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V.

THE CAUSE
A. DIFFERENT CATEGORIES
1. PROXIMATE
G.R. No. L-10126

October 22, 1957

SALUD VILLANUEVA VDA. DE BATACLAN and the minors NORMA, LUZVIMINDA, ELENITA, OSCAR
and ALFREDO BATACLAN, represented by their Natural guardian, SALUD VILLANUEVA VDA. DE
BATACLAN, plaintiffs-appellants,
vs.
MARIANO MEDINA, defendant-appellant.
Lope E. Adriano, Emmanuel Andamo and Jose R. Francisco for plaintiffs-appellants.
Fortunato Jose for defendant and appellant.
MONTEMAYOR, J.:
Shortly after midnight, on September 13, 1952 bus no. 30 of the Medina Transportation, operated by its owner
defendant Mariano Medina under a certificate of public convenience, left the town of Amadeo, Cavite, on its way
to Pasay City, driven by its regular chauffeur, Conrado Saylon. There were about eighteen passengers, including
the driver and conductor. Among the passengers were Juan Bataclan, seated beside and to the right of the driver,
Felipe Lara, sated to the right of Bataclan, another passenger apparently from the Visayan Islands whom the
witnesses just called Visaya, apparently not knowing his name, seated in the left side of the driver, and a woman
named Natalia Villanueva, seated just behind the four last mentioned. At about 2:00 o'clock that same morning,
while the bus was running within the jurisdiction of Imus, Cavite, one of the front tires burst and the vehicle
began to zig-zag until it fell into a canal or ditch on the right side of the road and turned turtle. Some of the
passengers managed to leave the bus the best way they could, others had to be helped or pulled out, while the
three passengers seated beside the driver, named Bataclan, Lara and the Visayan and the woman behind them
named Natalia Villanueva, could not get out of the overturned bus. Some of the passengers, after they had
clambered up to the road, heard groans and moans from inside the bus, particularly, shouts for help from Bataclan
and Lara, who said they could not get out of the bus. There is nothing in the evidence to show whether or not the
passengers already free from the wreck, including the driver and the conductor, made any attempt to pull out or
extricate and rescue the four passengers trapped inside the vehicle, but calls or shouts for help were made to the
houses in the neighborhood. After half an hour, came about ten men, one of them carrying a lighted torch made of
bamboo with a wick on one end, evidently fueled with petroleum. These men presumably approach the
overturned bus, and almost immediately, a fierce fire started, burning and all but consuming the bus, including
the four passengers trapped inside it. It would appear that as the bus overturned, gasoline began to leak and
escape from the gasoline tank on the side of the chassis, spreading over and permeating the body of the bus and
the ground under and around it, and that the lighted torch brought by one of the men who answered the call for
help set it on fire.
That same day, the charred bodies of the four deemed passengers inside the bus were removed and duly identified
that of Juan Bataclan. By reason of his death, his widow, Salud Villanueva, in her name and in behalf of her five
minor children, brought the present suit to recover from Mariano Medina compensatory, moral, and exemplary
damages and attorney's fees in the total amount of P87,150. After trial, the Court of First Instance of Cavite
awarded P1,000 to the plaintiffs plus P600 as attorney's fee, plus P100, the value of the merchandise being
carried by Bataclan to Pasay City for sale and which was lost in the fire. The plaintiffs and the defendants
appealed the decision to the Court of Appeals, but the latter endorsed the appeal to us because of the value
involved in the claim in the complaint.
Our new Civil Code amply provides for the responsibility of common carrier to its passengers and their goods.
For purposes of reference, we are reproducing the pertinent codal provisions:
ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735,
and 1745, Nos. 5, 6, and 7, while the extra ordinary diligence for the safety of the passengers is further set
forth in articles 1755 and 1756.
ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight
can provide, using the utmost diligence of very cautious persons, with a due regard for all the
circumstances.
ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they observed extraordinary diligence as
prescribed in articles 1733 and 1755
ART. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence
or willful acts of the former's employees, although such employees may have acted beyond the scope of
their authority or in violation of the order of the common carriers.
This liability of the common carriers does not cease upon proof that they exercised all the diligence of a
good father of a family in the selection and supervision of their employees.
ART. 1763. A common carrier responsible for injuries suffered by a passenger on account of the willful
acts or negligence of other passengers or of strangers, if the common carrier's employees through the
exercise of the diligence of a good father of a family could have prevented or stopped the act or omission.
We agree with the trial court that the case involves a breach of contract of transportation for hire, the Medina
Transportation having undertaken to carry Bataclan safely to his destination, Pasay City. We also agree with the
trial court that there was negligence on the part of the defendant, through his agent, the driver Saylon. There is
evidence to show that at the time of the blow out, the bus was speeding, as testified to by one of the passengers,
and as shown by the fact that according to the testimony of the witnesses, including that of the defense, from the
point where one of the front tires burst up to the canal where the bus overturned after zig-zaging, there was a
distance of about 150 meters. The chauffeur, after the blow-out, must have applied the brakes in order to stop the
bus, but because of the velocity at which the bus must have been running, its momentum carried it over a distance
of 150 meters before it fell into the canal and turned turtle.
There is no question that under the circumstances, the defendant carrier is liable. The only question is to what
degree. The trial court was of the opinion that the proximate cause of the death of Bataclan was not the
overturning of the bus, but rather, the fire that burned the bus, including himself and his co-passengers who were
unable to leave it; that at the time the fire started, Bataclan, though he must have suffered physical injuries,
perhaps serious, was still alive, and so damages were awarded, not for his death, but for the physical injuries
suffered by him. We disagree. A satisfactory definition of proximate cause is found in Volume 38, pages 695-696
of American jurisprudence, cited by plaintiffs-appellants in their brief. It is as follows:
. . . 'that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause,
produces the injury, and without which the result would not have occurred.' And more comprehensively,
'the proximate legal cause is that acting first and producing the injury, either immediately or by setting
other events in motion, all constituting a natural and continuous chain of events, each having a close
causal connection with its immediate predecessor, the final event in the chain immediately effecting the
injury as a natural and probable result of the cause which first acted, under such circumstances that the
person responsible for the first event should, as an ordinary prudent and intelligent person, have
reasonable ground to expect at the moment of his act or default that an injury to some person might
probably result therefrom.
It may be that ordinarily, when a passenger bus overturns, and pins down a passenger, merely causing him
physical injuries, if through some event, unexpected and extraordinary, the overturned bus is set on fire, say, by
lightning, or if some highwaymen after looting the vehicle sets it on fire, and the passenger is burned to death,
one might still contend that the proximate cause of his death was the fire and not the overturning of the vehicle.
But in the present case under the circumstances obtaining in the same, we do not hesitate to hold that the
proximate cause was the overturning of the bus, this for the reason that when the vehicle turned not only on its
side but completely on its back, the leaking of the gasoline from the tank was not unnatural or unexpected; that
the coming of the men with a lighted torch was in response to the call for help, made not only by the passengers,
but most probably, by the driver and the conductor themselves, and that because it was dark (about 2:30 in the
morning), the rescuers had to carry a light with them, and coming as they did from a rural area where lanterns
and flashlights were not available; and what was more natural than that said rescuers should innocently approach

the vehicle to extend the aid and effect the rescue requested from them. In other words, the coming of the men
with a torch was to be expected and was a natural sequence of the overturning of the bus, the trapping of some of
its passengers and the call for outside help. What is more, the burning of the bus can also in part be attributed to
the negligence of the carrier, through is driver and its conductor. According to the witness, the driver and the
conductor were on the road walking back and forth. They, or at least, the driver should and must have known that
in the position in which the overturned bus was, gasoline could and must have leaked from the gasoline tank and
soaked the area in and around the bus, this aside from the fact that gasoline when spilled, specially over a large
area, can be smelt and directed even from a distance, and yet neither the driver nor the conductor would appear to
have cautioned or taken steps to warn the rescuers not to bring the lighted torch too near the bus. Said negligence
on the part of the agents of the carrier come under the codal provisions above-reproduced, particularly, Articles
1733, 1759 and 1763.
As regard the damages to which plaintiffs are entitled, considering the earning capacity of the deceased, as well
as the other elements entering into a damage award, we are satisfied that the amount of SIX THOUSAND
(P6,000) PESOS would constitute satisfactory compensation, this to include compensatory, moral, and other
damages. We also believe that plaintiffs are entitled to attorney's fees, and assessing the legal services rendered
by plaintiffs' attorneys not only in the trial court, but also in the course of the appeal, and not losing sight of the
able briefs prepared by them, the attorney's fees may well be fixed at EIGHT HUNDRED (P800) PESOS for the
loss of merchandise carried by the deceased in the bus, is adequate and will not be disturbed.
There is one phase of this case which disturbs if it does not shock us. According to the evidence, one of the
passengers who, because of the injuries suffered by her, was hospitalized, and while in the hospital, she was
visited by the defendant Mariano Medina, and in the course of his visit, she overheard him speaking to one of his
bus inspectors, telling said inspector to have the tires of the bus changed immediately because they were already
old, and that as a matter of fact, he had been telling the driver to change the said tires, but that the driver did not
follow his instructions. If this be true, it goes to prove that the driver had not been diligent and had not taken the
necessary precautions to insure the safety of his passengers. Had he changed the tires, specially those in front,
with new ones, as he had been instructed to do, probably, despite his speeding, as we have already stated, the
blow out would not have occurred. All in all, there is reason to believe that the driver operated and drove his
vehicle negligently, resulting in the death of four of his passengers, physical injuries to others, and the complete
loss and destruction of their goods, and yet the criminal case against him, on motion of the fiscal and with his
consent, was provisionally dismissed, because according to the fiscal, the witnesses on whose testimony he was
banking to support the complaint, either failed or appear or were reluctant to testify. But the record of the case
before us shows the several witnesses, passengers, in that bus, willingly and unhesitatingly testified in court to
the effect of the said driver was negligent. In the public interest the prosecution of said erring driver should be
pursued, this, not only as a matter of justice, but for the promotion of the safety of passengers on public utility
buses. Let a copy of this decision be furnished the Department of Justice and the Provincial Fiscal of Cavite.
In view of the foregoing, with the modification that the damages awarded by the trial court are increased from
ONE THOUSAND (P1,000) PESOS TO SIX THOUSAND (P6,000) PESOS, and from SIX HUNDRED PESOS
TO EIGHT HUNDRED (P800) PESOS, for the death of Bataclan and for the attorney's fees, respectively, the
decision appealed is from hereby affirmed, with costs.
Paras, C. J., Bengzon, Padilla, Reyes, A., Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Endencia, and
Felix, JJ., concur.

MERCURY DRUG CORPORATION,G.R. No. 156037


Petitioner,
Present:
-

versus -

SEBASTIAN M. BAKING,
Respondent.

PUNO, C.J., Chairperson,


SANDOVAL-GUTIERREZ,
*
CORONA,
AZCUNA, and
GARCIA, JJ.
Promulgated:
May 25, 2007

x --------------------------------------------------------------------------------------x
DECISION
SANDOVAL-GUTIERREZ, J.:

For our resolution is the instant Petition for Review on Certiorari [1] assailing the Decision[2] dated May 30, 2002
and Resolution dated November 5, 2002 of the Court of Appeals in CA-G.R. CV No. 57435, entitled Sebastian
M. Baking, plaintiff-appellee, versus Mercury Drug Co. Inc., defendant-appellant.

The facts are:

On November 25, 1993, Sebastian M. Baking, respondent, went to the clinic of Dr. Cesar Sy for a medical checkup. On the following day, after undergoing an ECG, blood, and hematology examinations and urinalysis, Dr. Sy
found that respondents blood sugar and triglyceride were above normal levels. Dr. Sy then gave respondent two
medical prescriptions Diamicron for his blood sugar and Benalize tablets for his triglyceride.

Respondent then proceeded to petitioner Mercury Drug Corporation (Alabang Branch) to buy the prescribed
medicines. However, the saleslady misread the prescription for Diamicron as a prescription
for Dormicum. Thus, what was sold to respondent was Dormicum, a potent sleeping tablet.

Unaware that what was given to him was the wrong medicine, respondent took one pill of Dormicum on three
consecutive days November 6, 1993 at 9:00 p.m., November 7 at 6:00 a.m., and November 8 at 7:30 a.m.

On November 8 or on the third day he took the medicine, respondent figured in a vehicular accident. The car he
was driving collided with the car of one Josie Peralta. Respondent fell asleep while driving. He could not
remember anything about the collision nor felt its impact.

Suspecting that the tablet he took may have a bearing on his physical and mental state at the time of the collision,
respondent returned to Dr. Sys clinic. Upon being shown the medicine, Dr. Sy was shocked to find that what was

sold to respondent was Dormicum, instead of the prescribed Diamicron.

Thus, on April 14, 1994, respondent filed with the Regional Trial Court (RTC), Branch 80 of Quezon City a
complaint for damages against petitioner, docketed as Civil Case No. Q-94-20193.

After hearing, the trial court rendered its Decision dated March 18, 1997 in favor of respondent, thus:

WHEREFORE, premises considered, by preponderance of evidence, the Court hereby


renders judgment in favor of the plaintiff and against the defendant ordering the latter to pay
mitigated damages as follows:
1. P250,000.00 as moral damages;
2. P20,000.00 as attorneys fees and litigation expenses;
3. plus % of the cost of the suit.
SO ORDERED.
On appeal, the Court of Appeals, in its Decision, affirmed in toto the RTC judgment. Petitioner filed a
motion for reconsideration but it was denied in a Resolution dated November 5, 2002.

Hence, this petition.

Petitioner contends that the Decision of the Court of Appeals is not in accord with law or prevailing
jurisprudence.

Respondent, on the other hand, maintains that the petition lacks merit and, therefore, should be denied.

The issues for our resolution are:

1. Whether petitioner was negligent, and if so, whether such negligence was the proximate cause of
respondents accident; and

2. Whether the award of moral damages, attorneys fees, litigation expenses, and cost of the suit is
justified.

Article 2176 of the New Civil Code provides:

Art. 2176. 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.

To sustain a claim based on the above provision, the following requisites must concur: (a) damage
suffered by the plaintiff; (b) fault or negligence of the defendant; and, (c) connection of cause and effect between
the fault or negligence of the defendant and the damage incurred by the plaintiff.[3]

There is no dispute that respondent suffered damages.

It is generally recognized that the drugstore business is imbued with public interest. The health and safety
of the people will be put into jeopardy if drugstore employees will not exercise the highest degree of care and
diligence in selling medicines. Inasmuch as the matter of negligence is a question of fact, we defer to the findings
of the trial court affirmed by the Court of Appeals.

Obviously, petitioners employee was grossly negligent in selling to respondent Dormicum, instead of the
prescribed Diamicron. Considering that a fatal mistake could be a matter of life and death for a buying patient,
the said employee should have been very cautious in dispensing medicines. She should have verified whether the
medicine she gave respondent was indeed the one prescribed by his physician. The care required must be
commensurate with the danger involved, and the skill employed must correspond with the superior knowledge of
the business which the law demands.[4]

Petitioner contends that the proximate cause of the accident was respondents negligence in driving his
car.

We disagree.

Proximate cause is defined as any cause that produces injury in a natural and continuous sequence,
unbroken by any efficient intervening cause, such that the result would not have occurred otherwise. Proximate
cause is determined from the facts of each case, upon a combined consideration of logic, common sense, policy,
and precedent.[5]

Here, the vehicular accident could not have occurred had petitioners employee been careful in reading Dr.
Sys prescription. Without the potent effects of Dormicum, a sleeping tablet, it was unlikely that respondent would
fall asleep while driving his car, resulting in a collision.

Complementing Article 2176 is Article 2180 of the same Code which states:

ART. 2180. The obligation imposed by Article 2176 is demandable not only for ones own
acts or omissions, but also for those of persons for whom one is responsible.

xxx

The owners and managers of an establishment or enterprise are likewise responsible for
damages caused by their employees in the service of the branches in which the latter are employed
or on the occasion of their functions.
Employers shall be liable for the damages caused by their employees and household
helpers acting within the scope of their assigned tasks, even though the former are not engaged in
any business or industry.
xxx
The responsibility treated of in this article shall cease when the persons herein mentioned
prove that they observed the diligence of a good father of a family to prevent damage.

It is thus clear that the employer of a negligent employee is liable for the damages caused by the
latter. When an injury is caused by the negligence of an employee, there instantly arises a presumption of the law
that there has been negligence on the part of the employer, either in the selection of his employee or in the
supervision over him, after such selection. The presumption, however, may be rebutted by a clear showing on the
part of the employer that he has exercised the care and diligence of a good father of a family in the selection and
supervision of his employee.[6]Here, petitioner's failure to prove that it exercised the due diligence of a good
father of a family in the selection and supervision of its employee will make it solidarily liable for damages
caused by the latter.

As regards the award of moral damages, we hold the same to be in order. Moral damages may be awarded
whenever the defendants wrongful act or omission is the proximate cause of the plaintiffs physical suffering,
mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation,
and
similar
injury
in
the
cases
[7]
specified or analogous to those provided in Article 2219 of the Civil Code.

Respondent has adequately established the factual basis for the award of moral damages when he testified
that he suffered mental anguish and anxiety as a result of the accident caused by the negligence of petitioners
employee.

There is no hard-and-fast rule in determining what would be a fair and reasonable amount of moral
damages, since each case must be governed by its own peculiar facts. However, it must be commensurate to the
loss or injury suffered.[8] Taking into consideration the attending circumstances here, we are convinced that the
amount awarded by the trial court is exorbitant. Thus, we reduce the amount of moral damages from P250,000.00
to P50,000.00 only.

In addition, we also deem it necessary to award exemplary damages. Article 2229 allows the grant of
exemplary damages by way of example or correction for the public good. As mentioned earlier, the drugstore

business is affected with public interest. Petitioner should have exerted utmost diligence in the selection and
supervision of its employees. On the part of the employee concerned, she should have been extremely cautious in
dispensing pharmaceutical products. Due to the sensitive nature of its business, petitioner must at all times
maintain a high level of meticulousness. Therefore, an award of exemplary damages in the amount of P25,000.00
is in order.

On the matter of attorneys fees and expenses of litigation, it is settled that the reasons or grounds for the
award thereof must be set forth in the decision of the court. [9] Since the trial courts decision did not give the basis
of the award, the same must be deleted. In Vibram Manufacturing Corporation v. Manila Electric Company,
[10]
we held:

Likewise, the award for attorneys fees and litigation expenses should be deleted. Wellenshrined is that an award for attorneys fees must be stated in the text of the courts decision and
not in the dispositive portion only (Consolidated Bank and Trust Corporation (Solidbank) v. Court
of Appeals, 246 SCRA 193 [1995] and Keng Hua Paper Products, Inc. v. Court of Appeals, 286
SCRA 257 [1998]). This is also true with the litigation expenses where the body of the decision
discussed nothing for its basis.

