Professional Documents
Culture Documents
Covers the file on the application filed on the request submitted originally before this
Court by Balbina Mendoza, appellant,in which the Assembly requested that, under
the faculty' which confers on us the rule 45 of the Rules of the Courts, let us look at
the opinion issued by the hall resorted Paciano Dizon in his concept of auditor
general, in the case of the gratification or gratuity of the deceased Juan M. Cuevas,
legitimate child of the appellant.
In 1932 Cuevas married Florence Cocadiz. This marriage was definitively dissolved
on march 21, 1944 by virtue of a decree divorce issued by the Court of First Instance
in Batangas on that date. There was no offspring. It is not disputed that Balbina
Mendoza, the appellant, it is the kinswoman (nearest relative) to the deceased and,
therefore, with the right to pass, to the exclusion of the brothers and nephews that he
himself has left it.
In December 7, 1945 the President of the Philippines of Commonwealth issued
Administrative Order No. 27 in which under certain conditions is available to the
bonuses or gratuities to officials and employees of the Government National who had
been in active service in December 8, 1941, have been or not called to return to their
jobs after the liberation.The Administrative Order was issued by the President
"Virtue of the authority to my conferred by the existing law (referred to the
emergency powers) and to carry out the recommendations of the Committee
established under the Joint Resolution No. 5 The Congress of the Philippines 47/226
adopted July 28, 1945." chanrobles virtual law library
Before December 7, or 4 of the month, because the appellant had directed an instance
to the Auditor General, accompanied by the corresponding documents that the
claimed,stating the circumstances of their kinship with the deceased Juan M. Cuevas
and a list of the estates of this, including certain amounts of money in power of the
Government, the Banco Filipino national and of the Bank's Postal Savings, and
asking for accordingly " It is designated as the kinswoman nearest in order to enable
terms receive without delay any amount that is due to her deceased
son. . . ." chanrobles virtual law library
Florence Cocadiz, divorced wife, has not appeared officially before the Auditor
General, nor has it presented any instance.chanroblesvirtualawlibrary chanrobles
virtual law library
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The record demonstrates that at the beginning the Auditor General Delegate raised
the issue in consultation to the Justice Department to seek an opinion, among other
points, on whether "the divorced wife referred to here has any right to the
gratification or gratuity to the deceased husband under the Administrative Order No.
27 Dated December 7, 1945, considering that the gratuity is equivalent to their
salaries for the months of January and February, 1942. The Department of Justice
give the requested opinion, among other reasons because the query related to a
hypothetical case, taking into account that there was no conflict of reclamations,
because the divorced wife was not a claimant, not having more instance than the one
submitted by Balbina Mendoza, the mother survivor.w library
Later - 12 March 1946 - the Auditor General Delegate, making use of course powers
conferred on it by article 262 of the Administrative Code, solved the substance of the
instance of Balbina Mendoza, dictating the following judgment: chanrobles virtual
law library
Memorandum for Auditor Pedro Rivera
Central office chanrobles virtual law library
As the gratuity of the late Juan M. Cuevas under Administrative Order No. 27, dated
December 7, 1945, corresponds to his salary for the months of January and February,
1942, during which his marriage with Florencia Cocadiz in 1932 was not yet
dissolved, the decree of their divorce having been issued by the Court of First
Instance of Batangas only on March 21, 1944, the said gratuity should be deemed to
be a part of their conjugal estate. Only one-half thereof may, therefore, be paid to his
surviving mother, the herein claimant, who is hereby designated as his next of kin,
the other half being payable to his divorced wife as her share.
(Sgd.) Juan Concon
Deputy Auditor General
In this ruling, the petitioner timely filed his appeal, which we now proceed to decide.
The Attorney General, in his brief filed on behalf of the Government
commission raises the complaints between the parties in the following summary,
made with appropriate brevity and fairness:
The question raised by the appellant is whether the reward (gratuity)
payable to the decedent Jun Cuevas under Administrative Order No. 27
dated December 7, 1945, belongs to his vacant inheritance, or whether
such gratuity should be considered as goods belonging to the acquisitions of
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The plaintiff Aleko E. Lilius has, for many years, been a well-known and reputed
journalist, author and photographer. At the time of the collision in question, he was a
staff correspondent in the Far East of the magazines The American Weekly of New
York and The Sphere of London.
