsideration constitute the subject of the instant appeal by plaintiff Saura on the three alleged errors, which converge on the correctness of the ruling, wholly dismissing the complaint absolving both the insurance company and the bank from liability.

In the determination of liabilities of the parties herein, let us look into the general principles of insurance, in matters of cancellations of policy by the insurer. Fire insurance policies and other contracts of insurance upon property, in addition to the common provision for cancellation of the policy upon request of the insured, generally provide for cancellation by the insurer by notice to the insured for a prescribed period, which is usually 5 days, and the return of the unearned portion of the premium paid by the insured, such provision for cancellation upon notice being authorized by statutes in some jurisdiction, either specifically or as a provision of an adopted standard form of policy. The purpose of provisions or stipulations for notice to the insured, is to prevent the cancellation of the policy, without allowing the insured ample opportunity to negotiate for other insurance in its stead. The form and sufficiency of a notice of cancellation is determined by policy provisions. In order to form the basis for the cancellation of a policy, notice to the insured n not be in any particular form, in the absence of a statute or policy provision prescribing such form, and it is sufficient, so long as it positively and unequivocally indicates to the insured, that it is the intention of the company that the policy shall cease to be binding. Where the policy contains no provisions that a certain number of days notice shall be given, a reasonable notice and opportunity to obtain other insurance must be given. Actual personal notice to the insured is essential to a cancellation under a provision for cancellation by notice. The actual receipt by the insured of a notice of cancellation is universally recognized as a condition precedent to a cancellation of the policy by the insurer, and consequently a letter containing notice of cancellation which is mailed by the insurer but not received by the insured, is ineffective as cancellation (29 Am. Jur. pp. 732-741).

The policy in question (Exh. A), does not provide for the notice, its form or period. The Insurance Law, Act No. 2427, does not likewise provide for such notice. This being the case, it devolves upon the Court to apply the generally accepted principles of insurance, regarding cancellation of the insurance policy by the insurer. From what has been heretofore stated, actual notice of cancellation in a clear and unequivocal manner, preferably in writing, in view of the importance of an insurance contract, should be given by the insurer to the insured, so that the latter might be given an opportunity to obtain other insurance for his own protection. The notice should be personal to the insured and not to and/or through any unauthorized person by the policy. In the case at bar, the defendant insurance company, must have realized the paramount importance of sending a notice of cancellation, when it sent the notice of cancellation of the policy to the defendant bank (as mortgagee), but not to the insured with which it (insurance company) had direct dealing. It was the primary duty of the defendant-appellee insurance company to notify the insured, but it did not. It should be stated that the house and its contents were burned on April 6, 1955, at the time when the policy was enforced (October 2, 1954 to October 2, 1955); and that under the facts, as found by the trial court, to which We are bound, it is evident that both the insurance company and the appellee bank failed, wittingly or unwittingly, to notify the insured appellant Saura of the cancellation made xcnpF.

Of course, the defendant insurance company contends that it gave notice to the defendant-appellee bank as mortgagee of the property, and that was already a substantial compliance with its duty to notify the insured of the cancellation of the policy. But notice to the bank, as far appellant herein is concerned, is not effective notice.

If a mortgage or lien exists against the property insured, and the policy contains a clause stating that loss, if any, shall be payable to such mortgagee or the holder of such lien as interest may appear, notice of cancellation to the mortgagee or lienholder alone is ineffective as a cancellation of the policy to the owner of the property. (Connecticut Ins. Co. v. Caumisar, 218 Ky. 378, 391 SW 776, cited in 29 Am. Jur. p. 743).

Upon authority of the above case, therefore, the liability of the insurance company becomes a fact.

It may be argued that in the appeal brief of appellant, no error has been assigned against the insurance company and no prayer is found therein asking that it be made liable. It must be noted, however, that the case was dismissed the lower court and the main object of the appeal is to secure a reversal of the said judgment. This Court is clothed with ample authority to review matters, even if they are not assigned as errors in the appeal, if it finds that their consideration is necessary in arriving at a just decision of the case. Thus it was held:

While an assignment of error which is required by law or rule of court has been held essential to appellate review, only those assigned will be considered, there are a number of cases which appear to accord to the appellate court a broad discretionary power to waive the lack of proper assignment of errors and consider errors not assigned. And an unassigned error closely related to an error properly assigned, or upon which the determination of the question raised by the error properly assigned is dependent, will be considered by the appellate court notwithstanding the failure to assign it as error. (Hernandez v. Andal, 78 Phil. 198-199).