WHEREFORE, we DENY the petition. The challenged Decision and Resolution of the Court of Appeals
in CA-G.R. CV No. 57435 are AFFIRMED with modification in the sense that (a) the award of moral damages
to respondent is reduced from P250,000.00 to P50,000.00; (b) petitioner is likewise ordered to pay said
respondent exemplary damages in the amount of P25,000.00; and (c) the award of attorneys fees and litigation
expenses is deleted.

Costs against petitioner.

SO ORDERED.

G.R. No. 105410 July 25, 1994


PILIPINAS BANK, petitioner,
vs.
HON. COURT OF APPEALS AND FLORENCIO REYES, respondents.
Gella Reyes Danguilan & Associates for petitioner.
Santos V. Pampolina, Jr. for private respondent.

PUNO, J.:
This is a petition for review of the Decision of the respondent court 1 in CA-G.R. CV No. 29524 dated May 13,
1992 which ordered petitioner to pay the private respondent the sum of P50,000.00 as moral damages,
P25,000.00 as attorney's fees and cost of suit.
The facts as found both by the trial court 2 and the respondent court are:

As payments for the purchased shoe materials and rubber shoes, Florencio Reyes issued postdated
checks to Winner Industrial Corporation for P20,927.00 and Vicente Tui, for P11,419.50, with due
dates on October 10 and 12, 1979, respectively.
To cover the face value of the checks, plaintiff, on October 10, 1979, requested PCIB Money
Shop's manager Mike Potenciano to effect the withdrawal of P32,000.00 from his savings account
therein and have it deposited with his current account with Pilipinas Bank (then Filman Bank),
Bian Branch. Roberto Santos was requested to make the deposit.
In depositing in the name of FLORENCIO REYES, he inquired from the teller the current account
number of Florencio Reyes to complete the deposit slip he was accomplishing. He was informed
that it was "815" and so this was the same current account number he placed on the deposit slip
below the depositor's name FLORENCIO REYES.
Nothing that the account number coincided with the name Florencio, Efren Alagasi, then Current
Account Bookkeeper of Pilipinas Bank, thought it was for Florencio Amador who owned the listed
account number. He, thus, posted the deposted in the latter's account not noticing that the
depositor's surname in the deposit slip was REYES.
On October 11, 1979, the October 10, check in favor of Winner Industrial Corporation was
presented for payment. Since the ledger of Florencio Reyes indicated that his account had only a
balance of P4,078.43, it was dishonored and the payee was advised to try it for next clearing.
On October 15, 1979, the October 10, 1979 check was redeposited but was again dishonored.
Likewise, the October 12, 1979 check in favor of Vicente Tui when presented for payment on that
same date met the same fate but was advised to try the next clearing. Two days after the October
10 check was again dishonored, the payee returned the same to Florencio Reyes and demanded a
cash payment of its face value which he did if only to save his name. The October 12, 1979 check
was redeposited on October 18, 1979, but again dishonored for the reason that the check was
drawn against insufficient fund.
Furious over the incident, he immediately proceeded to the bank and urged an immediate
verification of his account.
Upon verification, the bank noticed the error. The P32,000.00 deposit posted in the account of
Florencio Amador was immediately transferred to the account of Reyes upon being cleared by
Florencio Amador that he did not effect a deposit in the amount of P32,000.00. The transfer having
been effected, the bank then honored the October 12, 1979, check (Exh. "C").
On the basis of these facts, the trial court ordered petitioner to pay to the private respondent: (1) P200,000.00 as
compensatory damages; (2) P100,000.00 as moral damages; (3) P25,000.00 as attorney's fees, and (4) the costs of
suit. On appeal to the respondent court, the judgment was modified as aforestated.
In this petition for review, petitioner argues:
I. Respondent Court of Appeals erred on a matter of law, in not applying the first sentence of
Article 2179, New Civil Code, in view of its own finding that respondent Reyes' own
representative committed the mistake in writing down the correct account number;
II. Respondent Court of Appeals erred, on a matter of law, in holding that respondent Reyes has
the right to recover moral damages and in awarding the amount of P50,000.00, when there is no
legal nor factual basis for it;
III. The Honorable Court of Appeals erred, on a matter of law, in holding petitioner liable for
attorney's fees in the amount of P20,000.00, when there is no legal nor factual basis for it.
We find no merit in the petition.

First. For Article 2179 3 of the Civil Code to apply, it must be established that private respondent's own
negligence was the immediate and proximate cause of his injury. The concept of proximate cause is well defined
in our corpus of jurisprudence as "any cause which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces the result complained of and without which would not have occurred and
from which it ought to have been forseen or reasonably anticipated by a person of ordinary case that the injury
complained of or some similar injury, would result therefrom as a natural and probable consequence." 4 In the
case at bench, the proximate cause of the injury is the negligence of petitioner's employee in erroneously posting
the cash deposit of private respondent in the name of another depositor who had a similar first name. As held by
the trial court:
xxx xxx xxx
Applying the test, the bank employee is, on that basis, deemed to have failed to exercise the degree
of care required in the performance of his duties. As earlier stated, the bank employee posted the
cash deposit in the account of Florencio Amador from his assumption that the name Florencio
appearing on the ledger without, however, going through the full name, is the same Florencio
stated in the deposit slip. He should have continuously gone beyond mere assumption, which was
proven to be erroneous, and proceeded with clear certainty, considering the amount involved and
the repercussions it would create on the totality of the person notable of which is the credit
standing of the person involved should a mistake happen. The checks issued by the plaintiff in the
course of his business were dishonored by the bank because the ledger of Florencio Reyes
indicated a balance insufficient to cover the face value of checks.
Second. In light of this negligence, the liability of petitioner for moral damages cannot be impugned. So we held
in Bank of the Philippine Islands vs. IAC, et al. 5
The bank is not expected to be infallible but, as correctly observed by respondent Appellate Court,
in this instance, it must bear the blame for not discovering the mistake of its teller despite the
established procedure requiring the papers and bank books to pass through a battery of bank
personnel whose duty it is to check and countercheck them for possible errors. Apparently, the
officials and employees tasked to do that did not perform their duties with due care, as may be
gathered from the testimony of the bank's lone witness, Antonio Enciso, who casually declared
that "the approving officer does not have to see the account numbers and all those things. Those
are very petty things for the approving manager to look into" (p. 78, Record on Appeal).
Unfortunately, it was a "petty thing," like the incorrect account number that the bank teller wrote
on the initial deposit slip for the newly-opened joint current account of the Canlas spouses, that
sparked this half-a-million-peso damage suit against the bank.
While the bank's negligence may not have been attended with malice and bad faith, nevertheless, it
caused serious anxiety, embarrassment and humiliation to the private respondents for which they
are entitled to recover reasonable moral damages (American Express International, Inc. IAC, 167
SCRA 209). The award of reasonable attorney's fees is proper for the private respondent's were
compelled to litigate to protect their interest (Art. 2208, Civil Code). However, the absence of
malice and bad faith renders the award of exemplary damages improper (Globe Mackay Cable and
Radio Corp. vs. Court of Appeals, 176 SCRA 778).
IN VIEW WHEREOF, the petition is denied there being no reversible error in the Decision of the respondent
court. Cost against petitioner.
SO ORDERED.

G.R. No. 130068 October 1, 1998

FAR EASTERN SHIPPING COMPANY, petitioner,


vs.
COURT OF APPEALS and PHILIPPINE PORTS AUTHORITY, respondents.
G.R. No. 130150 October, 1998
MANILA PILOTS ASSOCIATION, petitioner,
vs.
PHILIPPINE PORTS AUTHORITY and FAR EASTERN SHIPPING COMPANY, respondents.

REGALADO, J.:
These consolidated petitions for review on certiorari seek in unison to annul and set aside the decision 1 of
respondent Court of Appeals of November 15, 1996 and its resolution 2 dated July 31, 1997 in CA-G.R. CV No.
24072, entitled "Philippine Ports Authority, Plaintiff-Appellee vs. Far Eastern Shipping Company, Senen C.
Gavino and Manila Pilots' Association, Defendants-Appellants," which affirmed with modification the judgment
of the trial court holding the defendants-appellants therein solidarily liable for damages in favor of herein private
respondent.
There is no dispute about the facts as found by the appellate court,
thus
. . . On June 20, 1980, the M/V PAVLODAR, flying under the flagship of the USSR, owned and
operated by the Far Eastern Shipping Company (FESC for brevity's sake), arrived at the Port of
Manila from Vancouver, British Columbia at about 7:00 o'clock in the morning. The vessel was
assigned Berth 4 of the Manila International Port, as its berthing space. Captain Roberto Abellana
was tasked by the Philippine Port Authority to supervise the berthing of the vessel. Appellant
Senen Gavino was assigned by the Appellant Manila Pilots' Association (MPA for brevity's sake)
to conduct docking maneuvers for the safe berthing of the vessel to Berth No. 4.
Gavino boarded the vessel at the quarantine anchorage and stationed himself in the bridge, with
the master of the vessel, Victor Kavankov, beside him. After a briefing of Gavino by Kavankov of
the particulars of the vessel and its cargo, the vessel lifted anchor from the quarantine anchorage
and proceeded to the Manila International Port. The sea was calm and the wind was ideal for
docking maneuvers.
When the vessel reached the landmark (the big church by the Tondo North Harbor) one-half mile
from the pier, Gavino ordered the engine stopped. When the vessel was already about 2,000 feet
from the pier, Gavino ordered the anchor dropped. Kavankov relayed the orders to the crew of the
vessel on the bow. The left anchor, with two (2) shackles, were dropped. However, the anchor did
not take hold as expected. The speed of the vessel did not slacken. A commotion ensued between
the crew members. A brief conference ensued between Kavankov and the crew members. When
Gavino inquired what was all the commotion about, Kavankov assured Gavino that there was
nothing to it.
After Gavino noticed that the anchor did not take hold, he ordered the engines half-astern.
Abellana, who was then on the pier apron, noticed that the vessel was approaching the pier fast.
Kavankov likewise noticed that the anchor did not take hold. Gavino thereafter gave the "fullastern" code. Before the right anchor and additional shackles could be dropped, the bow of the
vessel rammed into the apron of the pier causing considerable damage to the pier. The vessel
sustained damage too, (Exhibit "7-Far Eastern Shipping). Kavankov filed his sea protest (Exhibit
"1-Vessel"). Gavino submitted his report to the Chief Pilot (Exhibit "1-Pilot") who referred the
report to the Philippine Ports Authority (Exhibit 2-Pilot"). Abellana likewise submitted his report
of the incident (Exhibit "B").
Per contract and supplemental contract of the Philippine Ports Authority and the contractor for the
rehabilitation of the damaged pier, the same cost the Philippine Ports Authority the amount of
P1,126,132.25 (Exhibits "D" and "E"). 3

On January 10, 1983, the Philippine Ports Authority (PPA, for brevity), through the Solicitor General, filed before
the Regional Trial Court of Manila, Branch 39, a complaint for a sum of money against Far Eastern Shipping Co.,
Capt. Senen C. Gavino and the Manila Pilots' Association, docketed as Civil Case No. 83-14958, 4 praying that
the defendants therein be held jointly and severally liable to pay the plaintiff actual and exemplary damages plus
costs of suit. In a decision dated August 1, 1985, the trial court ordered the defendants therein jointly and
severally to pay the PPA the amount of P1,053,300.00 representing actual damages and the costs of suit. 5
The defendants appealed to the Court of Appeals and raised the following issues: (1) Is the pilot of a commercial
vessel, under compulsory pilotage, solely liable for the damage caused by the vessel to the pier, at the port of
destination, for his negligence? and (2) Would the owner of the vessel be liable likewise if the damage is caused
by the concurrent negligence of the master of the vessel and the pilot under a compulsory pilotage?
As stated at the outset, respondent appellate court affirmed the findings of the court a quo except that if found no
employer-employee relationship existing between herein private respondents Manila Pilots' Association (MPA,
for short) and Capt. Gavino. 6 This being so, it ruled instead that the liability of MPA is anchored, not on Article
2180 of the Civil Code, but on the provisions of Customs Administrative Order No. 15-65, 7 and accordingly
modified said decision of the trial court by holding MPA, along with its co-defendants therein, still solidarily
liable to PPA but entitled MPA to reimbursement from Capt. Gavino for such amount of the adjudged pecuniary
liability in excess of the amount equivalent to seventy-five percent (75%) of its prescribed reserve
fund. 8
Neither Far Eastern Shipping Co. (briefly, FESC) nor MPA was happy with the decision of the Court of Appeals
and both of them elevated their respective plaints to us via separate petitions for review on certiorari.
In G. R. No. 130068, which was assigned to the Second Division of this Court, FESC imputed that the Court of
Appeals seriously erred:
1. in not holding Senen C. Gavino and the Manila Pilots' Association as the parties solely
responsible for the resulting damages sustained by the pier deliberately ignoring the established
jurisprudence on the matter;
2. in holding that the master had not exercised the required diligence demanded from him by the
circumstances at the time the incident happened;
3. in affirming the amount of damages sustained by the respondent Philippine Ports Authority
despite a strong and convincing evidence that the amount is clearly exorbitant and unreasonable;
4. in not awarding any amount of counterclaim prayed for by the petitioner in its answer; and
5. in not granting herein petitioner's claim against pilot Senen C. Gavino and Manila Pilots'
Association in the event that it be held
liable. 9
Petitioner asserts that since the MV PAVLODAR was under compulsory pilotage at the time of the incident, it
was the compulsory pilot, Capt. Gavino, who was in command and had complete control in the navigation and
docking of the vessel. It is the pilot who supersedes the master for the time being in the command and navigation
of a ship and his orders must be obeyed in all respects connected with her navigation. Consequently, he was
solely responsible for the damage caused upon the pier apron, and not the owners of the vessel. It claims that the
master of the boat did not commit any act of negligence when he failed to countermand or overrule the orders of
the pilot because he did not see any justifiable reason to do so. In other words, the master cannot be faulted for
relying absolutely on the competence of the compulsory pilot. If the master does not observe that a compulsory
pilot is incompetent or physically incapacitated, the master is justified in relying on the pilot. 10
Respondent PPA, in its comment, predictably in full agreement with the ruling of respondent court on the
solidary liability of FESC, MPA and Capt. Gavino, stresses the concurrent negligence of Capt. Gavino, the harbor
pilot, and Capt. Viktor Kabankov, * shipmaster of MV Pavlodar, as the basis of their solidary liability for
damages sustained by PPA. It posits that the vessel was being piloted by Capt. Gavino with Capt. Kabankov
beside him all the while on the bridge of the vessel, as the former took over the helm of MV Pavlodar when it
rammed and damaged the apron of the pier of Berth No. 4 of the Manila International Port. Their concurrent
negligence was the immediate and proximate cause of the collision between the vessel and the pier Capt.
Gavino, for his negligence in the conduct of docking maneuvers for the safe berthing of the vessel; and Capt.

Kabankov, for failing to countermand the orders of the harbor pilot and to take over and steer the vessel himself
in the face of imminent danger, as well as for merely relying on Capt. Gavino during the berthing procedure. 11
On the other hand, in G.R. No. 130150, originally assigned to the Court's First Division and later transferred to
the Third Division. MPA, now as petitioner in this case, avers that respondent court's errors consisted in
disregarding and misinterpreting Customs Administrative Order No. 15-65 which limits the liability of MPA.
Said pilots' association asseverates that it should not be held solidarily liable with Capt. Gavino who, as held by
respondent court is only a member, not an employee, thereof. There being no employer-employee relationship,
neither can MPA be held liable for any vicarious liability for the respective exercise of profession by its members
nor be considered a joint tortfeasor as to be held jointly and severally liable. 12 It further argues that there was
erroneous reliance on Customs Administrative Order No. 15-65 and the constitution and by-laws of MPA, instead
of the provisions of the Civil Code on damages which, being a substantive law, is higher in category than the
aforesaid constitution and by-laws of a professional organization or an administrative order which bears no
provision classifying the nature of the liability of MPA for the negligence its member pilots. 13
As for Capt. Gavino, counsel for MPA states that the former had retired from active pilotage services since July
28, 1994 and has ceased to be a member of petitioner pilots' association. He is not joined as a petitioner in this
case since his whereabouts are unknown. 14
FESC's comment thereto relied on the competence of the Court of Appeals in construing provisions of law or
administrative orders as bases for ascertaining the liability of MPA, and expressed full accord with the appellate
court's holding of solidary liability among itself, MPA and Capt. Gavino. It further avers that the disputed
provisions of Customs Administrative Order No. 15-65 clearly established MPA's solidary liability. 15
On the other hand, public respondent PPA, likewise through representations by the Solicitor General, assumes the
same supportive stance it took in G.R. No. 130068 in declaring its total accord with the ruling of the Court of
Appeals that MPA is solidarily liable with Capt. Gavino and FESC for damages, and in its application to the
fullest extent of the provisions of Customs Administrative Order No. 15-65 in relation to MPA's constitution and
by-laws which spell out the conditions of and govern their respective liabilities. These provisions are clear and
unambiguous as regards MPA's liability without need for interpretation or construction. Although Customs
Administrative Order No. 15-65 is a mere regulation issued by an administrative agency pursuant to delegated
legislative authority to fix details to implement the law, it is legally binding and has the same statutory force as
any valid statute. 16
Upon motion 17 by FESC dated April 24, 1998 in G.R. No. 130150, said case was consolidated with G.R. No.
130068. 18
Prefatorily, on matters of compliance with procedural requirements, it must be mentioned that the conduct of the
respective counsel for FESC and PPA leaves much to be desired, to the displeasure and disappointment of this
Court.
Sec. 2, Rule 42 of the 1997 Rules of Civil Procedure 19 incorporates the former Circular No. 28-91 which
provided for what has come to be known as the certification against forum shopping as an additional requisite for
petitions filed with the Supreme Court and the Court of Appeals, aside from the other requirements contained in
pertinent provisions of the Rules of Court therefor, with the end in view of preventing the filing of multiple
complaints involving the same issues in the Supreme Court, Court of Appeals or different divisions thereof or any
other tribunal or agency.
More particularly, the second paragraph of Section 2, Rule 42 provides:
xxx xxx xxx
The petitioner shall also submit together with the petition a certification under oath that he has not
theretofore commenced any other action involving the same issues in the Supreme Court, the
Court of Appeals or different divisions thereof, or any other tribunal or agency; if there is such
other action or proceeding, he must state the status of the same; and if he should thereafter learn
that a similar action or proceeding has been filed or is pending before the Supreme Court, the
Court of Appeals or different divisions thereof, or any other tribunal or agency, he undertakes to
promptly inform the aforesaid courts and other tribunal or agency thereof within five (5) days
therefrom. (Emphasis ours.)