Some of his works have been translated into various languages. He had others in
preparation when the accident occurred. According to him, his writings netted him a
monthly income of P1,500. He utilized the linguistic ability of his wife Sonja Maria
Lilius, who translated his articles and books into English, German, and Swedish.
Furthermore, she acted as his secretary.
At about 7 o'clock on the morning of May 10, 1931, the plaintiff, his wife Sonja
Maria Lilius, and his 4-year old daughter Brita Marianne Lilius, left Manila in their
Studebaker car driven by the said plaintiff Aleko E. Lilius for the municipality
of Pagsanjan, Province of Laguna, on a sight-seeing trip. It was the first time that he
made said trip although he had already been to many places, driving his own car, in
and outside the Philippines. Where the road was clear and unobstructed, the plaintiff
drove at the rate of from 19 to 25 miles an hour. Prior thereto, he had made the trip as
far as Calauan, but never from Calauan to Pagsanjan, via Dayap. He was entirely
unacquainted with the conditions of the road at said points and had no knowledge of
the existence of a railroad crossing at Dayap. Before reaching the crossing in
question, there was nothing to indicate its existence and inasmuch as there were
many houses, shrubs and trees along the road, it was impossible to see an
approaching train. At about seven or eight meters from the crossing, coming from
Calauan, the plaintiff saw an autotruck parked on the left side of the road. Several
people, who seemed to have alighted from the said truck, were walking on the
opposite side. He slowed down to about 12 miles an hour and sounded his horn for
the people to get out of the way. With his attention thus occupied, he did not see the
crossing but he heard two short whistles. Immediately afterwards, he saw a huge
black mass fling itself upon him, which turned out to be locomotive No. 713 of the
defendant company's train coming eastward from Bay to Dayap station. The
locomotive struck the plaintiff's car right in the center. After dragging the said car a
distance of about ten meters, the locomotive threw it upon a siding. The force of the
impact was so great that the plaintiff's wife and daughter were thrown from the car
and were picked up from the ground unconscious and seriously hurt. In spite of the
efforts of engineer Andres Basilio, he was unable to stop the locomotive until after it
had gone about seventy meters from the crossing.
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engineer, for not having taken the necessary precautions to avoid an accident, in view
of the absence of said flagman and switchman, by slackening his speed and
continuously ringing the bell and blowing the whistle before arriving at the crossing.
Although it is probable that the defendant-appellant entity employed the diligence of
a good father of a family in selecting its aforesaid employees, however, it did not
employ such diligence in supervising their work and the discharge of their duties
because, otherwise, it would have had a semaphore or sign at the crossing and, on
previous occasions as well as on the night in question, the flagman and switchman
would have always been at his post at the crossing upon the arrival of a train. The
diligence of a good father of a family, which the law requires in order to avoid
damage, is not confined to the careful and prudent selection of subordinates or
employees but includes inspection of their work and supervision of the discharge of
their duties.
However, in order that a victim of an accident may recover indemnity for damages
from the person liable therefor, it is not enough that the latter has been guilty of
negligence, but it is also necessary that the said victim has not, through his own
negligence, contributed to the accident, inasmuch as nobody is a guarantor of his
neighbor's personal safety and property, but everybody should look after them,
employing the care and diligence that a good father of a family should apply to his
own person, to the members of his family and to his property, in order to avoid any
damage. It appears that the herein plaintiff-appellant Aleko E. Lilius took all
precautions which his skill and the presence of his wife and child suggested to him in
order that his pleasure trip might be enjoyable and have a happy ending, driving his
car at a speed which prudence demanded according to the circumstances and
conditions of the road, slackening his speed in the face of an obstacle and blowing
his horn upon seeing persons on the road, in order to warn them of his approach and
request them to get out of the way, as he did when he came upon the truck parked on
the left hand side of the road seven or eight meters from the place where the accident
occurred, and upon the persons who appeared to have alighted from the said truck. If
he failed to stop, look and listen before going over the crossing, in spite of the fact
that he was driving at 12 miles per hour after having been free from obstacles, it was
because, his attention having been occupied in attempting to go ahead, he did not see
the crossing in question, nor anything, nor anybody indicating its existence, as he
knew nothing about it beforehand. The first and only warning, which he received of
the impending danger, was two short blows from the whistle of the locomotive
immediately preceding the collision and when the accident had already become
inevitable.
