Alvarez vs. Court of Appeals

An employer's subsidiary liability under Articles 102 and 103 of the Revised Penal Code automatically arises upon the employee's conviction and proof of the latter's inability to pay, and it may be enforced by a subsidiary writ of execution in the same criminal proceeding without a separate civil action; the law of the case does not preclude applying a later Supreme Court doctrine to the execution of a final judgment.

Maximiliano Alvarez was the employer of Renato Ramos, who was charged with Double Homicide with Multiple Serious Physical Injuries Through Reckless Imprudence in the Court of First Instance of Quezon Province. The case implicated Articles 102 and 103 of the Revised Penal Code, which impose subsidiary civil liability on employers engaged in industry for felonies committed by employees in the discharge of their duties. Pajarito vs. Seneris, decided on 14 December 1978, later clarified that the employer's subsidiary liability is conclusive from the criminal judgment and may be enforced within the execution proceedings.

Maximiliano Alvarez was engaged in the business of buying coconuts and copra for resale. Renato Ramos, his employee, was charged in the Court of First Instance of Quezon Province with Double Homicide with Multiple Serious Physical Injuries Through Reckless Imprudence. The charge arose from a collision between a sakbayan and a weapon's [sic] carrier. After trial, the court found Ramos guilty of negligence and sentenced him to pay a fine of P200.00, with subsidiary imprisonment in case of insolvency. The trial court also held Ramos civilly liable for the deaths and physical injuries resulting from the collision, ordering him to indemnify the heirs of Rodolfo Briones P12,000.00 as actual damages, the heirs of Juan Briones P12,000.00 as actual damages, Socorro Briones P15,000.00 for hospitalization and burial expenses, Exaltacion de Gala P3,000.00 for hospitalization and incidental expenses, Basilica de Gala P3,000.00 for hospitalization and incidental expenses, and Joselito Leonor and Cenon Leonor P15,000.00 for actual damages and permanent facial deformity, plus P2,000.00 as attorney's fees.

The trial court further found that Alvarez was engaged in the business of buying coconuts and copra for resale and therefore was engaged in "any kind of industry." On that basis, it ordered Alvarez to be subsidiarily liable and to pay the adjudged amounts jointly and severally with Ramos. The bail bond filed by Ramos for provisional liberty was ordered cancelled.

Ramos appealed to the Court of Appeals. On 13 December 1977, the Court of Appeals affirmed the trial court's decision but deleted the portion making Alvarez, as employer, subsidiarily liable for payment of the adjudged indemnities. It reasoned that Alvarez was not a party to the criminal action and that subsidiary liability under Article 103 of the Revised Penal Code was not litigated in the criminal prosecution; a separate action should be filed against the supposed employer to enforce that liability. That decision was not appealed.

On 14 December 1978, the Supreme Court decided Pajarito vs. Seneris, holding that the judgment of conviction sentencing an employee to pay indemnity under Articles 102 and 103 of the Revised Penal Code is conclusive upon the employer as to the civil liability and its amount, and that enforcement of the employer's subsidiary liability may be considered part of the execution proceeding. After the Court of Appeals judgment in CA-G.R. No. 19077-CR became final, the case was remanded to the trial court. On 2 July 1979, the private prosecutor filed a Motion for Issuance of Subsidiary Writ of Execution after the writ of execution against Ramos was returned unsatisfied on 27 February 1979. Alvarez opposed the motion, but on 14 November 1979 the respondent Judge ordered issuance of the subsidiary writ of execution; reconsideration was denied on 26 November 1979. Alvarez then filed a petition for certiorari in the Court of Appeals, questioning the acts of the respondent Judge and the Sheriff who had levied on his properties under the subsidiary writ.

On 16 May 1980, the Court of Appeals granted Alvarez's petition and declared the orders of 14 November 1979 and 26 November 1979, as well as the subsidiary writ of execution issued on 15 November 1979, null and void. It held that because its judgment in the criminal case was promulgated on 13 December 1977, before Pajarito was decided on 14 December 1978, the final judgment in the criminal case—which expressly declared that a separate action should be instituted to enforce Alvarez's subsidiary civil liability—had become the law of the case and prevailed. On 24 July 1980, respondents filed a motion for reconsideration. On 23 October 1980, the Court of Appeals granted the motion, set aside its 16 May 1980 decision, and dismissed the petition for lack of merit on the strength of Pajarito. Alvarez's motion for reconsideration was denied on 20 January 1982, prompting his petition for review on certiorari before the Supreme Court.