For petitions for review filed before the Supreme Court, Section 4(e), Rule 45 specifically requires that
such petition shall contain a sworn certification against forum shopping as provided in the last paragraph
of Section 2, Rule 42.
The records show that the law firm of Del Rosario and Del Rosario through its associate, Atty. Herbert A. Tria, is
the counsel of record for FESC in both G.R. No. 130068 and G.R. No. 130150.
G.R. No. 130068, which is assigned to the Court's Second Division, commenced with the filing by FESC through
counsel on August 22, 1997 of a verified motion for extension of time to file its petition for thirty (30) days from
August 28, 1997 or until September 27, 1997. 20 Said motion contained the following certification against forum
shopping 21 signed by Atty. Herbert A. Tria as affiant:
CERTIFICATION
AGAINST FORUM SHOPPING
I/we hereby certify that I/we have not commenced any other action or proceeding involving the
same issues in the Supreme Court, the Court of Appeals, or any other tribunal or agency; that to
the best of my own knowledge, no such action or proceeding is pending in the Supreme Court, the
Court of Appeals, or any other tribunal or agency; that if I/we should thereafter learn that a similar
action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals,
or any other tribunal or agency, I/we undertake to report that fact within five (5) days therefrom to
this Honorable Court.
This motion having been granted, FESC subsequently filed its petition on September 26, 1997, this time
bearing a "verification and certification against forum-shopping" executed by one Teodoro P. Lopez on
September 24, 1997, 22 to wit:
VERIFICATION AND CERTIFICATION
AGAINST FORUM SHOPPING
in compliance with Section 4(e), Rule 45 in relation
to Section 2, Rule 42 of the Revised Rules of Civil Procedure
I, Teodoro P. Lopez, of legal age, after being duly sworn, depose and state:
1. That I am the Manager, Claims Department of Filsov Shipping Company, the local agent of
petitioner in this case.
2. That I have caused the preparation of this Petition for Review on Certiorari.
3. That I have read the same and the allegations therein contained are true and correct based on the
records of this case.
4. That I certify that petitioner has not commenced any other action or proceeding involving the
same issues in the Supreme Court or Court of Appeals, or any other tribunal or agency, that to the
best of my own knowledge, no such action or proceeding is pending in the Supreme Court, the
Court of Appeals or any other tribunal or agency, that if I should thereafter learn that a similar
action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals,
or any other tribunal or agency, I undertake to report the fact within five (5) days therefrom to this
Honorable Court. (Italics supplied for emphasis.)
Reviewing the records, we find that the petition filed by MPA in G.R. No. 130150 then pending with the Third
Division was duly filed on August 29, 1997 with a copy thereof furnished on the same date by registered mail to
counsel for FESC. 23 Counsel of record for MPA. Atty. Jesus P. Amparo, in his verification accompanying said
petition dutifully revealed to the Court that
xxx xxx xxx
3. Petitioner has not commenced any other action or proceeding involving the same issues in this
Honorable Court, the Court of Appeals or different Divisions thereof, or any other tribunal or
agency, but to the best of his knowledge, there is an action or proceeding pending in this

Honorable Court, entitled Far Eastern Shipping Co., Petitioner, vs. Philippine Ports Authority
and Court of Appeals with a Motion for Extension of time to file Petition For Review by Certiorari
filed sometime on August 18, 1987. If undersigned counsel will come to know of any other
pending action or claim filed or pending he undertakes to report such fact within five (5) days to
this Honorable Court. 24 (Emphasis supplied.)
Inasmuch as MPA's petition in G.R. No. 130150 was posted by registered mail on August 29, 1997 and taking
judicial notice of the average period of time it takes local mail to reach its destination, by reasonable estimation it
would be fair to conclude that when FESC filed its petition in G.R. No. 130068 on September 26, 1997, it would
already have received a copy of the former and would then have knowledge of the pendency of the other petition
initially filed with the First Division. It was therefore incumbent upon FESC to inform the Court of that fact
through its certification against forum shopping. For failure to make such disclosure, it would appear that the
aforequoted certification accompanying the petition in G.R. No. 130068 is defective and could have been a
ground for dismissal thereof.
Even assuming that FESC had not yet received its copy of MPA's petition at the time it filed its own petition and
executed said certification, its signatory did state "that if I should thereafter learn that a similar action or
proceeding has been filed or is pending before the Supreme Court, the Court of Appeals or any other tribunal or
agency, I undertake to report the fact within five (5) days therefrom to this Honorable Court." 25 Scouring the
records page by page in this case, we find that no manifestation concordant with such undertaking was then or at
any other time thereafter ever filed by FESC nor was there any attempt to bring such matter to the attention of the
Court. Moreover, it cannot feign non-knowledge of the existence of such other petition because FESC itself filed
the motion for consolidation in G.R. No. 130150 of these two cases on April 24, 1998.
It is disturbing to note that counsel for FESC, the law firm of Del Rosario and Del Rosario, displays an
unprofessional tendency of taking the Rules for granted, in this instance exemplified by its pro forma compliance
therewith but apparently without full comprehension of and with less than faithful commitment to its
undertakings to this Court in the interest of just, speedy and orderly administration of court proceedings.
As between the lawyer and the courts, a lawyer owes candor, fairness and good faith to the court. 26 He is an
officer of the court exercising a privilege which is indispensable in the administration of justice. 27 Candidness,
especially towards the courts, is essential for the expeditious administration of justice. Courts are entitled to
expect only complete honesty from lawyers appearing and pleading before them. 28 Candor in all dealings is the
very essence of honorable membership in the legal profession. 29 More specifically, a lawyer is obliged to observe
the rules of procedure and not to misuse them to defeat the ends of justice. 30 It behooves a lawyer, therefore, to
exert every effort and consider it his duty to assist in the speedy and efficient administration of justice. 31 Being
an officer of the court, a lawyer has a responsibility in the proper administration of justice. Like the court itself,
he is an instrument to advance its ends the speedy, efficient, impartial, correct and inexpensive adjudication of
cases and the prompt satisfaction of final judgments. A lawyer should not only help attain these objectives but
should likewise avoid any unethical or improper practices that impede, obstruct or prevent their realization,
charged as he is with the primary task of assisting in the speedy and efficient administration of justice. 32
Sad to say, the members of said law firm sorely failed to observe their duties as responsible members of the Bar.
Their actuations are indicative of their predisposition to take lightly the avowed duties of officers of the Court to
promote respect for law and for legal processes. 33 We cannot allow this state of things to pass judicial muster.
In view of the fact that at around the time these petitions were commenced, the 1997 Rules of Civil Procedure
had just taken effect, the Court treated infractions of the new Rules then with relative liberality in evaluating full
compliance therewith. Nevertheless, it would do well to remind all concerned that the penal provisions of
Circular No. 28-91 which remain operative provides, inter alia:
3. Penalties.
xxx xxx xxx
(c) The submission of a false certification under Par. 2 of the Circular shall likewise constitute
contempt of court, without prejudice to the filing of criminal action against the guilty party. The
lawyer may also be subjected to disciplinary proceedings.
It must be stressed that the certification against forum shopping ordained under the Rules is to be executed by
thepetitioner, and not by counsel. Obviously it is the petitioner, and not always the counsel whose professional
services have been retained for a particular case, who is in the best position to know whether he or it actually

filed or caused the filing of a petition in that case. Hence, a certification against forum shopping by counsel is a
defective certification. It is clearly equivalent to non-compliance with the requirement under Section 2, Rule 42
in relation to Section 4, Rule 45, and constitutes a valid cause for dismissal of the petition.
Hence, the initial certification appended to the motion for extension of time to file petition in G.R. No. 130068
executed in behalf of FESC by Atty. Tria is procedurally deficient. But considering that it was a superfluity at that
stage of the proceeding, it being unnecessary to file such a certification with a mere motion for extension, we
shall disregard such error. Besides, the certification subsequently executed by Teodoro P. Lopez in behalf of
FESC cures that defect to a certain extent, despite the inaccuracies earlier pointed out. In the same vein, we shall
consider the verification signed in behalf of MPA by its counsel, Atty. Amparo, in G.R. No. 130150 as substantial
compliance inasmuch as it served the purpose of the Rules of informing the Court of the pendency of another
action or proceeding involving the same issues.
It bears stressing that procedural rules are instruments in the speedy and efficient administration of justice. They
should be used to achieve such end and not to derail it. 34
Counsel for PPA did not make matters any better. Despite the fact that, save for the Solicitor General at the time,
the same legal team of the Office of the Solicitor General (OSG, for short) composed of Assistant Solicitor
General Roman G. Del Rosario and Solicitor Luis F. Simon, with the addition of Assistant Solicitor General Pio
C. Guerrero very much later in the proceedings, represented PPA throughout the appellate proceedings in both
G.R. No. 130068 and G.R. No. 130150 and was presumably fully acquainted with the facts and issues of the case,
it took the OSG an inordinately and almost unreasonably long period of time to file its comment, thus unduly
delaying the resolution of these cases. It took several changes of leadership in the OSG from Silvestre H.
Bello III to Romeo C. dela Cruz and, finally, Ricardo P. Galvez before the comment in behalf of PPA was
finally filed.
In G.R. No. 130068, it took eight (8) motions for extension of time totaling 210 days, a warning that no further
extensions shall be granted, and personal service on the Solicitor General himself of the resolution requiring the
filing of such comment before the OSG indulged the Court with the long required comment on July 10,
1998. 35This, despite the fact that said office was required to file its comment way back on November 12,
1997. 36 A closer scrutiny of the records likewise indicates that petitoner FESC was not even furnished a copy of
said comment as required by Section 5, Rule 42. Instead, a copy thereof was inadvertently furnished to MPA
which, from the point of view of G.R. No. 130068, was a non-party. 37 The OSG fared slightly better in G.R. No.
130150 in that it took only six (6) extensions, or a total of 180 days, before the comment was finally filed. 38 And
while it properly furnished petitioner MPA with a copy of its comment, it would have been more desirable and
expedient in this case to have furnished its therein co-respondent FESC with a copy thereof, if only as a matter of
professional courtesy. 39
This undeniably dilatory disinclination of the OSG to seasonably file required pleadings constitutes deplorable
disservice to the tax-paying public and can only be categorized as censurable inefficiency on the part of the
government law office. This is most certainly professionally unbecoming of the OSG.
Another thing that baffles the Court is why the OSG did not take the inititive of filing a motion for consolidation
in either G.R. No. 130068 or G.R. No. 130150, considering its familiarity with the background of the case and if
only to make its job easier by having to prepare and file only one comment. It could not have been unaware of
the pendency of one or the other petition because, being counsel for respondent in both cases, petitioner is
required to furnish it with a copy of the petition under pain of dismissal of the petition for failure otherwise. 40
Besides, in G.R. 130068, it prefaces its discussions thus
Incidentally, the Manila Pilots' Association (MPA), one of the defendants-appellants in the case
before the respondent Court of Appeals, has taken a separate appeal from the said decision to this
Honorable Court, which was docketed as G.R. No. 130150 and entitled "Manila Pilots'
Association, Petitioner, versus Philippine Ports Authority and Far Eastern Shipping Co.,
Respondents." 41
Similarly, in G.R. No. 130150, it states
Incidentally, respondent Far Eastern Shipping Co. (FESC) had also taken an appeal from the said
decision to this Honorable Court, docketed as G.R. No. 130068, entitled "Far Eastern Shipping
Co. vs. Court of Appeals and Philippine Ports Authority." 42

We find here a lackadaisical attitude and complacency on the part of the OSG in the handling of its cases and an
almost reflexive propensity to move for countless extensions, as if to test the patience of the Court, before
favoring it with the timely submission of required pleadings.
It must be emphasized that the Court can resolve cases only as fast as the respective parties in a case file the
necessary pleadings. The OSG, by needlessly extending the pendency of these cases through its numerous
motions for extension, came very close to exhausting this Court's forbearance and has regrettably fallen short of
its duties as the People's Tribune.
The OSG is reminded that just like other members of the Bar, the canons under the Code of Professional
Responsibility apply with equal force on lawyers in government service in the discharge of their official
tasks. 43These ethical duties are rendered even more exacting as to them because, as government counsel, they
have the added duty to abide by the policy of the State to promote a high standard of ethics in public
service. 44 Furthermore, it is incumbent upon the OSG, as part of the government bureaucracy, to perform and
discharge its duties with the highest degree of professionalism, intelligence and skill 45 and to extend prompt,
courteous and adequate service to the public. 46
Now, on the merits of the case. After a judicious examination of the records of this case, the pleadings filed, and
the evidence presented by the parties in the two petitions, we find no cogent reason to reverse and set aside the
questioned decision. While not entirely a case of first impression, we shall discuss the issues seriatim and,
correlatively by way of a judicial once-over, inasmuch as the matters raised in both petitions beg for validation
and updating of well-worn maritime jurisprudence. Thereby, we shall write finis to the endless finger-pointing in
this shipping mishap which has been stretched beyond the limits of judicial tolerance.
The Port of Manila is within the Manila Pilotage District which is under compulsory pilotage pursuant to Section
8, Article III of Philippine Ports Authority Administrative Order No. 03-85, 47 which provides that:
Sec. 8. Compulsor Pilotage Service. For entering a harbor and anchoring thereat, or passing
through rivers or straits within a pilotage district, as well as docking and undocking at any
pier/wharf, or shifting from one berth or another, every vessel engaged in coastwise and foreign
trade shall be under compulsory pilotage. . . .
In case of compulsory pilotage, the respective duties and responsibilities of the compulsory pilot and the master
have been specified by the same regulation in this wise:
Sec. 11. Control of vessels and liability for damage. On compulsory pilotage grounds, the
Harbor Pilot providing the service to a vessel shall be responsible for the damage caused to a
vessel or to life and property at ports due to his negligence or fault. He can only be absolved from
liability if the accident is caused by force majeure or natural calamities provided he has exercised
prudence and extra diligence to prevent or minimize damage.
The Master shall retain overall command of the vessel even on pilotage grounds whereby he can
countermand or overrule the order or command of the Harbor Pilot on beard. In such event, any
damage caused to a vessel or to life and property at ports by reason of the fault or negligence of
the Master shall be the responsibility and liability of the registered owner of the vessel concerned
without prejudice to recourse against said Master.
Such liability of the owner or Master of the vessel or its pilots shall be determined by competent
authority in appropriate proceedings in the light of the facts and circumstances of each particular
case.
Sec. 32. Duties and responsibilities of the Pilot or Pilots' Association. The duties and
responsibilities of the Harbor Pilot shall be as follows:
xxx xxx xxx
f) a pilot shall be held responsible for the direction of a vessel from the time he assumes his work
as a pilot thereof until he leaves it anchored or berthed safely; Provided, however, that his
responsibility shall cease at the moment the Master neglects or refuses to carry out hisorder.
Customs Administrative Order No. 15-65 issued twenty years earlier likewise provided in Chapter I thereof for
the responsibilities of pilots:

Par. XXXIX. A Pilot shall be held responsible for the direction of a vessel from the time he
assumes control thereof until he leaves it anchored free from shoal: Provided, That his
responsibility shall cease at the moment the master neglects or refuses to carry out his instructions.
xxx xxx xxx
Par. XLIV. Pilots shall properly and safely secure or anchor vessels under their control when
requested to do so by the master of such vessels.
I. G.R. No. 130068
Petitioner FESC faults the respondent court with serious error in not holding MPA and Capt. Gavino solely
responsible for the damages cause to the pier. It avers that since the vessel was under compulsory pilotage at the
time with Capt. Gavino in command and having exclusive control of the vessel during the docking maneuvers,
then the latter should be responsible for damages caused to the pier. 48 It likewise holds the appellate court in
error for holding that the master of the ship, Capt. Kabankov, did not exercise the required diligence demanded
by the circumstances. 49
We start our discussion of the successive issues bearing in mind the evidentiary rule in American jurisprudence
that there is a presumption of fault against a moving vessel that strikes a stationary object such as a dock or
navigational aid. In admiralty, this presumption does more than merely require the ship to go forward and
produce some evidence on the presumptive matter. The moving vessel must show that it was without fault or that
the collision was occasioned by the fault of the stationary object or was the result of inevitable accident. It has
been held that such vessel must exhaust every reasonable possibility which the circumstances admit and show
that in each, they did all that reasonable care required. 50 In the absence of sufficient proof in rebuttal, the
presumption of fault attaches to a moving vessel which collides with a fixed object and makes a prima facie case
of fault against the vessel. 51Logic and experience support this presumption:
The common sense behind the rule makes the burden a heavy one. Such accidents simply do not
occur in the ordinary course of things unless the vessel has been mismanaged in some way. It is
nor sufficient for the respondent to produce witnesses who testify that as soon as the danger
became apparent everything possible was done to avoid an accident. The question remains, How
then did the collision occur? The answer must be either that, in spite of the testimony of the
witnesses, what was done was too little or too late or, if not, then the vessel was at fault for being
in a position in which an unavoidable collision would occur. 52
The task, therefore, in these cases is to pinpoint who was negligent the master of the ship, the harbor
pilot or both.
A pilot, in maritime law, is a person duly qualified, and licensed, to conduct a vessel into or out of ports, or in
certain waters. In a broad sense, the term "pilot" includes both (1) those whose duty it is to guide vessels into or
out of ports, or in particular waters and (2) those entrusted with the navigation of vessels on the high
seas. 53 However, the term "pilot" is more generally understood as a person taken on board at a particular place
for the purpose of conducting a ship through a river, road or channel, or from a port. 54
Under English and American authorities, generally speaking, the pilot supersedes the master for the time being in
the command and navigation of the ship, and his orders must be obeyed in all matters connected with her
navigation. He becomes the master pro hac vice and should give all directions as to speed, course, stopping and
reversing anchoring, towing and the like. And when a licensed pilot is employed in a place where pilotage is
compulsory, it is his duty to insist on having effective control of the vessel, or to decline to act as pilot. Under
certain systems of foreign law, the pilot does not take entire charge of the vessel, but is deemed merely the
adviser of the master, who retains command and control of the navigation even in localities where pilotage is
compulsory. 55
It is quite common for states and localities to provide for compulsory pilotage, and safety laws have been enacted
requiring vessels approaching their ports, with certain exceptions, to take on board pilots duly licensed under
local law. The purpose of these laws is to create a body of seamen thoroughly acquainted with the harbor, to pilot
vessels seeking to enter or depart, and thus protect life and property from the dangers of navigation. 56
In line with such established doctrines, Chapter II of Customs Administrative Order No. 15-65 prescribes the
rules for compulsory pilotage in the covered pilotage districts, among which is the Manila Pilotage District,
viz.