In view of the foregoing considerations, this court is of the opinion that the defendant
the Manila Railroad Company alone is liable for the accident by reason of its own
negligence and that of its employees, for not having employed the diligence of a
good father of a family in the supervision of the said employees in the discharge of
their duties.
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impliedly been decided in the negative when the defendant-appellant entity's petition
for the reduction of said indemnity was denied, declaring it to be reasonable.
As to the amount of P10,000 claimed by the plaintiff Aleko E. Lilius as damages for
the loss of his wife's services in his business as journalist and author, which services
consisted in going over his writings, translating them into English, German and
Swedish, and acting as his secretary, in addition to the fact that such services formed
part of the work whereby he realized a net monthly income of P1,500, there is no
sufficient evidence of the true value of said services nor to the effect that he needed
them during her illness and had to employ a translator to act in her stead.
The plaintiff Aleko E. Lilius also seeks to recover the sum of P2,500 for the loss of
what is called Anglo-Saxon common law "consortium" of his wife, that is, "her
services, society and conjugal companionship", as a result of personal injuries which
she had received from the accident now under consideration.
In the case of Goitia vs. Campos Rueda (35 Phil., 252, 255, 256), this court,
interpreting the provisions of the Civil Marriage Law of 1870, in force in these
Islands with reference to the mutual rights and obligations of the spouses, contained
in articles 44-48 thereof, said as follows:
The above quoted provisions of the Law of Civil Marriage and the Civil
Code fix the duties and obligations of the spouses. The spouses must be
faithful to, assist, and support each other. The husband must live with and
protect his wife. The wife must obey and live with her husband and follow
him when he changes his domicile or residence, except when he removes to
a foreign country. . . .
Therefore, under the law and the doctrine of this court, one of the husband's rights is
to count on his wife's assistance. This assistance comprises the management of the
home and the performance of household duties, including the care and education of
the children and attention to the husband upon whom primarily devolves the duty of
supporting the family of which he is the head. When the wife's mission was
circumscribed to the home, it was not difficult to assume, by virtue of the marriage
alone, that she performed all the said tasks and her physical incapacity always
redounded to the husband's prejudice inasmuch as it deprived him of her assistance.
However, nowadays when women, in their desire to be more useful to society and to
the nation, are demanding greater civil rights and are aspiring to become man's equal
in all the activities of life, commercial and industrial, professional and political,
many of them spending their time outside the home, engaged in their businesses,
industry, profession and within a short time, in politics, and entrusting the care of
their home to a housekeeper, and their children, if not to a nursemaid, to public or
private institutions which take charge of young children while their mothers are at
work, marriage has ceased to create the presumption that a woman complies with the
duties to her husband and children, which the law imposes upon her, and he who
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would have seen to it that the soldiers did not beat him to the terminal toilets; he did
not tell anybody about the reason for going to the beach, until after the plane had
taken off from Wake.
We find this pretense devoid of merit. Although Mr. Zulueta had to look for a
secluded place in the beach to relieve himself, beyond the view of others, defendant's
airport manager, whom Mr. Zulueta informed about it, soon after the departure of the
plane, could have forthwith checked the veracity of Mr. Zulueta's statement by asking
him to indicate the specific place where he had been in the beach and then
proceeding thereto for purposes of verification.
Then, again, the passenger of a plane seldom knows how many toilets it has. As a
general rule, his knowledge is limited to the toilets for the class first class or
tourist class in which he is. Then, too, it takes several minutes for the passengers
of big aircrafts, like those flying from the U.S. to the Philippines, to deplane.
Besides, the speed with which a given passenger may do so depends, largely, upon
the location of his seat in relation to the exit door. He cannot go over the heads of
those nearer than he thereto. Again, Mr. Zulueta may have stayed in the toilet
terminal for some time, expecting one of the commodes therein to be vacated soon
enough, before deciding to go elsewhere to look for a place suitable to his purpose.