Although assigned errors apparently appear to be directed against the appellee bank alone, they in essence, seek a reversal of the decision on dismissal, entered by the lower court, which in the main has for its purpose the finding of liability on the policy. In the course of our examination of the records of the case, the decision and the errors assigned, We found that liability attached principally the insurance company, for its failure to give notice of the cancellation of the policy to herein appellant itself.

Because of the conclusions reached, We find it unnecessary to discuss the errors assigned against appellee bank.

WHEREFORE, the decision appealed from is hereby reversed, and another is entered, condemning the defendant-appellee Philippine International Surety Co., Inc., to pay Saura Import & Export Co., Inc., appellant herein, the sum of P29,000.00, the amount involved in Policy No. 429, subject-matter of the instant case. Without costs.

Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Dizon, Regala and Makalintal, JJ., concur.

Labrador, J., took no part. .

Torts and Damages Case Digest: Roberto Juntilla v. Clemente Fontanar

G.R. No. L-45637 May 31, 1985

Lessons Applicable: Fortuitous Event (Torts and Damages)

FACTS:

• Jeepney was driven by Berfol Camoro from Danao City to Cebu City.  It was Clemente Fontanar but was actually owned by defendant Fernando Banzon.
• When the jeepney reached Mandaue City, the right rear tire exploded causing the vehicle to turn turtle.  Roberto Juntilla was sitting at the front seat was thrown out of the vehicle.
• Upon landing on the ground, he momentarily lost consciousness.  When he came to his senses, he found that he had a lacerated wound on his right palm.  He also injured his left arm, right thigh and on his back.
• Because of his shock and injuries, he went back to Danao City but on the way, he discovered that his "Omega" wrist watch worth P 852.70 was lost.  Upon his arrival in Danao City, he immediately entered the Danao City Hospital to attend to his injuries, and also requested his father-in-law to proceed immediately to the place of the accident and look for the watch.
• Roberto Juntilla filed for breach of contract with damages 
• Respondents: beyond the control since tire that exploded was newly bought and was only slightly used
• RTC: favored Roberto Juntilla 
• CA: Reversed since accident was due to fortuitous event

ISSUE: W/N there is a fortuitous event

HELD: NO. CA reversed, RTC reinstated.

• passenger jeepney was running at a very fast speed before the accident
• at a regular and safe speed will not jump into a ditch when its right rear tire blows up
• passenger jeepney was overloaded
• 3 passengers in the front seat  
• 14 passengers in the rear
• caso fortuito presents the following essential characteristics: 
• (1) The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will. 
• (2) It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid. 
• (3) The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner.
• (4) the obligor (debtor) must be free from any participation in the aggravation of the injury resulting to the creditor. 
• In the case at bar, the cause of the unforeseen and unexpected occurrence was not independent of the human will. The accident was caused either through the negligence of the driver or because of mechanical defects in the tire. Common carriers should teach their drivers not to overload their vehicles, not to exceed safe and legal speed limits, and to know the correct measures to take when a tire blows up thus insuring the safety of passengers at all times
• the source of a common carrier's legal liability is the contract of carriage, and by entering into the said contract, it binds itself to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with a due regard for all the circumstances. The records show that this obligation was not met by the respondents
• respondents likewise argue that the petitioner cannot recover any amount for failure to prove such damages during the trial
• findings of facts of the City Court of Cebu 

Jurisprudence: G.R. No. L-45637

FIRST DIVISION

G.R. No. L-45637 May 31, 1985

ROBERTO JUNTILLA, petitioner,
vs.
CLEMENTE FONTANAR, FERNANDO BANZON and BERFOL CAMORO, respondents.

Valentin A. Zozobrado for petitioner.

Ruperto N. Alfarara for respondents.

GUTIERREZ, JR., J.:

This is a petition for review, on questions of law, of the decision of the Court of First Instance of Cebu which reversed the decision of the City Court of Cebu and exonerated the respondents from any liability arising from a vehicular accident.

