AMBROCIO DE LA CRUZ AND PAULINA SIGURADO, PLAINTIFFS AND APPELLANTS, VS. PRIMITIVA BERROYA AND ELISA MANALO, DEFENDANTS AND APPELLEES.

De la Cruz versus Berroya

The Case

This is a civil action brought by the parents of a child killed by a jeepney, to enforce the subsidiary civil liability of the persons who, they alleged, owned and operated the vehicle, after the driver's own civil liability had been affirmed but could not be collected. The parents, Ambrocio de la Cruz and Paulina Sigurado, sued Primitiva Berroya and Elisa Manalo in the Court of First Instance of Manila. The case matters because it settles two practical points every litigator must know: that a release of claim is a ground for a motion to dismiss, and that such a release is a matter of defense, not a compulsory counterclaim that must be pleaded in the earlier criminal case.

Procedural History

The driver, Igmidio Senin, was charged with homicide through reckless imprudence in the Court of First Instance of Manila. After trial he was found guilty, sentenced to imprisonment, and ordered to indemnify the parents in the amount of six thousand pesos, with subsidiary imprisonment in case of insolvency. On appeal, the Court of Appeals modified the penalty of imprisonment but affirmed the award of civil indemnity. The judgment became final and executory, and a writ of execution issued against the driver for his civil liability was returned unsatisfied.

The parents then commenced a separate civil action in the Court of First Instance of Manila against Berroya and Manalo to enforce their subsidiary civil liability. The defendants moved to dismiss on two grounds: that the claim had been released by a written instrument, and that the cause of action did not accrue against them because the owner and operator of the jeepney was a corporation of which they were merely officers. The trial court found the motion meritorious and, on July 22, 1963, issued the order of dismissal. The parents appealed directly to the Supreme Court.

Facts

On the evening of January 6, 1960, a jeepney running along Juan Luna Street in Tondo, Manila, and driven by Igmidio Senin, hit the child of the appellants, causing his death. Two days later, on January 8, 1960, the parents signed a document entitled Release of Claim. For the sole consideration of seven hundred fifty pesos, they acknowledged receipt and released and forever discharged Igmidio Senin and E.N.P. Berroya Trans. Inc. from all actions, claims, demands and rights of action then existing or thereafter developing, particularly on account of all known, unknown, and unanticipated injuries, damages and losses arising out of the accident of January 6, 1960.

Senin was prosecuted for homicide through reckless imprudence. He was convicted and ordered to indemnify the parents in the amount of six thousand pesos. The Court of Appeals affirmed the civil indemnity, the judgment became final, and execution against the driver was returned unsatisfied.

The parents then sued Berroya and Manalo to enforce subsidiary civil liability under Article 103 of the Revised Penal Code. The defendants attached the Release of Claim to their motion to dismiss. The parents opposed, arguing that the release, not having been set up in the criminal case, was barred, and they asked leave to amend the complaint to correct the surname of one defendant. The trial court dismissed the complaint, and the parents appealed.

Issues

• Whether or not a release of the claim is a proper ground for a motion to dismiss rather than a matter that must be pleaded as a defense in an answer.
• Whether or not the defense of release is barred because it was not raised as a compulsory counterclaim in the criminal case against the driver.
• Whether or not the release executed in favor of the party primarily liable also releases those who may be held subsidiarily liable, even if they are not expressly named in the instrument.

Applicable Provisions

Rule 16, Section 1, paragraph (h) of the Rules of Court, as quoted in the decision, provides:

That the claim or demand set forth in the plaintiff's pleading has been paid, waived, abandoned, or otherwise extinguished.

This provision is the basis for holding that release may be raised by motion to dismiss.

Article 103 of the Revised Penal Code, invoked by the appellants as the source of the subsidiary civil liability, provides:

The subsidiary liability established in the next preceding article shall also apply to employers, teachers, persons, and corporations engaged in any kind of industry, for felonies committed by their servants, pupils, workmen, apprentices, or employees in the discharge of their duties.

This is the liability the appellants sought to enforce against the appellees, and which the Court held had been extinguished by the release.

Ruling

On the first issue, the Court held that release is expressly a ground for a motion to dismiss. The appellees relied on the release and attached the written instrument to their motion. The appellants never put in issue, as the Rules require, the genuineness of that public document, under whose terms they had considered themselves fully paid as far as their right to indemnity was concerned. The first contention is therefore without merit.

On the second issue, the Court held that the release of the claim is not in the nature of a compulsory counterclaim but a matter of defense. Consequently, the argument that the release could no longer be invoked because it was not raised as a compulsory counterclaim in the criminal case against the driver is without merit.

On the third issue, the Court acknowledged that the appellees were not expressly named in the instrument, but held that the release of the party primarily liable necessarily means likewise the release of those who might be held subsidiarily liable. Since the principal debtor had been discharged, the subsidiary liability could no longer be enforced.

Doctrine

First, release of the claim is a ground for a motion to dismiss under Rule 16, Section 1, paragraph (h) of the Rules of Court; it need not wait for an answer.

Second, release is a matter of defense, not a compulsory counterclaim. A defendant who fails to raise it in an earlier criminal case is not barred from raising it in a later civil action to enforce subsidiary liability.

Third, the release of the party primarily liable extinguishes the subsidiary liability of those who may be held subsidiarily liable, even if they are not expressly named in the instrument.

Disposition

The Supreme Court affirmed the order of dismissal, with costs; the appellees prevailed and the complaint against them was dismissed.

Remember This

The one line to memorize: the release of the party primarily liable necessarily releases those subsidiarily liable, and release is a defense, not a compulsory counterclaim. Examiners use this case to test the grounds for a motion to dismiss and the distinction between a defense and a compulsory counterclaim in the context of subsidiary civil liability.