But he had to walk, first, from the plane to the terminal building and, then, after
vainly waiting therein for a while, cover a distance of about 400 yards therefrom to
the beach, and seek there a place not visible by the people in the plane and in the
terminal, inasmuch as the terrain at Wake Island is flat. What is more, he must have
had to takeoff part, at least, of his clothing, because, without the facilities of a toilet,
he had to wash himself and, then, dry himself up before he could be properly attired
and walk back the 400 yards that separated him from the terminal building and/or the
plane. Considering, in addition to the foregoing, the fact that he was not feeling well,
at that time, We are not prepared to hold that it could not have taken him around an
hour to perform the acts narrated by him.
But, why asks the defendant did he not reveal the same before the plane took
off? The record shows that, even before Mr. Zulueta had reached the ramp leading to
the plane, Capt. Zentner was already demonstrating at him in an intemperate and
arrogant tone and attitude ("What do you think you are?), thereby impelling Mr.
Zulueta to answer back in the same vein. As a consequence, there immediately
ensued an altercation in the course of which each apparently tried to show that he
could not be cowed by the other. Then came the order of Capt. Zentner to off-load all
of the Zuluetas, including Mrs. Zulueta and the minor Miss Zulueta, as well as their
luggage, their overcoats and other effects handcarried by them; but, Mr. Zulueta
requested that the ladies be allowed to continue the trip. Meanwhile, it had taken
time to locate his four (4) pieces of luggage. As a matter of fact, only three (3) of
them were found, and the fourth eventually remained in the plane. In short, the issue
between Capt. Zentner and Mr. Zulueta had been limited to determining whether the
latter would allow himself to be browbeaten by the former. In the heat of the
altercation, nobody had inquired about the cause of Mr. Zulueta's delay in returning
"minimum of one week" revealed the intention to keep him there stranded that long,
for no other plane, headed for Manila, was expected within said period of time,
although Mr. Zulueta managed to board, days later, a plane that brought him to
Hawaii, whence he flew back to the Philippines, via Japan.
Defendant's motion for reconsideration assails: (1) the amount of damages awarded
as excessive; (2) the propriety of accepting as credible plaintiffs' theory; (3)
plaintiffs' right to recover either moral or exemplary damages; (4) plaintiffs' right to
recover attorney's fees; and (5) the non-enforcement of the compromise agreement
between the defendant and plaintiff's wife, Mrs. Zulueta. Upon the other hand,
plaintiffs' motion for reconsideration contests the decision of this Court reducing the
amount of damages awarded by the trial court to approximately one-half thereof,
upon the ground, not only that, contrary to the findings of this Court, in said
decision, plaintiff had not contributed to the aggravation of his altercation or incident
with Capt. Zentner by reacting to his provocation with extreme belligerency thereby
allowing himself to be dragged down to the level on which said agent of the
defendant had placed himself, but, also, because the purchasing power of our local
currency is now much lower than when the trial court rendered its appealed decision,
over five (5) years ago, on July 5, 1967, which is an undeniable and undisputed fact.
Precisely, for this reason, defendant's characterization as exorbitant of the aggregate
award of over P700,000 by way of damages, apart from attorney's fees in the sum of
P75,000, is untenable. Indeed, said award is now barely equivalent to around
100,000 U. S. dollars.
Neither may criminal cases, nor the cases for libel and slander cited in the
defendant's motion for reconsideration, be equated with the present case. Indeed, in
ordinary criminal cases, the award for damages is, in actual practice, of purely
academic value, for the convicts generally belong to the poorest class of society.
There is, moreover, a fundamental difference between said cases and the one at bar.
The Zuluetas had a contract of carriage with the defendant, as a common carrier,
pursuant to which the latter was bound, for a substantial monetary consideration
paid by the former, not merely to transport them to Manila, but, also, to do so with
"extraordinary diligence" or "utmost diligence." 9 The responsibility of the common
carrier, under said contract, as regards the passenger's safety, is of such a nature,
affecting as it does public interest, that it "cannot be dispensed with" or even
"lessened by stipulation, by the posting of notices, by statements on tickets, or
otherwise." 10 In the present case, the defendant did not only fail to comply with its
obligation to transport Mr. Zulueta to Manila, but, also, acted in a manner calculated
to humiliate him, to chastise him, to make him suffer, to cause to him the greatest
possible inconvenience, by leaving him in a desolate island, in the expectation that
he would be stranded there for a "minimum of one week" and, in addition thereto,
charged therefor $13.30 a day.