The background facts which led to the filing of a complaint for breach of contract and damages against the respondents are summarized by the Court of First Instance of Cebu as follows:

The facts established after trial show that the plaintiff was a passenger of the public utility jeepney bearing plate No. PUJ-71-7 on the course of the trip from Danao City to Cebu City. The jeepney was driven by defendant Berfol Camoro. It was registered under the franchise of defendant Clemente Fontanar but was actually owned by defendant Fernando Banzon. When the jeepney reached Mandaue City, the right rear tire exploded causing the vehicle to turn turtle. In the process, the plaintiff who was sitting at the front seat was thrown out of the vehicle. Upon landing on the ground, the plaintiff momentarily lost consciousness. When he came to his senses, he found that he had a lacerated wound on his right palm. Aside from this, he suffered injuries on his left arm, right thigh and on his back. (Exh. "D"). Because of his shock and injuries, he went back to Danao City but on the way, he discovered that his "Omega" wrist watch was lost. Upon his arrival in Danao City, he immediately entered the Danao City Hospital to attend to his injuries, and also requested his father-in-law to proceed immediately to the place of the accident and look for the watch. In spite of the efforts of his father-in-law, the wrist watch, which he bought for P 852.70 (Exh. "B") could no longer be found.

xxx xxx xxx

Petitioner Roberto Juntilla filed Civil Case No. R-17378 for breach of contract with damages before the City Court of Cebu City, Branch I against Clemente Fontanar, Fernando Banzon and Berfol Camoro.

The respondents filed their answer, alleging inter alia that the accident that caused losses to the petitioner was beyond the control of the respondents taking into account that the tire that exploded was newly bought and was only slightly used at the time it blew up.

After trial, Judge Romulo R. Senining of the Civil Court of Cebu rendered judgment in favor of the petitioner and against the respondents. The dispositive portion of the decision reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants and the latter are hereby ordered, jointly and severally, to pay the plaintiff the sum of P750.00 as reimbursement for the lost Omega wrist watch, the sum of P246.64 as unrealized salary of the plaintiff from his employer, the further sum of P100.00 for the doctor's fees and medicine, an additional sum of P300.00 for attorney's fees and the costs.

The respondents appealed to the Court of First Instance of Cebu, Branch XIV.

Judge Leonardo B. Canares reversed the judgment of the City Court of Cebu upon a finding that the accident in question was due to a fortuitous event. The dispositive portion of the decision reads:

WHEREFORE, judgment is hereby rendered exonerating the defendants from any liability to the plaintiff without pronouncement as to costs.

A motion for reconsideration was denied by the Court of First Instance.

The petitioner raises the following alleged errors committed by the Court of First Instance of Cebu on appeal—

a. The Honorable Court below committed grave abuse of discretion in failing to take cognizance of the fact that defendants and/or their employee failed to exercise "utmost and/or extraordinary diligence" required of common carriers contemplated under Art. 1755 of the Civil Code of the Philippines.

b. The Honorable Court below committed grave abuse of discretion by deciding the case contrary to the doctrine laid down by the Honorable Supreme Court in the case of Necesito et al. v. Paras, et al.

We find the petition impressed with merit.

The City Court and the Court of First Instance of Cebu found that the right rear tire of the passenger jeepney in which the petitioner was riding blew up causing the vehicle to fall on its side. The petitioner questions the conclusion of the respondent court drawn from this finding of fact.

The Court of First Instance of Cebu erred when it absolved the carrier from any liability upon a finding that the tire blow out is a fortuitous event. The Court of First Instance of Cebu ruled that:

After reviewing the records of the case, this Court finds that the accident in question was due to a fortuitous event. A tire blow-out, such as what happened in the case at bar, is an inevitable accident that exempts the carrier from liability, there being absence of a showing that there was misconduct or negligence on the part of the operator in the operation and maintenance of the vehicle involved. The fact that the right rear tire exploded, despite being brand new, constitutes a clear case of caso fortuito which can be a proper basis for exonerating the defendants from liability. ...

The Court of First Instance relied on the ruling of the Court of Appeals in Rodriguez v. Red Line Transportation Co.,CA G.R. No. 8136, December 29, 1954, where the Court of Appeals ruled that:

A tire blow-out does not constitute negligence unless the tire was already old and should not have been used at all. Indeed, this would be a clear case of fortuitous event.

