Ozoa vs. Vda. de Madula

An employer’s subsidiary civil liability under Article 103 of the Revised Penal Code may be determined in the same criminal action, after notice and hearing, and the employer may appeal the order enforcing that liability by filing a notice of appeal within 15 days from notice of the order, provided the requisites for subsidiary liability are adequately established.

Virgilio Ozoa was the employer of Policarpio Balatayo, who drove Ozoa’s Weapons Carrier truck; Ozoa was a businessman engaged in hauling corn. The dispute concerns the subsidiary civil liability of an employer under Article 103 of the Revised Penal Code for the civil liability of an employee convicted of a felony, in relation to Article 102. The case also concerns the procedural route for reviewing an order that enforces that subsidiary liability.

Policarpio Balatayo drove a Weapons Carrier truck bearing Plate No. T-528-73 owned by Virgilio Ozoa. On the evening of February 9, 1976, in the municipality of Libona, Bukidnon, Balatayo allegedly drove the truck fast and operated it in a negligent, careless, and imprudent manner in disregard of traffic rules and regulations, ran over Arcadio Madula Lagas, and inflicted serious physical injuries on Nenito Ayag y Regidor; the information alleged that the injuries to Lagas resulted in his instantaneous death. Balatayo was charged in the Court of First Instance of Bukidnon with homicide with serious physical injuries thru reckless imprudence. He initially pleaded not guilty, withdrew that plea, and entered a plea of guilty.

By judgment dated May 7, 1978, Balatayo was convicted on the strength of his plea of guilty. The court sentenced him to undergo imprisonment ranging from six months of arresto mayor, as minimum, to three years, six months and twenty-one days of prision correccional, as maximum. It also sentenced him to indemnify the heirs of the deceased Arcadio Madula Lagas in the amount of P12,000.00 and Nenito Ayag y Regidor in the amount of P3,000.00, without subsidiary imprisonment in case of insolvency, to suffer the accessory penalties provided by law, and to pay the costs.

The judgment of conviction became final. At the instance of Caridad Madula, the widow of the deceased, a writ of execution issued for the enforcement of Balatayo’s civil liability, but the writ was returned unsatisfied because Balatayo was insolvent. The widow then moved for the issuance of a writ of execution against Balatayo’s employer, Ozoa. Ozoa opposed the motion, stating that the widow had executed an Affidavit of Desistance acknowledging full satisfaction of the civil liability, and that a separate civil case should and must be ventilated so that the court could acquire jurisdiction over his person, establish the employer-employee relationship, and afford him an opportunity to prove his defense.

The trial court held a hearing on the motion and received evidence from both the widow and Ozoa. It found that Ozoa was Balatayo’s employer and was a businessman engaged in the hauling of corn, facts Ozoa admitted in his affidavit marked Exhibit “F.” It also found that Ozoa promised to pay the widow P6,000 and thereby persuaded her to sign the affidavit of desistance marked Exhibit “1,” but that Ozoa never paid that amount; the only amount he gave was P1,500.00, which was used to defray burial expenses. Upon these facts, the trial court directed execution against Ozoa.

Ozoa filed a notice of appeal and a motion to recall the writ of execution. Madula opposed the appeal and moved for the issuance of an alias writ of execution. By Order dated May 12, 1982, the trial court denied Ozoa’s appeal and his motion to recall the writ. It declared that, because Ozoa filed only a notice of appeal and did not submit an appeal bond and a record on appeal, his appeal had not been perfected within the reglementary period of 30 days, and that the correct remedy was not appeal but the special civil action of certiorari. Ozoa moved for reconsideration and for quashal of the execution issued against him; the motion was denied. Ozoa then filed the present special civil action of certiorari and prohibition.

