as exemplary damages and P100,000.

00, for and as

[G.R. No. 126389. July 10, 1998]
SOUTHEASTERN COLLEGE, INC., petitioner, vs. COURT
OF APPEALS, JUANITA DE JESUS VDA. DE
DIMAANO, EMERITA DIMAANO, REMEDIOS
DIMAANO, CONSOLACION DIMAANO and
MILAGROS DIMAANO, respondents.
DECISION
PURISIMA, J.:
Petition for review under Rule 45 of the Rules of Court
seeking to set aside the Decision[1] promulgated on July 31,
1996, and Resolution[2] dated September 12, 1996 of the
Court of Appeals[3] in CA-G.R. No. 41422, entitled Juanita de
Jesus vda. de Dimaano, et al. vs. Southeastern College, Inc.,
which reduced the moral damages awarded below
from P1,000,000.00 to P200,000.00.[4] The Resolution under
attack denied petitioners motion for reconsideration.
Private respondents are owners of a house at 326
College Road, Pasay City, while petitioner owns a four-
storey school building along the same College Road. On
October 11, 1989, at about 6:30 in the morning, a powerful
typhoon Saling hit Metro Manila. Buffeted by very strong
winds, the roof of petitioners building was partly ripped off
and blown away, landing on and destroying portions of the
roofing of private respondents house. After the typhoon had
passed, an ocular inspection of the destroyed buildings was
conducted by a team of engineers headed by the city
building official, Engr. Jesus L. Reyna. Pertinent aspects of
the latters Report[5] dated October 18, 1989 stated, as
follows:
attorneys fees; plus costs.
In its Answer, petitioner averred that subject school
building had withstood several devastating typhoons and
other calamities in the past, without its roofing or any portion
thereof giving way; that it has not been remiss in its
responsibility to see to it that said school building, which
houses school children, faculty members, and employees, is
in tip-top condition; and furthermore, typhoon Saling was an
act of God and therefore beyond human control such that
petitioner cannot be answerable for the damages wrought
thereby, absent any negligence on its part.
The trial court, giving credence to the ocular inspection
report to the effect that subject school building had a
defective roofing structure, found that, while typhoon Saling
was accompanied by strong winds, the damage to private
respondents house could have been avoided if the
construction of the roof of [petitioners] building was not
faulty. The dispositive portion of the lower courts
decision[7] reads thus:
WHEREFORE, in view of the foregoing, the Court renders
judgment (sic) in favor of the plaintiff (sic) and against the
defendants, (sic) ordering the latter to pay jointly and
severally the former as follows:
a) P117,116.00, as actual damages, plus litigation expenses;
b) P1,000,000.00 as moral damages;
c) P100,000.00 as attorneys fees;
d) Costs of the instant suit.
The claim for exemplary damages is denied for the reason
that the defendants (sic) did not act in a wanton fraudulent,
reckless, oppressive or malevolent manner.

