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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; Quasi­Delicts; 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
afore­cited 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,
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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 "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 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,

_______________

* SECOND DIVISION.

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730 SUPREME COURT REPORTS ANNOTATED

Phil. School of Business Administration vs. Court of

Appeals

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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
Austro­American, 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 quasi­delict. 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.

The facts are stated in the opinion of the

Court.
     Balgos and Perez for petitioners.

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          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 second­floor 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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VOL. 205, FEBRUARY 4, 1992 731

Phil. School of Business Administration vs.
Court of Appeals

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
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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 afore­stated article.
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, as
enunciated1 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:
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"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 pre­existing con

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732 SUPREME COURT REPORTS

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Phil. School of Business Administration vs.
Court of Appeals

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
narrow 2concept as held in the old case of Exconde
3
vs.
Capuno and Mercado vs. 4
Court of Appeals ; hence,
the ruling in the Palisoc case that it should apply to
all kinds of educational institutions, academic or
vocational.
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.' This
can only
5
be done at a trial on the merits of the
case."

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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 quasi­delict 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. L­29025, 4 October 1971, 41 SCRA 548.
5 Rollo, p. 75.

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VOL. 205, FEBRUARY 4, 1992 733

Phil. School of Business Administration vs.
Court of Appeals

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 afore­cited cases of Exconde, Mendoza,
Palisoc and, more recently, in Amadora vs.
6
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6
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.
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
obligations which
7
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.

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Necessarily, the school must ensure that

adequate steps are taken to main­

_______________

6 G.R. No. L­47745, 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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ANNOTATED
Phil. School of Business Administration vs.
Court of Appeals

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 Bautista, 8the rules on
quasi­delict do not really govern. A perusal of
Article 2176 shows that obligations arising
from quasi­delicts or tort, also known as extra­
contractual obligations, arise only between
parties not otherwise bound by contract,
whether express or implied. However, this
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 first­class seat
aboard the petitioner airline. It is noted,
however, that the Court referred to the

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petitioner­airline'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. (Austro­America
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 non­contractual 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 extra­contractual 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 extra­contractual obligation had no
contract

_______________

8 Article 2176, Civil Code is re­quoted 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 pre­existing contractual
relation between the parties, is called a quasi­delict and is
governed by the provisions of this Chapter." (emphasis supplied)

735

VOL. 205, FEBRUARY 4, 1992 735

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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 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 Austro­American, 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 quasi­delict.
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
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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,
above­mentioned 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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ANNOTATED
Phil. School of Business Administration vs.
Court of Appeals

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 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
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nature of the obligation and corresponding 9to

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.

          Melencio­Herrera (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——

_______________

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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