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VOL. 205, FEBRUARY 4, 1992 729

Phil. School of Business Administration vs. Court of
Appeals

*
G.R. No. 84698. February 4,1992.

PHILIPPINE SCHOOL OF BUSINESS

ADMINISTRATION, JUAN D. LIM, BENJAMIN P.
PAULINO, ANTONIO M. MAGTALAS, COL. PEDRO
SACRO, AND LT. M. SORIANO, petitioners, vs. COURT
OF APPEALS, HON. REGINA ORDOÑEZ-BENITEZ, in
her capacity as Presiding Judge of Branch 47, Regional
Trial Court, Manila, SEGUNDA R. BAUTISTA, and
ARSENIA D. BAUTISTA, respondents.

Civil Law; Quasi-Delicts; Article 2180 of the Civil Code

provides that the damage should have been caused by pupils or
students of the educational institution.—Article 2180, in
conjunction with Article 2176 of the Civil Code, establishes the
rule of in loco parentis. This Court discussed this doctrine in the
afore-cited cases of Exconde, Mendoza, Palisoc and, more recently,
in Amadora vs. Court of Appeals. In all such cases, it had been
stressed that the law (Article 2180) plainly provides that the
damage should have been caused or inflicted by pupils or students
of the educational institution sought to be held liable for the acts
of its pupils or students while in its custody. However, this
material situation does not exist in the present case for, as earlier
indicated, the assailants of Carlitos were not students of the
PSBA, for whose acts the school could be made liable.
Same; Contracts; An academic institution enters into a
contract when it accepts students for enrollment; The contract
between school and student is one "imbued with public interest".—
Institutions of learning must also meet the implicit or "built-in"
obligation of providing their students with an atmosphere that
promotes or assists in attaining its primary undertaking of
imparting knowledge. Certainly, no student can absorb the
intricacies of physics or higher mathematics or explore the realm
of the arts and other sciences when bullets are flying or grenades
exploding in the air or where there looms around the school
premises a constant threat to life and limb. Necessarily, the

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school must ensure that adequate steps are taken to maintain

peace and order within the campus premises and to prevent the
breakdown thereof.
Same; Human Relations; Article 21; Any person who wilfully
causes loss or injury to another in a manner that is contrary to
morals,

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* SECOND DIVISION.

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Phil. School of Business Administration vs. Court of Appeals

good customs or public policy shall compensate the latter for the
damage.—Air France penalized the racist policy of the airline
which emboldened the petitioner's employee to forcibly oust the
private respondent to cater to the comfort of a white man who
allegedly "had a better right to the seat." In Austro-American,
supra, the public embarrassment caused to the passenger was the
justification for the Circuit Court of Appeals, (Second Circuit), to
award damages to the latter. From the foregoing, it can be
concluded that should the act which breaches a contract be done
in bad faith and be violative of Article 21, then there is a cause to
view the act as constituting a quasi-delict. In the circumstances
obtaining in the case at bar, however, there is, as yet, no finding
that the contract between the school and Bautista had been
breached thru the former's negligence in providing proper security
measures. This would be for the trial court to determine. And,
even if there be a finding of negligence, the same could give rise
generally to a breach of contractual obligation only. Using the test
of Cangco, supra, the negligence of the school would not be
relevant absent a contract. In fact, that negligence becomes
material only because of the contractual relation between PSBA
and Bautista. In other words, a contractual relation is a condition
sine qua non to the school's liability. The negligence of the school
cannot exist independently on the contract, unless the negligence
occurs under the circumstances set out in Article 21 of the Civil
Code.

PETITION to review the decision of the Court of Appeals.

Campos, Jr., J.

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The facts are stated in the opinion of the Court.

     Balgos and Perez for petitioners.
          Collantes, Ramirez & Associates for private
respondents.

PADILLA, J.:

A stabbing incident on 30 August 1985 which caused the

death of Carlitos Bautista while on the second-floor
premises of the Philippine School of Business
Administration (PSBA) prompted the parents of the
deceased to file suit in the Regional Trial Court of Manila
(Branch 47) presided over by Judge (now Court of Appeals
justice) Regina Ordoñez-Benitez, for damages against the
said PSBA and its corporate officers. At the time of his
death, Carlitos was enrolled in the third year commerce
course at the PSBA. It was established that his assailants
were not members of the school's academic community but
were ele-
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Phil. School of Business Administration vs. Court of
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ments from outside the school.

Specifically, the suit impleaded the PSBA and the
following school authorities: Juan D. Lim (President),
Benjamin P. Paulino (Vice-President), Antonio M. Magtalas
(Treasurer/Cashier), Col. Pedro Sacro (Chief of Security)
and a Lt. M. Soriano (Assistant Chief of Security).
Substantially, the plaintiffs (now private respondents)
sought to adjudge them liable for the victim's untimely
demise due to their alleged negligence, recklessness and
lack of security precautions, means and methods before,
during and after the attack on the victim. During the
proceedings a quo, Lt. M. Soriano terminated his
relationship with the other petitioners by resigning from
his position in the school.
Defendants a quo (now petitioners) sought to have the
suit dismissed, alleging that since they are presumably
sued under Article 2180 of the Civil Code, the complaint
states no cause of action against them, as jurisprudence on
the subject is to the effect that academic institutions, such
as the PSBA, are beyond the ambit of the rule in the afore-
stated article.

