civ2 cases

8/10/2019 Civ2 Cases

1/72

G.R. No. 190696 August 3, 2010

Respondent.

R E S O L U T I O N

BRION, J.:We resolve the motion for reconsideration filed by the petitioners,

Philtranco Service Enterprises, Inc. (Philtranco) and Rolito Calang, to challengeour Resolution of February 17, 2010. Our assailed Resolution denied the petitionfor review on certiorarifor failure to show any reversible error sufficient to warrantthe exercise of this Courts discretionary appellate jurisdiction.

Antecedent Facts

At around 2:00 p.m. of April 22, 1989, Rolito Calang was driving PhiltrancoBus No. 7001, owned by Philtranco along Daang Maharlika Highway in BarangayLambao, Sta. Margarita, Samar when its rear left side hit the front left portion of a

Sarao jeep coming from the opposite direction. As a result of the collision,Cresencio Pinohermoso, the jeeps driver, lost control of the vehicle, and bumpedand killed Jose Mabansag, a bystander who was standing along the highwaysshoulder. The jeep turned turtle three (3) times before finally stopping at about 25meters from the point of impact. Two of the jeeps passengers, Armando Nablo andan unidentified woman, were instantly killed, while the other passengers sustainedserious physical injuries.

The prosecution charged Calang with multiple homicide, multiple seriousphysical injuries and damage to property thru reckless imprudence before theRegional Trial Court (RTC), Branch 31, Calbayog City. The RTC, in its decisiondated May 21, 2001, found Calang guilty beyond reasonable doubt of reckless

imprudence resulting to multiple homicide, multiple physical injuries and damageto property, and sentenced him to suffer an indeterminate penalty of thirty days ofarresto menor, as minimum, to four years and two months of prision correccional,as maximum. The RTC ordered Calang and Philtranco, jointly and severally, topay P50,000.00 as death indemnity to the heirs of Armando; P50,000.00 as deathindemnity to the heirs of Mabansag; and P90,083.93 as actual damages to theprivate complainants.

The petitioners appealed the RTC decision to the Court of Appeals(CA), docketed as CA-G.R. CR No. 25522. The CA, in its decision dated November20, 2009, affirmed the RTC decision in toto. The CA ruled that petitioner Calangfailed to exercise due care and precaution in driving the Philtranco bus. According

to the CA, various eyewitnesses testified that the bus was traveling fast andencroached into the opposite lane when it evaded a pushcart that was on the side of

the road. In addition, he failed to slacken his speed, despite admitting that he hadalready seen the jeep coming from the opposite direction when it was still half akilometer away. The CA further ruled that Calang demonstrated a reckless attitudewhen he drove the bus, despite knowing that it was suffering from loosecompression, hence, not roadworthy.

The CA added that the RTC correctly held Philtranco jointly and severallyliable with petitioner Calang, for failing to prove that it had exercised the diligence

of a good father of the family to prevent the accident.

The petitioners filed with this Court a petition for review on certiorari.In our Resolution dated February 17, 2010, we denied the petition for failure tosufficiently show any reversible error in the assailed decision to warrant theexercise of this Courts discretionary appellate jurisdiction.

The Motion for Reconsideration

In the present motion for reconsideration, the petitioners claim thatthere was no basis to hold Philtranco jointly and severally liable with Calangbecause the former was not a party in the criminalcase (for multiple homicide with

multiple serious physical injuries and damage to property thru reckless imprudence)before the RTC.

The petitioners likewise maintain that the courts below overlookedseveral relevant facts, supported by documentary exhibits, which, if considered,would have shown that Calang was not negligent, such as the affidavit andtestimony of witness Celestina Cabriga; the testimony of witness RodrigoBocaycay; the traffic accident sketch and report; and the jeepney s registrationreceipt. The petitioners also insist that the jeeps driver had the last clear chance toavoid the collision.

We partly grantthe motion.

Li ability of Calang

We see no reason to overturn the lower courts finding on Calangsculpability. The finding of negligence on his part by the trial court, affirmed by theCA, is a question of fact that we cannot pass upon without going into factualmatters touching on the finding of negligence. In petitions for review on certiorariunder Rule 45 of the Revised Rules of Court, this Court is limited to reviewing onlyerrors of law, not of fact, unless the factual findings complained of are devoid ofsupport by the evidence on record, or the assailed judgment is based on amisapprehension of facts.

Li ability of Philtr anco

ROLITO CALANG and PHILTRANCO SERVICE ENTERPRISES, INC.,

Petitioners,-versus-

PEOPLE OF THE PHILIPPINES,


2/72

We, however, hold that the RTC and the CA both erred in holdingPhiltranco jointly and severally liable with Calang. We emphasize that Calang wascharged criminally before the RTC. Undisputedly, Philtranco was not a direct partyin this case. Since the cause of action against Calang was based on delict, both theRTC and the CA erred in holding Philtranco jointly and severally liable withCalang, based on quasi-delict under Articles 2176[1] and 2180[2] of the Civil Code.Articles 2176 and 2180 of the Civil Code pertain to the vicarious liability of anemployer for quasi-delicts that an employee has committed. Such provision of law

does not apply to civil liability arising from delict.

If at all, Philtrancos liability may only be subsidiary. Article 102 of theRevised Penal Code states the subsidiary civil liabilities of innkeepers,tavernkeepers and proprietors of establishments, as follows:

In default of the persons criminally liable,innkeepers, tavernkeepers, and any other persons orcorporations shall be civilly liable for crimes committed intheir establishments, in all cases where a violation ofmunicipal ordinances or some general or special policeregulations shall have been committed by them or their

employees.

Innkeepers are also subsidiary liable for therestitution of goods taken by robbery or theft within theirhouses from guests lodging therein, or for the payment ofthe value thereof, provided that such guests shall havenotified in advance the innkeeper himself, or the personrepresenting him, of the deposit of such goods within theinn; and shall furthermore have followed the directionswhich such innkeeper or his representative may have giventhem with respect to the care of and vigilance over suchgoods. No liability shall attach in case of robbery with

violence against or intimidation of persons unlesscommitted by the innkeepers employees.

The foregoing subsidiary liability applies to employers, according toArticle 103 of the Revised Penal Code, which reads:

The subsidiary liability established in the nextpreceding article shall also apply to employers, teachers,persons, and corporations engaged in any kind of industryfor felonies committed by their servants, pupils, workmen,apprentices, or employees in the discharge of their duties.

The provisions of the Revised Penal Code on subsidiary liability Articles 102 and 103 are deemed written into the judgments in cases to which

they are applicable. Thus, in the dispositive portion of its decision, the trial courtneed not expressly pronounce the subsidiary liability of the employer.[3]Nonetheless, before the employers subsidiary liability is enforced, adequateevidence must exist establishing that (1) they are indeed the employers of theconvicted employees; (2) they are engaged in some kind of industry; (3) the crimewas committed by the employees in the discharge of their duties; and (4) theexecution against the latter has not been satisfied due to insolvency. Thedetermination of these conditions may be done in the same criminal action in which

the employees liability, criminal and civil, has been pronounced, in a hearing setfor that precise purpose, with due notice to the employer, as part of the proceedingsfor the execution of the judgment.[4]

WHEREFORE, we PARTLY GRANTthe present motion. The Courtof Appeals decision that affirmed in toto the RTC decision, finding Rolito Calangguilty beyond reasonable doubt of reckless imprudence resulting in multiplehomicide, multiple serious physical injuries and damage to property, isAFFIRMED, with the MODIFICATIONthat Philtrancos liability should only besubsidiary. No costs.

SO ORDERED.

Designated additional Member of the Third Division, in view of the retirement ofChief Justice Reynato S. Puno, per Special Order No. 843 dated May 17, 2010.

[1] Art. 2176. Whoever by act or omission causes damage to another, there beingfault or negligence, is obliged to pay for the damage done. Such fault ornegligence, if there is no pre-existing contractual relation between the parties, iscalled a quasi-delict and is governed by the provisions of this Chapter.

[2] Art. 2180. The obligation imposed by Article 2176 is demandable not only forones own acts or omissions, but also for those of persons for whom one isresponsible.

x x x x

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

[3] Pangonorom v. People, 495 Phil. 195 (2005).[4] Philippine Rabbit Bus Lines, Inc. v. People, G.R. No. 147703, April 14, 2004,427 SCRA 456.


3/72

G.R. No. L-55138 September 28, 1984

ERNESTO V. RONQUILLO, petitioner, vs. HONORABLE COURT OFAPPEALS AND ANTONIO P. SO, respondents.

CUEVAS, J. :

This is a petition to review the Resolution dated June 30, 1980 of the thenCourt of Appeals (now the Intermediate Appellate Court) in CA-G.R. No.SP-10573, entitled "Ernesto V. Ronquillo versus the Hon. Florellana Castro-Bartolome, etc."and the Order of said court dated August 20, 1980, denyingpetitioner's motion for reconsideration of the above resolution.

Petitioner Ernesto V. Ronquillo was one of four (4) defendants in Civil CaseNo. 33958 of the then Court of First Instance of Rizal (now the RegionalTrial Court), Branch XV filed by private respondent Antonio P. So, on July23, 1979, for the collection of the sum of P17,498.98 plus attorney's feesand costs. The other defendants were Offshore Catertrade Inc., Johnny Tanand Pilar Tan. The amount of P117,498.98 sought to be collected

represents the value of the checks issued by said defendants in payment forfoodstuffs delivered to and received by them. The said checks weredishonored by the drawee bank.