PARAGRAPH I. Pilotage for entering a harbor and anchoring thereat, as well as docking and
undocking in any pier or shifting from one berth to another shall be compulsory, except
Government vessels and vessels of foreign governments entitled to courtesy, and other vessels
engaged solely in river or harbor work, or in a daily ferry service between ports which shall be
exempt from compulsory pilotage provisions of these regulations: provided, however, that
compulsory pilotage shall not apply in pilotage districts whose optional pilotage is allowed under
these regulations.
Pursuant thereto, Capt. Gavino was assigned to pilot MV Pavlodar into Berth 4 of the Manila International Port.
Upon assuming such office as compulsory pilot, Capt. Gavino is held to the universally accepted high standards
of care and diligence required of a pilot, whereby he assumes to have skill and knowledge in respect to
navigation in the particular waters over which his license extends superior to and more to be trusted than that of
the master. 57 A pilot 57 should have a thorough knowledge of general and local regulations and physical
conditions affecting the vessel in his charge and the waters for which he is licensed, such as a particular harbor or
river.
He is not held to the highest possible degree of skill and care, but must have and exercise the ordinary skill and
care demanded by the circumstances, and usually shown by an expert in his profession. Under extraordinary
circumstancesm, a pilot must exercise extraordinary care. 58
In Atlee vs. The Northwesrern Union Packet Company. 59 Mr. Justice Miller spelled out in great detail the duties
of a pilot:
. . . (T)he pilot of a river steamer, like the harbor pilot, is selected for his personal knowledge of
the topography through which he steers his vessel. In the long course of a thousand miles in one of
these rivers, he must be familiar with the appearance of the shore on each side of the river as he
goes along. Its banks, towns, its landings, its houses and trees, are all landmarks by which he
steers his vessel. The compass is of little use to him. He must know where the navigable channel
is, in its relation to all these external objects, especially in the night. He must also be familiar with
all dangers that are permanently located in the course of the river, as sand-bars, snags, sunken
rocks or trees or abandoned vessels orbarges. All this he must know and remember and avoid. To
do this, he must be constantly informed of the changes in the current of the river, of the sand-bars
newly made,of logs or snags, or other objects newly presented, against which his vessel might be
injured.
xxx xxx xxx
It may be said that this is exacting a very high order of ability in a pilot. But when we consider the
value of the lives and property committed to their control, for in this they are absolute masters, the
high compensation they receive, the care which Congress has taken to secure by rigid and frequent
examinations and renewal of licenses, this very class of skill, we do not think we fix the standard
too high.
Tested thereby, we affirm respondent court's finding that Capt. Gavino failed to measure up to such strict standard
of care and diligence required of pilots in the performance of their duties. Witness this testimony of Capt.
Gavino:
Court: You have testified before that the reason why the vessel bumped the pier
was because the anchor was not released immediately or as soon as you have given
the order. Do you remember having srated that?
A Yes, your Honor.
Q And you gave this order to the captain of the vessel?
A Yes, your Honor.
Q By that testimony, you are leading the Court to understand that if that anchor was
released immediately at the time you gave the order, the incident would not have
happened. Is that correct?
A Yes, sir, but actually it was only a presumption on my part because there was a
commotion between the officers who are in charge of the dropping of the anchor

and the captain. I could not understand their language, it was in Russian, so I
presumed the anchor was not dropped on time.
Q So, you are not sure whether it was really dropped on time or not?
A I am not sure, your Honor.
xxx xxx xxx
Q You are not even sure what could have caused the incident. What factor could
have caused the incident?
A Well, in this case now, because either the anchor was not dropped on time or the
anchor did not hold, that was the cause of the incident, your Honor. 60
It is disconcertingly riddled with too much incertitude and manifests a seeming indifference for the possibly
injurious consequences his commands as pilot may have. Prudence required that he, as pilot, should have made
sure that his directions were promptly and strictly followed. As correctly noted by the trial court
Moreover, assuming that he did indeed give the command to drop the anchor on time, as pilot he
should have seen to it that the order was carried out, and he could have done this in a number of
ways, one of which was to inspect the bow of the vessel where the anchor mechanism was
installed. Of course, Captain Gavino makes reference to a commotion among the crew members
which supposedly caused the delay in the execution of the command. This account was reflected
in the pilot's report prepared four hours later, but Capt. Kavankov, while not admitting whether or
not such a commotion occurred, maintained that the command to drop anchor was followed
"immediately and precisely." Hence, the Court cannot give much weight or consideration to this
portion of Gavino's testimony." 61
An act may be negligent if it is done without the competence that a reasonable person in the position of the actor
would recognize as necessary to prevent it from creating an unreasonable risk of harm to another. 62 Those who
undertake any work calling for special skills are required not only to exercise reasonable care in what they do but
also possess a standard minimum of special knowledge and ability. 63
Every man who offers his services to another, and is employed, assumes to exercise in the employment such
skills he possesses, with a reasonable degree of diligence. In all these employments where peculiar skill is
requisite, if one offers his services he is understood as holding himself out to the public as possessing the degree
of skill commonly possessed by others in the same employment, and if his pretensions are unfounded he commits
a species of fraud on every man who employs him in reliance on his public profession. 64
Furthermore, there is an obligation on all persons to take the care which, under ordinary circumstances of the
case, a reasonable and prudent man would take, and the omission of that care constitutes negligence. 65Generally,
the degree of care required is graduated according to the danger a person or property attendant upon the activity
which the actor pursues or the instrumentality which he uses. The greater the danger the greater the degree of
care required. What is ordinary under extraordinary of conditions is dictated by those conditions; extraordinary
risk demands extraordinary care. Similarly, the more imminent the danger, the higher the degree of care. 66
We give our imprimatur to the bases for the conclusion of the Court of Appeals that Capt. Gavino was indeed
negligent in the performance of his duties:
xxx xxx xxx
. . . As can be gleaned from the logbook, Gavino ordered the left anchor and two (2) shackles
dropped at 8:30 o'clock in the morning. He ordered the engines of the vessel stopped at 8:31
o'clock. By then,Gavino must have realized that the anchor did not hit a hard object and was not
clawed so as to reduce the momentum of the vessel. In point of fact, the vessel continued
travelling towards the pier at the same speed. Gavino failed to react, At 8:32 o'clock, the two (2)
tugboats began to push the stern part of the vessel from the port side bur the momentum of the
vessel was not contained. Still, Gavino did not react. He did not even order the other anchor and
two (2) more shackles dropped to arrest the momentum of the vessel. Neither did he order fullastern. It was only at 8:34 o'clock, or four (4) minutes, after the anchor was dropped that Gavino
reacted. But his reaction was even (haphazard) because instead of arresting fully the momentum of
the vessel with the help of the tugboats, Gavino ordered merely "half-astern". It took Gavino

another minute to order a "full-astern". By then, it was too late. The vessel's momentum could no
longer be arrested and, barely a minute thereafter, the bow of the vessel hit the apron of the pier.
Patently, Gavino miscalculated. He failed to react and undertake adequate measures to arrest fully
the momentum of the vessel after the anchor failed to claw to the seabed. When he reacted, the
same was even (haphazard). Gavino failed to reckon the bulk of the vessel, its size and its cargo.
He erroneously believed that only one (1) anchor would suffice and even when the anchor failed
to claw into the seabed or against a hard object in the seabed, Gavino failed to order the other
anchor dropped immediately. His claim that the anchor was dropped when the vessel was only
1,000 feet from the pier is but a belated attempt to extricate himself from the quagmire of his own
insouciance and negligence. In sum, then, Appellants' claim that the incident was caused by "force
majeure" is barren of factual basis.
xxx xxx xxx
The harbor pilots are especially trained for this job. In the Philippines, one may not be a harbor
pilot unless he passed the required examination and training conducted then by the Bureau of
Custom, under Customs Administrative Order No. 15-65, now under the Philippine Ports
Authority under PPA Administrative Order 63-85, Paragraph XXXIX of the Customs
Administrative Order No. 15-65 provides that "the pilot shall be held responsible for the direction
of the vessel from the time he assumes control thereof, until he leaves it anchored free from
shoal: Provided, that his responsibility shall cease at the.moment the master neglects or refuse(s)
to carry out his instructions." The overall direction regarding the procedure for docking and
undocking the vessel emanates from the harbor pilot. In the present recourse, Gavino failed to live
up to his responsibilities and exercise reasonable care or that degree of care required by the
exigencies of the occasion. Failure on his part to exercise the degree of care demanded by the
circumstances is negligence (Reese versus Philadelphia & RR Co. 239 US 363, 60 L ed. 384, 57
Am Jur, 2d page 418). 67
This affirms the findings of the trial court regarding Capt. Gavino's negligence:
This discussion should not however, divert the court from the fact that negligence in manuevering
the vessel must be attributed to Capt. Senen Gavino. He was an experienced pilot and by this time
should have long familiarized himself with the depth of the port and the distance he could keep
between the vessel and port in order to berth safely. 68
The negligence on the part of Capt. Gavino is evident; but Capt. Kabancov is no less responsible for the allision.
His unconcerned lethargy as master of the ship in the face of troublous exigence constitutes negligence.
While it is indubitable that in exercising his functions a pilot is in sole command of the ship 69 and supersedes the
master for the time being in the command and navigation of a ship and that he becomes master pro hac vice of a
vessel piloted by him, 70 there is overwhelming authority to the effect that the master does not surrender his vessel
to the pilot and the pilot is not the master. The master is still in command of the vessel notwithstanding the
presence of a pilot. There are occasions when the master may and should interfere and even displace the pilot, as
when the pilot is obviously incompetent or intoxicated and the circumstances may require the master to displace
a compulsory pilot because of incompetency or physical incapacity. If, however, the master does nor observe that
a compulsory pilot is incompetent or physically incapacitated, the master is justified in relying on the pilot, but
not blindly. 71
The master is not wholly absolved from his duties while a pilot is on board his vessel, and may advise with or
offer suggestions to him. He is still in command of the vessel, except so far as her navigation is concerned, and
must cause the ordinary work of the vessel to be properly carried on and the usual precaution taken. Thus, in
particular, he is bound to see that there is sufficient watch on deck, and that the men are attentive to their duties,
also that engines are stopped, towlines cast off, and the anchors clear and ready to go at the pilot's order. 72
A perusal of Capt. Kabankov's testimony makes it apparent that he was remiss in the discharge of his duties as
master of the ship, leaving the entire docking procedure up to the pilot, instead of maintaining watchful vigilance
over this risky maneuver:
Q Will you please tell us whether you have the right to intervene in docking of your
ship in the harbor?

A No sir, I have no right to intervene in time of docking, only in case there is


imminent danger to the vessel and to the pier.
Q Did you ever intervene during the time that your ship was being docked by Capt.
Gavino?
A No sir, I did not intervene at the time when the pilot was docking my ship.
Q Up to the time it was actually docked at the pier, is that correct?
A No sir, I did not intervene up to the very moment when the vessel was docked.
xxx xxx xxx
Atty. Del Rosario (to the witness)
Q Mr. Witness, what happened, if any, or was there anything unusual that happened
during the docking?
A Yes sir, our ship touched ihe pier and the pier was damaged.
Court (to the witness)
Q When you said touched the pier, are you leading the court to understand that your
ship bumped the pier?
A I believe that my vessel only touched the pier but the impact was very weak.
Q Do you know whether the pier was damaged as a result of that slight or weak
impact?
A Yes sir, after the pier was damaged.
xxx xxx xxx
Q Being most concerned with the safety of your vessel, in the maneuvering of your
vessel to the port, did you observe anything irregular in the maneuvering by Capt.
Gavino at the time he was trying to cause the vessel to be docked at the pier?
A You mean the action of Capt. Gavino or his condition?
Court:
Q Not the actuation that conform to the safety maneuver of the ship to the harbor?
A No sir, it was a usual docking.
Q By that statement of yours, you are leading the court to understand that there was
nothing irregular in the docking of the ship?
A Yes sir, during the initial period of the docking, there was nothing unusual that
happened.
Q What about in the last portion of the docking of the ship, was there anything
unusual or abnormal that happened?
A None Your Honor, I believe that Capt. Gavino thought that the anchor could keep
or hold the vessel.
Q You want us to understand, Mr. Witness, that the dropping of the anchor of the
vessel was nor timely?
A I don't know the depth of this port but I think, if the anchor was dropped earlier
and with more shackles, there could not have been an incident.

Q So you could not precisely tell the court that the dropping of the anchor was
timery because you are not well aware of the seabed, is that correct?
A Yes sir, that is right.
xxx xxx xxx
Q Alright, Capt. Kavankov, did you come to know later whether the anchor held its
ground so much so that the vessel could not travel?
A It is difficult for me to say definitely. I believe that the anchor did not hold the
ship.
Q You mean you don't know whether the anchor blades stuck to the ground to stop
the ship from further moving?
A Yes sir, it is possible.
Q What is possible?
A I think, the 2 shackles were not enough to hold the vessel.
Q Did you know that the 2 shackles were dropped?
A Yes sir, I knew that.
Q If you knew that the shackles were not enough to hold the ship, did you not make
any protest to the pilot?
A No sir, after the incident, that was my assumption.
Q Did you come to know later whether that presumption is correct?
A I still don't know the ground in the harbor or the depths.
Q So from the beginning, you were not competent whether the 2 shackles were also
dropped to hold the ship?
A No sir, at the beginning, I did not doubt it because I believe Capt. Gavino to be
an experienced pilot and he should be more aware as to the depths of the harbor
and the ground and I was confident in his actions.
xxx xxx xxx
Solicitor Abad (to the witness)
Q Now, you were standing with the pilot on the bridge of the vessel before the
inicident happened, were you not?
A Yes sir, all the time, I was standing with the pilot.
Q And so whatever the pilot saw, you could also see from that point of view?
A That is right.
Q Whatever the piler can read from the panel of the bridge, you also could read, is
that correct?
A What is the meaning of panel?
Q All indications necessary for men on the bridge to be informed of the movements
of the ship?
A That is right.
Q And whatever sound the captain . . . Capt. Gavino would hear from the bridge,
you could also hear?

A That is right.
Q Now, you said that when the command to lower the anchor was given, it was
obeyed, is that right?
A This command was executed by the third mate and boatswain.
Court (to the witness)
Q Mr. Witness, earlier in today's hearing, you said that you did not intervene with
the duties of the pilot and that, in your opinion, you can only intervene if the ship is
placed in imminent danger, is that correct?
A That is right, I did say that.
Q In your observation before the incident actually happened, did you observe
whether or not the ship, before the actual incident, the ship was placed in imminent
danger?
A No sir, I did not observe.
Q By that answer, are you leading the court to understand that because you did not
intervene and because you believed that it was your duty to intervene when the
vessel is placed in imminent danger to which you did not observe any imminent
danger thereof, you have not intervened in any manner to the command of the
pilot?
A That is right, sir.
xxx xxx xxx
Q Assuminp that you disagreed with the pilot regarding the step being taken by the
pilot in maneuvering the vessel, whose command will prevail, in case of imminent
danger to the vessel?
A I did nor consider the situation as having an imminent danger. I believed that the
vessel will dock alongside the pier.
Q You want us to understand that you did not see an imminent danger to your ship,
is that what you mean?
A Yes sir, up to the very last moment, I believed that there was no imminent danger.
Q Because of that, did you ever intervene in the command of the pilot?
A Yes sir, I did not intervene because I believed that the command of the pilot to be
correct.
Solicitor Abad (to the witness)
Q As a captain of M/V Pavlodar, you consider docking maneuvers a serious matter,
is it not?
A Yes sir, that is right.
Q Since it affects not only the safety of the port or pier, but also the safety of the
vessel and the cargo, is it not?
A That is right.
Q So that, I assume that you were watching Capt. Gavino very closely at the time
he was making his commands?
A I was close to him, I was hearing his command and being executed.

Q And that you were also alert for any possible mistakes he might commit in the
maneuvering of the vessel?
A Yes sir, that is right.
Q But at no time during the maneuver did you issue order contrary to the orders
Capt. Gavino made?
A No sir.
Q So that you were in full accord with all of Capt. Gavino's orders?
A Yes sir.
Q Because, otherwise, you would have issued order that would supersede his own
order?
A In that case, I should t,ke him away from his command or remove the command
from him.
Court (to the witness)
Q You were in full accord with the steps being taken by Capt. Gavino because you
relied on his knowledge, on his familiarity of the seabed and shoals and other
surroundings or conditions under the sea, is that correct?
A Yes sir, that is right.
xxx xxx xxx
Solicitor Abad (to the witness)
Q And so after the anchors were ordered dropped and they did not take hold of the
seabed, you were alerted that there was danger already on hand?
A No sir, there was no imminent danger to the vessel.
Q Do you mean to tell us that even if the anchor was supposed to take hold of the
bottom and it did not, there was no danger to the ship?
A Yes sir, because the anchor dragged on the ground later.
Q And after a few moments when the anchor should have taken hold the seabed bur
not done (sic), as you expected, you already were alerted that there was danger to
the ship, is that correct?
A Yes sir, I was alerted but there was no danger.
Q And you were alerted that somebody was wrong?
A Yes sir, I was alerted.
Q And this alert vou assumed was the ordinary alertness that you have for normal
docking?
A Yes sir, I mean that it was usual condition of any man in time of docking to be
alert.
Q And that is the same alertness when the anchor did not hold onto the ground, is
that correct?
A Yes sir, me and Capt. Gavino (thought) that the anchor will hold the ground.
Q Since, as you said that you agreed all the while with the orders of Capt. Gavino,
you also therefore agreed with him in his failure to take necessary precaution
against the eventuality that the anchor will not hold as expected?