5. One of the factors that may have led to this calamitous In its appeal to the Court of Appeals, petitioner
event is the formation of the buildings in the area and the assigned as errors,[8] that:
general direction of the wind. Situated in the peripheral lot is
an almost U-shaped formation of 4-storey building. Thus, I
with the strong winds having a westerly direction, the general
formation of the buildings becomes a big funnel-like THE TRIAL COURT ERRED IN HOLDING
structure, the one situated along College Road, receiving the THAT TYPHOON SALING, AS AN ACT OF GOD,
heaviest impact of the strong winds. Hence, there are IS NOT THE SOLE AND ABSOLUTE REASON
portions of the roofing, those located on both ends of the FOR THE RIPPING-OFF OF THE SMALL
building, which remained intact after the storm. PORTION OF THE ROOF OF
SOUTHEASTERNS FOUR (4) STOREY
SCHOOL BUILDING.
6. Another factor and perhaps the most likely reason for the
dislodging of the roofings structural trusses is the improper II
anchorage of the said trusses to the roof beams. The 1/2
diameter steel bars embedded on the concrete roof beams THE TRIAL COURT ERRED IN HOLDING
which serve as truss anchorage are not bolted nor nailed to THAT THE CONSTRUCTION OF THE ROOF OF
the trusses. Still, there are other steel bars which were not DEFENDANTS SCHOOL BUILDING WAS
even bent to the trusses, thus, those trusses are not FAULTY NOTWITHSTANDING THE ADMISSION
anchored at all to the roof beams. THAT THERE WERE TYPHOONS BEFORE BUT
NOT AS GRAVE AS TYPHOON SALING WHICH
IS THE DIRECT AND PROXIMATE CAUSE OF
It then recommended that to avoid any further loss and
THE INCIDENT.
damage to lives, limbs and property of persons living in the
vicinity, the fourth floor of subject school building be declared III
as a structural hazard.
THE TRIAL COURT ERRED IN AWARDING
In their Complaint[6] before the Regional Trial Court of ACTUAL AND MORAL DAMAGES AS WELL AS
Pasay City, Branch 117, for damages based on culpa ATTORNEYS FEES AND LITIGATION
aquiliana, private respondents alleged that the damage to EXPENSES AND COSTS OF SUIT TO
their house rendered the same uninhabitable, forcing them to DIMAANOS WHEN THEY HAVE NOT
stay temporarily in others houses. And so they sought to INCURRED ACTUAL DAMAGES AT ALL AS
recover from petitioner P117,116.00, as actual DIMAANOS HAVE ALREADY SOLD THEIR
damages, P1,000,000.00, as moral damages, P300,000.00,
 PROPERTY, AN INTERVENING EVENT THAT
RENDERS THIS CASE MOOT AND ACADEMIC.
IV
THE TRIAL COURT ERRED IN ORDERING
THE ISSUANCE OF THE WRIT OF EXECUTION
INSPITE OF THE PERFECTION OF
SOUTHEASTERNS APPEAL WHEN THERE IS
NO COMPELLING REASON FOR THE
ISSUANCE THERETO.
As mentioned earlier, respondent Court of Appeals
affirmed with modification the trial courts disposition by
reducing the award of moral damages from P1,000,000.00
to P200,000.00. Hence, petitioners resort to this Court,
raising for resolution the issues of:
1. Whether or not the award of actual damage [sic] to
respondent Dimaanos on the basis of speculation or
conjecture, without proof or receipts of actual
damage, [sic] legally feasible or justified.
2. Whether or not the award of moral damages to respondent
Dimaanos, without the latter having suffered, actual damage
has legal basis.
3. Whether or not respondent Dimaanos who are no longer
the owner of the property, subject matter of the case, during
its pendency, has the right to pursue their complaint against
petitioner when the case was already rendered moot and
academic by the sale of the property to third party.
4. Whether or not the award of attorneys fees when the case
was already moot and academic [sic] legally justified.
5. Whether or not petitioner is liable for damage caused to
others by typhoon Saling being an act of God.
6. Whether or not the issuance of a writ of execution pending
appeal, ex-parte or without hearing, has support in law.
The pivot of inquiry here, determinative of the other
issues, is whether the damage on the roof of the building of
private respondents resulting from the impact of the falling
portions of the school buildings roof ripped off by the strong
winds of typhoon Saling, was, within legal contemplation,
due to fortuitous event? If so, petitioner cannot be held liable
for the damages suffered by the private respondents. This
conclusion finds support in Article 1174 of the Civil Code,
which provides:
Art 1174. Except in cases expressly specified by the law, or
when it is otherwise declared by stipulation, or when the
nature of the obligation requires the assumption of risk, no
person shall be responsible for those events which could not
be foreseen, or which, though foreseen, were inevitable.
The antecedent of fortuitous event or caso fortuito is
found in the Partidas which defines it as an event which
takes place by accident and could not have been
foreseen.[9] Escriche elaborates it as an unexpected event or
act of God which could neither be foreseen nor
resisted.[10] Civilist Arturo M. Tolentino adds that [f]ortuitous
events may be produced by two general causes: (1) by
nature, such as earthquakes, storms, floods, epidemics,
fires, etc. and (2) by the act of man, such as an armed
invasion, attack by bandits, governmental prohibitions,
robbery, etc.[11]
In order that a fortuitous event may exempt a person
from liability, it is necessary that he be free from any
previous negligence or misconduct by reason of which the
loss may have been occasioned.[12] An act of God cannot be
invoked for the protection of a person who has been guilty of
gross negligence in not trying to forestall its possible adverse
consequences. When a persons negligence concurs with an
act of God in producing damage or injury to another, such
person is not exempt from liability by showing that the
immediate or proximate cause of the damage or injury was a
fortuitous event. When the effect is found to be partly the
result of the participation of man whether it be from active
intervention, or neglect, or failure to act the whole occurrence
is hereby humanized, and removed from the rules applicable
to acts of God.[13]
In the case under consideration, the lower court
accorded full credence to the finding of the investigating
team that subject school buildings roofing had no sufficient
anchorage to hold it in position especially when battered by
strong winds. Based on such finding, the trial court imputed
negligence to petitioner and adjudged it liable for damages to
private respondents.
After a thorough study and evaluation of the evidence
on record, this Court believes otherwise, notwithstanding the
general rule that factual findings by the trial court, especially
when affirmed by the appellate court, are binding and
conclusive upon this Court.[14] After a careful scrutiny of the
records and the pleadings submitted by the parties, we find
exception to this rule and hold that the lower courts
misappreciated the evidence proffered.
There is no question that a typhoon or storm is a
fortuitous event, a natural occurrence which may be foreseen
but is unavoidable despite any amount of foresight, diligence
or care.[15] In order to be exempt from liability arising from
any adverse consequence engendered thereby, there should
have been no human participation amounting to a negligent
act.[16] In other words, the person seeking exoneration from
liability must not be guilty of negligence. Negligence, as
commonly understood, is conduct which naturally or
reasonably creates undue risk or harm to others. It may be
the failure to observe that degree of care, precaution, and
vigilance which the circumstances justly demand, [17] or the
omission to do something which a prudent and reasonable
man, guided by considerations which ordinarily regulate the
conduct of human affairs, would do.[18] From these premises,
we proceed to determine whether petitioner was negligent,
such that if it were not, the damage caused to private
respondents house could have been avoided?
At the outset, it bears emphasizing that a person
claiming damages for the negligence of another has the
burden of proving the existence of fault or negligence
causative of his injury or loss. The facts constitutive of
negligence must be affirmatively established by competent
evidence,[19] not merely by presumptions and conclusions
without basis in fact. Private respondents, in establishing the
culpability of petitioner, merely relied on the aforementioned
report submitted by a team which made an ocular inspection
of petitioners school building after the typhoon. As the term
imparts, an ocular inspection is one by means of actual sight
or viewing.[20] What is visual to the eye though, is not always
reflective of the real cause behind. For instance, one who
hears a gunshot and then sees a wounded person, cannot
always definitely conclude that a third person shot the
victim. It could have been self-inflicted or caused accidentally
by a stray bullet. The relationship of cause and effect must
be clearly shown.
In the present case, other than the said ocular
inspection, no investigation was conducted to determine the
real cause of the partial unroofing of petitioners school
building. Private respondents did not even show that the
plans, specifications and design of said school building were
deficient and defective. Neither did they prove any
substantial deviation from the approved plans and wear and tear of the house itself, is an essential question
specifications. Nor did they conclusively establish that the that remains indeterminable.
construction of such building was basically flawed.[21]