On December 13, 1979, the lower court rendered its Decision 1based onthe compromise agreement submitted by the parties, the pertinent portion ofwhich reads as follows:

1. Plaintiff agrees to reduce its total claim of P117,498-95 to only P11,000.00 and defendants agree to acknowledge the validity of such claim andfurther bind themselves to initially pay out of the total indebtedness ofP10,000.00 the amount of P55,000.00 on or before December 24, 1979, the

balance of P55,000.00, defendants individually and jointly agree to paywithin a period of six months from January 1980, or before June 30, 1980;(Emphasis supplied)

xxx xxx xxx

4. That both parties agree that failure on the part of either party to complywith the foregoing terms and conditions, the innocent party will be entitled toan execution of the decision based on this compromise agreement and thedefaulting party agrees and hold themselves to reimburse the innocent partyfor attorney's fees, execution fees and other fees related with the execution.

xxx xxx xxx

On December 26, 1979, herein private respondent (then plaintiff filed aMotion for Execution on the ground that defendants failed to make the initialpayment of P55,000.00 on or before December 24, 1979 as provided in theDecision. Said motion for execution was opposed by herein petitioner (asone of the defendants) contending that his inability to make the paymentwas due to private respondent's own act of making himself scarce andinaccessible on December 24, 1979. Petitioner then prayed that privaterespondent be ordered to accept his payment in the amount of P13,750.00.2

During the hearing of the Motion for Execution and the Opposition theretoon January 16, 1980, petitioner, as one of the four defendants, tendered theamount of P13,750.00, as his prorata share in the P55,000.00 initialpayment. Another defendant, Pilar P. Tan, offered to pay the same amount.Because private respondent refused to accept their payments, demandingfrom them the full initial installment of P 55,000.00, petitioner and Pilar Taninstead deposited the said amount with the Clerk of Court. The amountdeposited was subsequently withdrawn by private respondent.

3

On the same day, January 16, 1980, the lower court ordered the issuance of

a writ of execution for the balance of the initial amount payable, against theother two defendants, Offshore Catertrade Inc. and Johnny Tan

4who did

not pay their shares.

On January 22, 1980, private respondent moved for the reconsiderationand/or modification of the aforesaid Order of execution and prayed insteadfor the "execution of the decision in its entirety against all defendants, jointlyand severally."

5Petitioner opposed the said motion arguing that under the

decision of the lower court being executed which has already become final,the liability of the four (4) defendants was not expressly declared to besolidary, consequently each defendant is obliged to pay only his own pro-rata or 1/4 of the amount due and payable.

On March 17, 1980, the lower court issued an Order reading as follows:

ORDER

Regardless of whatever the compromise agreement has intended thepayment whether jointly or individually, or jointly and severally, the fact isthat only P27,500.00 has been paid. There appears to be a non-payment inaccordance with the compromise agreement of the amount of P27,500.00on or before December 24, 1979. The parties are reminded that thepayment is condition sine qua non to the lifting of the preliminary attachment

and the execution of an affidavit of desistance.


4/72

WHEREFORE, let writ of execution issue as prayed for

On March 17, 1980, petitioner moved for the reconsideration of the aboveorder, and the same was set for hearing on March 25,1980.

Meanwhile, or more specifically on March 19, 1980, a writ of execution wasissued for the satisfaction of the sum of P82,500.00 as against theproperties of the defendants (including petitioner), "singly or jointly hable." 6

On March 20, 1980, Special Sheriff Eulogio C. Juanson of Rizal, issued anotice of sheriff's sale, for the sale of certain furnitures and appliances foundin petitioner's residence to satisfy the sum of P82,500.00. The public salewas scheduled for April 2, 1980 at 10:00 a.m.

7

Petitioner's motion for reconsideration of the Order of Execution datedMarch 17, 1980 which was set for hearing on March 25, 1980, was uponmotion of private respondent reset to April 2, 1980 at 8:30 a.m. Realizingthe actual threat to property rights poised by the re-setting of the hearing ofs motion for reconsideration for April 2, 1980 at 8:30 a.m. such that if his

motion for reconsideration would be denied he would have no more time toobtain a writ from the appellate court to stop the scheduled public sale of hispersonal properties at 10:00 a.m. of the same day, April 2, 1980, petitionerfiled on March 26, 1980 a petition for certiorari and prohibition with the thenCourt of Appeals (CA-G.R. No. SP-10573), praying at the same time for theissuance of a restraining order to stop the public sale. He raised thequestion of the validity of the order of execution, the writ of execution andthe notice of public sale of his properties to satisfy fully the entire unpaidobligation payable by all of the four (4) defendants, when the lower court'sdecision based on the compromise agreement did not specifically state theliability of the four (4) defendants to be solidary.

On April 2, 1980, the lower court denied petitioner's motion forreconsideration but the scheduled public sale in that same day did notproceed in view of the pendency of a certiorari proceeding before the thenCourt of Appeals.

On June 30, 1980, the said court issued a Resolution, the pertinent portionof which reads as follows:

This Court, however, finds the present petition to have been filedprematurely. The rule is that before a petition for certiorari can be broughtagainst an order of a lower court, all remedies available in that court mustfirst be exhausted. In the case at bar, herein petitioner filed a petition

without waiting for a resolution of the Court on the motion for

reconsideration, which could have been favorable to the petitioner. The factthat the hearing of the motion for reconsideration had been reset on thesame day the public sale was to take place is of no moment since themotion for reconsideration of the Order of March 17, 1980 having beenseasonably filed, the scheduled public sale should be suspended.Moreover, when the defendants, including herein petitioner, defaulted intheir obligation based on the compromise agreement, private respondenthad become entitled to move for an execution of the decision based on the

said agreement.

WHEREFORE, the instant petition for certiorari and prohibition withpreliminary injunction is hereby denied due course. The restraining orderissued in our resolution dated April 9, 1980 is hereby lifted withoutpronouncement as to costs.

SO ORDERED.

Petitioner moved to reconsider the aforesaid Resolution alleging that onApril 2, 1980, the lower court had already denied the motion referred to andconsequently, the legal issues being raised in the petition were already"ripe" for determination. 8The said motion was however denied by the Courtof Appeals in its Resolution dated August 20, 1980.

Hence, this petition for review, petitioner contending that the Court ofAppeals erred in

(a) declaring as premature, and in denying due course to the petition torestrain implementation of a writ of execution issued at variance with thefinal decision of the lower court filed barely four (4) days before thescheduled public sale of the attached movable properties;

(b) denying reconsideration of the Resolution of June 30, 1980, whichdeclared as premature the filing of the petition, although there is proof onrecord that as of April 2, 1980, the motion referred to was already denied bythe lower court and there was no more motion pending therein;

(c) failing to resolve the legal issues raised in the petition and in notdeclaring the liabilities of the defendants, under the final decision of thelower court, to be only joint;

(d) not holding the lower court's order of execution dated March 17, 1980,the writ of execution and the notice of sheriff's sale, executing the lowercourt's decision against "all defendants, singly and jointly", to be at variancewith the lower court's final decision which did not provide for solidary


5/72

obligation; and

(e) not declaring as invalid and unlawful the threatened execution, asagainst the properties of petitioner who had paid his pro-rata share of theadjudged obligation, of the total unpaid amount payable by his joint co-defendants.

The foregoing assigned errors maybe synthesized into the more importantissues of

1. Was the filing of a petition for certiorari before the then Court of Appealsagainst the Order of Execution issued by the lower court, dated March 17,1980, proper, despite the pendency of a motion for reconsideration of thesame questioned Order?

2. What is the nature of the liability of the defendants (including petitioner),was it merely joint, or was it several or solidary?

Anent the first issue raised, suffice it to state that while as a general rule, a

motion for reconsideration should precede recourse to certiorari in order togive the trial court an opportunity to correct the error that it may havecommitted, the said rule is not absolutes

9and may be dispensed with in

instances where the filing of a motion for reconsideration would serve nouseful purpose, such as when the motion for reconsideration would raise thesame point stated in the motion 10 or where the error is patent for the orderis void 11 or where the relief is extremely urgent, as in cases whereexecution had already been ordered 12where the issue raised is one purelyof law. 13

In the case at bar, the records show that not only was a writ of executionissued but petitioner's properties were already scheduled to be sold at

public auction on April 2, 1980 at 10:00 a.m. The records likewise show thatpetitioner's motion for reconsideration of the questioned Order of Executionwas filed on March 17, 1980 and was set for hearing on March 25, 1980 at8:30 a.m., but upon motion of private respondent, the hearing was reset to

April 2, 1980 at 8:30 a.m., the very same clay when petitioner's propertieswere to be sold at public auction. Needless to state that under thecircumstances, petitioner was faced with imminent danger of his propertiesbeing immediately sold the moment his motion for reconsideration is denied.Plainly, urgency prompted recourse to the Court of Appeals and theadequate and speedy remedy for petitioner under the situation was to file apetition for certiorari with prayer for restraining order to stop the sale. Forhim to wait until after the hearing of the motion for reconsideration on April

2, 1980 before taking recourse to the appellate court may already be too

late since without a restraining order, the public sale can proceed at 10:00that morning. In fact, the said motion was already denied by the lower courtin its order dated April 2, 1980 and were it not for the pendency of thepetition with the Court of Appeals and the restraining order issuedthereafter, the public sale scheduled that very same morning could haveproceeded.

The other issue raised refers to the nature of the liability of petitioner, as one

of the defendants in Civil Case No. 33958, that is whether or not he is liablejointly or solidarily.

In this regard, Article 1207 and 1208 of the Civil Code provides

Art. 1207. The concurrence of two or more debtors in one and the sameobligation does not imply that each one of the former has a right to demand,or that each one of the latter is bound to render, entire compliance with theprestation. Then is a solidary liability only when the obligation expressly sostates, or when the law or the nature of the obligation requires solidarity.