Atty. Del Rosario:


May I ask that the question . . .
Solicitor Abad:
Never mind, I will reform the question.
xxx xxx xxx
Solicitor Abad (to the witness)
Q Is it not a fact that the vessel bumped the pier?
A That is right, it bumped the pier.
Q For the main reason that the anchor of the vessel did not hold the ground as
expected?
A Yes sir, that is my opinion. 73
Further, on redirect examination, Capt. Kabankov fortified his apathetic assessment of the situation:
Q Now, after the anchor was dropped, was there any point in time that you felt that
the vessel was in imminent danger.
A No, at that time, the vessel was not in imminent, danger, sir. 74
This cavalier appraisal of the event by Capt. Kabankov is disturbingly antipodal to Capt. Gavino's anxious
assessment of the situation:
Q When a pilot is on board a vessel, it is the piler's command which should be
followed at that moment until the vessel is, or goes to port or reaches port?
A Yes, your Honor, but it does not take away from the Captain his prerogative to
countermand the pilot.
Q In what way?
A In any case, which he thinks the pilot is not maneuvering correctly, the Captain
always has the prerogative to countermand the pilot's order.
Q But insofar as competence, efficiency and functional knowledee of the seabed
which are vital or decisive in the safety (sic) bringing of a vessel to the port, he is
not competent?
A Yes, your Honor. That is why they hire a pilot in an advisory capacity, but still,
the safety of the vessel rest(s) upon the Captain, the Master of the vessel.
Q In this case, there was not a disagreement between you and the Captain of the
vessel in the bringing of the vessel to port?
A No, your Honor.
Court:
May proceed.
Atty. Catris:
In fact, the Master of the vessel testified here that he was all along in conformity
with the orders you, gave to him, and, as matter of fact, as he said, he obeyed all
your orders. Can you tell, if in the course of giving such normal orders for the
saf(e) docking of the MV Pavlodar, do you remember of any instance that the
Master of the vessel did not obey your command for the safety docking of the MV
Pavlodar?

Atty. del Rosario:


Already answered, he already said yes sir.
Court:
Yes, he has just answered yes sir to the Court that there was no disagreement
insofar as the bringing of the vessel safely to the port.
Atty. Catris:
But in this instance of docking of the MV Pavlodar, do you remember of a time
during the course of the docking that the MV Pavlodar was in imminent danger of
bumping the pier?
A When we were about more than one thousand meters from the pier, I think, the
anchor was not holding, so I immediately ordered to push the bow at a fourth
quarter, at the back of the vessel in order to swing the bow away from the pier and
at the same time, I ordered for a full astern of the engine. 75
These conflicting reactions can only imply, at the very least, unmindful disregard or, worse, neglectful
relinquishment of duty by the shipmaster, tantamount to negligence.
The findings of the trial court on this aspect is noteworthy:
For, while the pilot Gavino may indeed have been charged with the task of docking the vessel in
the berthing space, it is undisputed that the master of the vessel had the corresponding duty to
countermand any of the orders made by the pilot, and even maneuver the vessel himself, in case of
imminent danger to the vessel and the port.
In fact, in his testimony, Capt. Kavankov admitted that all throughour the man(eu)vering
procedures he did not notice anything was going wrong, and even observed that the order given to
drop the anchor was done at the proper time. He even ventured the opinion that the accident
occurred because the anchor failed to take hold but that this did not alarm him because.there was
still time to drop a second anchor.
Under normal circumstances, the abovementioned facts would have caused the master of a vessel
to take charge of the situation and see to the man(eu)vering of the vessel himself. Instead, Capt.
Kavankov chose to rely blindly upon his pilot, who by this time was proven ill-equipped to cope
with the situation.
xxx xxx xxx
It is apparent that Gavino was negligent but Far Eastern's employee Capt. Kavankov was no lesss
responsible for as master of the vessel he stood by the pilot during the man(eu)vering procedures
and was privy to every move the latter made, as well as the vessel's response to each of the
commands. His choice to rely blindly upon the pilot's skills, to the point that despite being
appraised of a notice of alert he continued to relinquish control of the vessel to Gavino, shows
indubitably that he was not performing his duties with the diligence required of him and therefore
may be charged with negligence along with defend;int Gavino. 76
As correctly affirmed by the Court of Appeals
We are in full accord with the findings and disquisitions of the Court a quo.
In the present recourse, Captain Viktor Kavankov had been a mariner for thirty-two years before
the incident. When Gavino was (in) the command of the vessel, Kavankov was beside Gavino,
relaying the commands or orders of Gavino to the crewmembers-officers of the vessel concerned.
He was thus fully aware of the docking maneuvers and procedure Gavino undertook to dock the
vessel. Irrefragably, Kavankov was fully aware of the bulk and size of the vessel and its cargo as
well as the weight of the vessel. Kavankov categorically admitted that, when the anchor and two
(2) shackles were dropped to the sea floor, the claws of the anchor did not hitch on to any hard
object in the seabed. The momentum of the vessel was not arrested. The use of the two (2)
tugboats was insufficient. The momentum of the vessel, although a little bit arrested, continued

(sic) the vessel going straightforward with its bow towards the port (Exhibit "A-1 ). There was
thus a need for the vessel to move "full-astern" and to drop the other anchor with another shackle
or two (2), for the vessel to avoid hitting the pier. Kavankov refused to act even as Gavino failed
to act. Even as Gavino gave mere "half-astern" order, Kavankov supinely stood by. The vessel was
already about twenty (20) meters away from the pier when Gavino gave the "full-astern" order.
Even then, Kavankov did nothing to prevent the vessel from hitting the pier simply because he
relied on the competence and plan of Gavino. While the "full-astern'' maneuver momentarily
arrested the momentum of the vessel, it was, by then, too late. All along, Kavankov stood supinely
beside Gavino, doing nothing but relay the commands of Gavino. Inscrutably, then, Kavankov was
negligent.
xxx xxx xxx
The stark incompetence of Kavankov is competent evidence to prove the unseaworthiness of the
vessel. It has been held that the incompetence of the navigator, the master of the vessel or its crew
makes the vessel unseaworthy (Tug Ocean Prince versus United States of America, 584 F. 2nd,
page 1151). Hence, the Appellant FESC is likewise liable for the damage sustained by the
Appellee. 77
We find strong and well-reasoned support in time-tested American maritime jurisprudence, on which much of our
laws and jurisprudence on the matter are based, for the conclusions of the Court of Appeals adjudging both Capt.
Gavino and Capt. Kabankov negligent.
As early as 1869, the U.S. Supreme Court declared, through Mr. Justice Swayne, in The Steamship China vs.
Walsh, 78 that it is the duty of the master to interfere in cases of the pilot's intoxication or manifest incapacity, in
cases of danger which he does not foresee, and in all cases of great necessity. The master has the same power to
displace the pilot that he has to remove any subordinate officer of the vessel, at his discretion.
In 1895, the U.S. Supreme Court, this time through Mr. Justice Brown, emphatically ruled that:
Nor are rye satisfied with the conduct of the master in leaving the pilot in sole charge of the
vessel. While the pilot doubtless supersedes the master for the time being in the command and
navigation of the ship, and his orders must be obeyed in all matters connected with her navigation,
the master is not wholly absolved from his duties while the pilot is on board, and may advise with
him, and even displace him in case he is intoxicated or manifestly incompetent. He is still in
command of the vessel, except so far as her navigation is concerned, and bound to see that there is
a sufficient watch on deck, and that the men are attentive to their duties.
. . . (N)orwithstanding the pilot has charge, it is the duty of the master to prevent accident, and not
to abandon the vessel entirely to the pilot; but that there are certain duties he has to discharge
(notwithstanding there is a pilot on board) for the benefit of the owners. . . . that in well conducted
ships the master does not regard the presence of a duly licensed pilot in compulsory pilot waters
as freeing him from every, obligation to attend to the safety of the vessel; but that, while the master
sees that his officers and crew duly attend to the pilot's orders, he himself is bound to keep a
vigilant eye on the navigation of the vessel, and, when exceptional circumstances exist, not only to
urge upon the pilot to use every precaution, but to insist upon such being taken. 79 (Italics for
emphasis.)
In Jure vs. United Fruit Co., 80 which, like the present petitions, involved compulsory pilotage, with a similar
scenario where at and prior to the time of injury, the vessel was in the charge of a pilot with the master on the
bridge of the vessel beside said pilot, the court therein ruled:
The authority of the master of a vessel is not in complete abeyance while a pilot, who is required
by law to be accepted, is in discharge of his functions. . . . It is the duty of the master to interfere
in cases of the pilot's intoxication or manifest incapacity, in cases of danger which he does not
foresee, and in all cases of great necessity. The master has the same power to displace the pilot
that he has to remove any subordinate officer of the vessel. He may exercise it, or not, according
to his discretion. There was evidence to support findings that piaintiff's injury was due to the
negligent operation of the Atenas, and that the master of that vessel was negligent in failing to take
action to avoid endangering a vessel situated as the City of Canton was and persons or property
thereon.

A phase of the evidence furnished support for the inferences . . . that he negligently failed to
suggest to the pilot the danger which was disclosed, and means of avoiding such danger; and that
the master's negligence in failing to give timelt admonition to the pilot proximately contributed to
the injury complained of. We are of opinion that the evidence mentioned tended to prove conduct
of the pilot, known to the master, giving rise to a case of danger or great necessity, calling for the
intervention of the master. A master of a vessel is not without fault in acquiescing in canduct of a
pilot which involves apparent and avoidable danger, whether such danger is to the vessel upon
which the pilot is, or to another vessel, or persons or property thereon or on shore. (Emphasis
ours.)
Still in another case involving a nearly identical setting, the captain of a vessel alongside the compulsory pilot
was deemed to be negligent, since, in the words of the court, "he was in a position to exercise his superior
authority if he had deemed the speed excessive on the occasion in question. I think it was clearly negligent of him
not to have recognized the danger to any craft moored at Gravell Dock and that he should have directed the pilot
to reduce his speed as required by the local governmental regulations. His failure amounted to negligence and
renders the respondent liable." 81 (Emphasis supplied.) Though a compulsory pilot might be regarded as an
independent contractor, he is at all times subject to the ultimate control of the ship's master. 82
In sum, where a compulsory pilot is in charge of a ship, the master being required to permit him to navigate it, if
the master observes that the pilot is incompetent or physically incapable, then it is the dury of the master to refuse
to permit the pilot to act. But if no such reasons are present, then the master is justified in relying upon the pilot,
but not blindly. Under the circumstances of this case, if a situation arose where the master, exercising that
reasonable vigilance which the master of a ship should exercise, observed, or should have observed, that the pilot
was so navigating the vessel that she was going, or was likely to go, into danger, and there was in the exercise of
reasonable care and vigilance an opportunity for the master to intervene so as to save the ship from danger, the
master should have acted accordingly. 83 The master of a vessel must exercise a degree of vigilance
commensurate with the circumstances. 84
Inasmuch as the matter of negligence is a question of fact, 85 we defer to the findings of the trial court, especially
as this is affirmed by the Court of Appeals. 86 But even beyond that, our own evaluation is that Capt. Kabankov's
shared liability is due mainly to the fact that he failed to act when the perilous situation should have spurred him
into quick and decisive action as master of the ship. In the face of imminent or actual danger, he did not have to
wait for the happenstance to occur before countermanding or overruling the pilot. By his own admission, Capt.
Kabankov concurred with Capt. Gavino's decisions, and this is precisely the reason why he decided not to
countermand any of the latter's orders. Inasmuch as both lower courts found Capt. Gavino negligent, by
expressing full agreement therewith Capt. Kabankov was just as negligent as Capt. Gavino.
In general, a pilot is personally liable for damages caused by his own negligence or default to the owners of the
vessel, and to third parties for damages sustained in a collision. Such negligence of the pilot in the performance
of duty constitutes a maritime tort. 87 At common law, a shipowner is not liable for injuries inflicted exclusively
by the negligence of a pilot accepted by a vessel compulsorily. 88 The exemption from liability for such
negligence shall apply if the pilot is actually in charge and solely in fault. Since, a pilot is responsible only for his
own personal negligence, he cannot be held accountable for damages proximately caused by the default of
others, 89 or, if there be anything which concurred with the fault of the pilot in producing the accident, the vessel
master and owners are liable.
Since the colliding vessel is prima facie responsible, the burden of proof is upon the party claiming benefit of the
exemption from liability. It must be shown affirmatively that the pilot was at fault, and that there was no fault on
the part of the officers or crew, which might have been conducive to the damage. The fact that the law compelled
the master to take the pilot does not exonerate the vessel from liability. The parties who suffer are entitled to have
their remedy against the vessel that occasioned the damage, and are not under necessity to look to the pilot from
whom redress is not always had for compensation. The owners of the vessel are responsible to the injured party
for the acts of the pilot, and they must be left to recover the amount as well as they can against him. It cannot be
maintained that the circumstance of having a pilot on board, and acting in conformity to his directions operate as
a discharge of responsibility of the owners. 90 Except insofar as their liability is limited or exempted by statute,
the vessel or her owner are liable for all damages caused by the negligence or other wrongs of the owners or
those in charge of the vessel. Where the pilot of a vessel is not a compulsory one in the sense that the owner or
master of the vessel are bound to accept him, but is employed voluntarily, the owners of the vessel are, all the
more, liable for his negligent act. 91

In the United States, the owners of a vessel are not personally liable for the negligent acts of a compulsory pilot,
but by admiralty law, the fault or negligence of a compulsory pilot is imputable to the vessel and it may be held
liable therefor in rem. Where, however, by the provisions of the statute the pilot is compulsory only in the sense
that his fee must be paid, and is not in compulsory charge of the vessel, there is no exemption from liability. Even
though the pilot is compulsory, if his negligence was not the sole cause of the injury, but the negligence of the
master or crew contributed thereto, the owners are liable. 92 But the liability of the ship in rem does not release
the pilot from the consequences of his own negligence. 93 The rationale for this rule is that the master is not
entirely absolved of responsibility with respect to navigation when a compulsory pilot is in charge. 94
By way of validation and in light of the aforecited guidepost rulings in American maritime cases, we declare that
our rulings during the early years of this century in City of Manila vs. Gambe, 95 China Navigation Co., Ltd. vs.
Vidal, 96and Yap Tica & Co. vs. Anderson, et al. 97 have withstood the proverbial test of time and remain good and
relevant case law to this day.
City of Manila stands for the doctrine that the pilot who was in command and complete control of a vessel, and
not the owners, must be held responsible for an accident which was solely the result of the mistake of the pilot in
not giving proper orders, and which did not result from the failure of the owners to equip the vessel with the most
modern and improved machinery. In China Navigation Co., the pilot deviated from the ordinary and safe course,
without heeding the warnings of the ship captain. It was this careless deviation that caused the vessel to collide
with a pinnacle rock which, though uncharted, was known to pilots and local navigators. Obviously, the captain
was blameless. It was the negligence of the pilot alone which was the proximate cause of the collision. The Court
could not but then rule that
The pilot in the case at bar having deviated from the usual and ordinary course followed by
navigators in passing through the strait in question, without a substantial reason, was guilty of
negligence, and that negligence having been the proximate cause of the damages, he is liable for
such damages as usually and naturally flow therefrom. . . .
. . . (T)he defendant should have known of the existence and location of the rock upon which the
vessel struck while under his control and management. . . . .
Consistent with the pronouncements in these two earlier cases, but on a slightly different tack, the Court in Yap
Tico & Co. exonerated the pilot from liability for the accident where the orders of the pilot in the handling of the
ship were disregarded by the officers and crew of the ship. According to the Court, a pilot is ". . . responsible for
a full knowledge of the channel and the navigation only so far as he can accomplish it through the officers and
crew of the ship, and I don't see chat he can be held responsible for damage when the evidence shows, as it does
in this case, that the officers and crew of the ship failed to obey his orders." Nonetheless, it is possible for a
compulsory pilot and the master of the vessel to be concurrently negligent and thus share the blame for the
resulting damage as joint tortfeasors, 98 but only under the circumstances obtaining in and demonstrated by the
instant petitions.
It may be said, as a general rule, that negligence in order to render a person liable need not be the sole cause of an
injury. It is sufficient that his negligence, concurring with one or more efficient causes other than piaintiff's, is the
proximate cause of the injury. Accordingly, where several causes combine to produce injuries, a person is not
relieved from liability because he is responsible for only one of them, it being sufficient that the negligence of the
person charged with injury is an efficient cause without which the injury would not have resulted to as great an
extent, and that such cause is not attributable to the person injured. It is no defense to one of the concurrent
tortfeasors that the injury would not have resulted from his negligence alone, without the negligence or wrongful
acts of the other concurrent rortfeasor. 99 Where several causes producing an injury are concurrent and each is an
efficient cause without which the injury would not have happened, the injury may be attributed to all or any of
the causes and recovery may be had against any or all of the responsible persons although under the
circumstances of the case, it may appear that one of them was more culpable, and that the duty owed by them to
the injured person was not the same. No actor's negligence ceases to be a proximate cause merely because it does
not exceed the negligence of other actors. Each wrongdoer is responsible for the entire result and is liable as
though his acts were the sole cause of the injury. 100
There is no contribution between joint tortfeasors whose liability is solidary since both of them are liable for the
total damage. Where the concurrent or successive negligent acts or omissions of two or more persons, although
acting independently, are in combination the direct and proximate cause of a single injury to a third person, it is
impossible to determine in what proportion each contributed to the injury and either of them is responsible for the

whole injury. Where their concurring negligence resulted in injury or damage to a third party, they become joint
tortfeasors and are solidarily liable for the resulting damage under Article 2194 101 of the Civil Code. 102
As for the amount of damages awarded by the trial court, we find the same to be reasonable. The testimony of
Mr. Pascual Barral, witness for PPA, on cross and redirect examination, appears to be grounded on practical
considerations:
Q So that the cost of the two additional piles as well as the (two) square meters is
already included in this P1,300,999.77.
A Yes sir, everything. It is (the) final cost already.
Q For the eight piles.
A Including the reduced areas and other reductions.
Q (A)nd the two square meters.
A Yes sir.
Q In other words, this P1,300,999.77 does not represent only for the six piles that
was damaged as well as the corresponding two piles.
A The area was corresponding, was increased by almost two in the actual payment.
That was why the contract was decreased, the real amount was P1,124,627.40 and
the final one is P1,300,999.77.
Q Yes, but that P1,300,999.77 included the additional two new posts.
A It was increased.
Q Why was it increased?
A The original was 48 and the actual was 46.
Q Now, the damage was somewhere in 1980. It took place in 1980 and you started
the repair and reconstruction in 1982, that took almost two years?
A Yes sir.
Q May it not happen that by natural factors, the existing damage in 1980 was
aggravated for the 2 year period that the damage portion was not repaired?
A I don't think so because that area was at once marked and no vehicles can park, it
was closed.
Q Even if or even natural elements cannot affect the damage?
A Cannot, sir.
xxx xxx xxx
Q You said in the cross-examination that there were six piles damaged by the
accident, but that in the reconstruction of the pier, PPA drove and constructed 8
piles. Will you explain to us why there was change in the number of piles from the
original number?
A In piers where the piles are withdrawn or pulled out, you cannot re-drive or drive
piles at the same point. You have to redesign the driving of the piles. We cannot
drive the piles at the same point where the piles are broken or damaged or pulled
out. We have to redesign, and you will note that in the reconstruction, we
redesigned such that it necessitated 8 plies.
Q Why not, why could you not drive the same number of piles and on the same
spot?