The Court deems unnecessary to resolve the other
On the other hand, petitioner elicited from one of the issues posed by petitioner.
witnesses of private respondents, city building official Jesus
Reyna, that the original plans and design of petitioners As regards the sixth issue, however, the writ of
school building were approved prior to its construction. Engr. execution issued on April 1, 1993 by the trial court is hereby
Reyna admitted that it was a legal requirement before the nullified and set aside. Private respondents are ordered to
construction of any building to obtain a permit from the city reimburse any amount or return to petitioner any property
building official (city engineer, prior to the passage of the which they may have received by virtue of the enforcement
Building Act of 1977). In like manner, after construction of the of said writ.
building, a certification must be secured from the same WHEREFORE, the petition is GRANTED and the
official attesting to the readiness for occupancy of the challenged Decision is REVERSED. The complaint of private
edifice. Having obtained both building permit and certificate respondents in Civil Case No. 7314 before the trial court a
of occupancy, these are, at the very least, prima quo is ordered DISMISSED and the writ of execution issued
facie evidence of the regular and proper construction of on April 1, 1993 in said case is SET ASIDE. Accordingly,
subject school building.[22] private respondents are ORDERED to return to petitioner
Furthermore, when part of its roof needed repairs of the any amount or property received by them by virtue of said
damage inflicted by typhoon Saling, the same city official writ. Costs against the private respondents.
gave the go-signal for such repairs without any deviation SO ORDERED.
from the original design and subsequently, authorized the
use of the entire fourth floor of the same building. These only
prove that subject building suffers from no structural defect,
contrary to the report that its U-shaped form was structurally
defective. Having given his unqualified imprimatur, the city
building official is presumed to have properly performed his
duties[23] in connection therewith.
In addition, petitioner presented its vice president for
finance and administration who testified that an annual
maintenance inspection and repair of subject school building
were regularly undertaken. Petitioner was even willing to
present its maintenance supervisor to attest to the extent of
such regular inspection but private respondents agreed to
dispense with his testimony and simply stipulated that it
would be corroborative of the vice presidents narration.
Moreover, the city building official, who has been in the
city government service since 1974, admitted in open court
that no complaint regarding any defect on the same structure
has ever been lodged before his office prior to the institution
of the case at bench. It is a matter of judicial notice that
typhoons are common occurrences in this country. If subject
school buildings roofing was not firmly anchored to its
trusses, obviously, it could not have withstood long years
and several typhoons even stronger than Saling.
In light of the foregoing, we find no clear and convincing
evidence to sustain the judgment of the appellate court. We
thus hold that petitioner has not been shown negligent or at
fault regarding the construction and maintenance of its
school building in question and that typhoon Saling was the
proximate cause of the damage suffered by private
respondents house.
With this disposition on the pivotal issue, private
respondents claim for actual and moral damages as well as
attorneys fees must fail.[24] Petitioner cannot be made to
answer for a purely fortuitous event.[25] More so because no
bad faith or willful act to cause damage was alleged and
proven to warrant moral damages.
Private respondents failed to adduce adequate and
competent proof of the pecuniary loss they actually
incurred.[26] It is not enough that the damage be capable of
proof but must be actually proved with a reasonable degree
of certainty, pointing out specific facts that afford a basis for
measuring whatever compensatory damages are
borne.[27] Private respondents merely submitted an estimated
amount needed for the repair of the roof of their subject
building. What is more, whether the necessary repairs were
caused ONLY by petitioners alleged negligence in the
maintenance of its school building, or included the ordinary
 [G.R. No. 129792. December 21, 1999]
JARCO MARKETING CORPORATION, LEONARDO
KONG, JOSE TIOPE and ELISA
PANELO, petitioners, vs. HONORABLE COURT
OF APPEALS, CONRADO C. AGUILAR and
CRISELDA R. AGUILAR, respondents.
DECISION
DAVIDE, JR., C.J.:
In this petition for review on certiorari under Rule
45 of the Rules of Court, petitioners seek the reversal of
the 17 June 1996 decision[1] of the Court of Appeals in
C.A. G.R. No. CV 37937 and the resolution[2]denying
their motion for reconsideration. The assailed decision
set aside the 15 January 1992 judgment of the Regional
Trial Court (RTC), Makati City, Branch 60 in Civil Case
No. 7119 and ordered petitioners to pay damages and
attorneys fees to private respondents Conrado and
Criselda (CRISELDA) Aguilar.
Petitioner Jarco Marketing Corporation is the
owner of Syvels Department Store, Makati
City. Petitioners Leonardo Kong, Jose Tiope and Elisa
Panelo are the stores branch manager, operations
manager, and supervisor, respectively. Private
respondents are spouses and the parents of Zhieneth
Aguilar (ZHIENETH).
In the afternoon of 9 May 1983, CRISELDA and
ZHIENETH were at the 2nd floor of Syvels Department
Store, Makati City. CRISELDA was signing her credit
card slip at the payment and verification counter when
she felt a sudden gust of wind and heard a loud
thud. She looked behind her. She then beheld her
daughter ZHIENETH on the floor, her young body
pinned by the bulk of the stores gift-wrapping
counter/structure. ZHIENETH was crying and
screaming for help. Although shocked, CRISELDA was
quick to ask the assistance of the people around in
lifting the counter and retrieving ZHIENETH from the
floor.[3]
ZHIENETH was quickly rushed to the Makati
Medical Center where she was operated on. The next
day ZHIENETH lost her speech and thereafter
communicated with CRISELDA by writing on a magic
slate. The injuries she sustained took their toil on her
young body. She died fourteen (14) days after the
accident or on 22 May 1983, on the hospital bed. She
was six years old.[4]
The cause of her death was attributed to the
injuries she sustained. The provisional medical
certificate[5] issued by ZHIENETHs attending doctor
described the extent of her injuries:
Diagnoses:
1. Shock, severe, sec. to intra-abdominal injuries due to
blunt injury
2. Hemorrhage, massive, intraperitoneal sec. to
laceration, (L) lobe liver
3. Rupture, stomach, anterior & posterior walls
4. Complete transection, 4th position, duodenum
5. Hematoma, extensive, retroperitoneal
6. Contusion, lungs, severe
CRITICAL
After the burial of their daughter, private
respondents demanded upon petitioners the
reimbursement of the hospitalization, medical bills and
wake and funeral expenses[6] which they had
incurred.Petitioners refused to pay. Consequently,
private respondents filed a complaint for damages,
docketed as Civil Case No. 7119 wherein they sought
the payment of P157,522.86 for actual
damages, P300,000 for moral damages, P20,000 for
attorneys fees and an unspecified amount for loss of
income and exemplary damages.
In their answer with counterclaim, petitioners
denied any liability for the injuries and consequent
death of ZHIENETH. They claimed that CRISELDA was
negligent in exercising care and diligence over her
daughter by allowing her to freely roam around in a
store filled with glassware and appliances. ZHIENETH
too, was guilty of contributory negligence since she
climbed the counter, triggering its eventual collapse on
her. Petitioners also emphasized that the counter was
made of sturdy wood with a strong support; it never fell
nor collapsed for the past fifteen years since its
construction.
Additionally, petitioner Jarco Marketing
Corporation maintained that it observed the diligence of
a good father of a family in the selection, supervision
and control of its employees. The other petitioners
likewise raised due care and diligence in the
performance of their duties and countered that the
complaint was malicious for which they suffered
besmirched reputation and mental anguish.They sought
the dismissal of the complaint and an award of moral
and exemplary damages and attorneys fees in their
favor.
In its decision[7] the trial court dismissed the
complaint and counterclaim after finding that the
preponderance of the evidence favored petitioners. It
ruled that the proximate cause of the fall of the counter
on ZHIENETH was her act of clinging to it. It believed
petitioners witnesses who testified that ZHIENETH
clung to the counter, afterwhich the structure and the
girl fell with the structure falling on top of her, pinning
her stomach. In contrast, none of private respondents
witnesses testified on how the counter fell. The trial
court also held that CRISELDAs negligence contributed
to ZHIENETHs accident.
In absolving petitioners from any liability, the trial
court reasoned that the counter was situated at the end
or corner of the 2nd floor as a precautionary measure
hence, it could not be considered as an attractive
nuisance.[8] The counter was higher than ZHIENETH. It
has been in existence for fifteen years. Its structure was