The foregoing conclusions of the Court of First Instance of Cebu are based on a misapprehension of overall facts from which a conclusion should be drawn. The reliance of the Court of First Instance on the Rodriguez case is not in order. In La Mallorca and Pampanga Bus Co. v. De Jesus, et al. (17 SCRA 23), we held that:

Petitioner maintains that a tire blow-out is a fortuitous event and gives rise to no liability for negligence, citing the rulings of the Court of Appeals in Rodriguez v. Red Line Transportation Co., CA G.R. No. 8136, December 29, 1954, and People v. Palapad, CA-G.R. No. 18480, June 27, 1958. These rulings, however, not only are not binding on this Court but were based on considerations quite different from those that obtain in the case at bar. The appellate court there made no findings of any specific acts of negligence on the part of the defendants and confined itself to the question of whether or not a tire blow-out, by itself alone and without a showing as to the causative factors, would generate liability. ...

In the case at bar, there are specific acts of negligence on the part of the respondents. The records show that the passenger jeepney turned turtle and jumped into a ditch immediately after its right rear tire exploded. The evidence shows that the passenger jeepney was running at a very fast speed before the accident. We agree with the observation of the petitioner that a public utility jeep running at a regular and safe speed will not jump into a ditch when its right rear tire blows up. There is also evidence to show that the passenger jeepney was overloaded at the time of the accident. The petitioner stated that there were three (3) passengers in the front seat and fourteen (14) passengers in the rear.

While it may be true that the tire that blew-up was still good because the grooves of the tire were still visible, this fact alone does not make the explosion of the tire a fortuitous event. No evidence was presented to show that the accident was due to adverse road conditions or that precautions were taken by the jeepney driver to compensate for any conditions liable to cause accidents. The sudden blowing-up, therefore, could have been caused by too much air pressure injected into the tire coupled by the fact that the jeepney was overloaded and speeding at the time of the accident.

In Lasam v. Smith (45 Phil. 657), we laid down the following essential characteristics of caso fortuito:

xxx xxx xxx

... In a legal sense and, consequently, also in relation to contracts, a caso fortuito presents the following essential characteristics: (1) The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will. (2) It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid. (3) The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. And (4) the obligor (debtor) must be free from any participation in the aggravation of the injury resulting to the creditor. (5 Encyclopedia Juridica Espanola, 309.)

In the case at bar, the cause of the unforeseen and unexpected occurrence was not independent of the human will. The accident was caused either through the negligence of the driver or because of mechanical defects in the tire. Common carriers should teach their drivers not to overload their vehicles, not to exceed safe and legal speed limits, and to know the correct measures to take when a tire blows up thus insuring the safety of passengers at all times. Relative to the contingency of mechanical defects, we held in Necesito, et al. v. Paras, et al. (104 Phil. 75), that:

... The preponderance of authority is in favor of the doctrine that a passenger is entitled to recover damages from a carrier for an injury resulting from a defect in an appliance purchased from a manufacturer, whenever it appears that the defect would have been discovered by the carrier if it had exercised the degree of care which under the circumstances was incumbent upon it, with regard to inspection and application of the necessary tests. For the purposes of this doctrine, the manufacturer is considered as being in law the agent or servant of the carrier, as far as regards the work of constructing the appliance. According to this theory, the good repute of the manufacturer will not relieve the carrier from liability' (10 Am. Jur. 205, s, 1324; see also Pennsylvania R. Co. v. Roy, 102 U.S. 451; 20 L. Ed. 141; Southern R. Co. v. Hussey, 74 ALR 1172; 42 Fed. 2d 70; and Ed Note, 29 ALR 788.: Ann. Cas. 1916E 929).

The rationale of the carrier's liability is the fact that the passenger has neither choice nor control over the carrier in the selection and use of the equipment and appliances in use by the carrier. Having no privity whatever with the manufacturer or vendor of the defective equipment, the passenger has no remedy against him, while the carrier usually has. It is but logical, therefore, that the carrier, while not an insurer of the safety of his passengers, should nevertheless be held to answer for the flaws of his equipment if such flaws were at all discoverable. ...

It is sufficient to reiterate that the source of a common carrier's legal liability is the contract of carriage, and by entering into the said contract, it binds itself to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with a due regard for all the circumstances. The records show that this obligation was not met by the respondents.

The respondents likewise argue that the petitioner cannot recover any amount for failure to prove such damages during the trial. The respondents submit that if the petitioner was really injured, why was he treated in Danao City and not in Mandaue City where the accident took place. The respondents argue that the doctor who issued the medical certificate was not presented during the trial, and hence not cross-examined. The respondents also claim that the petitioner was not wearing any wrist watch during the accident.