Art. 1208. If from the law,or the nature or the wording of the obligation towhich the preceding article refers the contrary does not appear, the credit ordebt shall be presumed to be divided into as many equal shares as thereare creditors and debtors, the credits or debts being considered distinct fromone another, subject to the Rules of Court governing the multiplicity of quits.

The decision of the lower court based on the parties' compromiseagreement, provides:

1. Plaintiff agrees to reduce its total claim of P117,498.95 to onlyP110,000.00 and defendants agree to acknowledge the validity of suchclaim and further bind themselves to initially pay out of the total

indebtedness of P110,000.00, the amount of P5,000.00 on or beforeDecember 24, 1979, the balance of P55,000.00, defendants individually and

jointly agree to pay within a period of six months from January 1980 orbefore June 30, 1980. (Emphasis supply)

Clearly then, by the express term of the compromise agreement and thedecision based upon it, the defendants obligated themselves to pay theirobligation "individually and jointly".

The term "individually" has the same meaning as "collectively", "separately","distinctively", respectively or "severally". An agreement to be " individuallyliable" undoubtedly creates a several obligation, 14and a "several obligationis one by which one individual binds himself to perform the whole obligation.


6/72

15

In the case of Parot vs. Gemora16We therein ruled that "the phrasejuntosor separadamente or in the promissory note is an express statement makingeach of the persons who signed it individually liablefor the payment of thefun amount of the obligation contained therein." Likewise in Un Pak Leungvs. Negorra 17We held that "in the absence of a finding of facts that thedefendants made themselves individually hable for the debt incurred they

are each liable only for one-half of said amount

The obligation in the case at bar being described as "individually andjointly", the same is therefore enforceable against one of the numerousobligors.

IN VIEW OF THE FOREGOING CONSIDERATIONS, the instant petition ishereby DISMISSED. Cost against petitioner.

SO ORDERED.


7/72

G.R. No. L-36413 September 26, 1988

MALAYAN INSURANCE CO., INC., petitioner, vs. THE HON. COURTOF APPEALS (THIRD DIVISION) MARTIN C. VALLEJOS, SIO CHOY,SAN LEON RICE MILL, INC. and PANGASINAN TRANSPORTATIONCO., INC., respondents.

PADILLA, J. :

Review on certiorari of the judgment *of the respondent appellate court inCA-G.R. No. 47319-R, dated 22 February 1973, which affirmed, with somemodifications, the decision, **dated 27 April 1970, rendered in Civil CaseNo. U-2021 of the Court of First Instance of Pangasinan.

The antecedent facts of the case are as follows:

On 29 March 1967, herein petitioner, Malayan Insurance Co., Inc., issued infavor of private respondent Sio Choy Private Car Comprehensive Policy No.MRO/PV-15753, effective from 18 April 1967 to 18 April 1968, covering a

Willys jeep with Motor No. ET-03023 Serial No. 351672, and Plate No. J-21536, Quezon City, 1967. The insurance coverage was for "own damage"not to exceed P600.00 and "third-party liability" in the amount ofP20,000.00.

During the effectivity of said insurance policy, and more particularly on 19December 1967, at about 3:30 o'clock in the afternoon, the insured jeep,while being driven by one Juan P. Campollo an employee of the respondentSan Leon Rice Mill, Inc., collided with a passenger bus belonging to therespondent Pangasinan Transportation Co., Inc. (PANTRANCO, for short)at the national highway in Barrio San Pedro, Rosales, Pangasinan, causingdamage to the insured vehicle and injuries to the driver, Juan P. Campollo,

and the respondent Martin C. Vallejos, who was riding in the ill-fated jeep.

As a result, Martin C. Vallejos filed an action for damages against Sio Choy,Malayan Insurance Co., Inc. and the PANTRANCO before the Court of FirstInstance of Pangasinan, which was docketed as Civil Case No. U-2021. Heprayed therein that the defendants be ordered to pay him, jointly andseverally, the amount of P15,000.00, as reimbursement for medical andhospital expenses; P6,000.00, for lost income; P51,000.00 as actual, moraland compensatory damages; and P5,000.00, for attorney's fees.

Answering, PANTRANCO claimed that the jeep of Sio Choy was thenoperated at an excessive speed and bumped the PANTRANCO bus whichhad moved to, and stopped at, the shoulder of the highway in order to avoid

the jeep; and that it had observed the diligence of a good father of a familyto prevent damage, especially in the selection and supervision of itsemployees and in the maintenance of its motor vehicles. It prayed that it beabsolved from any and all liability.

Defendant Sio Choy and the petitioner insurance company, in their answer,also denied liability to the plaintiff, claiming that the fault in the accident wassolely imputable to the PANTRANCO.

Sio Choy, however, later filed a separate answer with a cross-claim againstthe herein petitioner wherein he alleged that he had actually paid theplaintiff, Martin C. Vallejos, the amount of P5,000.00 for hospitalization andother expenses, and, in his cross-claim against the herein petitioner, healleged that the petitioner had issued in his favor a private carcomprehensive policy wherein the insurance company obligated itself toindemnify Sio Choy, as insured, for the damage to his motor vehicle, as wellas for any liability to third persons arising out of any accident during theeffectivity of such insurance contract, which policy was in full force andeffect when the vehicular accident complained of occurred. He prayed thathe be reimbursed by the insurance company for the amount that he may be

ordered to pay.

Also later, the herein petitioner sought, and was granted, leave to file athird-party complaint against the San Leon Rice Mill, Inc. for the reason thatthe person driving the jeep of Sio Choy, at the time of the accident, was anemployee of the San Leon Rice Mill, Inc. performing his duties within thescope of his assigned task, and not an employee of Sio Choy; and that, asthe San Leon Rice Mill, Inc. is the employer of the deceased driver, Juan P.Campollo, it should be liable for the acts of its employee, pursuant to Art.2180 of the Civil Code. The herein petitioner prayed that judgment berendered against the San Leon Rice Mill, Inc., making it liable for theamounts claimed by the plaintiff and/or ordering said San Leon Rice Mill,Inc. to reimburse and indemnify the petitioner for any sum that it may beordered to pay the plaintiff.

After trial, judgment was rendered as follows:

WHEREFORE, in view of the foregoing findings of this Court judgment ishereby rendered in favor of the plaintiff and against Sio Choy and MalayanInsurance Co., Inc., and third-party defendant San Leon Rice Mill, Inc., asfollows:

(a) P4,103 as actual damages;


8/72

(b) P18,000.00 representing the unearned income of plaintiff Martin C.Vallejos for the period of three (3) years;

(c) P5,000.00 as moral damages;

(d) P2,000.00 as attomey's fees or the total of P29,103.00, plus costs.

The above-named parties against whom this judgment is rendered arehereby held jointly and severally liable. With respect, however, to MalayanInsurance Co., Inc., its liability will be up to only P20,000.00.

As no satisfactory proof of cost of damage to its bus was presented bydefendant Pantranco, no award should be made in its favor. Its counter-claim for attorney's fees is also dismissed for not being proved.

1

On appeal, the respondent Court of Appeals affirmed the judgment of thetrial court that Sio Choy, the San Leon Rice Mill, Inc. and the MalayanInsurance Co., Inc. are jointly and severally liable for the damages awardedto the plaintiff Martin C. Vallejos. It ruled, however, that the San Leon Rice

Mill, Inc. has no obligation to indemnify or reimburse the petitioner insurancecompany for whatever amount it has been ordered to pay on its policy, sincethe San Leon Rice Mill, Inc. is not a privy to the contract of insurancebetween Sio Choy and the insurance company.

2

Hence, the present recourse by petitioner insurance company.

The petitioner prays for the reversal of the appellate court's judgment, or, inthe alternative, to order the San Leon Rice Mill, Inc. to reimburse petitionerany amount, in excess of one-half (1/2) of the entire amount of damages,petitioner may be ordered to pay jointly and severally with Sio Choy.

The Court, acting upon the petition, gave due course to the same, but "onlyinsofar as it concerns the alleged liability of respondent San Leon Rice Mill,Inc. to petitioner, it being understood that no other aspect of the decision ofthe Court of Appeals shall be reviewed, hence, execution may already issuein favor of respondent Martin C. Vallejos against the respondents, withoutprejudice to the determination of whether or not petitioner shall be entitled toreimbursement by respondent San Leon Rice Mill, Inc. for the whole or partof whatever the former may pay on the P20,000.00 it has been adjudged topay respondent Vallejos."

3

However, in order to determine the alleged liability of respondent San LeonRice Mill, Inc. to petitioner, it is important to determine first the nature orbasis of the liability of petitioner to respondent Vallejos, as compared to that

of respondents Sio Choy and San Leon Rice Mill, Inc.

Therefore, the two (2) principal issues to be resolved are (1) whether thetrial court, as upheld by the Court of Appeals, was correct in holdingpetitioner and respondents Sio Choy and San Leon Rice Mill, Inc. "solidarilyliable" to respondent Vallejos; and (2) whether petitioner is entitled to bereimbursed by respondent San Leon Rice Mill, Inc. for whatever amountpetitioner has been adjudged to pay respondent Vallejos on its insurance

policy.

As to the first issue, it is noted that the trial court found, as affirmed by theappellate court, that petitioner and respondents Sio Choy and San LeonRice Mill, Inc. are jointly and severally liable to respondent Vallejos.

We do not agree with the aforesaid ruling. We hold instead that it is onlyrespondents Sio Choy and San Leon Rice Mill, Inc, (to the exclusion of thepetitioner) that are solidarily liable to respondent Vallejos for the damagesawarded to Vallejos.