safe and well-balanced. ZHIENETH, therefore, had no
business climbing on and clinging to it.
Private respondents appealed the decision,
attributing as errors of the trial court its findings that: (1)
the proximate cause of the fall of the counter was
ZHIENETHs misbehavior; (2) CRISELDA was negligent
in her care of ZHIENETH; (3) petitioners were not
negligent in the maintenance of the counter; and (4)
petitioners were not liable for the death of ZHIENETH.
Further, private respondents asserted that
ZHIENETH should be entitled to the conclusive
presumption that a child below nine (9) years is
incapable of contributory negligence. And even if
ZHIENETH, at six (6) years old, was already capable of
contributory negligence, still it was physically impossible
for her to have propped herself on the counter. She had
a small frame (four feet high and seventy pounds) and
the counter was much higher and heavier than she
was. Also, the testimony of one of the stores former
employees, Gerardo Gonzales, who accompanied
ZHIENETH when she was brought to the emergency
room of the Makati Medical Center belied petitioners
theory that ZHIENETH climbed the counter. Gonzales
claimed that when ZHIENETH was asked by the doctor
what she did, ZHIENETH replied, [N]othing, I did not
come near the counter and the counter just fell on
me.[9] Accordingly, Gonzales testimony on ZHIENETHs
spontaneous declaration should not only be considered
as part of res gestae but also accorded credit.
Moreover, negligence could not be imputed to
CRISELDA for it was reasonable for her to have let go
of ZHIENETH at the precise moment that she was
signing the credit card slip.
Finally, private respondents vigorously maintained
that the proximate cause of ZHIENETHs death, was
petitioners negligence in failing to institute measures to
have the counter permanently nailed.
On the other hand, petitioners argued that private
respondents raised purely factual issues which could no
longer be disturbed. They explained that ZHIENETHs
death while unfortunate and tragic, was an accident for
which neither CRISELDA nor even ZHIENETH could
entirely be held faultless and blameless. Further,
petitioners adverted to the trial courts rejection of
Gonzales testimony as unworthy of credence.
As to private respondents claim that the counter
should have been nailed to the ground, petitioners
justified that it was not necessary. The counter had
been in existence for several years without any prior
accident and was deliberately placed at a corner to
avoid such accidents. Truth to tell, they acted without
fault or negligence for they had exercised due diligence
on the matter. In fact, the criminal case[10] for homicide
through simple negligence filed by private respondents
against the individual petitioners was dismissed; a
verdict of acquittal was rendered in their favor.
The Court of Appeals, however, decided in favor
of private respondents and reversed the appealed
judgment. It found that petitioners were negligent in
maintaining a structurally dangerous counter.The
counter was shaped like an inverted L [11] with a top
wider than the base. It was top heavy and the weight of
the upper portion was neither evenly distributed nor
supported by its narrow base. Thus, the counter was
defective, unstable and dangerous; a downward
pressure on the overhanging portion or a push from the
front could cause the counter to fall. Two former
employees of petitioners had already previously brought
to the attention of the management the danger the
counter could cause. But the latter ignored their
concern. The Court of Appeals faulted the petitioners
for this omission, and concluded that the incident that
befell ZHIENETH could have been avoided had
petitioners repaired the defective counter. It was
inconsequential that the counter had been in use for
some time without a prior incident.
The Court of Appeals declared that ZHIENETH,
who was below seven (7) years old at the time of the
incident, was absolutely incapable of negligence or
other tort. It reasoned that since a child under nine (9)
years could not be held liable even for an intentional
wrong, then the six-year old ZHIENETH could not be
made to account for a mere mischief or reckless act. It
also absolved CRISELDA of any negligence, finding
nothing wrong or out of the ordinary in momentarily
allowing ZHIENETH to walk while she signed the
document at the nearby counter.
The Court of Appeals also rejected the testimonies
of the witnesses of petitioners. It found them biased and
prejudiced. It instead gave credit to the testimony of
disinterested witness Gonzales. The Court of Appeals
then awarded P99,420.86 as actual damages, the
amount representing the hospitalization expenses
incurred by private respondents as evidenced by the
hospital's statement of account.[12]It denied an award for
funeral expenses for lack of proof to substantiate the
same. Instead, a compensatory damage of P50,000
was awarded for the death of ZHIENETH.
We quote the dispositive portion of the assailed
decision,[13] thus:
WHEREFORE, premises considered, the judgment of
the lower court is SET ASIDE and another one is
entered against [petitioners], ordering them to pay
jointly and severally unto [private respondents] the
following:
1. P50,000.00 by way of compensatory damages
for the death of Zhieneth Aguilar, with legal
interest (6% p.a.) from 27 April 1984;
2. P99,420.86 as reimbursement for
hospitalization expenses incurred; with legal
interest (6% p.a.) from 27 April 1984;
3. P100,000.00 as moral and exemplary damages;
4. P20,000.00 in the concept of attorneys fees;
and
5. Costs.
Private respondents sought a reconsideration of
the decision but the same was denied in the Court of
Appeals resolution[14] of 16 July 1997.
Petitioners now seek the reversal of the Court of
Appeals decision and the reinstatement of the judgment
of the trial court. Petitioners primarily argue that the
Court of Appeals erred in disregarding the factual
findings and conclusions of the trial court. They stress
that since the action was based on tort, any finding of
negligence on the part of the private respondents would
necessarily negate their claim for damages, where said
negligence was the proximate cause of the injury
sustained. The injury in the instant case was the death
of ZHIENETH. The proximate cause was ZHIENETHs
act of clinging to the counter. This act in turn caused the
counter to fall on her. This and CRISELDAs contributory
negligence, through her failure to provide the proper
care and attention to her child while inside the store,
nullified private respondents claim for damages. It is
also for these reasons that parents are made
accountable for the damage or injury inflicted on others
by their minor children. Under these circumstances,
petitioners could not be held responsible for the
accident that befell ZHIENETH.
Petitioners also assail the credibility of Gonzales
who was already separated from Syvels at the time he
testified; hence, his testimony might have been
tarnished by ill-feelings against them.
For their part, private respondents principally
reiterated their arguments that neither ZHIENETH nor
CRISELDA was negligent at any time while inside the
store; the findings and conclusions of the Court of
Appeals are substantiated by the evidence on record;
the testimony of Gonzales, who heard ZHIENETH
comment on the incident while she was in the hospitals
emergency room should receive credence; and finally,
ZHIENETHs part of the res gestae declaration that she
did nothing to cause the heavy structure to fall on her
should be considered as the correct version of the
gruesome events.
We deny the petition.
The two issues to be resolved are: (1) whether the
death of ZHIENETH was accidental or attributable to
negligence; and (2) in case of a finding of negligence,
whether the same was attributable to private
respondents for maintaining a defective counter or to
CRISELDA and ZHIENETH for failing to exercise due
and reasonable care while inside the store premises.
An accident pertains to an unforeseen event in
which no fault or negligence attaches to the
defendant.[15] It is a fortuitous circumstance, event or
happening; an event happening without any human
agency, or if happening wholly or partly through human
agency, an event which under the circumstances is
unusual or unexpected by the person to whom it
happens.[16]
On the other hand, negligence is the omission to
do something which a reasonable man, guided by those
considerations which ordinarily regulate the conduct of
human affairs, would do, or the doing of something
which a prudent and reasonable man would not
do.[17] Negligence is the failure to observe, for the
protection of the interest of another person, that degree
of care, precaution and vigilance which the
circumstances justly demand, whereby such other
person suffers injury.[18]
Accident and negligence are intrinsically
contradictory; one cannot exist with the other. Accident
occurs when the person concerned is exercising
ordinary care, which is not caused by fault of any
person and which could not have been prevented by
any means suggested by common prudence.[19]
The test in determining the existence of
negligence is enunciated in the landmark case of Picart
v. Smith,[20] thus: Did the defendant in doing the alleged
negligent act use that reasonable care and caution
which an ordinarily prudent person would have used in
the same situation? If not, then he is guilty of
negligence.[21]
We rule that the tragedy which befell ZHIENETH
was no accident and that ZHIENETHs death could only