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The respondent trial court, however, overruled

petitioners' contention and thru an order dated 8 December
1987, denied their motion to dismiss. A subsequent motion
for reconsideration was similarly dealt with by an order
dated 25 January 1988. Petitioners then assailed the trial
court's dispositions before
**
the respondent appellate court
which, in a decision promulgated on 10 June 1988,
affirmed the trial court's orders. On 22 August 1988, the
respondent appellate court resolved to deny the petitioners'
motion for reconsideration. Hence, this petition.
At the outset, it is to be observed that the respondent
appellate court primarily anchored its decision on the law
of quasidelicts, 1 as enunciated in Articles 2176 and 2180 of
the Civil Code. Pertinent portions of the appellate court's
now assailed

_______________

** Penned by Justice Jose C. Campos, Jr. and concurred in by Justices

Ricardo J. Francisco and Alfredo L. Benipayo.
1 Article 2176 provides:

"Whoever by act or omission causes damage to another, there being fault or

negligence, is obliged to pay for the damage done. Such fault or negligence, if there
is no pre-existing con

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Phil. School of Business Administration vs. Court of
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ruling state:

"Article 2180 (formerly Article 1903) of the Civil Code is an

adoptation from the old Spanish Civil Code'. The comments of
Manresa and learned authorities on its meaning should give way
to present day changes. The law is not fixed and flexible (sic); it
must be dynamic. In fact, the greatest value and significance of
law as a rule of conduct in (sic) its flexibility to adopt to changing
social conditions and its capacity to meet the new challenges of
progress.
Construed in the light of modern day educational systems,
Article 2180 cannot be construed in its 2
narrow concept as held in
the old 3case of Exconde vs. Capuno and 4Mercado vs. Court of
Appeals ; hence, the ruling in the Palisoc case that it should
apply to all kinds of educational institutions, academic or
vocational.

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At any rate, the law holds the teachers and heads of the school
staff liable unless they relieve themselves of such liability
pursuant to the last paragraph of Article 2180 by 'proving that
they observed all the diligence to prevent damage.'
5
This can only
be done at a trial on the merits of the case."

While we agree with the respondent appellate court that

the motion to dismiss the complaint was correctly denied
and the complaint should be tried on the merits, we do not
however agree with the premises of the appellate court's
ruling.

_______________

tractual relation between the parties, is called a quasi-delict and is governed by

the provisions of this Chapter."
Article 2180 provides:
"The obligation imposed by article 2176 is demandable not only for one's own
acts or omissions, but also for those of persons for whom one is responsible.
xxx
"Lastly, teachers or heads of establishments of arts and trades shall be liable
for damages caused by their pupils and students or apprentices, so long as they
remain in their custody.
"The responsibility treated of in this article shall cease when the persons herein
mentioned prove that they observed all the diligence of a good father of a family to
prevent damage."

2 101 Phil. 843.

3 108 Phil. 414.
4 G.R. No. L-29025, 4 October 1971, 41 SCRA 548.
5 Rollo, p. 75.

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Phil. School of Business Administration vs. Court of
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Article 2180, in conjunction with Article 2176 of the Civil

Code, establishes the rule of in loco parentis. This Court
discussed this doctrine in the afore-cited cases of Exconde,
Mendoza, Palisoc
6
and, more recently, in Amadora vs. Court
of Appeals. In all such cases, it had been stressed that the
law (Article 2180) plainly provides that the damage should
have been caused or inflicted by pupils or students of the
educational institution sought to be held liable for the acts
of its pupils or students while in its custody. However, this
material situation does not exist in the present case for, as
earlier indicated, the assailants of Carlitos were not
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students of the PSBA, for whose acts the school could be

made liable.
However, does the appellate court's failure to consider
such material facts mean the exculpation of the petitioners
from liability? It does not necessarily follow.
When an academic institution accepts students for
enrollment, there is established a contract between them,
resulting in bilateral 7obligations which both parties are
bound to comply with. For its part, the school undertakes
to provide the student with an education that would
presumably suffice to equip him with the necessary tools
and skills to pursue higher education or a profession. On
the other hand, the student covenants to abide by the
school's academic requirements and observe its rules and
regulations.
Institutions of learning must also meet the implicit or
"builtin" obligation of providing their students with an
atmosphere that promotes or assists in attaining its
primary undertaking of imparting knowledge. Certainly, no
student can absorb the intricacies of physics or higher
mathematics or explore the realm of the arts and other
sciences when bullets are flying or grenades exploding in
the air or where there looms around the school premises a
constant threat to life and limb. Necessarily, the school
must ensure that adequate steps are taken to main-

_______________

6 G.R. No. L-47745, 15 April 1988,160 SCRA 315.

7 In Non vs. Dames II, G.R. No. 89317, 20 May 1990, 185 SCRA 535, it
was held that the contract between school and student is one "imbued
with public interest" but a contract nonetheless.