A The original location was already disturbed. We cannot get required bearing
capacity. The area is already disturbed.
Q Nonetheless, if you drove the original number of piles, six, on different places,
would not that have sustained the same load?
A It will not suffice, sir. 103
We quote the findings of the lower court with approval.
With regards to the amount of damages that is to be awarded to plaintiff, the Court finds that the
amount of P1,053,300.00 is justified. Firstly, the doctrine of res ipsa loquitur best expounded upon
in the landmark case of Republic vs. Luzon Stevedoring Corp. (21 SCRA 279) establishes the
presumption that in the ordinary course of events the ramming of the dock would not have
occurred if proper care was used.
Secondly, the various estimates and plans justify the cost of the port construction price. The new
structure constructed not only replaced the damaged one but was built of stronger materials to
forestall the possibility of any similar accidents in the future.
The Court inevitably finds that the plaintiff is entitled to an award of P1,053,300.00 which
represents actual damages caused by the damage to Berth 4 of the Manila International Port. Codefendants Far Eastern Shipping, Capt. Senen Gavino and Manila Pilots Association are solidariiy
liable to pay this amount to plaintiff. 104
The Solicitor General rightly commented that the adjudicated amount of damages represents the
proportional cost of repair and rehabilitation of the damaged section of the pier. 105
Except insofar as their liability is limited or exempted by statute, the vessel or her owners are liable for all
damages caused by the negligence or other wrongs of the owners or those in charge of the vessel. As a general
rule, the owners or those in possession and control of a vessel and the vessel are liable for all natural and
proximate damages caused to persons or property by reason of her negligent management or navigation. 106
FESC's imputation of PPA's failure to provide a safe and reliable berthing place is obtuse, not only because it
appears to be a mere afterthought, being tardily raised only in this petition, but also because there is no allegation
or evidence on record about Berth No. 4 being unsafe and unreliable, although perhaps it is a modest pier by
international standards. There was, therefore, no error on the part of the Court of Appeals in dismissing FESC's
counterclaim.
II. G.R. No. 130150
This consolidated case treats on whether the Court of Appeals erred in holding MPA jointly and solidarily liable
with its member pilot. Capt. Gavino, in the absence of employer-employee relationship and in applying Customs
Administrative Order No. 15-65, as basis for the adjudged solidary liability of MPA and Capt. Gavino.
The pertinent provisions in Chapter I of Customs Administrative Order No. 15-65 are:
PAR. XXVII. In all pilotage districts where pilotage is compulsory, there shall be created and
maintained by the pilots or pilots' association, in the manner hereinafter prescribed, a reserve fund
equal to P1,000.00 for each pilot thereof for the purpose of paying claims for damages to vessels
or property caused through acts or omissions of its members while rendered in compulsory
pilotage service. In Manila, the reserve fund shall be P2,000.00 for each pilot.
PAR. XXVIII. A pilots' association shall not be liable under these regulations for damage to
any vessel, or other property, resulting from acts of a member of an association in the actual
performance of his duty for a greater amount than seventy-five per centum (75%) of its prescribed
reserve fund; it being understood that if the association is held liable for an amount greater than
the amount above-stated, the excess shall be paid by the personal funds of the member concerned.
PAR. XXXI. If a payment is made from the reserve fund of an association on account of
damages caused by a member thereof, and he shall have been found at fault, such member shall
reimburse the association in the amount so paid as soon as practicable; and for this purpose, not

less than twenty-five per centum of his dividends shall be retained each month until the full
amount has been returned to the reserve fund.
PAR. XXXIV. Nothing in these regulations shall relieve any pilots' association or members
thereof, individually or collectively, from civil responsibility for damages to life or property
resulting from the acts of members in the performance of their duties.
Correlatively, the relevant provisions of PPA Administrative Order No. 03-85, which timery amended this
applicable maritime regulation, state:
Art. IV
Sec. 17. Pilots' Association The Pilots in a Pilotage District shall organize themselves into a
Pilots' Association or firm, the members of which shall promulgate their own By-Laws not in
conflict with the rules and regulations promulgated by the Authority. These By-Laws shall be
submitted not later than one (1) month after the organization of the Pilots' Association for approval
by the General Manager of the Authority. Subsequent amendments thereto shall likewise be
submitted for approval.
Sec. 25. Indemnity Insurance and Reserve Fund
a) Each Pilots' Association shall collectively insure its membership
at the rate of P50,000.00 each member to cover in whole or in part
any liability arising from any accident resulting in damage to
vessel(s), port facilities and other properties and/or injury to persons
or death which any member may have caused in the course of his
performance of pilotage duties. . . . .
b) The Pilotage Association shall likewise set up and maintain a
reserve fund which shall answer for any part of the liability referred
to in the immediately preceding paragraph which is left unsatisfied
by the insurance proceeds, in the following manner:
1) Each pilot in the Association shall contribute from
his own account an amount of P4,000.00 (P6,000.00
in the Manila Pilotage District) to the reserve fund.
This fund shall not be considered part of the capital
of the Association nor charged as an expense thereof.
2) Seventy-five percent (75 %) of the reserve fund
shall be set aside for use in the payment of damages
referred to above incurred in the actual performance
of pilots' duties and the excess shall be paid from the
personal funds of the member concerned.
xxx xxx xxx
5) If payment is made from the reserve fund of an
Association on account of damage caused by a
member thereof who is found at fault, he shall
reimburse the Association in the amount so paid as
soon as practicable; and for this purpose, not less
than twenty-five percentum (25 %) of his dividend
shall be retained each month until the full amount has
been returned to the reserve fund. Thereafter, the
pilot involved shall be entitled to his full dividend.
6) When the reimbursement has been completed as
prescribed in the preceding paragraph, the ten
percentum (10%) and the interest withheld from the
shares of the other pilots in accordance with
paragraph (4) hereof shall be returned to them.

c) Liability of Pilots' Association Nothing in these regulations


shall relieve any Pilots' Association or members thereof,
individually or collectively, from any civil, administrative and/or
criminal responsibility for damages to life or property resulting from
the individual acts of its members as well as those of the
Association's employees and crew in the performance of their
duties.
The Court of Appeals, while affirming the trial court's finding of solidary liability on the part of FESC, MPA and
Capt. Gavino, correctly based MPA' s liability not on the concept of employer-employee relationship between
Capt. Gavino and itself, but on the provisions of Customs Administrative Order No. 15-65:
The Appellant MPA avers that, contrary to the findings and disquisitions of the Court a quo, the
Appellant Gavino was not and has never been an employee of the MPA but was only a member
thereof. The Court a quo, it is noteworthy, did not state the factual basis on which it anchored its
finding that Gavino was the employee of MPA. We are in accord with MPA's pose. Case law
teaches Us that, for an employer-employee relationship to exist, the confluence of the following
elements must be established: (1) selection and engagement of employees; (2) the payment of
wages; (3) the power of dismissal; (4) the employer's power to control the employees with respect
to the means and method by which the work is to be performed (Ruga versus NLRC, 181 SCRA
266).
xxx xxx xxx
The liability of MPA for damages is not anchored on Article 2180 of the New Civil Code as
erroneously found and declared by the Court a quo but under the provisions of Customs
Administrative Order No. 15-65, supra, in tandem with the by-laws of the MPA. 107
There being no employer-employee relationship, clearly Article 2180 108 of the Civil Code is inapplicable since
there is no vicarious liability of an employer to speak of. It is so stated in American law, as follows:
The well established rule is that pilot associations are immune to vicarious liability for the tort of
their members. They are not the employer of their members and exercise no control over them
once they take the helm of the vessel. They are also not partnerships because the members do not
function as agents for the association or for each other. Pilots' associations are also not liable for
negligently assuring the competence of their members because as professional associations they
made no guarantee of the professional conduct of their members to the general public. 109
Where under local statutes and regulations, pilot associations lack the necessary legal incidents of responsibility,
they have been held not liable for damages caused by the default of a member pilot. 110 Whether or not the
members of a pilots' association are in legal effect a copartnership depends wholly on the powers and duties of
the members in relation to one another under the provisions of the governing statutes and regulations. The
relation of a pilot to his association is not that of a servant to the master, but of an associate assisting and
participating in a common purpose. Ultimately, the rights and liabilities between a pilots' association and an
individual member depend largely upon the constitution, articles or by-laws of the association, subject to
appropriate government regulations. 111
No reliance can be placed by MPA on the cited American rulings as to immunity from liability of a pilots'
association in ljght of existing positive regulation under Philippine law. The Court of Appeals properly applied
the clear and unequivocal provisions of Customs Administrative Order No. 15-65. In doing so, it was just being
consistent with its finding of the non-existence of employer-employee relationship between MPA and Capt.
Gavino which precludes the application of Article 2180 of the Civil Code.
True. Customs Administrative Order No. 15-65 does not categorically characterize or label MPA's liability as
solidary in nature. Nevertheless, a careful reading and proper analysis of the correlated provisions lead to the
conclusion that MPA is solidarily liable for the negligence of its member pilots, without prejudice to subsequent
reimbursement from the pilot at fault.
Art. 1207 of the Civil Code provides that there is solidary liability only when the obligation expressly so states,
or when the law or the nature of the obligation requires solidarity. Plainly, Customs Administrative Order No. 1565, which as an implementing rule has the force and effect of law, can validly provide for solidary liability.We
note the Solicitor General's comment hereon, to wit:

. . . Customs Administrative Order No. 15-65 may be a mere rule and regulation issued by an
administrative agency pursuant to a delegated authority to fix "the details" in the execution or
enforcement of a policy set out in the law itself. Nonetheless, said administrative order, which
adds to the procedural or enforcing provisions of substantive law, is legally binding and receives
the same statutory force upon going into effect. In that sense, it has equal, not lower, statutory
force and effect as a regular statute passed by the legislature. 112
MPA's prayer for modification of the appellate court's decision under review by exculpating petitioner MPA
"from liability beyond seventy-five percent (75 %) of Reserve Fund" is unnecessary because the liability of MPA
under Par. XXVIII of Customs Administrative Order No. 15-65 is in fact limited to seventy-five percent (75 %)
of its prescribed reserve fund, any amount of liability beyond that being for the personal account of the erring
pilot and subject to reimbursement in case of a finding of fault by the member concerned. This is clarified by the
Solicitor General:
Moreover, contrary to petitioner's pretensions, the provisions of Customs Administrative Order
No. 15-65 do not limit the liability of petitioner as a pilots' association to an absurdly small
amount of seventy-five per centum (75 %) of the member pilots' contribution of P2,000.00 to the
reserve fund. The law speaks of the entire reserve fund required to be maintained by the pilots'
association to answer (for) whatever liability arising from the tortious act of its members. And
even if the association is held liable for an amount greater than the reserve fund, the association
may not resist the liability by claiming to be liable only up to seventy-five per centum (75 %) of
the reserve fund because in such instance it has the right to be reimbursed by the offending
member pilot for the excess. 113
WHEREFORE, in view of all of the foregoing, the consolidated petitions for review are DENIED and the
assailed decision of the Court of Appeals is AFFIRMED in toto.
Counsel for FESC, the law firm of Del Rosario and Del Rosario, specifically its associate, Atty. Herbert A. Tria,
is REPRIMANDED and WARNED that a repetition of the same or similar acts of heedless disregard of its
undertakings under the Rules shall be dealt with more severely.
The original members of the legal team of the Office of the Solicitor General assigned to this case, namely,
Assistant Solicitor General Roman G. Del Rosario and Solicitor Luis F. Simon, are ADMONISHED and
WARNED that a repetition of the same or similar acts of unduly delaying proceedings due to delayed filing of
required pleadings shall also be dealt with more stringently.
The Solicitor Genral is DIRECTED to look into the circumstances of this case and to adopt provident measures
to avoid a repetition of this incident and which would ensure prompt compliance with orders of this Court
regarding the timely filing of requisite pleadings, in the interest of just, speedy and orderly administration of
justice.
Let copies of this decision be spread upon the personal records of the lawyers named herein in the Office of the
Bar Confidant.
SO ORDERED.
Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Panganiban, Martinez, Quisumbing and Purisima,
JJ., concur.
Narvasa, C.J. and Mendoza, J., are on official leave.

G.R. No. 204866

January 21, 2015

RUKS KONSULT AND CONSTRUCTION, Petitioner,


vs.
ADWORLD SIGN AND ADVERTISING CORPORATION* and TRANSWORLD MEDIA ADS,
INC., Respondents.
DECISION

PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated November 16, 2011 and the
Resolution3dated December 10, 2012 of the Court of Appeals (CA) in CA-G.R. CV No. 94693 which affirmed
the Decision4dated August 25, 2009 of the Regional Trial Court of Makati City, Branch 142 (RTC) in Civil Case
No. 03-1452 holding, inter alia, petitioner Ruks Konsult and Construction (Ruks) and respondent Transworld
Media Ads, Inc. (Transworld) jointly and severally liable to respondent Adworld Sign and Advertising
Corporation (Adworld) for damages.
The Facts
The instant case arose from a complaint for damages filed by Adworld against Transworld and Comark
International Corporation (Comark) before the RTC.5 In the complaint, Adworld alleged that it is the owner of a
75 ft. x 60 ft. billboard structure located at EDSA Tulay, Guadalupe, Barangka Mandaluyong, which was
misaligned and its foundation impaired when, on August 11, 2003, the adjacent billboard structure owned by
Transworld and used by Comark collapsed and crashed against it. Resultantly, on August 19, 2003, Adworld sent
Transworld and Comark a letter demanding payment for the repairs of its billboard as well asloss of rental
income. On August 29, 2003, Transworld sent its reply, admitting the damage caused by its billboard structure on
Adworlds billboard, but nevertheless, refused and failed to pay the amounts demanded by Adworld. As
Adworlds final demand letter also went unheeded, it was constrained to file the instant complaint, praying for
damages in the aggregate amount of P474,204.00, comprised of P281,204.00 for materials, P72,000.00 for labor,
and P121,000.00 for indemnity for loss of income.6
In its Answer with Counterclaim, Transworld averred that the collapse of its billboard structure was due to
extraordinarily strong winds that occurred instantly and unexpectedly, and maintained that the damage caused to
Adworlds billboard structure was hardly noticeable. Transworld likewise filed a Third-Party Complaint against
Ruks, the company which built the collapsed billboard structure in the formers favor.1wphi1 It was alleged
therein that the structure constructed by Ruks had a weak and poor foundation not suited for billboards, thus,
prone to collapse, and as such, Ruks should ultimately be held liable for the damages caused to Adworlds
billboard structure.7
For its part, Comark denied liability for the damages caused to Adworlds billboard structure, maintaining that it
does not have any interest on Transworlds collapsed billboard structure as it only contracted the use of the same.
In this relation, Comark prayed for exemplary damages from Transworld for unreasonably includingit as a partydefendant in the complaint.8
Lastly, Ruks admitted that it entered into a contract with Transworld for the construction of the latters billboard
structure, but denied liability for the damages caused by its collapse. It contended that when Transworld hired its
services, there was already an existing foundation for the billboard and that it merely finished the structure
according to the terms and conditions of its contract with the latter.9
The RTC Ruling
In a Decision10 dated August 25, 2009, the RTC ultimately ruled in Adworlds favor, and accordingly, declared,
inter alia, Transworld and Ruks jointly and severally liable to Adworld in the amount of P474,204.00 as actual
damages, with legal interest from the date of the filing of the complaint until full payment thereof, plus attorneys
fees in the amount of P50,000.00.11 The RTC found both Transworld and Ruks negligent in the construction of
the collapsed billboard as they knew that the foundation supporting the same was weak and would pose danger to
the safety of the motorists and the other adjacent properties, such as Adworlds billboard, and yet, they did not do
anything to remedy the situation.12 In particular, the RTC explained that Transworld was made aware by Ruks
that the initial construction of the lower structure of its billboard did not have the proper foundation and would
require additional columns and pedestals to support the structure. Notwithstanding, however, Ruks proceeded
with the construction of the billboards upper structure and merely assumed that Transworld would reinforce its

lower structure.13 The RTC then concluded that these negligent acts were the direct and proximate cause of the
damages suffered by Adworlds billboard.14
Aggrieved, both Transworld and Ruks appealed to the CA. In a Resolution dated February 3, 2011, the CA
dismissed Transworlds appeal for its failure to file an appellants brief on time.15 Transworld elevated its case
before the Court, docketed as G.R. No. 197601.16 However, in a Resolution17 dated November 23, 2011, the
Court declared the case closed and terminated for failure of Transworld to file the intended petition for review on
certiorariwithin the extended reglementary period. Subsequently, the Court issued an Entry of Judgment18 dated
February 22, 2012 in G.R. No. 197601 declaring the Courts November 23, 2011 Resolution final and executory.
The CA Ruling
In a Decision19 dated November 16, 2011, the CA denied Rukss appeal and affirmed the ruling of the RTC. It
adhered to the RTCs finding of negligence on the part of Transworld and Ruks which brought about the damage
to Adworlds billboard. It found that Transworld failed to ensure that Ruks will comply with the approved plans
and specifications of the structure, and that Ruks continued to install and finish the billboard structure despite the
knowledge that there were no adequate columns to support the same.20
Dissatisfied, Ruks moved for reconsideration,21 which was, however, denied in a Resolution22 dated December
10, 2012,hence, this petition.
On the other hand, Transworld filed another appeal before the Court, docketed as G.R. No. 205120.23 However,
the Court denied outright Transworlds petition in a Resolution24 dated April 15, 2013, holding that the same was
already bound by the dismissal of its petition filed in G.R. No. 197601.
The Issue Before the Court
The primordial issue for the Courts resolution is whether or not the CA correctly affirmed the ruling of the RTC
declaring Ruks jointly and severally liable with Transworld for damages sustained by Adworld.
The Courts Ruling
The petition is without merit.
At the outset, it must be stressed that factual findings of the RTC, when affirmed by the CA, are entitled to great
weight by the Court and are deemed final and conclusive when supported by the evidence on record.25 Absent
any exceptions to this rule such as when it is established that the trial court ignored, overlooked, misconstrued,
or misinterpreted cogent facts and circumstances that, if considered, would change the outcome of the case26
such findings must stand.
After a judicious perusal of the records, the Court sees no cogent reason to deviate from the findings of the RTC
and the CA and their uniform conclusion that both Transworld and Ruks committed acts resulting in the collapse
of the formers billboard, which in turn, caused damage to the adjacent billboard of Adworld.
Jurisprudence defines negligence as the omission to do something which a reasonable man, guided by those
considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something
which a prudent and reasonable man would not do.27 It is the failure to observe for the protection of the interest
of another person that degree of care, precaution, and vigilance which the circumstances justly demand, whereby
such other person suffers injury.28
In this case, the CA correctly affirmed the RTCs finding that Transworlds initial construction of its billboards
lower structure without the proper foundation, and that of Rukss finishing its upper structure and just merely
assuming that Transworld would reinforce the weak foundation are the two (2) successive acts which were the
direct and proximate cause of the damages sustained by Adworld. Worse, both Transworld and Ruks were fully
aware that the foundation for the formers billboard was weak; yet, neither of them took any positive step to
reinforce the same. They merely relied on each others word that repairs would be done to such foundation, but
none was done at all. Clearly, the foregoing circumstances show that both Transworld and Ruks are guilty of