be attributed to negligence.
We quote the testimony of Gerardo Gonzales who
was at the scene of the incident and accompanied
CRISELDA and ZHIENETH to the hospital:
Q While at the Makati Medical Center, did you hear
or notice anything while the child was being
treated?
A At the emergency room we were all surrounding
the child. And when the doctor asked the child
what did you do, the child said nothing, I did
not come near the counter and the counter just
fell on me.
Q (COURT TO ATTY. BELTRAN)
You want the words in Tagalog to be translated?
ATTY. BELTRAN
Yes, your Honor.
COURT
Granted. Intercalate wala po, hindi po ako lumapit
doon. Basta bumagsak.[22]
This testimony of Gonzales pertaining to
ZHIENETHs statement formed (and should be admitted
as) part of the res gestae under Section 42, Rule 130 of
the Rules of Court, thus:
Part of res gestae. Statements made by a person while
a startling occurrence is taking place or immediately
prior or subsequent thereto with respect to the
circumstances thereof, may be given in evidence as
part of the res gestae. So, also, statements
accompanying an equivocal act material to the issue,
and giving it a legal significance, may be received as
part of the res gestae.
It is axiomatic that matters relating to declarations
of pain or suffering and statements made to a physician
are generally considered declarations and
admissions.[23] All that is required for their admissibility
as part of the res gestae is that they be made or uttered
under the influence of a startling event before the
declarant had the time to think and concoct a falsehood
as witnessed by the person who testified in court. Under
the circumstances thus described, it is unthinkable for
ZHIENETH, a child of such tender age and in extreme
pain, to have lied to a doctor whom she trusted with her
life. We therefore accord credence to Gonzales
testimony on the matter, i.e., ZHIENETH performed no
act that facilitated her tragic death. Sadly, petitioners
did, through their negligence or omission to secure or
make stable the counters base.
Gonzales earlier testimony on petitioners
insistence to keep and maintain the structurally
unstable gift-wrapping counter proved their negligence,
thus:
Q When you assumed the position as gift wrapper at
the second floor, will you please describe the gift
wrapping counter, were you able to examine?
A Because every morning before I start working I used
to clean that counter and since it is not nailed and it was
only standing on the floor, it was shaky.
xxx
Q Will you please describe the counter at 5:00
oclock [sic] in the afternoon on [sic] May 9
1983?
A At that hour on May 9, 1983, that counter was
standing beside the verification counter. And
since the top of it was heavy and considering
that it was not nailed, it can collapse at
anytime, since the top is heavy.
xxx
Q And what did you do?
A I informed Mr. Maat about that counter which
is [sic] shaky and since Mr. Maat is fond of
putting display decorations on tables, he even
told me that I would put some decorations. But
since I told him that it not [sic] nailed and it is
shaky he told me better inform also the
 company about it. And since the company did
not do anything about the counter, so I also did
not do anything about the
counter.[24] [Emphasis supplied]
Ramon Guevarra, another former employee,
corroborated the testimony of Gonzales, thus:
Q Will you please described [sic] to the honorable
Court the counter where you were assigned in
January 1983?
xxx
A That counter assigned to me was when my
supervisor ordered me to carry that counter to
another place. I told him that the counter
needs nailing and it has to be nailed because it
might cause injury or accident to another since
it was shaky.
Q When that gift wrapping counter was transferred
at the second floor on February 12, 1983, will
you please describe that to the honorable
Court?
A I told her that the counter wrapper [sic] is really in
good [sic] condition; it was shaky. I told her
that we had to nail it.
Q When you said she, to whom are you referring to
[sic]?
A I am referring to Ms. Panelo, sir.
Q And what was the answer of Ms. Panelo when
you told her that the counter was shaky?
A She told me Why do you have to teach me. You
are only my subordinate and you are to teach
me? And she even got angry at me when I told
her that.
xxx
Q From February 12, 1983 up to May 9, 1983, what
if any, did Ms. Panelo or any employee of the
management do to that (sic)
xxx
Witness:
None, sir. They never nailed the counter. They only
nailed the counter after the accident
happened.[25] [Emphasis supplied]
Without doubt, petitioner Panelo and another store
supervisor were personally informed of the danger
posed by the unstable counter. Yet, neither initiated any
concrete action to remedy the situation nor ensure the
safety of the stores employees and patrons as a
reasonable and ordinary prudent man would have
done. Thus, as confronted by the situation petitioners
miserably failed to discharge the due diligence required
of a good father of a family.
On the issue of the credibility of Gonzales and
Guevarra, petitioners failed to establish that the formers
testimonies were biased and tainted with
partiality. Therefore, the allegation that Gonzales and
Guevarras testimonies were blemished by ill feelings
against petitioners since they (Gonzales and Guevarra)
were already separated from the company at the time
their testimonies were offered in court was but mere
speculation and deserved scant consideration.
It is settled that when the issue concerns the
credibility of witnesses, the appellate courts will not as a
general rule disturb the findings of the trial court, which
is in a better position to determine the same. The trial
court has the distinct advantage of actually hearing the
testimony of and observing the deportment of the
witnesses.[26] However, the rule admits of exceptions
such as when its evaluation was reached arbitrarily or it
overlooked or failed to appreciate some facts or
circumstances of weight and substance which could
affect the result of the case.[27] In the instant case,
petitioners failed to bring their claim within the
exception.
Anent the negligence imputed to ZHIENETH, we
apply the conclusive presumption that favors children
below nine (9) years old in that they are incapable of
contributory negligence. In his book,[28]former Judge
Cezar S. Sangco stated:
In our jurisdiction, a person under nine years of age is
conclusively presumed to have acted without
discernment, and is, on that account, exempt from
criminal liability. The same presumption and a like
exemption from criminal liability obtains in a case of a
person over nine and under fifteen years of age, unless
it is shown that he has acted with discernment. Since
negligence may be a felony and a quasi-delict and
required discernment as a condition of liability, either
criminal or civil, a child under nine years of age is, by
analogy, conclusively presumed to be incapable of
negligence; and that the presumption of lack of
discernment or incapacity for negligence in the case of
a child over nine but under fifteen years of age is a
rebuttable one, under our law. The rule, therefore, is
that a child under nine years of age must be
conclusively presumed incapable of contributory
negligence as a matter of law. [Emphasis supplied]
Even if we attribute contributory negligence to
ZHIENETH and assume that she climbed over the
counter, no injury should have occurred if we accept
petitioners theory that the counter was stable and
sturdy. For if that was the truth, a frail six-year old could
not have caused the counter to collapse. The physical
analysis of the counter by both the trial court and Court
of Appeals and a scrutiny of the evidence [29]on record
reveal otherwise, i.e., it was not durable after
all. Shaped like an inverted L, the counter was heavy,
huge, and its top laden with formica. It protruded
towards the customer waiting area and its base was not
secured.[30]
CRISELDA too, should be absolved from any
contributory negligence. Initially, ZHIENETH held on to
CRISELDAs waist, later to the latters
hand.[31] CRISELDA momentarily released the childs
hand from her clutch when she signed her credit card
slip. At this precise moment, it was reasonable and
usual for CRISELDA to let go of her child. Further, at
the time ZHIENETH was pinned down by the counter,
she was just a foot away from her mother; and the gift-
wrapping counter was just four meters away from
CRISELDA.[32] The time and distance were both
significant. ZHIENETH was near her mother and did not
loiter as petitioners would want to impress upon us. She
even admitted to the doctor who treated her at the
hospital that she did not do anything; the counter just
fell on her.
WHEREFORE, in view of all the foregoing, the
instant petition is DENIED and the challenged decision
of the Court of Appeals of 17 June 1996 in C.A. G.R.
No. CV 37937 is hereby AFFIRMED.
Costs against petitioners.
 SO ORDERED.
Puno, Kapunan, Pardo, and Ynares-Santiago,
JJ., concur.
G.R. No. L-20761 July 27, 1966
LA MALLORCA, petitioner,
vs.
HONORABLE COURT OF APPEALS, MARIANO
BELTRAN, ET AL., respondents.
G. E. Yabut, R. Monterey and M.C. Lagman for petitioner.
Ahmed Garcia for respondents.
BARRERA, J.:
La Mallorca seeks the review of the decision of the Court of
Appeals in CA-G.R. No. 23267-R, holding it liable for quasi-
delict and ordering it to pay to respondents Mariano Beltran,
et al., P6,000.00 for the death of his minor daughter Raquel
Beltran, plus P400.00 as actual damages.