It should be noted that the City Court of Cebu found that the petitioner had a lacerated wound on his right palm aside from injuries on his left arm, right thigh and on his back, and that on his way back to Danao City, he discovered that his "Omega" wrist watch was lost. These are findings of facts of the City Court of Cebu which we find no reason to disturb. More so when we consider the fact that the Court of First Instance of Cebu impliedly concurred in these matters when it confined itself to the question of whether or not the tire blow out was a fortuitous event.

WHEREFORE, the decision of the Court of First Instance of Cebu, Branch IV appealed from is hereby REVERSED and SET ASIDE, and the decision of the City Court of Cebu, Branch I is REINSTATED, with the modification that the damages shall earn interest at 12% per annum and the attorney's fees are increased to SIX HUNDRED PESOS (P600.00). Damages shall earn interests from January 27, 1975.

SO ORDERED.

Teehankee (Chairman), Melencio-Herrera, Plana, Relova, De la Fuente and Alampay, JJ., concur.

Torts and Damages Case Digest: Porfirio P. Cinco v. Hon. Mateo Canonoy et al. (1979)

G.R. No. L-33171 May 31, 1979
Laws Applicable: Rule 111, Section 3 of the Rules of Court, Art. 31 and Article 2176 of the Civil Code

Lessons Applicable: Quasi-delict (Torts and Damages)

FACTS:

• Porfirio P. Cinco filed a complaint against jeepney driven by Romeo Hilot and operated by Valeriana Pepito and Carlos Pepito for a vehicular accident
• At the pre-trial in the civil case, counsel for private respondents moved to suspend the civil action pending the final determination of the criminal suit, invoking Rule 111, Section 3 (b) of the Rules of Court, which provides:
  (b) After a criminal action has been commenced. no civil action arising from the same offense can be prosecuted, and the same shall be suspended, in whatever stage it may be found, until final judgment in the criminal proceeding has been rendered
• City Court: ordered the suspension of the civil case
• CFI by certiorari: dismissed

ISSUE: W/N there can be an independent civil action for damage to property during the pendency of the criminal action

HELD: YES. granting the Writ of certiorari prayed for

• nature and character of his action was quasi-delictual predicated principally on Articles 2176 and 2180 of the Civil Code
• Art. 2177. Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant
• primary and direct responsibility of employers and their presumed negligence are principles calculated to protect society
• The separate and independent civil action for a quasi-delict is also clearly recognized in section 3, Rule 111 of the Rules of Court:

SEC. 3. When civil action may proceed independently.—In the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action may be brought by the offended party. It shall proceed independently of the criminal action and shall require only a preponderance of evidence. In no case, however, may the offended party recover damages twice for the same act or omission charged in the criminal action. 

• Secs. 3(a) and 3(b) of Rule 111 of the Rules of Court, which should be suspended after the criminal action has been instituted is that arising from the criminal offense not the civil action based on quasi-delict
• Art. 31. When the civil action is based on an obligation not arising from the act or omission complained of as a felony, such civil action may proceed independently of the criminal proceedings and regardless of the result of the latter.
• Article 2176 of the Civil Code (supra), is so broad that it includes not only injuries to persons but also damage to property
• word "damage" is used in two concepts: the "harm" done and "reparation" for the harm done

Jurisprudence: G.R. No. L-33171

FIRST DIVISION

G.R. No. L-33171 May 31, 1979

PORFIRIO P. CINCO, petitioner-appellant,
vs.
HON. MATEO CANONOY, Presiding Judge of the Third Branch of the Court of First Instance of Cebu, HON. LORENZO B. BARRIA City Judge of Mandaue City, Second Branch ROMEO HILOT, VALERIANA PEPITO and CARLOS PEPITO, respondents-appellees.

Eriberto Seno for appellant.

Jose M. Mesina for appellees.

MELENCIO-HERRERA, J.:

This is a Petition for Review on certiorari of the Decision of the Court of First Instance of Cebu rendered on November 5, 1970.