It further support of its contention, defendant cites the damages awarded in previous
cases to passengers of airlines, 8 as well as in several criminal cases, and some cases
for libel and slander. None of these cases is, however, in point. Said cases against
airlines referred to passengers who were merely constrained to take a tourist class
accommodation, despite the fact that they had first class tickets, and that although, in
one of such cases, there was proof that the airline involved had acted as it did to give
preference to a "white" passenger, this motive was not disclosed until the trial in
court. In the case at bar, plaintiff Rafael Zulueta was "off-loaded" at Wake Island, for
having dared to retort to defendant's agent in a tone and manner matching, if not
befitting his intemperate language and arrogant attitude. As a consequence, Capt.
Zentner's attempt to humiliate Rafael Zulueta had boomeranged against him
(Zentner), in the presence of the other passengers and the crew. It was, also, in their
presence that defendant's agent had referred to the plaintiffs as "monkeys," a racial
insult not made openly and publicly in the abovementioned previous cases against
airlines.
It is urged by the defendant that exemplary damages are not recoverable in quasidelicts, pursuant to Article 2231 of our Civil Code, except when the defendant has
acted with "gross negligence," and that there is no specific finding that it had so
acted. It is obvious, however, that in off-loading plaintiff at Wake Island, under the
circumstances heretofore adverted to, defendant's agents had acted with malice
aforethought and evident bad faith. If "gross negligence" warrants the award of
exemplary damages, with more reason is its imposition justified when the act
performed is deliberate, malicious and tainted with bad faith. Thus, in Lopez v.
PANAM, 11 We held:
In other words, Mr. Zulueta was off-loaded, not to protect the safety of the aircraft
and its passengers, but to retaliate and punish him for the embarrassment and loss of
face thus suffered by defendant's agent. This vindictive motive is made more
manifest by the note delivered to Mr. Zulueta by defendant's airport manager at Wake
Island, Mr. Sitton, stating that the former's stay therein would be "for a minimum of
one week," during which he would be charged $13.30 per day. This reference to a
Similarly, in NWA v. Cuenca, 12 this Court declared that an award for exemplary
damages was justified by the fact that the airline's "agent had acted in a wanton,
reckless and oppressive manner" in compelling Cuenca, upon arrival at Okinawa, to
transfer, over his objection, from the first class, where he was accommodated from
Manila to Okinawa, to the tourist class, in his trip to Japan, "under threat of
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It is next urged that, under the contract of carriage with the defendant, Mr. Zulueta
was bound to be present at the time scheduled for the departure of defendant's plane
and that he had, consequently, violated said contract when he did not show up at such
time. This argument might have had some weight had defendant's plane taken off
before Mr. Zulueta had shown up. But the fact is that he was ready, willing and able
to board the plane about two hours before it actually took off, and that he was
deliberately and maliciously off-loaded on account of his altercation with Capt.
Zentner. It should, also, be noted that, although Mr. Zulueta was delayed some 20 to
30 minutes, the arrival or departure of planes is often delayed for much longer
periods of time. Followed to its logical conclusion, the argument adduced by the
defense suggests that airlines should be held liable for damages due to the
inconvenience and anxiety, aside from actual damages, suffered by many passengers
either in their haste to arrive at the airport on scheduled time just to find that their
plane will not take off until later, or by reason of the late arrival of the aircraft at its
destination.
PANAM impugns the award of attorney's fees upon the ground that no penalty
should be imposed upon the right to litigate; that, by law, it may be awarded only in
exceptional cases; that the claim for attorney's fees has not been proven; and that said
defendant was justified in resisting plaintiff's claim "because it was patently
exorbitant."
Nothing, however, can be farther from the truth. Indeed apart from plaintiff's claim
for actual damages, the amount of which is not contested, plaintiffs did not ask any
specific sum by way of exemplary and moral damages, as well as attorney's fees, and
left the amount thereof to the "sound discretion" of the lower court. This, precisely, is
the reason why PANAM, now, alleges without justification that the lower court
had no jurisdiction over the subject matter of the present case.