The facts of the case as found by the Court of Appeals,
briefly are:
On December 20, 1953, at about noontime,
plaintiffs, husband and wife, together with their
minor daughters, namely, Milagros, 13 years old,
Raquel, about 4 years old, and Fe, over 2 years
old, boarded the Pambusco Bus No. 352, bearing
plate TPU No. 757 (1953 Pampanga), owned and
operated by the defendant, at San Fernando,
Pampanga, bound for Anao, Mexico, Pampanga. At
the time, they were carrying with them four pieces
of baggages containing their personal belonging.
The conductor of the bus, who happened to be a
half-brother of plaintiff Mariano Beltran, issued three
tickets (Exhs. A, B, & C) covering the full fares of
the plaintiff and their eldest child, Milagros. No fare
was charged on Raquel and Fe, since both were
below the height at which fare is charged in
accordance with the appellant's rules and
regulations.
After about an hour's trip, the bus reached Anao
whereat it stopped to allow the passengers bound
therefor, among whom were the plaintiffs and their
children to get off. With respect to the group of the
plaintiffs, Mariano Beltran, then carrying some of
their baggages, was the first to get down the bus,
followed by his wife and his children. Mariano led
his companions to a shaded spot on the left
pedestrians side of the road about four or five
meters away from the vehicle. Afterwards, he
returned to the bus in controversy to get his
other bayong, which he had left behind, but in so
doing, his daughter Raquel followed him, unnoticed
by her father. While said Mariano Beltran was on
the running board of the bus waiting for the
conductor to hand him his bayong which he left
under one of its seats near the door, the bus, whose
motor was not shut off while unloading, suddenly
started moving forward, evidently to resume its trip,
notwithstanding the fact that the conductor has not
given the driver the customary signal to start, since
said conductor was still attending to the baggage
left behind by Mariano Beltran. Incidentally, when
the bus was again placed into a complete stop, it
had travelled about ten meters from the point where
the plaintiffs had gotten off.
Sensing that the bus was again in motion, Mariano
Beltran immediately jumped from the running board
without getting his bayong from the conductor. He
landed on the side of the road almost in front of the
shaded place where he left his wife and children. At
that precise time, he saw people beginning to
gather around the body of a child lying prostrate on
the ground, her skull crushed, and without life. The
child was none other than his daughter Raquel, who
was run over by the bus in which she rode earlier
together with her parents.
For the death of their said child, the plaintiffs
commenced the present suit against the defendant
seeking to recover from the latter an aggregate
amount of P16,000 to cover moral damages and
actual damages sustained as a result thereof and
attorney's fees. After trial on the merits, the court
below rendered the judgment in question.
On the basis of these facts, the trial court found defendant
liable for breach of contract of carriage and sentenced it to
pay P3,000.00 for the death of the child and P400.00 as
compensatory damages representing burial expenses and
costs.
On appeal to the Court of Appeals, La Mallorca claimed that
there could not be a breach of contract in the case, for the
reason that when the child met her death, she was no longer
a passenger of the bus involved in the incident and,
therefore, the contract of carriage had already terminated.
Although the Court of Appeals sustained this theory, it
nevertheless found the defendant-appellant guilty of quasi-
delict and held the latter liable for damages, for the
negligence of its driver, in accordance with Article 2180 of
the Civil Code. And, the Court of Appeals did not only find
the petitioner liable, but increased the damages awarded the
plaintiffs-appellees to P6,000.00, instead of P3,000.00
granted by the trial court.
In its brief before us, La Mallorca contends that the Court of
Appeals erred (1) in holding it liable for quasi-delict,
considering that respondents complaint was one for breach
of contract, and (2) in raising the award of damages from
P3,000.00 to P6,000.00 although respondents did not appeal
from the decision of the lower court.
Under the facts as found by the Court of Appeals, we have to
sustain the judgement holding petitioner liable for damages
for the death of the child, Raquel Beltran. It may be pointed
out that although it is true that respondent Mariano Beltran,
his wife, and their children (including the deceased child) had
alighted from the bus at a place designated for disembarking
or unloading of passengers, it was also established that the
father had to return to the vehicle (which was still at a stop)
to get one of his bags or bayong that was left under one of
the seats of the bus. There can be no controversy that as far
as the father is concerned, when he returned to the bus for
his bayongwhich was not unloaded, the relation of passenger
and carrier between him and the petitioner remained
subsisting. For, the relation of carrier and passenger does
not necessarily cease where the latter, after alighting from
the car, aids the carrier's servant or employee in removing
his baggage from the car.1 The issue to be determined here
is whether as to the child, who was already led by the father
to a place about 5 meters away from the bus, the liability of
the carrier for her safety under the contract of carriage also
persisted.
It has been recognized as a rule that the relation of carrier
and passenger does not cease at the moment the passenger
alights from the carrier's vehicle at a place selected by the
carrier at the point of destination, but continues until the
passenger has had a reasonable time or a reasonable
opportunity to leave the carrier's premises. And, what is a
reasonable time or a reasonable delay within this rule is to
be determined from all the circumstances. Thus, a person
who, after alighting from a train, walks along the station
platform is considered still a passenger.2 So also, where a
passenger has alighted at his destination and is proceeding
by the usual way to leave the company's premises, but
before actually doing so is halted by the report that his
brother, a fellow passenger, has been shot, and he in good
faith and without intent of engaging in the difficulty, returns to
relieve his brother, he is deemed reasonably and necessarily
delayed and thus continues to be a passenger entitled as
such to the protection of the railroad and company and its
agents.3
In the present case, the father returned to the bus to get one
of his baggages which was not unloaded when they alighted
from the bus. Raquel, the child that she was, must have
followed the father. However, although the father was still on
the running board of the bus awaiting for the conductor to
hand him the bag or bayong, the bus started to run, so that
even he (the father) had to jump down from the moving
vehicle. It was at this instance that the child, who must be
near the bus, was run over and killed. In the circumstances,
it cannot be claimed that the carrier's agent had exercised
the "utmost diligence" of a "very cautions person" required by
Article 1755 of the Civil Code to be observed by a common
carrier in the discharge of its obligation to transport safely its
passengers. In the first place, the driver, although stopping
the bus, nevertheless did not put off the engine. Secondly,
he started to run the bus even before the bus conductor gave
him the signal to go and while the latter was still unloading
part of the baggages of the passengers Mariano Beltran and
family. The presence of said passengers near the bus was
not unreasonable and they are, therefore, to be considered
still as passengers of the carrier, entitled to the protection
under their contract of carriage.
board of the bus and near it, started to run off the vehicle.
The presentation of proof of the negligence of its employee
gave rise to the presumption that the defendant employer did
not exercise the diligence of a good father of the family in the
selection and supervision of its employees. And this
presumption, as the Court of Appeals found, petitioner had
failed to overcome. Consequently, petitioner must be
adjudged peculiarily liable for the death of the child Raquel
Beltran.
The increase of the award of damages from P3,000.00 to
P6,000.00 by the Court of Appeals, however, cannot be
sustained. Generally, the appellate court can only pass upon
and consider questions or issues raised and argued in
appellant's brief. Plaintiffs did not appeal from that portion of
the judgment of the trial court awarding them on P3,000.00
damages for the death of their daughter. Neither does it
appear that, as appellees in the Court of Appeals, plaintiffs
have pointed out in their brief the inadequacy of the award,
or that the inclusion of the figure P3,000.00 was merely a
clerical error, in order that the matter may be treated as an
exception to the general rule.5Herein petitioner's contention,
therefore, that the Court of Appeals committed error in
raising the amount of the award for damages is, evidently,
meritorious.1wph1.t
Wherefore, the decision of the Court of Appeals is hereby
modified by sentencing, the petitioner to pay to the
respondents Mariano Beltran, et al., the sum of P3,000.00 for
the death of the child, Raquel Beltran, and the amount of
P400.00 as actual damages. No costs in this instance. So
ordered.