• Finality and Jurisdiction: Petitioner argued that the 16 May 1980 decision of the Court of Appeals had already become final and executory when respondents filed their Motion for Reconsideration on 24 July 1980, so the Court of Appeals no longer had jurisdiction to reverse itself.
• Law of the Case: Petitioner maintained that the 16 May 1980 decision was already the law of the case as far as his subsidiary liability was concerned, notwithstanding Pajarito vs. Seneris.
• Bad Faith and Belated Reconsideration: Petitioner cited the bad faith of respondents' counsel in deliberately instructing his clerks not to receive the 16 May 1980 decision on the day of service on 22 May 1980 while he was in the United States, with the consequence that the decision became final thirty days from the day it should have been received; respondents could not belatedly ask for reconsideration on 24 July 1980.
• Non-existence of Pajarito at the Time of the Criminal Judgment: Petitioner pointed to the non-existence of the Pajarito doctrine on 13 December 1977, when the Court of Appeals affirmed the judgment of conviction against Renato Ramos while excluding the trial court's order finding petitioner-employer subsidiarily liable in case Ramos was insolvent.
• Invalid Subsidiary Writ: Petitioner questioned the acts of the respondent Judge and the Sheriff who had levied on his properties pursuant to the subsidiary writ of execution.

• Finality and Jurisdiction: Whether the Court of Appeals had jurisdiction to set aside its 16 May 1980 decision on respondents' motion for reconsideration filed after the decision had allegedly become final and executory.
• Law of the Case: Whether the 16 May 1980 decision had become the law of the case on petitioner's subsidiary liability, barring application of Pajarito vs. Seneris.
• Subsidiary Liability and Execution: Whether the employer's subsidiary liability under Articles 102 and 103 of the Revised Penal Code may be enforced by a subsidiary writ of execution in the same criminal proceeding without a separate civil action.
• Retroactive Application of Pajarito: Whether Pajarito vs. Seneris may be applied to the execution of a final judgment rendered before Pajarito was promulgated.
• Due Process of the Employer: Whether enforcement of the employer's subsidiary liability in the same proceeding deprives the employer of due process and his day in court.

• Finality and Jurisdiction: No. The Court of Appeals could set aside its earlier decision; the censurable act of respondents' counsel in avoiding service did not justify a strict and technical application of procedural rules that would only delay relief to the victims.
• Law of the Case: No. The principle of law of the case is not applicable to a Court of Appeals decision at odds with a Supreme Court decision, and it cannot be used to accomplish injustice or manifest delay in the execution of justice.
• Subsidiary Liability and Execution: Yes. The employer's subsidiary liability automatically arises upon the employee's conviction and proof of inability to pay, and it may be enforced in the same proceeding by a subsidiary writ of execution.
• Retroactive Application of Pajarito: Yes. Pajarito may be applied to the execution of the final judgment because it is a reiteration and amplification of earlier rulings and the case remains pending for purposes of execution.
• Due Process of the Employer: No. The employer is in substance and in effect a party to the criminal case because of the subsidiary liability imposed by law, and he cannot claim deprivation of his day in court if he failed to participate in the defense of his employee.