• Appeal from Subsidiary Liability: Petitioner argued that an employer may appeal from an order finding him subsidiarily civilly liable in the same criminal proceeding and in the same manner as in appeals in criminal cases.
• Perfection of Appeal: Petitioner argued that it was error for the trial court to deny his appeal for failure to submit a record on appeal and an appeal bond because, in appeals in criminal cases, only a notice of appeal need be filed to perfect the appeal; he filed the requisite notice of appeal within 15 days from notice of the order declaring him subsidiarily liable, which was the period prescribed for appeals in criminal cases.
• Civil Aspect and Finality: Petitioner argued that an employer should be allowed to appeal as regards the civil aspect of the criminal case because a new and different matter is involved, and the judgment declaring him liable cannot be deemed to have become final merely because the criminal action has itself become final.
• Alias Writ and Jurisdiction: Petitioner argued that it was beyond the power of the trial court to issue an alias writ of execution after the perfection of the appeal, because the perfection of the appeal caused the court to lose jurisdiction over the case.

• Period of Appeal: Respondent’s theory was that the 15-day period for appeal should be reckoned from the time the accused pleaded guilty and commenced to serve sentence on May 17, 1978, and not from the issuance of the Order for the execution of the judgment against Ozoa on May 12, 1982.

• Appeal from Subsidiary Liability Order: Whether an employer may appeal from an order finding him subsidiarily civilly liable in the same criminal proceeding and in the same manner as in appeals in criminal cases.
• Perfection of Appeal: Whether the trial court erred in denying Ozoa’s appeal for failure to file a record on appeal and an appeal bond when he filed a notice of appeal within 15 days from notice of the order declaring him subsidiarily liable.
• Period of Appeal: Whether the 15-day period for appeal should be reckoned from the accused’s plea of guilty and commencement of sentence, rather than from the order enforcing the employer’s subsidiary liability.
• Requisites for Subsidiary Liability: Whether Ozoa’s subsidiary civil liability was duly established by evidence and could be enforced without a separate civil action.

• Appeal from Subsidiary Liability Order: Yes. The proceeding is part or a continuation of the criminal action, so the rules on appeal in criminal cases apply; an employer may appeal the order enforcing subsidiary liability.
• Perfection of Appeal: Yes. A notice of appeal filed within 15 days from notice of the order is sufficient; no record on appeal or appeal bond is required in criminal appeals. The trial court erred in denying due course.
• Period of Appeal: No. The 15-day period is counted from notice of the order embodying the determination of the employer’s subsidiary liability, not from the accused’s plea and commencement of sentence.
• Requisites for Subsidiary Liability: Yes. The evidence at the hearing established the requisites under Article 103 of the Revised Penal Code, so execution against Ozoa was proper.

• Appeal from Subsidiary Liability Order: The SC began with the settled rules that a person criminally liable is also civilly liable; that upon institution of the criminal action, the civil action for recovery of the civil liability arising from the crime is impliedly instituted unless waived or a separate action is reserved; and that the employer is subsidiarily answerable for the adjudicated civil liability ex delito of his employee if the latter is insolvent, with the judgment in the criminal action conclusive on the employer as to the actuality and amount of that liability. But the SC added that before the employer’s subsidiary liability is exacted, there must be adequate evidence establishing the employer-employee relationship, the employer’s engagement in some kind of industry, the commission of the crime by the employee in the discharge of his duties, and the unsatisfied execution against the employee. The determination of these matters need not be done in a separate civil action; it may be done in the same criminal action at a hearing with notice to the employer. The determination is not conclusive in the sense of being non-reviewable; it may be appealed by writ of error for questions of fact or mixed questions of fact and law, by petition for review on certiorari limited to questions of law, or by special civil action of certiorari for lack or excess of jurisdiction or grave abuse of discretion. Because no explicit rule governed the precise manner and time of appeal from an adjudgment of an employer’s subsidiary liability, and because the basic proposition itself was laid down by judicial construction, a party should not be strictly held to account for a mistake as to the proper mode of appeal. The SC held that it was not reasonable to apply the rules on appeal in civil actions; the proceeding was part or a continuation of the criminal action, so the more logical step was to apply the rules in criminal cases, which provide that an appeal is taken by filing a notice of appeal within 15 days from notice or promulgation of the judgment. The trial court’s view that the remedy was certiorari rather than appeal was incorrect; the appropriate remedy is appeal by writ of error or certiorari depending on the nature of the questions, with certiorari available where lack or excess of jurisdiction or grave abuse of discretion is claimed. Even if an appeal were mistakenly directed to the CA despite raising only questions of law, the mistake would not be fatal; the appeal would be referred to the SC.