The background facts to the controversy may be set forth as follows:

Petitioner herein filed, on February 25, 1970, a Complaint in the City Court of Mandaue City, Cebu, Branch II, for the recovery of damages on account of a vehicular accident involving his automobile and a jeepney driven by Romeo Hilot and operated by Valeriana Pepito and Carlos Pepito, the last three being the private respondents in this suit. Subsequent thereto, a criminal case was filed against the driver, Romeo Hilot, arising from the same accident. At the pre-trial in the civil case, counsel for private respondents moved to suspend the civil action pending the final determination of the criminal suit, invoking Rule 111, Section 3 (b) of the Rules of Court, which provides:

(b) After a criminal action has been commenced. no civil action arising from the same offense can be prosecuted, and the same shall be suspended, in whatever stage it may be found, until final judgment in the criminal proceeding has been rendered;

The City Court of Mandaue City in an Order dated August 11, 1970, ordered the suspension of the civil case. Petitioner's Motion for Reconsideration thereof, having been denied on August 25, 1970, ¹ petitioner elevated the matter on certiorari to the Court of First Instance of Cebu, respondent Judge presiding, on September 11, 1970, alleging that the City Judge had acted with grave abuse of discretion in suspending the civil action for being contrary to law and jurisprudence. ²

On November 5, 1970, respondent Judge dismissed the Petition for certiorari on the ground that there was no grave abuse of discretion on the part of the City Court in suspending the civil action inasmuch as damage to property is not one of the instances when an independent civil action is proper; that petitioner has another plain, speedy, and adequate remedy under the law, which is to submit his claim for damages in the criminal case; that the resolution of the City Court is interlocutory and, therefore, certiorari is improper; and that the Petition is defective inasmuch as what petitioner actually desires is a Writ of mandamus (Annex "R"). Petitioner's Motion for Reconsideration was denied by respondent Judge in an Order dated November 14,1970 (Annex "S" and Annex "U").

Hence, this Petition for Review before this Tribunal, to which we gave due course on February 25, 1971. ³

Petitioner makes these:

ASSIGNMENTS OF ERROR

1. THE TRIAL COURT, RESPONDENT JUDGE MATEO CANONOY, ERRED IN HOLDING THAT THE TRIAL OF THE CIVIL CASE NO. 189 FILED IN THE CITY COURT OF MANDAUE SHOULD BE SUSPENDED UNTIL AFTER A FINAL JUDGMENT IS RENDERED IN THE CRIMINAL CASE.

2. THAT THE COURT ERRED IN HOLDING THAT IN ORDER TO AVOID DELAY THE OFFENDED PARTY MAY SUBMIT HIS CLAIM FOR DAMAGES IN THE CRIMINAL CASE.

3. THAT THE COURT ERRED IN HOLDING THAT THE PETITION FOR certiorari IS NOT PROPER, BECAUSE THE RESOLUTION IN QUESTION IS INTERLOCUTORY.

4. THAT THE COURT ERRED IN HOLDING THAT THE PETITION IS DEFECTIVE. ⁴

all of which can be synthesized into one decisive issue: whether or not there can be an independent civil action for damage to property during the pendency of the criminal action.

From the Complaint filed by petitioner before the City Court of Mandaue City, Cebu, it is evident that the nature and character of his action was quasi-delictual predicated principally on Articles 2176 and 2180 of the Civil Code, which provide:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is caned a quasi-delict and is governed by the provisions of this Chapter. (1902a)

Art. 2180. The obligation imposed by article 2176 is demandable not only for one's own acts or omissions but also for those of persons for whom one is responsible.

xxx xxx xxx

Employers shall be liable for the damages cause by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.

xxx xxx xxx

The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. (1903a)

Thus, plaintiff made the essential averments that it was the fault or negligence of the driver, Romeo Hilot, in the operation of the jeepney owned by the Pepitos which caused the collision between his automobile and said jeepney; that damages were sustained by petitioner because of the collision; that there was a direct causal connection between the damages he suffered and the fault and negligence of private respondents.

Similarly, in the Answer, private respondents contended, among others, that defendant, Valeriana Pepito, observed due diligence in the selection and supervision of her employees, particularly of her co-defendant Romeo Hilot, a defense peculiar to actions based on quasi-delict. ⁵

Liability being predicated on quasi-delict the civil case may proceed as a separate and independent civil action, as specifically provided for in Article 2177 of the Civil Code.