It must be observed that respondent Sio Choy is made liable to said plaintiffas owner of the ill-fated Willys jeep, pursuant to Article 2184 of the CivilCode which provides:

Art. 2184. In motor vehicle mishaps, the owner is solidarily liable with hisdriver, if the former, who was in the vehicle, could have, by the use of duediligence, prevented the misfortune it is disputably presumed that a driverwas negligent, if he had been found guilty of reckless driving or violatingtraffic regulations at least twice within the next preceding two months.

If the owner was not in the motor vehicle, the provisions of article 2180 areapplicable.

On the other hand, it is noted that the basis of liability of respondent SanLeon Rice Mill, Inc. to plaintiff Vallejos, the former being the employer of thedriver of the Willys jeep at the time of the motor vehicle mishap, is Article2180 of the Civil Code which reads:

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

xxx xxx xxx

Employers shall be liable for the damages caused by their employees and


9/72

household helpers acting within the scope of their assigned tasks, eventhough the former are not engaged ill any business or industry.

xxx xxx xxx

The responsibility treated in this article shall cease when the persons hereinmentioned proved that they observed all the diligence of a good father of afamily to prevent damage.

It thus appears that respondents Sio Choy and San Leon Rice Mill, Inc. arethe principal tortfeasors who are primarily liable to respondent Vallejos. Thelaw states that the responsibility of two or more persons who are liable for aquasi-delictis solidarily.

4

On the other hand, the basis of petitioner's liability is its insurance contractwith respondent Sio Choy. If petitioner is adjudged to pay respondentVallejos in the amount of not more than P20,000.00, this is on account of itsbeing the insurer of respondent Sio Choy under the third party liabilityclause included in the private car comprehensive policy existing between

petitioner and respondent Sio Choy at the time of the complained vehicularaccident.

In Guingon vs. Del Monte,5 a passenger of a jeepney had just alighted

therefrom, when he was bumped by another passenger jeepney. He died asa result thereof. In the damage suit filed by the heirs of said passengeragainst the driver and owner of the jeepney at fault as well as against theinsurance company which insured the latter jeepney against third partyliability, the trial court, affirmed by this Court, adjudged the owner and thedriver of the jeepney at fault jointly and severally liable to the heirs of thevictim in the total amount of P9,572.95 as damages and attorney's fees;while the insurance company was sentenced to pay the heirs the amount of

P5,500.00 which was to be applied as partial satisfaction of the judgmentrendered against said owner and driver of the jeepney. Thus, in saidGuingoncase, it was only the owner and the driver of the jeepney at fault,not including the insurance company, who were held solidarily liable to theheirs of the victim.

While it is true that where the insurance contract provides for indemnityagainst liability to third persons, such third persons can directly sue theinsurer,

6 however, the direct liability of the insurer under indemnity

contracts against third party liability does not mean that the insurer can beheld solidarily liable with the insured and/or the other parties found at fault.The liability of the insurer is based on contract; that of the insured is based

on tort.

In the case at bar, petitioner as insurer of Sio Choy, is liable to respondentVallejos, but it cannot, as incorrectly held by the trial court, be made"solidarily" liable with the two principal tortfeasors namely respondents SioChoy and San Leon Rice Mill, Inc. For if petitioner-insurer were solidarilyliable with said two (2) respondents by reason of the indemnity contractagainst third party liability-under which an insurer can be directly sued by athird party this will result in a violation of the principles underlying solidaryobligation and insurance contracts.

In solidary obligation, the creditor may enforce the entire obligation againstone of the solidary debtors.

7On the other hand, insurance is defined as "a

contract whereby one undertakes for a consideration to indemnify anotheragainst loss, damage, or liability arising from an unknown or contingentevent."

8

In the case at bar, the trial court held petitioner together with respondentsSio Choy and San Leon Rice Mills Inc. solidarily liable to respondentVallejos for a total amount of P29,103.00, with the qualification thatpetitioner's liability is only up to P20,000.00. In the context of a solidaryobligation, petitioner may be compelled by respondent Vallejos to pay the

entireobligation of P29,013.00, notwithstanding the qualification made bythe trial court. But, how can petitioner be obliged to pay the entire obligationwhen the amount stated in its insurance policy with respondent Sio Choy forindemnity against third party liability is only P20,000.00? Moreover, thequalification made in the decision of the trial court to the effect that petitioneris sentenced to pay up to P20,000.00 only when the obligation to payP29,103.00 is made solidary, is an evident breach of the concept of asolidary obligation. Thus, We hold that the trial court, as upheld by the Courtof Appeals, erred in holding petitioner, solidarily liable with respondents SioChoy and San Leon Rice Mill, Inc. to respondent Vallejos.

As to the second issue, the Court of Appeals, in affirming the decision of the

trial court, ruled that petitioner is not entitled to be reimbursed byrespondent San Leon Rice Mill, Inc. on the ground that said respondent isnot privy to the contract of insurance existing between petitioner andrespondent Sio Choy. We disagree.

The appellate court overlooked the principle of subrogation in insurancecontracts. Thus

... Subrogation is a normal incident of indemnity insurance (Aetna L. Ins. Co.vs. Moses, 287 U.S. 530, 77 L. ed. 477). Upon payment of the loss, theinsurer is entitled to be subrogatedpro tantoto any right of action which the

insured may have against the third person whose negligence or wrongful actcaused the loss (44 Am. Jur. 2nd 745, citing Standard Marine Ins. Co. vs.


10/72

Scottish Metropolitan Assurance Co., 283 U.S. 284, 75 L. ed. 1037).

The right of subrogation is of the highest equity. The loss in the first instanceis that of the insured but after reimbursement or compensation, it becomesthe loss of the insurer (44 Am. Jur. 2d, 746, note 16, citing Newcomb vs.Cincinnati Ins. Co., 22 Ohio St. 382).

Although many policies including policies in the standard form, now provide

for subrogation, and thus determine the rights of the insurer in this respect,the equitable right of subrogation as the legal effect of payment inures to theinsurer without any formal assignment or any express stipulation to thateffect in the policy" (44 Am. Jur. 2nd 746). Stated otherwise, when theinsurance company pays for the loss, such payment operates as anequitable assignment to the insurer of the property and all remedies whichthe insured may have for the recovery thereof. That right is not dependentupon , nor does it grow out of any privity of contract (emphasis supplied) orupon written assignment of claim, and payment to the insured makes theinsurer assignee in equity (Shambley v. Jobe-Blackley Plumbing andHeating Co., 264 N.C. 456, 142 SE 2d 18).

9

It follows, therefore, that petitioner, upon paying respondent Vallejos theamount of riot exceeding P20,000.00, shall become the subrogee of theinsured, the respondent Sio Choy; as such, it is subrogated to whateverrights the latter has against respondent San Leon Rice Mill, Inc. Article 1217of the Civil Code gives to a solidary debtor who has paid the entireobligation the right to be reimbursed by his co-debtors for the share whichcorresponds to each.

Art. 1217. Payment made by one of the solidary debtors extinguishes theobligation. If two or more solidary debtors offer to pay, the creditor maychoose which offer to accept.

He who made the payment may claim from his co-debtors only the sharewhich corresponds to each, with the interest for the payment already made.If the payment is made before the debt is due, no interest for the interveningperiod may be demanded.

xxx xxx xxx

In accordance with Article 1217, petitioner, upon payment to respondentVallejos and thereby becoming the subrogee of solidary debtor Sio Choy, isentitled to reimbursement from respondent San Leon Rice Mill, Inc.

To recapitulate then: We hold that only respondents Sio Choy and San Leon

Rice Mill, Inc. are solidarily liable to the respondent Martin C. Vallejos for theamount of P29,103.00. Vallejos may enforce the entire obligation on onlyone of said solidary debtors. If Sio Choy as solidary debtor is made to payfor the entire obligation (P29,103.00) and petitioner, as insurer of Sio Choy,is compelled to pay P20,000.00 of said entire obligation, petitioner would beentitled, as subrogee of Sio Choy as against San Leon Rice Mills, Inc., to bereimbursed by the latter in the amount of P14,551.50 (which is 1/2 ofP29,103.00 )

WHEREFORE, the petition is GRANTED. The decision of the trial court, asaffirmed by the Court of Appeals, is hereby AFFIRMED, with themodification above-mentioned. Without pronouncement as to costs.

SO ORDERED.


11/72

G.R. No. L-28046 May 16, 1983

PHILIPPINE NATIONAL BANK, plaintiff-appellant, vs. INDEPENDENTPLANTERS ASSOCIATION, INC., ANTONIO DIMAYUGA, DELFINFAJARDO, CEFERINO VALENCIA, MOISES CARANDANG, LUCIANOCASTILLO, AURELIO VALENCIA, LAURO LEVISTE, GAVINOGONZALES, LOPE GEVANA and BONIFACIO LAUREANA, defendants-appellees.

PLANA, J. :

Appeal by the Philippine National Bank (PNB) from the Order of the defunctCourt of First Instance of Manila (Branch XX) in its Civil Case No. 46741dismissing PNB's complaint against several solidary debtors for thecollection of a sum of money on the ground that one of the defendants(Ceferino Valencia) died during the pendency of the case (i.e., after theplaintiff had presented its evidence) and therefore the complaint, being amoney claim based on contract, should be prosecuted in the testate orintestate proceeding for the settlement of the estate of the deceaseddefendant pursuant to Section 6 of Rule 86 of the Rules of Court whichreads:

SEC. 6. Solidary obligation of decedent.the obligation of the decedent issolidary with another debtor, the claim shall be filed against the decedent asif he were the only debtor, without prejudice to the right of the estate torecover contribution from the other debtor. In a joint obligation of thedecedent, the claim shall be confined to the portion belonging to him.