But even assuming arguendo that the contract of carriage

has already terminated, herein petitioner can be held liable
for the negligence of its driver, as ruled by the Court of
Appeals, pursuant to Article 2180 of the Civil Code.
Paragraph 7 of the complaint, which reads

That aside from the aforesaid breach of contract,

the death of Raquel Beltran, plaintiffs' daughter,
was caused by the negligence and want of exercise
of the utmost diligence of a very cautious person on
the part of the defendants and their agent,
necessary to transport plaintiffs and their daughter
safely as far as human care and foresight can
provide in the operation of their vehicle.

is clearly an allegation for quasi-delict. The inclusion of this

averment for quasi-delict, while incompatible with the other
claim under the contract of carriage, is permissible under
Section 2 of Rule 8 of the New Rules of Court, which allows
a plaintiff to allege causes of action in the alternative, be they
compatible with each other or not, to the end that the real
matter in controversy may be resolved and determined. 4

The plaintiffs sufficiently pleaded the culpa or negligence

upon which the claim was predicated when it was alleged in
the complaint that "the death of Raquel Beltran, plaintiffs'
daughter, was caused by the negligence and want of
exercise of the utmost diligence of a very cautious person on
the part of the defendants and their agent." This allegation
was also proved when it was established during the trial that
the driver, even before receiving the proper signal from the
conductor, and while there were still persons on the running