• Perfection of Appeal: The SC held that the trial court erred in denying Ozoa’s appeal for failure to submit an appeal bond and a record on appeal. In appeals in criminal cases, only a notice of appeal need be filed to perfect the appeal, and Ozoa filed the requisite notice within 15 days from notice of the order declaring him subsidiarily liable. Under ordinary circumstances, this error would justify reinstatement of Ozoa’s appeal and its referral to the CA in due course. The SC nevertheless held that doing so would only prolong the litigation to no valid purpose and prejudice the parties entitled to execution of judgment. The SC examined the record and was convinced that Ozoa’s subsidiary civil responsibility had been duly established by the evidence, which was presented at a hearing where Ozoa was given the opportunity to submit proofs in his behalf. There was therefore no need for further proceedings.

• Period of Appeal: The SC rejected the private respondent’s theory that the 15-day period for appeal should be reckoned from May 17, 1978, when the accused pleaded guilty and commenced to serve sentence, rather than from the May 12, 1982 Order for execution against Ozoa. The SC explained that there is no occasion to speak of enforcing the employer’s subsidiary civil liability until and unless it appears that the employee’s primary liability cannot in the first instance be satisfied by reason of insolvency. This fact cannot, in the very nature of things, be known until some time after the verdict of conviction shall have become final. Even if it appears prima facie that execution against the employee cannot be satisfied, execution against the employer will not issue as a matter of course. There must first be a determination that the convict was in truth in the employ of the employer, that the latter is engaged in some kind of industry, and that the employee committed the crime to which civil liability attaches while in the performance of his duties as such. It is from the order embodying that determination that an appeal should be taken, and it is from notice of that order that the 15-day period of appeal must be counted.

• Requisites for Subsidiary Liability: The SC applied Article 103 of the Revised Penal Code, under which the employer is subsidiarily answerable for the adjudicated civil liability ex delito of his employee in the event of the latter’s insolvency, and the judgment in the criminal action pronouncing the employee civilly liable is conclusive on the employer not only as to the actuality of that liability but also as to its amount. Before the employer’s subsidiary liability is exacted, however, there must be adequate evidence establishing that (1) he is indeed the employer of the convict; (2) he is engaged in some kind of industry; (3) the crime was committed by the employee in the discharge of his duties; and (4) execution against the employee is unsatisfied. The determination of these issues need not be done in a separate civil action, but a determination there must be, on the basis of evidence that the offended party and the employer may fully and freely present; this may be done in the same criminal action at a hearing set for that precise purpose, with due notice to the employer. In this case, the evidence was presented at a hearing at which Ozoa was given the opportunity to submit proofs in his behalf. The facts proven adequately demonstrated the existence of the requisites for holding Ozoa subsidiarily liable as an employer under Article 103 of the Revised Penal Code.

• Subsidiary civil liability of employer under Article 103, Revised Penal Code — The employer is subsidiarily answerable for the adjudicated civil liability ex delito of his employee in the event of the latter’s insolvency, and the judgment in the criminal action pronouncing the employee civilly liable is conclusive on the employer not only as to the actuality of that liability but also as to its amount. The SC applied this rule to hold Ozoa subsidiarily liable for Balatayo’s civil liability after execution against Balatayo was returned unsatisfied due to insolvency.
• Requisites before enforcing employer’s subsidiary liability — Before the employer’s subsidiary liability is exacted, there must be adequate evidence establishing that (1) he is indeed the employer of the convict; (2) he is engaged in some kind of industry; (3) the crime was committed by the employee in the discharge of his duties; and (4) execution against the employee is unsatisfied. The SC found these requisites established by the evidence presented at the hearing.
• Determination of subsidiary liability in the same criminal action — The determination of the employer’s subsidiary liability need not be done in a separate civil action. It may be done in the same criminal action at a hearing set for that precise purpose, with due notice to the employer, on the basis of evidence that the offended party and the employer may fully and freely present. The SC upheld the trial court’s procedure of holding a hearing and receiving evidence from both the widow and Ozoa.
• Review of the determination of subsidiary liability — The determination of the employer’s subsidiary civil liability is not conclusive in the sense of being non-reviewable. It may be appealed to a higher court by writ of error seeking review of questions of fact or mixed questions of fact and law, or through a petition for review on certiorari limited to questions of law, or by special civil action of certiorari on the ground that the determination was made without or in excess of jurisdiction or with grave abuse of discretion. The SC held that the employer’s appeal from the order enforcing subsidiary liability is taken by notice of appeal within 15 days from notice of the order, applying the rules on appeal in criminal cases because the proceeding is part or a continuation of the criminal action.
• Conclusiveness of criminal judgment on employer — The judgment in the criminal action pronouncing the employee civilly liable is conclusive on the employer as to the actuality and amount of the civil liability, but the employer must be given an opportunity to contest the existence of the requisites for subsidiary liability before execution issues against him. The SC applied this by requiring adequate evidence at a hearing with notice to Ozoa.