The appellant assails the order of dismissal, invoking its right of recourseagainst one, some or all of its solidary debtors under Article 1216 of the CivilCode

ART. 1216. The creditor may proceed against any one of the solidarydebtors or some or all of them simultaneously. The demand made againstone of them shall not be an obstacle to those which may subsequently bedirected against the others, so long as the debt has not been fully collected.

The sole issue thus raised is whether in an action for collection of a sum ofmoney based on contract against all the solidary debtors, the death of onedefendant deprives the court of jurisdiction to proceed with the case againstthe surviving defendants.

It is now settled that the quoted Article 1216 grants the creditor the

substantive right to seek satisfaction of his credit from one, some or all of

his solidary debtors, as he deems fit or convenient for the protection of hisinterests; and if, after instituting a collection suit based on contract againstsome or all of them and, during its pendency, one of the defendants dies,the court retains jurisdiction to continue the proceedings and decide thecase in respect of the surviving defendants. Thus inManila Surety & FidelityCo., Inc. vs. Villarama et al., 107 Phil. 891 at 897, this Court ruled:

Construing Section 698 of the Code of Civil Procedure from whence the

aforequoted provision (Sec. 6, Rule 86) was taken, this Court held thatwhere two persons are bound in solidumfor the same debt and one of themdies, the whole indebtedness can be proved against the estate of the latter,the decedent's liability being absolute and primary; and if the claim is notpresented within the time provided by the rules, the same will be barred asagainst the estate. It is evident from the foregoing that Section 6 of Rule 87(now Rule 86) provides the procedure should the creditor desire to goagainst the deceased debtor, but there is certainly nothing in the saidprovision making compliance with such procedure a condition precedentbefore an ordinary action against the surviving solidary debtors, should thecreditor choose to demand payment from the latter, could be entertained tothe extent that failure to observe the same would deprive the court

jurisdiction to take cognizance of the action against the surviving debtors.Upon the other hand, the Civil Code expressly allows the creditor to proceedagainst any one of the solidary debtors or some or all of themsimultaneously. There is, therefore, nothing improper in the creditor's filingof an action against the surviving solidary debtors alone, instead ofinstituting a proceeding for the settlement of the estate of the deceaseddebtor wherein his claim could be filed.

Similarly, in PNB vs. Asuncion, 80 SCRA 321 at 323-324, this Court,speaking thru Mr. Justice Makasiar, reiterated the doctrine.

A cursory perusal of Section 6, Rule 86 of the Revised Rules of Court

reveals that nothing therein prevents a creditor from proceeding against thesurviving solidary debtors. Said provision merely sets up the procedure inenforcing collection in case a creditor chooses to pursue his claimagainstthe estate of the deceased solidary, debtor.

It is crystal clear that Article 1216 of the New Civil Code is the applicableprovision in this matter. Said provision gives the creditor the right to'proceed against anyone of the solidary debtors or some or all of themsimultaneously.' The choice is undoubtedly left to the solidary, creditor todetermine against whom he will enforce collection. In case of the death ofone of the solidary debtors, he (the creditor) may, if he so chooses, proceedagainst the surviving solidary debtors without necessity of filing a claim inthe estate of the deceased debtors. It is not mandatory for him to have the


12/72

case dismissed against the surviving debtors and file its claim in the estateof the deceased solidary debtor . . .

As correctly argued by petitioner, if Section 6, Rule 86 of the Revised Rulesof Court were applied literally, Article 1216 of the New Civil Code would, ineffect, be repealed since under the Rules of Court, petitioner has no choicebut to proceed against the estate of Manuel Barredo only. Obviously, thisprovision diminishes the Bank's right under the New Civil, Code to proceed

against any one, some or all of the solidary debtors. Such a construction isnot sanctioned by the principle, which is too well settled to require citation,that a substantive law cannot be amended by a procedural rule. Otherwisestared, Section 6, Rule 86 of the Revised Rules of Court cannot be made toprevail over Article 1216 of the New Civil Code, the former being merelyprocedural, while the latter, substantive.

WHEREFORE the appealed order of dismissal of the court a quoin its CivilCase No. 46741 is hereby set aside in respect of the surviving defendants;and the case is remanded to the corresponding Regional Trial Court forproceedings. proceedings. No costs.

SO ORDERED.


13/72

G.R. No. L-28497 November 6, 1928

THE BACHRACH MOTOR CO., INC.,plaintiff-appellee, vs. FAUSTINOESPIRITU,defendant-appellant.

------------------------------

G.R. No. L-28498 November 6, 1928

THE BACHRACH MOTOR CO., INC.,plaintiff-appellee, vs. FAUSTINOESPIRITU,defendant-appellant, and ROSARIO ESPIRITU,intervenor-appellant.

AVANCEA, C. J.:

These two cases, Nos. 28497 and 28948, were tried together.

It appears, in connection with case 28497; that on July 28, 1925 thedefendant Faustino Espiritu purchased of the plaintiff corporation a two-ton

Whitetruck for P11,983.50, paying P1,000 down to apply on account of thisprice, and obligating himself to pay the remaining P10,983.50 within theperiods agreed upon. To secure the payment of this sum, the defendantsmortgaged the said truck purchased and, besides, three others, two ofwhich are numbered 77197 and 92744 respectively, and all of the Whitemake (Exhibit A). These two trucks had been purchased from the sameplaintiff and were fully paid for by the defendant and his brother RosarioEspiritu. The defendant failed to pay P10,477.82 of the price secured by thismortgage.

In connection with case 28498, it appears that on February 18, 1925 thedefendant bought a one-ton White truck of the plaintiff corporation for thesum of P7,136.50, and after having deducted the P500 cash payment andthe 12 per cent annual interest on the unpaid principal, obligated himself tomake payment of this sum within the periods agreed upon. To secure thispayment the defendant mortgaged to the plaintiff corporation the said truckpurchased and two others, numbered 77197 and 92744, respectively, thesame that were mortgaged in the purchase of the other truck referred to inthe other case. The defendant failed to pay P4,208.28 of this sum.

In both sales it was agreed that 12 per cent interest would be paid upon theunpaid portion of the price at the executon of the contracts, and in case ofnon-payment of the total debt upon its maturity, 25 per cent thereon, aspenalty.

In addition to the mortagage deeds referred to, which the defendantexecuted in favor of the plaintiff, the defendant at the same time also signeda promissory note solidarily with his brother Rosario Espiritu for the severalsums secured by the two mortgages (Exhibits B and D).

Rosario Espiritu appeared in these two cases as intervenor, alleging to bethe exclusive owner of the two White trucks Nos. 77197 and 92744, whichappear to have been mortgaged by the defendants to the plaintiff.

lawphi1.net

While these two cases were pending in the lower court the mortgagedtrucks were sold by virtue of the mortgage, all of them together bringing in,after deducting the sheriff's fees and transportation charges to Manila, thenet sum of P3,269.58.

The judgment appealed from ordered the defendants and the intervenor topay plaintiff in case 28497 the sum of P7,732.09 with interest at the rate of12 per cent per annum from May 1, 1926 until fully paid, and 25 per centthereof in addition as penalty. In case 28498, the trial court ordered thedefendant and the intervenor to pay plaintiff the sum of P4,208.28 withinterest at 12 per cent per annum from December 1, 1925 until fully paid,and 25 per cent thereon as penalty.

The appellants contend that trucks 77197 and 92744 were not mortgaged,because, when the defendant signed the mortgage deeds these trucks werenot included in those documents, and were only put in later, withoutdefendant's knowledge. But there is positive proof that they were included atthe time the defendant signed these documents. Besides, there werepresented two of defendant's letters to Hidalgo, an employee of theplaintiff's written a few days before the transaction, acquiescing in theinclusion of all his Whitetrucks already paid for, in the mortgage (Exhibit H-I).

Appellants also alleged that on February 4, 1925, the defendant sold hisrights in said trucks Nos. 77197 and 92744 to the intervenor, and that as thelatter did not sign the mortgage deeds, such trucks cannot be considered asmortgaged. But the evidence shows that while the intervenor RosarioEspiritu did not sign the two mortgage deeds (Exhibits A and C), yet,together with the defendants Faustino Espiritu, he signed the twopromissory notes (Exhibits B and D) secured by these two mortgages. Allthese instruments were executed at the same time, and when the trucks77197 and 92744 were included in the mortgages, the intervenor RosarioEspiritu was aware of it and consented to such inclusion. These facts are

supported by the testimony of Bachrach, manager of the plaintiffcorporation, of Agustin Ramirez, who witnessed the execution of all these


14/72


15/72

G.R. No. L-41093 October 30, 1978

ROBES-FRANCISCO REALTY & DEVELOPMENT CORPORATION,petitioner, vs. COURT OF FIRST INSTANCE OF RIZAL (BRANCHXXXIV), and LOLITA MILLAN, respondents.

MUOZ PALMA, J. :

This is a direct appeal on questions of law from a decision of the Court ofFirst Instance of Rizal, Branch XXXIV, presided by the Honorable BernardoP. Pardo, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered commanding the defendant toregister the deed of absolute sale it had executed in favor of plaintiff with theRegister of Deeds of Caloocan City and secure the corresponding title in thename of plaintiff within ten (10) days after finality of this decision; if, for anyreason, this not possible, defendant is hereby sentenced to pay plaintiff thesum of P5,193.63 with interest at 4% per annum from June 22, 1972 untilfully paid.