Moreover, Article 2208 of our Civil Code expressly authorizes the award of
attorney's fees "when exemplary damages are awarded," as they are in this case
as well as "in any other case where the court deems it just and equitable that
attorney's fees ... be recovered," and We so deem it just and equitable in the present
case, considering the "exceptional" circumstances obtaining therein, particularly the
bad faith with which defendant's agent had acted, the place where and the conditions
under which Rafael Zulueta was left at Wake Island, the absolute refusal of
defendant's manager in Manila to take any step whatsoever to alleviate Mr. Zulueta's
predicament at Wake and have him brought to Manila which, under their contract
of carriage, was defendant's obligation to discharge with "extra-ordinary" or "utmost"
diligence and, the "racial" factor that had, likewise, tainted the decision of
defendant's agent, Capt. Zentner, to off-load him at Wake Island.
As regards the evidence necessary to justify the sum of P75,000 awarded as
attorney's fees in this case, suffice it to say that the quantity and quality of the
services rendered by plaintiffs' counsel appearing on record, apart from the nature of
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without the husband's consent, except from her ascendants, descendants, parents-inlaw, and collateral relatives within the fourth degree. 18
It is true that the law favors and encourages the settlement of litigations by
compromise agreement between the contending parties, but, it certainly does not
favor a settlement with one of the spouses, both of whom are plaintiffs or defendants
in a common cause, such as the defense of the rights of the conjugal partnership,
when the effect, even if indirect, of the compromise is to jeopardize "the solidarity of
the family" which the
law 19 seeks to protect by creating an additional cause for the misunderstanding
that had arisen between such spouses during the litigation, and thus rendering more
difficult a reconciliation between them.
It is urged that there is no proof as to the purpose of the trip of the plaintiffs, that
neither is there any evidence that the money used to pay the plane tickets came from
the conjugal funds and that the award to Mrs. Zulueta was for her personal suffering
or injuries. There was, however, no individual or specific award in favor of Mrs.
Zulueta or any of the plaintiffs. The award was made in their favor collectively.
Again, in the absence of said proof, the presumption is that the purpose of the trip
was for the common benefit of the plaintiffs and that the money had come from the
conjugal funds, for, unless there is proof to the contrary, it is presumed "(t)hat things
have happened according to the ordinary course of nature and the ordinary habits of
life." 20 In fact Manresa maintains 21 that they are deemed conjugal, when the source
of the money used therefor is not established, even if the purchase had been made by
the wife. 22 And this is the rule obtaining in the Philippines. Even property registered,
under the Torrens system, in the name of one of the spouses, or in that of the wife
only, if acquired during the marriage, is presumed to belong to the conjugal
partnership, unless there is competent proof to the contrary. 23
PANAM maintains that the damages involved in the case at bar are not among those
forming part of the conjugal partnership pursuant to Article 153 of the Civil Code,
reading:
ART. 153. The following are conjugal partnership property:
(1) That which is acquired by onerous title during the marriage at
the expense of the common fund, whether the acquisition be for the
partnership, or for only one of the spouses;
(2) That which is obtained by the industry, or work, or as salary of
the spouses, or of either of them;
(3) The fruits, rents or interests received or due during the
marriage, coming from the common property or from the exclusive
property of each spouse.
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therefor belongs to Mrs. Zulueta the property involved, or the rights arising
therefrom, must be presumed, therefore, to form part of the conjugal partnership.
It is true that in Lilius v. Manila Railroad Co., 27 it was held that the "patrimonial and
moral damages" awarded to a young and beautiful woman by reason of a scar in
consequence of an injury resulting from an automobile accident which disfigured
her face and fractured her left leg, as well as caused a permanent deformity, are her
paraphernal property. Defendant cites, also, in support of its contention the following
passage from Colin y Capitant:
No esta resuelta expresamente en la legislacion espaola la
cuestion de si las indemnizaciones debidas por accidentes del
trabaho tienen la consideracion de gananciales, o son bienes
particulares de los conyuges.