• Finality and Jurisdiction: The Court acknowledged that respondents' counsel could have been more efficient and scrupulous in receiving the 16 May 1980 decision, but held that his censurable act could not be made the basis for a strict and rigorously technical interpretation of procedural rules on grounds that did not touch the merits of the criminal case. Such an interpretation would only needlessly prolong the case and unjustly delay relief to the victims of the employer's criminally negligent driver. Thus, the finality argument did not bar the Court of Appeals from reconsidering its earlier decision.
• Law of the Case: The Court cited People vs. Pinuila for the definition of law of the case: the opinion delivered on a former appeal; whatever is once irrevocably established as the controlling legal rule of decision between the same parties in the same case continues to be the law of the case, whether correct on general principles or not, so long as the facts on which the decision was predicated continue to be the facts of the case. However, the principle is not applicable to a Court of Appeals decision at odds with a Supreme Court decision, and where the Supreme Court still has the power to decide the applicable doctrine. It is merely a rule of convenience and public policy to stabilize judicial decisions of tribunals of coordinate jurisdiction, prevent re-litigation of questions in the same action, and obviate undue prolongation of litigation. Those purposes would be negated if Pajarito were not applied simply because of technical reasons not touching the merits.
• Subsidiary Liability and Execution: The Court held that the subsidiary liability of an employer automatically arises upon his employee's conviction and subsequent proof of inability to pay. The application of Pajarito is merely the enforcement of a procedural remedy designed to ease the burden of litigation for recovery of indemnity by the victims of a judicially-declared criminally negligent act. A separate civil action may be warranted where additional facts have to be established or more evidence must be adduced, or where the criminal case has been fully terminated and a separate complaint would be just as efficacious or even more expedient than a timely remand to the trial court where the criminal action was decided for further hearings on the civil aspects of the case. None of those circumstances existed. Considering the delays already suffered in the trial, appellate, and review stages, it would be unjust to require a separate civil action at that time.
• Retroactive Application of Pajarito: The Court noted that the Court of Appeals decision in CA-G.R. No. 19077-CR was promulgated on 13 December 1977, while Pajarito was promulgated on 14 December 1978. That fact alone did not prevent application of Pajarito to the execution of the case. Pajarito was merely a reiteration and amplification of previous rulings in Miranda vs. Malate Garage & Taxicab Inc. and Martinez vs. Barredo, adopted much earlier than the trial court's decision. Moreover, for all purposes of the execution of the Court of Appeals decision in CA-G.R. No. 19077-CR, the case was still pending, and there was no legal impediment to applying the Pajarito ruling to the execution, even retroactively.
• Due Process of the Employer: The Court adopted the reasoning that the employer cannot be said to have been deprived of his day in court because the situation was not one wherein the employer is sued for a primary liability under Article 1903 of the Civil Code, but one in which enforcement is sought of a subsidiary civil liability incident to and dependent upon his driver's criminal negligence, which is a proper issue to be tried and decided only in a criminal action. The employer becomes ipso facto subsidiarily liable upon his driver's conviction and upon proof of the latter's insolvency, in the same way that acquittal wipes out not only the employee's primary civil liability but also the employer's subsidiary liability for such criminal negligence. The employer is in substance and in effect a party to the criminal case considering the subsidiary liability imposed upon him by law; it is his concern, as well as his employee's, to see to it that his interest is protected in the criminal case by taking virtual participation in the defense of his employee. If because of his indifference or inaction the employee is convicted and damages are awarded, he cannot later complain that he was not given his day in court.

• Employer's Subsidiary Liability Under Articles 102 and 103, Revised Penal Code — An employer engaged in any kind of industry is subsidiarily liable for the civil liability of his employee for felonies committed in the discharge of the latter's duties. The liability automatically arises upon the employee's conviction and subsequent proof of the employee's inability to pay. The judgment of conviction is conclusive upon the employer as to the existence and amount of the civil liability. Enforcement may be had in the same criminal proceeding through a subsidiary writ of execution; a separate civil action is not required where no additional facts or evidence are needed and a separate action would not be more efficacious or expedient than a timely remand for further hearings on the civil aspects of the case.
• Law of the Case — Defined in People vs. Pinuila as the opinion delivered on a former appeal; whatever is once irrevocably established as the controlling legal rule of decision between the same parties in the same case continues to be the law of the case, whether correct on general principles or not, so long as the facts on which the decision was predicated continue to be the facts of the case. The principle is a rule of convenience and public policy to stabilize judicial decisions of tribunals of coordinate jurisdiction, prevent re-litigation, and obviate undue prolongation of litigation. It is not applicable to a Court of Appeals decision at odds with a Supreme Court decision, and it cannot be used to accomplish injustice or manifest delay in the execution of justice.
• Employer as Virtual Party in the Criminal Case — Although not exactly a party to the criminal case against his employee, an employer is in substance and in effect a party because of the subsidiary liability imposed upon him by law. It is his concern to participate in the defense of his employee; failure to do so bars him from later claiming deprivation of his day in court in the enforcement of his subsidiary liability.
• Execution as Part of the Proceeding — The enforcement of the employer's subsidiary civil liability may be litigated within the same proceeding because the execution of the judgment is a logical and integral part of the case itself. A case in which an execution has been issued is regarded as still pending, so that all proceedings on the execution are proceedings in the suit.
• Pajarito Doctrine — A judgment of conviction sentencing a defendant employee to pay an indemnity under Articles 102 and 103 of the Revised Penal Code is conclusive upon the employer not only with regard to the latter's civil liability but also with regard to its amount. In the action to enforce the employer's subsidiary liability, the court has no other function than to render decision based upon the indemnity awarded in the criminal case and has no power to amend or modify it even if in its opinion an error has been committed.