In either case, defendant is sentenced to pay plaintiff nominal damages inthe amount of P20,000.00 plus attorney's fee in the amount of P5,000.00and costs.

SO ORDERED.

Caloocan City, February 11, 1975. (rollo, p. 21)

Petitioner corporation questions the award for nominal damages ofP20,000.00 and attorney's fee of P5,000.00 which are allegedly excessiveand unjustified.

In the Court's resolution of October 20, 1975, We gave due course to thePetition only as regards the portion of the decision awarding nominaldamages. 1

The following incidents are not in dispute:

In May 1962 Robes-Francisco Realty & Development Corporation, nowpetitioner, agreed to sell to private respondent Lolita Millan for and inconsideration of the sum of P3,864.00, payable in installments, a parcel ofland containing an area of approximately 276 square meters, situated in

Barrio Camarin, Caloocan City, known as Lot No. 20, Block No. 11 of its

Franville Subdivision.2

Millan complied with her obligation under the contract and paid theinstallments stipulated therein, the final payment having been made onDecember 22, 1971. The vendee made a total payment of P5,193.63including interests and expenses for registration of title.

3

Thereafter, Lolita Millan made repeated demands upon the corporation for

the execution of the final deed of sale and the issuance to her of the transfercertificate of title over the lot. On March 2, 1973, the parties executed adeed of absolute sale of the aforementioned parcel of land. The deed ofabsolute sale contained, among others, this particular provision:

That the VENDOR further warrants that the transfer certificate of title of theabove-described parcel of land shall be transferred in the name of theVENDEE within the period of six (6) months from the date of full paymentand in case the VENDOR fails to issue said transfer certificate of title, itshall bear the obligation to refund to the VENDEE the total amount alreadypaid for, plus an interest at the rate of 4% per annum. (record on appeal, p.9)

Notwithstanding the lapse of the above-mentioned stipulated period of six(6) months, the corporation failed to cause the issuance of thecorresponding transfer certificate of title over the lot sold to Millan, hence,the latter filed on August 14, 1974 a complaint for specific performance anddamages against Robes-Francisco Realty & Development Corporation inthe Court of First Instance of Rizal, Branch XXXIV, Caloocan City, docketedtherein as Civil Case No. C-3268.

4

The complaint prayed for judgment (1) ordering the reformation of the deedof absolute sale; (2) ordering the defendant to deliver to plaintiff the

certificate of title over the lot free from any lien or encumbrance; or, shouldthis be not possible, to pay plaintiff the value of the lot which should not beless than P27,600.00 (allegedly the present estimated value of the lot); and(3) ordering the defendant to pay plaintiff damages, corrective and actual inthe sum of P15 000.00.

5

The corporation in its answer prayed that the complaint be dismissedalleging that the deed of absolute sale was voluntarily executed between theparties and the interest of the plaintiff was amply protected by the provisionin said contract for payment of interest at 4% per annum of the total amountpaid, for the delay in the issuance of the title.

6

At the pretrial conference the parties agreed to submit the case for decision


16/72

on the pleadings after defendant further made certain admissions of factsnot contained in its answer.

7

Finding that the realty corporation failed to cause the issuance of thecorresponding transfer certificate of title because the parcel of landconveyed to Millan was included among other properties of the corporationmortgaged to the GSIS to secure an obligation of P10 million and that theowner's duplicate certificate of title of the subdivision was in the possession

of the Government Service Insurance System (GSIS), the trial court, onFebruary 11, 1975, rendered judgment the dispositive portion of which isquoted in pages 1 and 2 of this Decision. We hold that the trial court did noterr in awarding nominal damages; however, the circumstances of the casewarrant a reduction of the amount of P20,000.00 granted to privaterespondent Millan.

There can be no dispute in this case under the pleadings and the admittedfacts that petitioner corporation was guilty of delay, amounting tononperformance of its obligation, in issuing the transfer certificate of title tovendee Millan who had fully paid up her installments on the lot bought byher. Article 170 of the Civil Code expressly provides that those who in the

performance of their obligations are guilty of fraud, negligence, or delay, andthose who in any manner contravene the tenor thereof, are liable fordamages.

Petitioner contends that the deed of absolute sale executed between theparties stipulates that should the vendor fail to issue the transfer certificateof title within six months from the date of full payment, it shall refund to thevendee the total amount paid for with interest at the rate of 4% per annum,hence, the vendee is bound by the terms of the provision and cannotrecover more than what is agreed upon. Presumably, petitioner in invoking

Article 1226 of the Civil Code which provides that in obligations with a penalclause, the penalty shall substitute the indemnity for damages and the

payment of interests in case of noncompliance, if there is no stipulation tothe contrary.

The foregoing argument of petitioner is totally devoid of merit. We wouldagree with petitioner if the clause in question were to be considered as apenal clause. Nevertheless, for very obvious reasons, said clause does notconvey any penalty, for even without it, pursuant to Article 2209 of the CivilCode, the vendee would be entitled to recover the amount paid by her withlegal rate of interest which is even more than the 4% provided for in theclause.

7-A

It is therefore inconceivable that the aforecited provision in the deed of saleis a penal clause which will preclude an award of damages to the vendee

Millan. In fact the clause is so worded as to work to the advantage ofpetitioner corporation.

Unfortunately, the vendee, now private respondent, submitted her casebelow without presenting evidence on the actual damages suffered by heras a result of the nonperformance of petitioner's obligation under the deedof sale. Nonetheless, the facts show that the right of the vendee to acquiretitle to the lot bought by her was violated by petitioner and this entitles her at

the very least to nominal damages.

The pertinent provisions of our Civil Code follow:

Art. 2221. Nominal damages are adjudicated in order that a right of theplaintiff, which has been violated or invaded by the defendant, may bevindicated or recognized, and not for the purpose of indemnifying theplaintiff for any loss suffered by him.

Art. 2222. The court may award nominal damages in every obligation arisingfrom any source enumerated in article 1157, or in every case where anyproperty right has been invaded.

Under the foregoing provisions nominal damages are not intended forindemnification of loss suffered but for the vindication or recognition of aright violated or invaded. They are recoverable where some injury has beendone the amount of which the evidence fails to show, the assessment ofdamages being left to the discretion of the court according to thecircumstances of the case. 8

It is true as petitioner claims that under American jurisprudence nominaldamages by their very nature are small sums fixed by the court withoutregard to the extent of the harm done to the injured party.

It is generally held that a nominal damage is a substantial claim, if basedupon the violation of a legal right; in such case, the law presumes adamage, although actual or compensatory damages are not proven; in truthnominal damages are damages in name only and not in fact, and areallowed, not as an equivalent of a wrong inflicted, but simply in recogniton ofthe existence of a technical injury. (Fouraker v. Kidd Springs Boating andFishing Club, 65 S. W. 2d 796-797, citing 17 C.J. 720, and a number ofauthorities).

9

In this jurisdiction, in Vda. de Medina, et al. v. Cresencia, et al. 1956, whichwas an action for damages arising out of a vehicular accident, this Court

had occasion to eliminate an award of P10,000.00 imposed by way of


17/72

nominal damages, the Court stating inter alia that the amount cannot, incommon sense, be demeed "nominal".

10

In a subsequent case, viz: Northwest Airlines, Inc. v. Nicolas L. Cuenca,1965, this Court, however, through then Justice Roberto Concepcion wholater became Chief Justice of this Court, sustained an award of P20,000.00as nominal damagesin favor of respnodent Cuenca. The Court there foundspecial reasonsfor considering P20,000.00 as "nominal". Cuenca who was

the holder of a first class ticket from Manila to Tokyo was rudely compelledby an agent of petitioner Airlines to move to the tourist class notwithstandingits knowledge that Cuenca as Commissioner of Public Highways of theRepublic of the Philippines was travelling in his official capacity as adelegate of the country to a conference in Tokyo."

11

Actually, as explained in the Court's decision in Northwest Airlines, there isno conflict between that case and Medina, for in the latter, the P10,000.00award for nominal damages was eliminated principally because theaggrieved party had already been awarded P6,000.00 as compensatorydamages, P30,000.00 as moral damages and P10,000.00 as exemplarydamages, and "nominal damages cannot coexist with compensatory

damages," while in the case of Commissioner Cuenca, no suchcompensatory, moral, or exemplary damages were granted to the latter.

12

At any rate, the circumstances of a particular case will determine whether ornot the amount assessed as nominal damages is within the scope or intentof the law, more particularly, Article 2221 of the Civil Code.

In the situation now before Us, We are of the view that the amount ofP20,000.00 is excessive. The admitted fact that petitioner corporation failedto convey a transfer certificate of title to respondent Millan because thesubdivision property was mortgaged to the GSIS does not in itself show thatthere was bad faith or fraud. Bad faith is not to be presumed. Moreover,there was the expectation of the vendor that arrangements were possible forthe GSIS to make partial releases of the subdivision lots from the overallreal estate mortgage. It was simply unfortunate that petitioner did notsucceed in that regard.

For that reason We cannot agree with respondent Millan Chat theP20,000.00 award may be considered in the nature of exemplary damages.

In case of breach of contract, exemplary damages may be awarded if theguilty party acted in wanton, fraudulent, reckless, oppressive or malevolentmanner. 13 Furthermore, exemplary or corrective damages are to be

imposed by way of example or correction for the public good, only if the

injured party has shown that he is entitled to recover moral, temperate orcompensatory damages."

Here, respondent Millan did not submit below any evidence to prove thatshe suffered actual or compensatory damages.