Cauton v. Court of Appeals, G.R. No. 158382 Case Digest
Obligations and Contracts: Usurious Transactions Article
1175
Facts:
On January 5, 1993, respondent Rebecca Salud, joined by
her husband Rolando Salud, instituted a suit for foreclosure
of real estate mortgage with damages against petitioner
Mansueto Cuaton and his mother, Conchita Cuaton, with the
Regional Trial Court of General Santos City, Branch 35. The
trial court rendered a decision declaring the mortgage
constituted on October 31, 1991 as void, because it was
executed by Mansueto Cuaton in favor of Rebecca Salud
without expressly stating that he was merely acting as a
representative of Conchita Cuaton, in whose name the
mortgaged lot was titled. The court ordered Cauton to pay
Salud the loan secured by the mortgage in the amount of
One Million Pesos plus a total P610, 000.00 representing
interests of 10% and 8% per month for the period February
1992 to August 1992.
On August 31, 2001, the Court of Appeals rendered the
assailed decision affirming the judgment of the trial court.
Cauton filed a motion for partial reconsideration of the trial
courts decision with respect to the award of interest in the
amount of P610,000.00, arguing that the same was
iniquitous and exorbitant. This was denied by the Court of
Appeals on May 7, 2003.
Issue:
Whether or not the 8% and 10% monthly interest rates
imposed on the one-million-peso loan obligation of Cauton to
respondent Salud are valid.
Held:
Yes. In Ruiz v. Court of Appeals, the Supreme Court
declared that the Usury Law was suspended by Central Bank
Circular No. 905, s. 1982, effective on January 1, 1983, and
that parties to a loan agreement have been given wide
latitude to agree on any interest rate. However, nothing in the
said Circular grants lenders carte blanche authority to raise
interest rates to levels which will either enslave their
borrowers or lead to a hemorrhaging of their assets. The
stipulated interest rates are illegal if they are
unconscionable. In the present case, the 10% and 8%
interest rates per month on the one-million-peso loan of
Cauton were even higher than those cases they previously
invalidated. Accordingly, the reduction of said rates to 12%
per annum was fair and reasonable. Stipulations authorizing
iniquitous or unconscionable interests are contrary to morals
if not against the law.
G.R. No. L-30771 May 28, 1984
LIAM LAW, plaintiff-appellee,
vs.
OLYMPIC SAWMILL CO. and ELINO LEE CHI, defendants-
appellants.
Felizardo S.M. de Guzman for plaintiff-appellee.
Mariano M. de Joya for defendants-appellants.
MELENCIO-HERRERA, J.:
This is an appeal by defendants from a Decision rendered by
the then Court of First Instance of Bulacan. The appeal was
originally taken to the then Court of Appeals, which endorsed
it to this instance stating that the issue involved was one of
law.
It appears that on or about September 7, 1957, plaintiff
loaned P10,000.00, without interest, to defendant partnership
and defendant Elino Lee Chi, as the managing partner. The
loan became ultimately due on January 31, 1960, but was
not paid on that date, with the debtors asking for an
extension of three months, or up to April 30, 1960.
On March 17, 1960, the parties executed another loan
document. Payment of the P10,000.00 was extended to April
30, 1960, but the obligation was increased by P6,000.00 as
follows:
That the sum of SIX THOUSAND PESOS
(P6,000.00), Philippine currency shall form
part of the principal obligation to answer
for attorney's fees, legal interest, and other
cost incident thereto to be paid unto the
creditor and his successors in interest
upon the termination of this agreement.
Defendants again failed to pay their obligation by April 30,
1960 and, on September 23, 1960, plaintiff instituted this
collection case. Defendants admitted the P10,000.00
principal obligation, but claimed that the additional P6,000.00
constituted usurious interest.
Upon application of plaintiff, the Trial Court issued, on the
same date of September 23, 1960, a writ of Attachment on
real and personal properties of defendants located at
Karanglan, Nueva Ecija. After the Writ of Attachment was
implemented, proceedings before the Trial Court versed
principally in regards to the attachment.
On January 18, 1961, an Order was issued by the Trial Court
stating that "after considering the manifestation of both
counsel in Chambers, the Court hereby allows both parties to
simultaneously submit a Motion for Summary
Judgment. 1 The plaintiff filed his Motion for Summary Judgment on
January 31, 1961, while defendants filed theirs on February 2, 196l. 2
On June 26, 1961, the Trial Court rendered decision ordering
defendants to pay plaintiff "the amount of P10,000.00 plus
the further sum of P6,000.00 by way of liquidated damages .
. . with legal rate of interest on both amounts from April 30,
1960." It is from this judgment that defendants have
appealed.
We have decided to affirm.

Under Article 1354 of the Civil Code, in regards to the

agreement of the parties relative to the P6,000.00 obligation,
"it is presumed that it exists and is lawful, unless the debtor
proves the contrary". No evidentiary hearing having been
held, it has to be concluded that defendants had not proven
that the P6,000.00 obligation was illegal. Confirming the Trial
Court's finding, we view the P6,000.00 obligation as
liquidated damages suffered by plaintiff, as of March 17,
1960, representing loss of interest income, attorney's fees
and incidentals.

The main thrust of defendants' appeal is the allegation in

their Answer that the P6,000.00 constituted usurious interest.
They insist the claim of usury should have been deemed
admitted by plaintiff as it was "not denied specifically and
under oath". 3

Section 9 of the Usury Law (Act 2655) provided:

SEC. 9. The person or corporation

sued shall file its answer in writing under
oath to any complaint brought or filed
against said person or corporation before a
competent court to recover the money or
other personal or real property, seeds or
agricultural products, charged or received
in violation of the provisions of this Act.
The lack of taking an oath to an answer to
a complaint will mean the admission of the
facts contained in the latter.

The foregoing provision envisages a complaint filed against

an entity which has committed usury, for the recovery of the
usurious interest paid. In that case, if the entity sued shall not
file its answer under oath denying the allegation of usury, the
defendant shall be deemed to have admitted the usury. The
provision does not apply to a case, as in the present, where
it is the defendant, not the plaintiff, who is alleging usury.

Moreover, for sometime now, usury has been legally non-

existent. Interest can now be charged as lender and
borrower may agree upon. The Rules of Court in regards to
4

allegations of usury, procedural in nature, should be

considered repealed with retroactive effect.

Statutes regulating the procedure of the

courts will be construed as applicable to
actions pending and undetermined at the
time of their passage. Procedural laws are
retrospective in that sense and to that
extent. 5

... Section 24(d), Republic Act No. 876,

known as the Arbitration Law, which took
effect on 19 December 1953, and may be
retroactively applied to the case at bar
because it is procedural in nature. ... 6

WHEREFORE, the appealed judgment is hereby affirmed,

without pronouncement as to costs.

SO ORDERED.

Teehankee (Chairman), Plana, Relova, Gutierrez, Jr. and De

la Fuente, JJ., concur.