• "The employer is subsidiarily answerable for the adjudicated civil liability ex delito of his employee in the event of the latter's insolvency; and the judgment in the criminal action pronouncing the employee to be also civilly liable is conclusive on the employer not only as to the actuality of that liability but also as to its amount." — The SC restates the basis and conclusiveness of the employer’s subsidiary liability under Article 103 of the Revised Penal Code.
• "before the employer's subsidiary liability is exacted, there must be adequate evidence establishing that (1) he is indeed the employer of the convict; (2) that he is engaged in some kind of industry; (3) the crime was committed by the employee in the discharge of his duties; and (4) execution against the employee is unsatisfied." — The SC states the four requisites that must be shown before an employer’s subsidiary liability may be exacted.
• "The more logical step then is to apply the corresponding rules in criminal cases, which provide that an appeal is taken simply by filing a notice of appeal within fifteen (15) days from notice or promulgation of the judgment." — The SC explains why the employer’s appeal from the order enforcing subsidiary liability is governed by the rules on appeal in criminal cases, not civil cases.
• "There is no occasion to speak of enforcing the employer's subsidiary civil liability until and unless it appears that the employee's primary liability cannot in the first instance be satisfied by reason of insolvency." — The SC rejects the theory that the 15-day appeal period should be counted from the accused’s plea and commencement of sentence rather than from the order enforcing the employer’s subsidiary liability.

• Miranda vs. Malate Garage, etc., 99 Phil. 670 — Cited by the trial court for the rule that the employee’s conviction is binding and conclusive upon the employer not only with regard to the civil liability but also as to its amount.
• Pajarito vs. Seneris, 87 SCRA 275 — Cited by the trial court and by the SC for the employer being in substance and in effect a party to the criminal action where the employee’s civil liability is adjudged, and for the hearing and requisites before subsidiary liability is enforced.

• Article 103, Revised Penal Code — Establishes the employer’s subsidiary civil liability for the adjudicated civil liability ex delito of an employee who is insolvent; applied to hold Ozoa subsidiarily liable for Balatayo’s civil liability.
• Article 102, Revised Penal Code — Cited by the trial court, in relation to Article 103, in declaring the employer subsidiarily responsible for the employee’s civil liability.
• Section 1, Rule 111, Rules of Court of 1964 — Provides that upon institution of the criminal action, the civil action for recovery of the civil liability arising from the crime is also impliedly instituted unless waived or a separate action is reserved; cited by the SC in stating the general rule.
• Rule 41, Rules of Court — Appeal by writ of error seeking review of questions of fact or mixed questions of fact and law; cited as one mode of reviewing the determination of subsidiary liability.
• Rule 45, Rules of Court — Petition for review on certiorari limited to questions of law; cited as another mode of reviewing the determination of subsidiary liability.
• Rule 65, Rules of Court — Special civil action of certiorari for lack or excess of jurisdiction or grave abuse of discretion; cited as the exceptional mode of review.
• Sections 3 and 6, Rule 122 — Appeal in criminal cases is taken by filing a notice of appeal within 15 days from notice or promulgation of judgment; applied to the employer’s appeal from the order enforcing subsidiary liability.
• Section 3, Rule 50 — A mistaken appeal to the CA despite raising only questions of law is not fatal; the appeal should be referred to the SC with a specific and clear statement of the grounds. Applied as a procedural guide.