14

To conclude, We hold that the sum of Ten Thousand Pesos (P10,000.00) byway of nominal damages is fair and just under the following circumstances,

viz: respondent Millan bought the lot from petitioner in May, 1962, and paidin full her installments on December 22, 1971, but it was only on March 2,1973, that a deed of absolute sale was executed in her favor, andnotwithstanding the lapse of almost three years since she made her lastpayment, petitioner still failed to convey the corresponding transfercertificate of title to Millan who accordingly was compelled to file the instantcomplaint in August of 1974.

PREMISES CONSIDERED, We modify the decision of the trial court andreduce the nominal damages to Ten Thousand Pesos (P10,000.00). In allother respects the aforesaid decision stands.

Without pronouncement as to costs.

SO ORDERED.


18/72

G.R. No. L-19670 June 24, 1965

PEDRO D. PAMINTUAN,petitioner, vs. HON. COURT OF APPEALS(Third Division),respondent.

CONCEPCION, J. :

Appeal by certiorarifrom a decision of the Court of Appeals.

On May 12, 1959, Jose Valeriano commenced in the Municipal Court ofManila Civil Case No. 67399 thereof, against Pedro D. Pamintuan, to ejecthim from a property of Valerians. In due course, said court rendered

judgment on August 3, 1959 sentencing Pamintuan to vacate said propertyand to pay a sum of money for its use, plus attorney's fees and costs. OnSeptember 16, 1960, the Sheriff of Manila ejected Pamintuan from theproperty and turned it over to Valeriano. Soon later, however, Pamintuanreoccupied the property, allegedly by force. After appropriate proceedings,Pamintuan was, accordingly, adjudged guilty of contempt of court, andsentenced accordingly. Subsequently, on motion of Valeriano, the MunicipalJudge ordered the issuance of an alias writ of execution directing the Sheriffto eject Pamintuan once more and to collect from him the amount of themoney judgment. Before this writ could be executed, Pamintuan institutedCivil Case No. 44410 of the Court of First Instance of Manila, againstValeriano, as well as the Municipal Judge and the Sheriff.

In Pamintuan's complaint, he prayed that judgment be rendered

1. Immediately enjoining the defendants from proceeding with the said orderof the Municipal Court ordering the herein plaintiff to vacate within four (4)days from October 1, 1960 the premises in question;

2. After trial making the injunction above-mentioned permanent and orderingthe defendant not to eject the herein plaintiff without first filing a suit forejectment based on the new contract created into between the hereinplaintiff and the herein defendant; and

3. Plaintiff further prays for any other relief that may be found just andequitable under the premises.

upon the ground that Pamintuan had paid a sum of money to Valeriano; thatthe balance of the money judgment in his favor was covered by severalpieces of jewelry delivered by Pamintuan to Valeriano; and that Pamintuanhad retaken possession of the aforementioned property in pursuance of acontract with Valeriano, who had agreed, not only to re-et the property, but,

also, to sell it to Pamintuan. Sometime after the filing of said complaint andof the answer thereto, the lower court issued, after due hearing, the writ ofpreliminary injunction prayed for by Pamintuan.

In due course, subsequently, or on April 17, 1961, the court, then presidedover by Hon. Juan P. Enriquez, Judge, rendered judgment dismissingPamintuan's complaint and sentencing him to pay P500 to Valeriano asattorney's fees and costs, and dissolving the writ of preliminary injunction

aforementioned, as well as sentencing Pamintuan and his surety to payValeriano P500, as damages for the issuance of said writ. Copy of thisdecision was served upon Pamintuan on April 22, 1961. Thirty (30) dayslater, or on May 22, 1961, Pamintuan filed his notice of appeal, record onappeal, and appeal bond, but the lower court, then presided by anotherJudge, respondent, Hon. Manuel P. Barcelona, disapproved the record onappeal, upon the ground that the decision sought to be appealed from hadbecome final and executory fifteen (15) days after notice of said decision,the case being one of certiorari, not injunction, as contended by Pamintuanand declared by Judge Enriquez.

Judge Barcelona having refused to reconsider its aforementioned view,

Pamintuan thereupon filed with the Court of Appeals a petition docketedas CA-G.R. No. 30156-R for a writ of certiorariand mandamusagainstJudge Barcelona as well as the Sheriff of Manila and Valeriano, to compelapproval of the aforementioned record on appeal, upon the ground that CivilCase No. 44410 is an injunction case, not one for certiorari, and thatPamintuan had, accordingly, thirty (30) days from notice, within which toappeal from the decision therein rendered. However, on December 29,1961, the Court of Appeals rendered a decision sustaining the view ofJudge Barcelona and, consequently, dismissing Pamintuan's petition forcertiorariand mandamus. A reconsideration of this decision of the Court of

Appeals having been denied, Pamintuan now seeks a review thereof bycertiorari.

The only question we are called upon to resolve is the nature of the causeof action set forth in Pamintuan's complaint in said case No. 44410.Respondent Judge and the Court of Appeals held that it was one forcertiorari because Pamintuan impugned therein the jurisdiction of themunicipal court of issue the aforementioned aliaswrit of execution. it is wellsettled, however, that the nature of an action is determined by theallegations of the pleadings therein. Pamintuan's complaint in case No.44410 contained, however, no allegation, either express or implied,assailing the jurisdiction of the municipal court to issue said alias writ ofexecution. There are in the complaint none of the allegations required inpetitions for certiorari, namely, an act performed without jurisdiction or in

excess of jurisdiction or with the grave abuse of discretion, amounting to


19/72

want of jurisdiction, and absence of a plain, speedy and adequate remedy inthe ordinary course of law (Rule 65, Section 1, Rules of Court).

Pamintuan merely relied in his complaint, upon a contract he allegedly hadwith Valeriano, after the rendition of the decision of the municipal court andthe partial execution thereof, whereby Valeriano had agreed to re-let and tosell the property in question to Pamintuan. What is more he made in hiscomplaint the allegations peculiar to petitions for injunction, such as, for

instance, that the aliaswrit of execution "would not only cause great andirreparable injury, but will, also, work injustice" to him (see Rule 58, Sections3 and 5, Rules of Court). In fact, the complaint stated that it was "forinjunction" and the decision of Judge Enriquez so characterized it. In otherwords, the cause of action set forth in Pamintuan's complaint was actuallyone for injunction, and so was the prayer in said pleading, regardless ofwhether or not the relief he should haveapplied for was certiorari, so that hehad thirty (30) days from notice to appeal from said decision.

The least that can be said, from a strictly technical viewpoint, is that thecomplaint could be considered as one either of injunction or of certiorari.Since, from the filing of said pleading up to the rendition of the decision on

the merits the parties and the court had considered the case as one ofinjunction, and the Rules of Court shall be "liberally construed in order topromote their object and to assist the parties in obtaining just, speedy, andinexpensive determination of every action and proceeding" (Rule 1, Section2, Rules of Court), the spirit of the Rules and the interest of justice and fairplay would be served by allowing Pamintuan to perfect his appeal within theperiod prescribed for injunction cases (Alonzo vs. Villamor, 16 Phil. 315;Case vs. Jugo, 77 Phil. 517; International Tobacco Co. vs. Yatco, 55 Off.Gaz. 811).

WHEREFORE, the decision of the Court of Appeals is hereby reversed andrespondent Judge is, accordingly, directed to approve the record on appeal

filed by petitioner herein in said Civil Case No. 44410 of the Court of FirstInstance of Manila and to certify it to the appellate court, with costs againstherein respondent Jose Valeriano. It is so ordered.


20/72

G.R. NO. 159617 August 8, 2007

ROBERTO C. SICAM and AGENCIA

de R.C. SICAM, INC., Petitioners,

-versus-

LULU V. JORGE and CESAR

JORGE, Respondents.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before us is a Petition for Review on Certiorarifiled by Roberto C. Sicam,Jr. (petitioner Sicam) and Agencia de R.C. Sicam, Inc. (petitioner corporation)seeking to annul the Decision[1] of the Court of Appeals dated March 31, 2003, andits Resolution[2] dated August 8, 2003, in CA G.R. CV No. 56633.

It appears that on different dates from September to October 1987, Lulu V.Jorge (respondent Lulu) pawned several pieces of jewelry with AgenciadeR. C.Sicam located at No. 17 Aguirre Ave., BF Homes Paraaque, Metro Manila, tosecure a loan in the total amount of P59,500.00.

On October 19, 1987, two armed men entered the pawnshop and took awaywhatever cash and jewelry were found inside the pawnshop vault. The incident wasentered in the police blotter of the Southern Police District, Paraaque PoliceStation as follows:

Investigation shows that at above TDPO, while victimswere inside the office, two (2) male unidentified personsentered into the said office with guns drawn.Suspects(sic) (1) went straight inside and poked his guntoward Romeo Sicam and thereby tied him with an electricwire while suspects (sic) (2) poked his gun toward DivinaMata and Isabelita Rodriguez and ordered them to lay (sic)face flat on the floor. Suspects asked forcibly the case andassorted pawned jewelries items mentioned above.

Suspects after taking the money and jewelries fled onboard a Marson Toyota unidentified plate number.[3]

Petitioner Sicam sent respondent Lulu a letter dated October 19, 1987informing her of the loss of her jewelry due to the robbery incident in thepawnshop. On November 2, 1987, respondent Lulu then wrote a letter[4] topetitioner Sicam expressing disbelief stating that when the robbery happened, alljewelry pawned were deposited with Far East Bank near the pawnshop since it hadbeen the practice that before they could withdraw, advance notice must be given to

the pawnshop so it could withdraw the jewelry from the bank. Respondent Luluthen requested petitioner Sicam to prepare the pawned jewelry for withdrawal onNovember 6, 1987 but petitioner Sicam failed to return the jewelry.