Art. 2177. Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant. (n)

The crucial distinction between criminal negligence and quasi-delict, which is readily discernible from the foregoing codal provision, has been expounded in Barredo vs. Garcia, et al., 73 Phil. 607, 620-621, ⁶ thus:

Firstly, the Revised Penal Code in article 365 punishes not only reckless but also simple imprudence. if we were to hold that articles 1902 to 1910 of the Civil Code refer only to fault or negligence not punished by law, according to the literal import of article 1093 of the Civil Code, the legal institution of culpa aquiliana would have very little scope and application in actual life. Death or injury to persons and damage to property through any degree of negligence — even the slightest would have to be indemnified only through the principle of civil hability arising from crime. In such a state of affairs, what sphere would remain for quasidelito or culpa aquiliana We are loath to impute to the lawmaker any intention to bring about a situation so absurd and anomalous. Nor are we, in the interpretation of the laws, disposed to uphold the letter that killeth rather than the spirit that giveth life. We will not use the literal meaning of the law to smother and render almost lifeless a principle of such ancient origin and such full-grown development as culpa aquiliana or quasi-delito, which is conserved and made enduring in articles 1902 to 11910 of the Spanish Civil Code.

Secondly, to find the accused guilty in a criminal case, proof of guilt beyond reasonable doubt is required, while in a civil case, preponderance of evidence is sufficient to make the defendant pay in damages. There are numerous cases of criminal negligence which cannot be shown beyond reasonable doubt, but can be proved by a preponderance of evidence. In such cases, the defendant can and should be made responsible in a civil action under articles 1902 to 1910 of the Civil Code, otherwise, there would be many instances of unvindicated civil wrongs. Ubi jus ibi remedium.

Thirdly, to hold that there is only one way to make defendants liability effective, and that is, to sue the driver and exhaust his (the latter's) property first, would be tantamount to compelling the plaintiff to follow a devious and cumbersome method of obtaining a reliel True, there is such a remedy under our laws, but there is also a more expeditious way, which is based on the primary and direct responsibility of the defendant under article 1903 of the Civil Code. Our view of the law is more likely to facilitate remedy for civil wrongs because the procedure indicated by the defendant is wasteful and productive of delay, it being a matter of common knowledge that professional drivers of taxis and similar public conveyances usually do not have sufficient means with which to pay damages. Why, then, should the plaintiff be required in all cases to go through this round-about, unnecessary, and probably useless procedure? In construing the laws, courts have endeavored to shorten and facilitate the pathways of right and justice.

At this juncture, it should be said that the primary and direct responsibility of employers and their presumed negligence are principles calculated to protect society. Workmen and employees should be carefully chosen and supervised in order to avoid injury to the public. It is the masters or employers who principally reap the profits resulting from the services of these servants and employees. It is but right that they should guarantee the latter's careful conduct for the personnel and patrimonial safety of others. As Theilhard has said, "they should reproach themselves, at least, some for their weakness, others for their poor selection and all for their negligence." And according to Manresa, "It is much more equitable and just that such responsibility should fail upon the principal or director who could have chosen a careful and prudent employee, and not upon the such employee because of his confidence in the principal or director." (Vol. 12, p. 622, 2nd Ed.) Many jurists also base this primary responsibility of the employer on the principle of representation of the principal by the agent. Thus, Oyuelos says in the work already cited (Vol. 7, p. 747) that before third persons the employer and employee vienen a ser como una sola personalidad, por refundicion de la del dependiente en la de quien la emplea y utihza (become as one personality by the merging of the person of the employee in that of him who employs and utilizes him.) All these observations acquire a peculiar force and significance when it comes to motor accidents, and there is need of stressing and accentuating the responsibility of owners of motor vehicles.

Fourthly, because of the broad sweep of the provisions of both the Penal Code and the Civil Code on this subject, which has given rise to overlapping or concurrence of spheres already discussed, and for lack of understanding of the character and efficacy of the action for culpaaquiliana there has grown up a common practice to seek damages only by virtue of the Civil responsibility arising from crime, forgetting that there is another remedy, which is by invoking articles 1902-1910 of the Civil Code. Although this habitual method is allowed by our laws, it has nevertheless rendered practically useless and nugatory the more expeditious and effective remedy based on culpa aquiliana or culpa extra-contractual. In the present case, we are asked to help perpetuate this usual course. But we believe it is high time we pointed out to the harm done by such practice and to restore the principle of responsibility for fault or negligence under articles 1902 et seq. of the Civil Code to its full rigor. It is high time we cause the stream of quasi-delict or culpa aquiliana to flow on its own natural channel, so that its waters may no longer be diverted into that of a crime under the Penal Code. This will, it is believed, make for the bet ter safeguarding of private rights because it re-establishes an ancient and additional remedy, and for the further reason that an independent civil action, not depending on the issues, stations and results of a criminal prosecution, and entirely directed by the party wronged or his counsel is more likely to secure adequate and efficacious redress. (Garcia vs. Florida 52 SCRA 420, 424-425, Aug. 31, 1973). (Emphasis supplied)