negligence in the construction of the formers billboard, and perforce, should be held liable for its collapse and
the resulting damage to Adworlds billboard structure. As joint tortfeasors, therefore, they are solidarily liable to
Adworld. Verily, "[j]oint tortfeasors are those who command, instigate, promote, encourage, advise, countenance,
cooperate in, aid or abet the commission of a tort, or approve of it after it is done, if done for their benefit. They
are also referred to as those who act together in committing wrong or whose acts, if independent of each other,
unite in causing a single injury. Under Article 219429 of the Civil Code, joint tortfeasors are solidarily liable for
the resulting damage. In other words, joint tortfeasors are each liable as principals, to the same extent and in the
same manner as if they had performed the wrongful act themselves."30 The Courts pronouncement in People v.
Velasco31 is instructive on this matter, to wit:32
Where several causes producing an injury are concurrent and each is an efficient cause without which the injury
would not have happened, the injury may be attributed to all or any of the causes and recovery may be had
against any or all of the responsible persons although under the circumstances of the case, it may appear that one
of them was more culpable, and that the duty owed by them to the injured person was not same. No actor's
negligence ceases to be a proximate cause merely because it does not exceed the negligence of other actors. Each
wrongdoer is responsible for the entire result and is liable as though his acts were the sole cause of the injury.
There is no contribution between joint [tortfeasors] whose liability is solidary since both of them are liable for the
total damage.1wphi1 Where the concurrent or successive negligent acts or omissions of two or more persons,
although acting independently, are in combination the direct and proximate cause of a single injury to a third
person, it is impossible to determine in what proportion each contributed to the injury and either of them is
responsible for the whole injury. x x x. (Emphases and underscoring supplied)
In conclusion, the CA correctly affirmed the ruling of the RTC declaring Ruks jointly and severally liable with
Transworld for damages sustained by Adworld.
WHEREFORE, the petition is DENIED. The Decision dated November 16, 2011 and the Resolution dated
December 10, 2012 of the Court of Appeals in CA-G.R. CV No. 94693 are hereby AFFIRMED.
SO ORDERED.
EN BANC
[G.R. No. L-8328. May 18, 1956.]
MANILA ELECTRIC COMPANY, Petitioner, vs. SOTERO REMOQUILLO, in his own behalf and as
guardian of the minors MANUEL, BENJAMIN, NESTOR, MILAGROS, CORAZON, CLEMENTE and
AURORA, all surnamed MAGNO, SALUD MAGNO, and the COURT OF APPEALS (Second
Division), Respondents.

DECISION
MONTEMAYOR, J.:
On August 22, 1950, Efren Magno went to the 3-story house of Antonio Pealoza, his stepbrother, located on
Rodriguez Lanuza Street, Manila, to repair a media agua said to be in a leaking condition. The media agua
was just below the window of the third story. Standing on said media agua, Magno received from his son thru
that window a 3 X 6 galvanized iron sheet to cover the leaking portion, turned around and in doing so the lower
end of the iron sheet came into contact with the electric wire of the Manila Electric Company (later referred to as
the Company) strung parallel to the edge of the media agua and 2 1/2 feet from it, causing his death by
electrocution. His widow and children fled suit to recover damages from the company. After hearing, the trial
court rendered judgment in their favor P10,000 as compensatory damages; chan roblesvirtualawlibraryP784 as

actual damages; chan roblesvirtualawlibraryP2,000 as moral and exemplary damages; chan


roblesvirtualawlibraryand P3,000 as attorneys fees, with costs. On appeal to the Court of Appeals, the latter
affirmed the judgment with slight modification by reducing the attorneys fees from P3,000 to P1,000 with costs.
The electric company has appealed said decision to us.
The findings of fact made by the Court of Appeals which are conclusive are stated in the following portions of its
decision which we reproduce below:chanroblesvirtuallawlibrary
The electric wire in question was an exposed, uninsulated primary wire stretched between poles on the street
and carrying a charge of 3,600 volts. It was installed there some two years before Pealozas house was
constructed. The record shows that during the construction of said house a similar incident took place, although
fortunate]y with much less tragic consequences. A piece of wood which a carpenter was holding happened to
come in contact with the same wire, producing some sparks. The owner of the house forthwith complained
to Defendant about the danger which the wire presented, and as a result Defendant moved one end of the wire
farther from the house by means of a brace, but left the other end where it was.
At any rate, as revealed by the ocular inspection of the premises ordered by the trial court, the distance from the
electric wire to the edge of the media agua on which the deceased was making repairs was only 30 inches or 2
1/2 feet. Regulations of the City of Manila required that all wires be kept three feet from the
building. Appellant contends that in applying said regulations to the case at bar the reckoning should not be from
the edge of the media agua but from the side of the house and that, thus measured, the distance was almost 7
feet, or more then the minimum prescribed. This contention is manifestly groundless, for not only is a media
agua an integral part of the building to which it is attached but to exclude it in measuring the distance would
defeat the purpose of the regulation. Appellant points out, nevertheless, that even assuming that the distance,
within the meaning of the city regulations, should be measured from the edge of the media agua, the fact that in
the case of the house involved herein such distance was actually less than 3 feet was due to the fault of the owner
of said house, because the city authorities gave him a permit to construct a media agua only one meter or 39 1/2
inches wide, but instead he built one having a width of 65 3/4 inches, 17 3/8 inches more than the width
permitted by the authorities, thereby reducing the distance to the electric wire to less than the prescribed
minimum of 3 feet.
It is a fact that the owner of the house exceeded the limit fixed in the permit given to him by the city authorities
for the construction of the media agua, and that if he had not done so Appellantswire would have been 11 3/8
(inches) more than the required distance of three feet from the edge of the media agua. It is also a fact, however,
that after the media agua was constructed the owner was given a final permit of occupancy of the house cralaw .
cralaw The wire was an exposed, high tension wire carrying a load of 3,600 volts. There was, according
to Appellant, no insulation that could have rendered it safe, first, because there is no insulation material in
commercial use for such kind of wire; chan roblesvirtualawlibraryand secondly, because the only insulation
material that may be effective is still in the experimental stage of development and, anyway, its costs would be
prohibitive
The theory followed by the appellate court in finding for the Plaintiff is that although the owner of the house in
constructing the media agua in question exceeded the limits fixed in the permit, still, after making that media
agua, its construction though illegal, was finally approved because he was given a final permit to occupy the
house; chan roblesvirtualawlibrarythat it was the company that was at fault and was guilty of negligence because
although the electric wire in question had been installed long before the construction of the house and in
accordance with the ordinance fixing a minimum of 3 feet, mere compliance with the regulations does not satisfy
the requirement of due diligence nor avoid the need for adopting such other precautionary measures as may be
warranted; chan roblesvirtualawlibrarythat negligence cannot be determined by a simple matter of inches; chan
roblesvirtualawlibrarythat all that the city did was to prescribe certain minimum conditions and that just because

the ordinance required that primary electric wires should be not less than 3 feet from any house, the obligation of
due diligence is not fulfilled by placing such wires at a distance of 3 feet and one inch, regardless of other factors.
The appellate court, however, refrained from stating or suggesting what other precautionary measures could and
should have been adopted.
After a careful study and discussion of the case and the circumstances surrounding the same, we are inclined to
agree to the contention of Petitioner Company that the death of Magno was primarily caused by his own
negligence and in some measure by the too close proximity of the media agua or rather its edge to the electric
wire of the company by reason of the violation of the original permit given by the city and the subsequent
approval of said illegal construction of the media agua. We fail to see how the Company could be held guilty of
negligence or as lacking in due diligence. Although the city ordinance called for a distance of 3 feet of its wires
from any building, there was actually a distance of 7 feet and 2 3/4 inches of the wires from the side of the house
of Pealoza. Even considering said regulation distance of 3 feet as referring not to the side of a building, but to
any projecting part thereof, such as a media agua, had the house owner followed the terms of the permit given
him by the city for the construction of his media agua, namely, one meter or 39 3/8 inches wide, the distance
from the wires to the edge of said media agua would have been 3 feet and 11 3/8 inches. In fixing said one
meter width for the media agua the city authorities must have wanted to preserve the distance of at least 3 feet
between the wires and any portion of a building. Unfortunately, however, the house owner disregarding the
permit, exceeded the one meter fixed by the same by 17 3/8 inches and leaving only a distance of 2 1/2 feet
between the Media agua as illegally constructed and the electric wires. And added to this violation of the
permit by the house owner, was its approval by the city through its agent, possibly an inspector. Surely we cannot
lay these serious violations of a city ordinance and permit at the door of the Company, guiltless of breach of any
ordinance or regulation. The Company cannot be expected to be always on the lookout for any illegal
construction which reduces the distance between its wires and said construction, and after finding that said
distance of 3 feet had been reduced, to change the stringing or installation of its wires so as to preserve said
distance. It would be much easier for the City, or rather it is its duty, to be ever on the alert and to see to it that its
ordinances are strictly followed by house owners and to condemn or disapprove all illegal constructions. Of
course, in the present case, the violation of the permit for the construction of the media agua was not the direct
cause of the accident. It merely contributed to it. Had said media agua been only one meter wide as allowed by
the permit, Magno standing on it, would instinctively have stayed closer to or hugged the side of the house in
order to keep a safe margin between the edge of the media agua and the yawning 2-story distance or height
from the ground, and possibly if not probably avoided the fatal contact between the lower end of the iron sheet
and the wires.
We realize that the presence of the wires in question quite close to the house or its media agua was always a
source of danger considering their high voltage and uninsulated as they were, but the claim of the company and
the reasons given by it for not insulating said wires were unrefuted as we gather from the findings of the Court of
Appeals, and so we have to accept them as satisfactory. Consequently, we may not hold said company as guilty of
negligence or wanting in due diligence in failing to insulate said wires. As to their proximity to the house it is to
be supposed that distance of 3 feet was considered sufficiently safe by the technical men of the city such as its
electrician or engineer. Of course, a greater distance of say 6 feet or 12 feet would have increased the margin of
safety but other factors had to be considered such as that the wires could not be strung or the posts supporting
them could not be located too far toward the middle of the street. Thus, the real cause of the accident or death
was the reckless or negligent act of Magno himself. When he was called by his stepbrother to repair the media
agua just below the third story window, it is to be presumed that due to his age and experience he was qualified
to do so. Perhaps he was a tinsmith or carpenter and had training and experience for the job. So, he could not
have been entirely a stranger to electric wires and the danger lurking in them. But unfortunately, in the instant
care, his training and experience failed him, and forgetting where he was standing, holding the 6-feet iron sheet
with both hands and at arms length, evidently without looking, and throwing all prudence and discretion to the
winds, he turned around swinging his arms with the motion of his body, thereby causing his own electrocution.

In support of its theory and holding that Defendant-Appellant was liable for damages the Court of Appeals cites
the case of Astudillo vs. Manila Electric Co., 55 Phil., 427. We do not think the case is exactly applicable. There,
the premises involved was that elevated portion or top of the walls of Intramuros, Manila, just above the Sta.
Lucia Gate. In the words of the Court, it was a public place where persons come to stroll, to rest and to enjoy
themselves. The electric company was clearly negligent in placing its wires so near the place that without much
difficulty or exertion, a person by stretching his hand out could touch them. A boy named Astudillo, placing one
foot on a projection, reached out and actually grasped the electric wire and was electrocuted. The person
electrocuted in said case was a boy who was in no position to realize the danger. In the present case, however, the
wires were well high over the street where there was no possible danger to pedestrians. The only possible danger
was to persons standing on the media agua, but a media agua can hardly be considered a public place where
persons usually gather. Moreover, a person standing on the media agua could not have reached the wires with
his hands alone. It was necessary as was done by Magno to hold something long enough to reach the wire.
Furthermore, Magno was not a boy or a person immature but the father of a family, supposedly a tinsmith trained
and experienced in the repair of galvanized iron roofs and media agua. Moreover, in that very case of Astudillo
vs. Manila Electric Co., supra, the court said that although it is a well- established rule that the liability of electric
companies for damages or personal injuries is governed by the rules of negligence, nevertheless such companies
are not insurers of the safety of the public.
But even assuming for a moment that under the facts of the present case the Defendant electric company could be
considered negligent in installing its electric wires so close to the house and media agua in question, and in
failing to properly insulate those wires (although according to the unrefuted claim of said company it was
impossible to make the insulation of that kind of wire), nevertheless to hold the Defendant liable in damages for
the death of Magno, such supposed negligence of the company must have been the proximate and principal cause
of the accident, because if the act of Magno in turning around and swinging the galvanized iron sheet with his
hands was the proximate and principal cause of the electrocution, then his heirs may not recover. Such was the
holding of this Court in the case of Taylor vs. Manila Electric Railroad and Light Company, 16 Phil., 8. In that
case, the electric company was found negligent in leaving scattered on its premises fulminating caps which
Taylor, a 15- year old boy found and carried home. In the course of experimenting with said fulminating caps, he
opened one of them, held it out with his hands while another boy applied a lighted match to it, causing it to
explode and injure one of his eyes eventually causing blindness in said eye. Said this Tribunal in denying
recovery for the injury:chanroblesvirtuallawlibrary
cralaw, so that while it may be true that these injuries would not have been incurred but for the negligent act of
the Defendant in leaving the caps exposed on its premises, nevertheless Plaintiffs own act was the proximate and
principal cause of the accident which inflicted the injury.
To us it is clear that the principal and proximate cause of the electrocution was not the electric wire, evidently a
remote cause, but rather the reckless and negligent act of Magno in turning around and swinging the galvanized
iron sheet without taking any precaution, such as looking back toward the street and at the wire to avoid its
contacting said iron sheet, considering the latters length of 6 feet. For a better understanding of the rule on
remote and proximate cause with respect to injuries, we find the following citation
helpful:chanroblesvirtuallawlibrary
A prior and remote cause cannot be made the basis of an action if such remote cause did nothing more than
furnish the condition or give rise to the occasion by which the injury was made possible, if there intervened
between such prior or remote cause and the injury a distinct, successive, unrelated, and efficient cause of the
injury, even though such injury would not have happened but for such condition or occasion. If no danger existed
in the condition except because of the independent cause, such condition was not the proximate cause. And if an
independent negligent act or defective condition sets into operation the circumstances which result in injury

because of the prior defective condition, such subsequent act or condition is the proximate cause. (45 C.J. pp.
931-332.).
We realize that the stringing of wires of such high voltage (3,600 volts), uninsulated and so close to houses is a
constant source of danger, even death, especially to persons who having occasion to be near said wires, do not
adopt the necessary precautions. But may be, the City of Manila authorities and the electric company could get
together and devise means of minimizing this danger to the public. Just as the establishment of pedestrian lanes
in city thoroughfares may greatly minimize danger to pedestrians because drivers of motor vehicles may expect
danger and slow down or even stop and take other necessary precaution upon approaching said lanes, so, a
similar way may possibly be found. Since these high voltage wires cannot be properly insulated and at reasonable
cost, they might perhaps be strung only up to the outskirts of the city where there are few houses and few
pedestrians and there step-down to a voltage where the wires carrying the same to the city could be properly
insulated for the better protection of the public.
In view of all the foregoing, the appealed decision of the Court of Appeals is hereby reversed and the complaint
filed against the Company is hereby dismissed. No costs.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-15674

October 17, 1921

CONSOLACION GABETO, in her own right and as guardian ad litem of her three children, plaintiffappellee,
vs.
AGATON ARANETA, defendant-appellant.
Jose E. Locsin for appellant.
Block, Johnston and Greenbaum for appellee.

STREET, J.:
This action was instituted in the Court of First Instance of Iloilo by Consolacion Gabeto, in her own right as
widow of Proceso Gayetano, and as guardian ad litem of the three children, Conchita Gayetano, Rosita Gayetano,
and Fermin Gayetano, for the purpose of recovering damages incurred by the plaintiff as a result of the death of
the said Proceso Gayetano, supposedly cause by the wrongful act of the defendant Agaton Araneta. Upon hearing
the evidence, his Honor, Judge L. M. Southworth, awarded damages to the plaintiff in the amount of P3,000,
from which judgment the defendant appealed.
It appears in evidence that on August 4, 1918. Basilio Ilano and Proceso Gayetano took a carromata near Plaza
Gay, in the City of Iloilo, with a view to going to a cockpit on Calle Ledesma in the same City. When the driver
of the carromata had turned his horse and started in the direction indicated, the defendant, Agaton Araneta,
stepped out into the street, and laying his hands on the reins, stopped the horse, at the same time protesting to the
driver that he himself had called this carromata first. The driver, one Julio Pagnaya, replied to the effect that he
had not heard or seen the call of Araneta, and that he had taken up the two passengers then in the carromata as the
first who had offered employment. At or about the same time Pagnaya pulled on the reins of the bridle to free the
horse from the control of Agaton Araneta, in order that the vehicle might pass on. Owing, however, to the
looseness of the bridle on the horse's head or to the rottenness of the material of which it was made, the bit came
out of the horse's mouth; and it became necessary for the driver to get out, which he did, in order to find the

bridle. The horse was then pulled over to near the curb, by one or the other it makes no difference which
and Pagnaya tried to fix the bridle.
While he was thus engaged, the horse, being free from the control of the bit, became disturbed and moved
forward, in doing which he pulled one of the wheels of the carromata up on the sidewalk and pushed Julio
Pagnaya over. After going a few years further the side of the carromata struck a police telephone box which was
fixed to a post on the sidewalk, upon which the box came down with a crash and frightened the horse to such an
extent that he set out at full speed up the street.
Meanwhile one of the passengers, to wit. Basilio Ilano, had alighted while the carromata was as yet alongside the
sidewalk; but the other, Proceso Gayetano, had unfortunately retained his seat, and after the runaway horse had
proceeded up the street to a point in front of the Mission Hospital, the said Gayetano jumped or fell from the rig,
and in so doing received injuries from which he soon died.
As to the facts above stated the evidence cannot be said to be materially in conflict; but there is decided conflict
upon the point of the exact relation of the defendant Agaton Araneta, to the runaway. The evidence for the
plaintiff on this point consists chiefly of the testimony of Julio Pagnaya and of Basilio Ilano. They both say that
while yet in the middle of the street, the defendant jerked the bridle, which caused the bit to come out of the
horse's mouth, and Julio says that at that juncture the throat latch of the bridle was broken. Be this as it may, we
are of the opinion that the mere fact that the defendant interfered with the carromata by stopping the horse in the
manner stated would not make him liable for the death of Proceso Gayetano; because it is admitted by Julio
Pagnaya that he afterwards got out of the carromata and went to the horse's head to fix the bridle. The evidence is
furthermore convincing to the effect that, after Julio Pagnaya alighted, the horse was conducted to the curb and
that an appreciable interval of time elapsed same witnesses say several minutes before the horse started on
his career up the street. 1awph!l.net
It is therefore evident that the stopping of the rig by Agaton Araneta in the middle of the street was too remote
from the accident that presently ensued to be considered the legal or proximate cause thereof. Moreover, by
getting out and taking his post at the head of the horse, the driver was the person primarily responsible for the
control of the animal, and the defendant cannot be charged with liability for the accident resulting from the action
of the horse thereafter.
Julio Pagnaya testifies to one fact which, if it were fully accredited, would possibly put a different complexion on
the case; for he says that when the horse was pulled over to the curb, the defendant, by way of emphasizing his
verbal denunciation of Pagnaya, gesticulated with one of his arms and incidentally brought his hand down on the
horse's nose. This, according to Pagnaya, is what made the horse run away. There is no other witness who
testifies to this; and it is noteworthy that Basilio Ilano does not mention it. A decided preponderance of the
evidence in our opinion is against it.
The evidence indicates that the bridle was old, and the leather of which it was made was probably so weak as to
be easily broken. Julio Pagnaya had a natural interest in refuting this fact, as well as in exculpating himself in
other respects; and we are of the opinion that the several witnesses who testified for the defendant gave a more
credible account of the affair than the witnesses for the plaintiff. According to the witnesses for the defendant, it
was Julio who jerked the rein, thereby causing the bit it come out of the horse's mouth; and they say that Julio,
after alighting, led the horse over to the curb, and proceeded to fix the bridle; and that in so doing the bridle was
slipped entirely off, when the horse, feeling himself free from control, started to go away as previously stated.
Upon the whole we are constrained to hold that the defendant is not legally responsible for the death of Proceso
Gayetano; and though reluctant to interfere with the findings of fact of a trial court when there is a conflict of
testimony, the evidence in this case so clearly preponderates in favor of the defendant, that we have no recourse
but to reverse the judgment.
The judgment will therefore be reversed, and the defendant will be absolved from the complaint; and it is so
ordered, without express finding as to costs of either instance. So ordered.