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tain peace and order within the campus premises and to

prevent the breakdown thereof.
Because the circumstances of the present case evince a
contractual relation between the PSBA and Carlitos 8
Bautista, the rules on quasi-delict do not really govern. A
perusal of Article 2176 shows that obligations arising from
quasi-delicts or tort, also known as extra-contractual
obligations, arise only between parties not otherwise bound
by contract, whether express or implied. However, this
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impression has not prevented this Court from determining

the existence of a tort even when there obtains a contract.
In Air France vs. Carrascoso (124 Phil. 722), the private
respondent was awarded damages for his unwarranted
expulsion from a first-class seat aboard the petitioner
airline. It is noted, however, that the Court referred to the
petitioner-airline's liability as one arising from tort, not one
arising from a contract of carriage. In effect, Air France is
authority for the view that liability from tort may exist
even if there is a contract, for the act that breaks the
contract may be also a tort. (Austro-America S.S. Co. vs.
Thomas, 248 Fed. 231).
This view was not all that revolutionary, for even as
early as 1918, this Court was already of a similar mind. In
Cangco vs. Manila Railroad (38 Phil. 780), Mr. Justice
Fisher elucidated thus:

"The field of non-contractual obligation is much more broader

than that of contractual obligation, comprising, as it does, the
whole extent of juridical human relations. These two fields,
figuratively speaking, concentric; that is to say, the mere fact that
a person is bound to another by contract does not relieve him from
extra-contractual liability to such person. When such a
contractual relation exists the obligor may break the contract
under such conditions that the same act which constitutes a
breach of the contract would have constituted the source of an
extra-contractual obligation had no contract

_______________

8 Article 2176, Civil Code is re-quoted for stress:

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

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Phil. School of Business Administration vs. Court of Appeals

existed between the parties."

Immediately what comes to mind is the chapter of the Civil

Code on Human Relations, particularly Article 21, which
provides:

"Any person who wilfully causes loss or injury to another in a

manner that is contrary to morals, good customs or public policy

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shall compensate the latter for the damage." (emphasis supplied).

Air France penalized the racist policy of the airline which

emboldened the petitioner's employee to forcibly oust the
private respondent to cater to the comfort of a white man
who allegedly "had a better right to the seat." In Austro-
American, supra, the public embarrassment caused to the
passenger was the justification for the Circuit Court of
Appeals, (Second Circuit), to award damages to the latter.
From the foregoing, it can be concluded that should the act
which breaches a contract be done in bad faith and be
violative of Article 21, then there is a cause to view the act
as constituting a quasi-delict.
In the circumstances obtaining in the case at bar,
however, there is, as yet, no finding that the contract
between the school and Bautista had been breached thru
the former's negligence in providing proper security
measures. This would be for the trial court to determine.
And, even if there be a finding of negligence, the same
could give rise generally to a breach of contractual
obligation only. Using the test of Cangco, supra, the
negligence of the school would not be relevant absent a
contract. In fact, that negligence becomes material only
because of the contractual relation between PSBA and
Bautista. In other words, a contractual relation is a
condition sine qua non to the school's liability. The
negligence of the school cannot exist independently on the
contract, unless the negligence occurs under the
circumstances set out in Article 21 of the Civil Code.
This Court is not unmindful of the attendant difficulties
posed by the obligation of schools, above-mentioned for
conceptually a school, like a common carrier, cannot be an
insurer of its students against all risks. This is specially
true in the populous student communities of the so-called
"university belt" in Manila where there have been reported
several incidents ranging from gang wars to other forms of
hooliganism. It would
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Phil. School of Business Administration vs. Court of
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not be equitable to expect of schools to anticipate all types

of violent trespass upon their premises, for
notwithstanding the security measures installed, the same
may still fail against an individual or group determined to
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carry out a nefarious deed inside school premises and

environs. Should this be the case, the school may still avoid
liability by proving that the breach of its contractual
obligation to the students was not due to its negligence,
here statutorily defined to be the omission of that degree of
diligence which is required by the nature of the obligation
and corresponding
9
to the circumstances of persons, time
and place.
As the proceedings a quo have yet to commence on the
substance of the private respondents' complaint, the record
is bereft of all the material facts. Obviously, at this stage,
only the trial court can make such a determination from
the evidence still to unfold.
WHEREFORE, the foregoing premises considered, the
petition is DENIED. The Court of origin (RTC, Manila, Br.
47) is hereby ordered to continue proceedings consistent
with this ruling of the Court. Costs against the petitioners.
SO ORDERED.

     Melencio-Herrera (Chairman), Paras, Regalado and

Nocon, JJ., concur.

Petition denied.

Note.—A person while not criminally liable may still be

civilly liable. (Lontoc v. MD Transit & Taxi Co., Inc., 160
SCRA 367)

——o0o——

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9 Article 1173, Civil Code provides:

"The fault or negligence of the obligor consists in the omission of that diligence
which is required by the nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the place. When negligence shows
bad faith, the provisions of articles 1171 and 2201, paragraph 2, shall apply."

737

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