On September 28, 1988, respondent Lulu joined by her husband, CesarJorge, filed a complaint against petitioner Sicam with the Regional Trial Court ofMakati seeking indemnification for the loss of pawned jewelry and payment of

actual, moral and exemplary damages as well as attorney's fees. The case wasdocketed as Civil Case No. 88-2035.

Petitioner Sicam filed his Answer contending that he is not the real party-in-interest as the pawnshop was incorporated on April 20, 1987 and known as AgenciadeR.C. Sicam, Inc; that petitioner corporation had exercised due care and diligencein the safekeeping of the articles pledged with it and could not be made liable for anevent that is fortuitous.

Respondents subsequently filed an Amended Complaint to include petitionercorporation.

Thereafter, petitioner Sicam filed a Motion to Dismiss as far as he isconcerned considering that he is not the real party-in-interest. Respondents opposedthe same. The RTC denied the motion in an Order dated November 8, 1989.[5]

After trial on the merits, the RTC rendered its Decision[6] datedJanuary 12, 1993, dismissing respondents complaint as well as petitionerscounterclaim. The RTC held that petitioner Sicam could not be made personallyliable for a claim arising out of a corporate transaction; that in the AmendedComplaint of respondents, they asserted that plaintiff pawned assorted jewelries indefendants' pawnshop; and that as a consequence of the separate juridicalpersonality of a corporation, the corporate debt or credit is not the debt or credit of astockholder.

The RTC further ruled that petitioner corporation could not be held liable forthe loss of the pawned jewelry since it had not been rebutted by respondents that theloss of the pledged pieces of jewelry in the possession of the corporation wasoccasioned by armed robbery; that robbery is a fortuitous event which exempts thevictim from liability for the loss, citing the case of Austria v. Court of Appeals;[7]and that the parties transaction was that of a pledgor and pledgee and under Art.1174 of the Civil Code, the pawnshop as a pledgee is not responsible for thoseevents which could not be foreseen.

Respondents appealed the RTC Decision to the CA. In a Decision datedMarch 31, 2003, the CA reversed the RTC, the dispositive portion of which readsas follows:


21/72

WHEREFORE, premises considered, the instantAppeal is GRANTED, and the Decision dated January 12,1993,of the Regional Trial Court of Makati, Branch 62, ishereby REVERSED and SET ASIDE, ordering the appelleesto pay appellants the actual value of the lost jewelryamounting to P272,000.00, and attorney' fees ofP27,200.00.[8]

In finding petitioner Sicam liable together with petitioner corporation, theCA applied the doctrine of piercing the veil of corporate entity reasoning thatrespondents were misled into thinking that they were dealing with the pawnshopowned by petitioner Sicam as all the pawnshop tickets issued to them bear thewords Agencia deR.C. Sicam; and that there was no indication on the pawnshoptickets that it was the petitioner corporation that owned the pawnshop whichexplained why respondents had to amend their complaint impleading petitionercorporation.

The CA further held that the corresponding diligence required of a pawnshopis that it should take steps to secure and protect the pledged items and should takesteps to insure itself against the loss of articles which are entrusted to its custody asit derives earnings from the pawnshop trade which petitioners failed to do; thatAustria is not applicable to this case since the robbery incident happened in 1961when the criminality had not as yet reached the levels attained in the presentday; that they are at least guilty of contributory negligence and should be heldliable for the loss of jewelries; and that robberies and hold-ups are foreseeable risksin that those engaged in the pawnshop business are expected to foresee.

The CA concluded that both petitioners should be jointly and severally heldliable to respondents for the loss of the pawned jewelry.

Petitioners motion for reconsideration was denied in a Resolution datedAugust 8, 2003.

Hence, the instant petition for review with the following assignment oferrors:

THE COURT OF APPEALS ERRED AND WHENIT DID, IT OPENED ITSELF TO REVERSAL, WHEN ITADOPTED UNCRITICALLY (IN FACT IT REPRODUCEDAS ITS OWN WITHOUT IN THE MEANTIMEACKNOWLEDGING IT) WHAT THE RESPONDENTSARGUED IN THEIR BRIEF, WHICH ARGUMENT WASPALPABLY UNSUSTAINABLE.

THE COURT OF APPEALS ERRED, AND WHEN

IT DID, IT OPENED ITSELF TO REVERSAL BY THISHONORABLE COURT, WHEN IT AGAIN ADOPTEDUNCRITICALLY (BUT WITHOUT ACKNOWLEDGINGIT) THE SUBMISSIONS OF THE RESPONDENTS INTHEIR BRIEF WITHOUT ADDING ANYTHING MORETHERETO DESPITE THE FACT THAT THE SAIDARGUMENT OF THE RESPONDENTS COULD NOTHAVE BEEN SUSTAINED IN VIEW OF UNREBUTTED

EVIDENCE ON RECORD.[9]

Anent the first assigned error, petitioners point out that the CAs finding thatpetitioner Sicam is personally liable for the loss of the pawned jewelries is a virtualand uncritical reproduction of the arguments set out on pp. 5-6 of the Appellantsbrief.[10]

Petitioners argue that the reproduced arguments of respondents in theirAppellants Brief suffer from infirmities, as follows:

(1) Respondents conclusively asserted in paragraph2 of their Amended Complaint that Agencia de R.C. Sicam,Inc. is the present owner of Agencia de R.C. SicamPawnshop, and therefore, the CA cannot rule against saidconclusive assertion of respondents;

(2) The issue resolved against petitioner Sicam wasnot among those raised and litigated in the trial court; and

(3) By reason of the above infirmities, it was errorfor the CA to have pierced the corporate veil since acorporation has a personality distinct and separate from itsindividual stockholders or members.

Anent the second error, petitioners point out that the CA finding on theirnegligence is likewise an unedited reproduction of respondents brief which had thefollowing defects:

(1) There were unrebutted evidence on recordthat petitioners had observed the diligence requiredof them, i.e, they wanted to open a vault with a nearbybank for purposes of safekeeping the pawned articles butwas discouraged by the Central Bank (CB) since CB rulesprovide that they can only store the pawned articles in avault inside the pawnshop premises and no other place;


22/72

(2) Petitioners were adjudged negligent as theydid not take insurance against the loss of the pledgedjelweries, but it is judicial notice that due to high incidenceof crimes, insurance companies refused to coverpawnshops and banks because of high probability of lossesdue to robberies;

(3) In Hernandez v. Chairman, Commission on

Audit (179 SCRA 39, 45-46), the victim of robbery wasexonerated from liability for the sum of money belonging toothers and lost by him to robbers.

Respondents filed their Comment and petitioners filed their Replythereto. The parties subsequently submitted their respective Memoranda.

We find no merit in the petition.

To begin with, although it is true that indeed the CA findings were exactreproductions of the arguments raised in respondents (appellants) brief filed withthe CA, we find the same to be not fatally infirmed. Upon examination of theDecision, we find that it expressed clearly and distinctly the facts and the law onwhich it is based as required by Section 8, Article VIII of the Constitution. Thediscretion to decide a case one way or another is broad enough to justify theadoption of the arguments put forth by one of the parties, as long as these arelegally tenable and supported by law and the facts on records.[11]

Our jurisdiction under Rule 45 of the Rules of Court is limited to the reviewof errors of law committed by the appellate court. Generally, the findings of fact ofthe appellate court are deemed conclusive and we are not duty-bound to analyze andcalibrate all over again the evidence adduced by the parties in the court a quo.[12]This rule, however, is not without exceptions, such as where the factual findings ofthe Court of Appeals and the trial court are conflicting or contradictory[13] as isobtaining in the instant case.

However, after a careful examination of the records, we find no justification toabsolve petitioner Sicam from liability.

The CA correctly pierced the veil of the corporate fiction and adjudgedpetitioner Sicam liable together with petitioner corporation. The rule is that the veilof corporate fiction may be pierced when made as a shield to perpetrate fraud and/orconfuse legitimate issues. [14] The theory of corporate entity was not meant topromote unfair objectives or otherwise to shield them.[15]

Notably, the evidence on record shows that at the time respondent Lulupawned her jewelry, the pawnshop was owned by petitioner Sicam himself. As

correctly observed by the CA, in all the pawnshop receipts issued to respondentLulu in September 1987, all bear the words Agencia de R. C. Sicam,notwithstanding that the pawnshop was allegedly incorporated in April 1987. Thereceipts issued after such alleged incorporation were still in the name of AgenciadeR. C. Sicam, thus inevitably misleading, or at the very least, creating the wrongimpression to respondents and the public as well, that the pawnshop was ownedsolely by petitioner Sicam and not by a corporation.

Even petitioners counsel, Atty. Marcial T. Balgos, in his letter[16] datedOctober 15, 1987 addressed to the Central Bank, expressly referred to petitionerSicam as the proprietor of the pawnshop notwithstanding the alleged incorporationin April 1987.

We also find no merit in petitioners' argument that since respondents hadalleged in their Amended Complaint that petitioner corporation is the present ownerof the pawnshop, the CA is bound to decide the case on that basis.

Section 4 Rule 129 of the Rules of Court provides that an admission, verbal orwritten, made by a party in the course of the proceedings in the same case, does notrequire proof. The admission may be contradicted only by showing that it was madethrough palpable mistake or that no such admission was made.

Thus, the general rule that a judicial admission is conclusive upon the partymaking it and does not require proof, admits of two exceptions, to wit: (1) when itis shown that such admission was made through palpable mistake, and (2) when it isshown that no such admission was in fact made. The latter exception allows one

to contradict an admission by denying that he made such an admission.[17]

The Committee on the Revision of the Rules of Court explained the secondexception in this wise:

x x x if

civ2 cases

Documents