Inclinan a la solucion de que estas indemnizaciones deben ser
consideradas como gananciales, el hecho de que la sociedad
pierde la capacidad de trabajocon el accidente, que a ella le
pertenece, puesto que de la sociedad son losfrutos de ese trabajo;
en cambio, la consideracion de que igual manera que losbienes que
sustituyen a los que cada conyuge lleva al matrimonio como
propiostienen el caracter de propios, hace pensar que las
indemnizaciones que vengana suplir la capacidad de trabajo
aportada por cada conyuge a la sociedad, debenser juridicamente
reputadas como bienes propios del conyuge que haya sufrido
elaccidente. Asi se llega a la misma solucion aportada por la
jurisprudencia francesca. 28
This opinion is, however, undecisive, to say the least. It should be noted that Colin y
Capitant were commenting on the French Civil Code; that their comment referred to
indemnities due in consequence of "accidentes del trabajo "resulting in physical
injuries sustained by one of the spouses (which Mrs. Zulueta has not suffered); and
that said commentators admit that the question whether or not said damages are
paraphernal property or belong to the conjugal partnership is not settled under the
Spanish law. 29 Besides, the French law and jurisprudence to which the comments
of Planiol and Ripert, likewise, refer are inapposite to the question under
consideration, because they differ basically from the Spanish law in the treatment of
the property relations between husband and wife. Indeed, our Civil Code, like the
Spanish Civil Code, favors the system of conjugal partnership of gains. Accordingly,
the former provides that, "(i)n the absence of marriage settlements, or when the same
are void, the system of relative community or conjugal partnership of gains ... shall
govern the property relations between" the spouses. 30 Hence, "(a)ll property of the
marriage is presumed to belong to the conjugal partnership, unless it be proved that it
pertains exclusively to the husband or to the wife." 31
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1. That the plaintiff, Rosario Gelano Vda. de Schuetze, window of the late
Adolphe Oscar Schuetze, is of legal age, a native of Manila, Philippine
Islands, and is and was at all times hereinafter mentioned a resident of
Germany, and at the time of the death of her husband, the late Adolphe
Oscar Schuetze, she was actually residing and living in Germany;
2. That the Bank of the Philippine Islands, is and was at all times hereinafter
mentioned a banking institution duly organized and existing under and by
virtue of the laws of the Philippine Islands;
3. That on or about August 23, 1928, the herein plaintiff before notary
public Salvador Zaragoza, drew a general power appointing the abovementioned Bank of the Philippine Islands as her attorney-in-fact, and among
the powers conferred to said attorney-in-fact was the power to represent her
in all legal actions instituted by or against her;
4. That the defendant, of legal age, is and at all times hereinafter mentioned
the duly appointed Collector of Internal Revenue with offices at Manila,
Philippine Islands;
5. That the deceased Adolphe Oscar Schuetze came to the Philippine Islands
for the first time of March 31, 1890, and worked in the several German
firms as a mere employee and that from the year 1903 until the year 1918 he
was partner in the business of Alfredo Roensch;
6. That from 1903 to 1922 the said Adolphe Oscar Schuetze was in the habit
of making various trips to Europe;
7. That on December 3, 1927, the late Adolphe Oscar Schuetze coming from
Java, and with the intention of going to Bremen, landed in the Philippine
Islands where he met his death on February 2, 1928;
8. That on March 31, 1926, the said Adolphe Oscar Schuetze, while in
Germany, executed a will, in accordance with its law, wherein plaintiff was
named his universal heir;
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19. That at the time of the death of the deceased and at all times thereafter
including the date when the said insurance policy was paid, the insurance
policy was not in the hands or possession of the Manila office of the Sun
Life Assurance Company of Canada, nor in the possession of the herein
plaintiff, nor in the possession of her attorney-in-fact the Bank of the
Philippine Islands, but the same was in the hands of the Head Office of the
Sun Life Assurance Company of Canada, at Montreal, Canada;
20. That on July 13, 1928, the Bank of the Philippine Islands as
administrator of the decedent's estate received from the Sun Life Assurance
Company of Canada, Manila branch, the sum of P20,150 representing the
proceeds of the insurance policy, as shown in the statement of income and
expenses of the estate of the deceased submitted on June 18, 1929, by the
administrator to the Court of First Instance of Manila, civil case No. 33089;
21. That the Bank of the Philippine Islands delivered to the plaintiff herein
the said sum of P20,150;
22. That the herein defendant on or about July 5, 1929, imposed an
inheritance tax upon the transmission of the proceeds of the policy in
question in the sum of P20,150 from the estate of the late Adolphe Oscar
Schuetze to the sole heir of the deceased, or the plaintiff herein, which
inheritance tax amounted to the sum of P1,209;
23. That the Bank of the Philippine Islands as administrator of the
decedent's estate and as attorney-in-fact of the herein plaintiff, having been
demanded by the herein defendant to pay inheritance tax amounting to the
sum of P1,209, paid to the defendant under protest the above-mentioned
sum;
24. That notwithstanding the various demands made by plaintiff to the
defendant, said defendant has refused and refuses to refund to plaintiff the
above mentioned sum of P1,209;
25. That plaintiff reserves the right to adduce evidence as regards the
domicile of the deceased, and so the defendant, the right to present rebuttal
evidence;
26. That both plaintiff and defendant submit this stipulation of facts without
prejudice to their right to introduce such evidence, on points not covered by
the agreement, which they may deem proper and necessary to support their
respective contentions.