• "It is already a settled rule that the subsidiary liability of an employer automatically arises upon his employee's conviction, and subsequent proof of inability to pay. In this light, the application of Pajarito is merely the enforcement of a procedural remedy designed to ease the burden of litigation for recovery of indemnity by the victims of a judicially-declared criminally negligent act." — This passage states the ratio decidendi for allowing the subsidiary writ of execution and explains why Pajarito is procedural in nature.
• "Moreover, the principle of 'law of the case' as discussed in People vs. Pinuila is not applicable to a Court of Appeals decision at odds with this Court's decision, and where the Supreme Court still has the power to decide on the applicable doctrine to the issue at hand. The rule cannot be utilized to accomplish injustice or manifest delay in the execution of justice." — This passage limits the law of the case and is central to the Court's rejection of petitioner's finality argument.
• "A separate civil action may be warranted where additional facts have to be established or more evidence must be adduced or where the criminal case has been fully terminated and a separate complaint would be just as efficacious or even more expedient than a timely remand to the trial court where the criminal action was decided for further hearings on the civil aspects of the case.... These do not exist in this case." — This passage identifies the exceptional circumstances that would justify a separate civil action and explains why none were present.
• "The employer cannot be said to have been deprived of his day in court, because the situation before us is not one wherein the employer is sued for a primary liability under articles 1903 of the Civil Code, but one in which enforcement is sought of a subsidiary civil liability incident to and dependent upon his driver's criminal negligence which is a proper issue to be tried and decided only in a criminal action." — This passage, quoted in the decision, explains why enforcing subsidiary liability in the same proceeding does not violate due process.

• Pajarito vs. Seneris, G.R. No. L-44627, December 14, 1978, 87 SCRA 275 — Controlling precedent applied by the Court; held that the employer's subsidiary liability may be enforced in the same proceeding/execution and that the judgment of conviction is conclusive upon the employer as to liability and amount.
• People vs. Pinuila, 103 Phil. 992 (1958) — Cited for the definition and limitations of the law of the case; the Court held it does not apply to a Court of Appeals decision at odds with a Supreme Court decision.
• Martinez vs. Barredo, 81 Phil. 1 — Cited for the rule that the judgment of conviction binds the person subsidiarily liable and that the employer cannot claim deprivation of his day in court; the employer is in substance and in effect a party to the criminal case.
• Miranda vs. Malate Garage & Taxicab Inc., 99 Phil. 670 — Cited for the rule that the employer is in substance and in effect a party to the criminal case and must participate in the defense of his employee; the conviction is binding on the employer.
• Padilla vs. CA, 129 SCRA 559, 570 (1984) — Cited for the circumstances in which a separate civil action may be warranted; the Court found none of those circumstances present.
• Philippine Railways Company vs. Jalandoni, CA, 40 O.G. 19 — Cited in the earlier Court of Appeals decision for the proposition that subsidiary liability is not litigated in the criminal prosecution; the Supreme Court ultimately applied Pajarito instead.

• Article 103, Revised Penal Code — Employers engaged in any kind of industry are subsidiarily liable for the civil liability of their employees for felonies committed in the discharge of their duties. The trial court found Alvarez engaged in buying coconuts and copra for resale, hence in industry; the Supreme Court affirmed that his subsidiary liability could be enforced in the execution of the criminal judgment.
• Articles 102 and 103, Revised Penal Code — Pajarito held that a judgment of conviction sentencing an employee to pay indemnity under these articles is conclusive upon the employer as to the civil liability and its amount, and that enforcement may be had in the same proceeding.
• Article 1903, Civil Code — Cited in the due process discussion to distinguish primary liability of an employer under the Civil Code from subsidiary civil liability incident to the employee's criminal negligence.

Yap (Chairman), Melencio-Herrera, Paras, and Sarmiento, JJ., concur.