The separate and independent civil action for a quasi-delict is also clearly recognized in section 2, Rule 111 of the Rules of Court, reading:

Sec. 2. Independent civil action. — In the cases provided for in Articles 31, 32, 33, 34 and 2177 of the Civil Code of the Philippines, Are independent civil action entirely separate and distinct from the c action, may be brought by the injured party during the pendency of the criminal case, provided the right is reserved as required in the preceding section. Such civil action shag proceed independently of the criminal prosecution, and shall require only a preponderance of evidence.

Significant to note is the fact that the foregoing section categorically lists cases provided for in Article 2177 of the Civil Code, supra, as allowing of an "independent civil action."

Tested by the hereinabove-quoted legal tenets, it has to be held that the City Court, in surrounding the civil action, erred in placing reliance on section 3 (b) of Rule 111 of the Rules of Court, supra which refers to "other civil actions arising from cases not included in the section just cited" (i.e., Section 2, Rule 111 above quoted), in which case 6 once the criminal action has being commenced, no civil action arising from the same offense can be prosecuted and the same shall be suspended in whatever stage it may be found, until final judgment in the criminal proceeding has been rendered." Stated otherwise, the civil action referred to in Secs. 3(a) and 3(b) of Rule 111 of the Rules of Court, which should be suspended after the criminal action has been instituted is that arising from the criminal offense not the civil action based on quasi-delict

Article 31 of the Civil Code then clearly assumes relevance when it provides:

Art. 31. When the civil action is based on an obligation not arising from the act or omission complained of as a felony, such civil action may proceed independently of the criminal proceedings and regardless of the result of the latter.

For obviously, the jural concept of a quasi-delict is that of an independent source of obligation "not arising from the act or omission complained of as a felony." Article 1157 of the Civil Code bolsters this conclusion when it specifically recognizes that:

Art. 1157. Obligations arise from:

(1) Law;

(2) Contracts;

(3) Quasi-contracts;

(4) Acts or omissions punished by law; and

(5) Quasi-delicts. (1089a)

(Emphasis supplied)

It bears emphasizing that petitioner's cause of action is based on quasi-delict. The concept of quasidelica as enunciated in Article 2176 of the Civil Code (supra), is so broad that it includes not only injuries to persons but also damage to property. ⁷ It makes no distinction between "damage to persons" on the one hand and "damage to property" on the other. Indeed, the word "damage" is used in two concepts: the "harm" done and "reparation" for the harm done. And with respect to harm it is plain that it includes both injuries to person and property since "harm" is not limited to personal but also to property injuries. In fact, examples of quasi-delict in the law itself include damage to property. An instance is Article 2191(2) of the Civil Code which holds proprietors responsible for damages caused by excessive smoke which may be harmful to persons or property."

In the light of the foregoing disquisition, we are constrained to hold that respondent Judge gravely abused his discretion in upholding the Decision of the City Court of Mandaue City, Cebu, suspending the civil action based on aquasi-delict until after the criminal case is finally terminated. Having arrived at this conclusion, a discussion of the other errors assigned becomes unnecessary.

WHEREFORE, granting the Writ of certiorari prayed for, the Decision of the Court of First Instance of Cebu sought to be reviewed is hereby set aside, and the City Court of Mandaue City, Cebu, Branch 11, is hereby ordered to proceed with the hearing of Civil Case No. 189 of that Court.

Without pronouncement as to costs.

SO ORDERED.

Teehankee (Chairman), Makasiar, Fernandez, Guerrero and De Castro, JJ., concur.

Footnotes

1 Annexes "N" and "O", Petition,

2 Annex "P", Petition.

3 p. 84, Rollo.

4 p. 17, Ibid.

5 Article 2180, Civil Code.

6 Cited in Garcia vs. Florido 52 SCRA 420, 424-425 (1973).

7 See Barredo vs, Garcia 73 Phil. 607, at 620, supra.