In as much as one of the question raised in the appeal is whether an insurance policy
on said Adolphe Oscar Schuetze's life was, by reason of its ownership, subject to the
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funds, and by his will made the proceeds of the policy payable to his own
estate. Held, that the proceeds were community estate, one-half of which
belonged to the wife.
In In re Stan's Estate, Myr. Prob. (Cal.), 5, the Supreme Court of California laid
down the following doctrine:
A testator, after marriage, took out an insurance policy, on which he paid the
premiums from his salary. Held that the insurance money was community
property, to one-half of which, the wife was entitled as survivor.
In In re Webb's Estate, Myr. Prob. (Cal.), 93, the same court laid down the following
doctrine:
A decedent paid the first third of the amount of the premiums on his lifeinsurance policy out of his earnings before marriage, and the remainder
from his earnings received after marriage. Held, that one-third of the policy
belonged to his separate estate, and the remainder to the community
property.
Thus both according to our Civil Code and to the ruling of those North American
States where the Spanish Civil Code once governed, the proceeds of a life-insurance
policy whereon the premiums were paid with conjugal money, belong to the conjugal
partnership.
The appellee alleges that it is a fundamental principle that a life-insurance policy
belongs exclusively to the beneficiary upon the death of the person insured, and that
in the present case, as the late Adolphe Oscar Schuetze named his own estate as the
sole beneficiary of the insurance on his life, upon his death the latter became the sole
owner of the proceeds, which therefore became subject to the inheritance tax, citing
Del Val vs. Del Val (29 Phil., 534), where the doctrine was laid down that an heir
appointed beneficiary to a life-insurance policy taken out by the deceased, becomes
the absolute owner of the proceeds of such policy upon the death of the insured.
The estate of a deceased person cannot be placed on the same footing as an
individual heir. The proceeds of a life-insurance policy payable to the estate of the
insured passed to the executor or administrator of such estate, and forms part of its
assets (37 Corpus Juris, 565, sec. 322); whereas the proceeds of a life-insurance
policy payable to an heir of the insured as beneficiary belongs exclusively to said
heir and does not form part of the deceased's estate subject to administrator. (Del Val
vs. Del Val, supra; 37 Corpus Juris, 566, sec. 323, and articles 419 and 428 of the
Code of Commerce.)
Just as an individual beneficiary of a life-insurance policy taken out by a married
person becomes the exclusive owner of the proceeds upon the death of the insured
xxx
xxx
In as much as the proceeds of the insurance policy on the life of the late Adolphe
Oscar Schuetze were paid to the Bank of the Philippine Islands, as administrator of
the deceased's estate, for management and partition, and as such proceeds were
turned over to the sole and universal testamentary heiress Rosario Gelano Vda. de
Schuetze, the plaintiff-appellant, here in Manila, the situs of said proceeds is the
Philippine Islands.
In his work "The Law of Taxation," Cooley enunciates the general rule governing the
levying of taxes upon tangible personal property, in the following words:
GENERAL RULE. The suits of tangible personal property, for purposes
of taxation may be where the owner is domiciled but is not necessarily so.
Unlike intangible personal property, it may acquire a taxation situs in a state
other than the one where the owner is domiciled, merely because it is
located there. Its taxable situs is where it is more or less permanently
located, regardless of the domicile of the owner. It is well settled that the
state where it is more or less permanently located has the power to tax it
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