THIRD DIVISION
AGUSAN DEL NORTE ELECTRIC
G.R. No. 173146
COOPERATIVE, INC. (ANECO), represented by
its Manager ROMEO O. DAGANI,
Present:
Petitioner,
CORONA, J.,
Chairperson,
- versus CHICO-NAZARIO,
VELASCO, JR.,
NACHURA, and
PERALTA, JJ.
ANGELITA BALEN and SPOUSES HERCULES
and RHEA LARIOSA,
Promulgated:
Respondents.
November 25, 2009
x------------------------------------------------------------------------------------x

DECISION
NACHURA, J.:

On appeal is the February 21, 2006 Decision[1] of the Court of Appeals (CA) in CA-G.R. CV No. 66153,
affirming the December 2, 1999 Decision[2] of the Regional Trial Court (RTC) of Butuan City, Branch 2, as well
as its subsequent Resolution,[3]denying petitioners motion for reconsideration.
Petitioner Agusan del Norte Electric Cooperative, Inc. (ANECO) is a duly organized and registered consumers
cooperative, engaged in supplying electricity in the province of Agusan del Norte and in Butuan City. In 1981,
ANECO installed an electric post in Purok 4, Ata-atahon, Nasipit, Agusan del Norte, with its main distribution
line of 13,000 kilovolts traversing Angelita Balens (Balens) residence. Balens father, Miguel, protested the
installation with the District Engineers Office and with ANECO, but his protest just fell on deaf ears.
On July 25, 1992, Balen, Hercules Lariosa (Lariosa) and Celestino Exclamado (Exclamado) were electrocuted
while removing the television antenna (TV antenna) from Balens residence. The antenna pole touched ANECOs
main distribution line which resulted in their electrocution. Exclamado died instantly, while Balen and Lariosa
suffered extensive third degree burns.
Balen and Lariosa (respondents) then lodged a complaint[4] for damages against ANECO with the RTC of
Butuan City.
ANECO filed its answer[5] denying the material averments in the complaint, and raising lack of cause of action
as a defense.It posited that the complaint did not allege any wrongful act on the part of ANECO, and that

respondents acted with gross negligence and evident bad faith. ANECO, thus, prayed for the dismissal of the
complaint.
After trial, the RTC rendered a Decision,[6] disposing that:
WHEREFORE, judgment is hereby rendered in favor of [respondents] and against [ANECO],
directing, ordaining and ordering
a) That [ANECO] pay [respondent] Angelita E. Balen the sum of One Hundred
Thousand Pesos (PHP100,000.00) and [respondent] Hercules A. Lariosa the sum of
Seventy Thousand Pesos (PHP70,000.00) as reimbursement of their expenses for
hospitalization, medicines, doctors professional fees, transportation and
miscellaneous expenses;
b) That [ANECO] pay [respondent] Angelita E. Balen the sum of Seventy Two
Thousand Pesos (PHP72,000.00) for loss of income for three (3) years;
c) That [ANECO] pay [respondent] Angelita E. Balen the sum of Fifteen Thousand
Pesos (PHP15,000.00) and another Fifteen Thousand Pesos (PHP15,000.00) to
[respondent] Hercules A. Lariosa as moral damages, or a total of Thirty Thousand
Pesos (PHP30,000.00);
d) That [ANECO] pay [respondents] Angelita E. Balen and Hercules A. Lariosa
Two Thousand Pesos (PHP2,000.00) each or a total of Four Thousand Pesos
(PHP4,000.00) as exemplary damages;
e) That [ANECO] pay [respondents] Angelita E. Balen and Hercules A. Lariosa
Eight Thousand Pesos (PHP8,000.00) each or a total of Sixteen Thousand Pesos
[(PHP 16,000.00)] as attorneys fees and the sum of Two Thousand Pesos
(PHP2,000.00) each or a total of Four Thousand Pesos (PHP4,000.00) for expense
of litigation;
f) That [ANECO] pay the costs of this suit;
g) The dismissal of [ANECOs] counterclaim; [and]
h) That the amount of Thirteen Thousand Pesos (PHP13,000.00) given by ANECO
to [respondent] Angelita E. Balen and acknowledged by the latter to have been
received (pre-trial order, record[s,] pp. 36-37) must be deducted from the herein
judgment debt.
SO ORDERED.[7]

On appeal, the CA affirmed in toto the RTC ruling. It declared that the proximate cause of the accident could not
have been the act or omission of respondents, who were not negligent in taking down the antenna. The proximate
cause of the injury sustained by respondents was ANECOs negligence in installing its main distribution line over
Balens residence. ANECO should have exercised caution, care and prudence in installing a high-voltage line over

a populated area, or it should have sought an unpopulated area for the said line to traverse. The CA further noted
that ANECO failed to put a precautionary sign for installation of wires over 600 volts, which is required by the
Philippine Electrical Code.[8]
The CA disposed, thus:
WHEREFORE, premises considered, the assailed Decision is hereby AFFIRMED in toto.
SO ORDERED.[9]

ANECO filed a motion for reconsideration, but the CA denied it on May 26, 2006.[10]
Hence, this appeal.
Indisputably, Exclamado died and respondents sustained injuries from being electrocuted by ANECOs hightension wire.These facts are borne out by the records and conceded by the parties.
ANECO, however, denied liability, arguing that the mere presence of the high-tension wires over Balens
residence did not cause respondents injuries. The proximate cause of the accident, it claims, was respondents
negligence in removing the TV antenna and in allowing the pole to touch the high-tension wires. The findings of
the RTC, it argues, patently run counter to the facts clearly established by the records. ANECO, thus, contends
that the CA committed reversible error in sustaining the findings of the RTC.
The argument lacks merit.
Negligence is defined as the failure to observe for the protection of the interests of another person that degree of
care, precaution, and vigilance which the circumstances justly demand, by reason of which such other person
suffers injury. The test to determine the existence of negligence in a particular case may be stated as follows: Did
the defendant in the performance of the alleged negligent act use reasonable care and caution which an ordinary
person would have used in the same situation? If not, then he is guilty of negligence. The existence of negligence
in a given case is not determined by reference to the personal judgment of the actor in the situation before him.
The law considers what would be reckless, blameworthy, or negligent in the man of ordinary intelligence and
prudence and determines liability by that norm.[11]
The issue of who, between the parties, was negligent is a factual issue that this Court cannot pass upon, absent
any whimsical or capricious exercise of judgment by the lower courts or an ample showing that they lacked any
basis for their conclusions.[12] The unanimity of the CA and the trial court in their factual ascertainment that
ANECOs negligence was the proximate cause of the injuries sustained by respondents bars us from supplanting
their findings and substituting them with our own. The function of this Court is limited to the review of the

appellate courts alleged errors of law. We are not required to weigh all over again the factualevidence already
considered in the proceedings below.[13] ANECO has not shown that it is entitled to be excepted from this rule.
It has not sufficiently demonstrated any special circumstances to justify a factual review.
That ANECOs negligence was the proximate cause of the injuries sustained by respondents was aptly discussed
by the CA, which we quote:
The evidence extant in the record shows that the house of MIGUEL BALEN already existed
before the high voltage wires were installed by ANECO above it. ANECO had to follow the
minimum clearance requirement of 3,050 under Part II of the Philippine Electrical Code for the
installation of its main distribution lines above the roofs of buildings or houses. Although ANECO
followed said clearance requirement, the installed lines were high voltage, consisting of open
wires, i.e., not covered with insulators, like rubber, and charged with 13, 200 volts. Knowing that
it was installing a main distribution line of high voltage over a populated area, ANECO should
have practiced caution, care and prudence by installing insulated wires, or else found an
unpopulated area for the said line to traverse. The court a quocorrectly observed that ANECO
failed to show any compelling reason for the installation of the questioned wires over MIGUEL
BALENs house. That the clearance requirements for the installation of said line were met by
ANECO does not suffice to exonerate it from liability.Besides, there is scarcity of evidence in the
records showing that ANECO put up the precautionary sign: WARNING-HIGH VOLTAGE-KEEP
OUT at or near the house of MIGUEL BALEN as required by the Philippine Electrical Code for
installation of wires over 600 volts.
Contrary to its stance, it is in fact ANECO which provided the proximate cause of the injuries of
[respondents].
One of the tests for determining the existence of proximate cause is the foreseeability test, viz.:
x x x Where the particular harm was reasonably foreseeable at the time of the
defendants misconduct, his act or omission is the legal cause thereof. Foreseeability
is the fundamental test of the law of negligence. To be negligent, the defendant
must have acted or failed to act in such a way that an ordinary reasonable man
would have realized that certain interests of certain persons were unreasonably
subjected to a general but definite class of risk which made the actors conduct
negligent, it is obviously the consequence for the actor must be held legally
responsible. Otherwise, the legal duty is entirely defeated. Accordingly, the
generalization may be formulated that all particular consequences, that is,
consequences which occur in a manner which was reasonably foreseeable by the
defendant at the time of his misconduct are legally caused by his breach of duty x x
x.
Thus applying aforecited test, ANECO should have reasonably foreseen that, even if it complied
with the clearance requirements under the Philippine Electrical Code in installing the subject high
tension wires above MIGUEL BALENs house, still a potential risk existed that people would get
electrocuted, considering that the wires were not insulated.

Above conclusion is further strengthened by the verity that MIGUEL BALEN had complained
about the installation of said line, but ANECO did not do anything about it. Moreover, there is
scant evidence showing that [respondents] knew beforehand that the lines installed by ANECO
were live wires.
Otherwise stated, the proximate cause of the electrocution of [respondents] was ANECOs
installation of its main distribution line of high voltage over the house of MIGUEL BALEN,
without which the accident would not have occurred.
xxxx
x x x the taking down by [respondents] of the antenna in MIGUEL BALENs house would not
have caused their electrocution were it not for the negligence of ANECO in installing live wires
over the roof of the said house.[14]

Clearly, ANECOs act of leaving unprotected and uninsulated the main distribution line over Balens residence was
the proximate cause of the incident which claimed Exclamados life and injured respondents Balen and
Lariosa. Proximate cause is defined as any cause that produces injury in a natural and continuous sequence,
unbroken by any efficient intervening cause, such that the result would not have occurred otherwise.[15]
ANECOs contention that the accident happened only eleven (11) years after the installation of the high-voltage
wire cannot serve to absolve or mitigate ANECOs liability. As we held in Benguet Electric Cooperative, Inc. v.
Court of Appeals:[16]
[A]s an electric cooperative holding the exclusive franchise in supplying electric power to the
towns of Benguet province, its primordial concern is not only to distribute electricity to its
subscribers but also to ensure the safety of the public by the proper maintenance and upkeep of its
facilities. It is clear to us then that BENECO was grossly negligent in leaving unprotected and
uninsulated the splicing point between the service drop line and the service entrance conductor,
which connection was only eight (8) feet from the ground level, in violation of the Philippine
Electrical Code. BENECO's contention that the accident happened only on January 14, 1985,
around seven (7) years after the open wire was found existing in 1978, far from mitigating its
culpability, betrays its gross neglect in performing its duty to the public. By leaving an open live
wire unattended for years, BENECO demonstrated its utter disregard for the safety of the
public.Indeed, Jose Bernardo's death was an accident that was bound to happen in view of the
gross negligence of BENECO.

Indeed, both the trial and the appellate courts findings, which are amply substantiated by the evidence on record,
clearly point to ANECOs negligence as the proximate cause of the damages suffered by respondents Balen and
Lariosa. No adequate reason has been given to overturn this factual conclusion. In fine, the CA committed no
reversible error in sustaining the RTC.

WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals in CAG.R. CV No. 66153 are AFFIRMED. Costs against petitioner.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-65295 March 10, 1987
PHOENIX CONSTRUCTION, INC. and ARMANDO U. CARBONEL, petitioners,
vs.
THE INTERMEDIATE APPELLATE COURT and LEONARDO DIONISIO, respondents.

FELICIANO, J:
In the early morning of 15 November 1975 at about 1:30 a.m. private respondent Leonardo Dionisio was
on his way home he lived in 1214-B Zamora Street, Bangkal, Makati from a cocktails-and-dinner meeting
with his boss, the general manager of a marketing corporation. During the cocktails phase of the evening,
Dionisio had taken "a shot or two" of liquor. Dionisio was driving his Volkswagen car and had just crossed the
intersection of General Lacuna and General Santos Streets at Bangkal, Makati, not far from his home, and was
proceeding down General Lacuna Street, when his car headlights (in his allegation) suddenly failed. He switched
his headlights on "bright" and thereupon he saw a Ford dump truck looming some 2-1/2 meters away from his
car. The dump truck, owned by and registered in the name of petitioner Phoenix Construction Inc. ("Phoenix"),
was parked on the right hand side of General Lacuna Street (i.e., on the right hand side of a person facing in the
same direction toward which Dionisio's car was proceeding), facing the oncoming traffic. The dump truck was
parked askew (not parallel to the street curb) in such a manner as to stick out onto the street, partly blocking the
way of oncoming traffic. There were no lights nor any so-called "early warning" reflector devices set anywhere
near the dump truck, front or rear. The dump truck had earlier that evening been driven home by petitioner
Armando U. Carbonel, its regular driver, with the permission of his employer Phoenix, in view of work
scheduled to be carried out early the following morning, Dionisio claimed that he tried to avoid a collision by
swerving his car to the left but it was too late and his car smashed into the dump truck. As a result of the
collision, Dionisio suffered some physical injuries including some permanent facial scars, a "nervous breakdown"
and loss of two gold bridge dentures.
Dionisio commenced an action for damages in the Court of First Instance of Pampanga basically claiming that
the legal and proximate cause of his injuries was the negligent manner in which Carbonel had parked the dump
truck entrusted to him by his employer Phoenix. Phoenix and Carbonel, on the other hand, countered that the
proximate cause of Dionisio's injuries was his own recklessness in driving fast at the time of the accident, while
under the influence of liquor, without his headlights on and without a curfew pass. Phoenix also sought to
establish that it had exercised due rare in the selection and supervision of the dump truck driver.
The trial court rendered judgment in favor of Dionisio and against Phoenix and Carbonel and ordered the latter:
(1) To pay plaintiff jointly and severally the sum of P 15,000.00 for hospital bills and the
replacement of the lost dentures of plaintiff;

(2) To pay plaintiff jointly and severally the sum of P 1,50,000.-00 as loss of expected income for
plaintiff brought about the accident in controversy and which is the result of the negligence of the
defendants;
(3) To pay the plaintiff jointly and severally the sum of P 10,000. as moral damages for the
unexpected and sudden withdrawal of plaintiff from his lifetime career as a marketing man; mental
anguish, wounded feeling, serious anxiety, social humiliation, besmirched reputation, feeling of
economic insecurity, and the untold sorrows and frustration in life experienced by plaintiff and his
family since the accident in controversy up to the present time;
(4) To pay plaintiff jointly and severally the sum of P 10,000.00 as damages for the wanton
disregard of defendants to settle amicably this case with the plaintiff before the filing of this case
in court for a smaller amount.
(5) To pay the plaintiff jointly and severally the sum of P 4,500.00 due as and for attorney's fees;
and
(6) The cost of suit. (Emphasis supplied)
Phoenix and Carbonel appealed to the Intermediate Appellate Court. That court in CA-G.R. No. 65476 affirmed
the decision of the trial court but modified the award of damages to the following extent:
1. The award of P15,000.00 as compensatory damages was reduced
to P6,460.71, the latter being the only amount that the appellate court found the
plaintiff to have proved as actually sustained by him;
2. The award of P150,000.00 as loss of expected income was reduced
to P100,000.00,basically because Dionisio had voluntarily resigned his job such
that, in the opinion of the appellate court, his loss of income "was not solely
attributable to the accident in question;" and
3. The award of P100,000.00 as moral damages was held by the appellate court as
excessive and unconscionable and hence reduced to P50,000.00.
The award of P10,000.00 as exemplary damages and P4,500.00 as attorney's fees
and costs remained untouched.
This decision of the Intermediate Appellate Court is now before us on a petition for review.
Both the trial court and the appellate court had made fairly explicit findings of fact relating to the manner in
which the dump truck was parked along General Lacuna Street on the basis of which both courts drew the
inference that there was negligence on the part of Carbonel, the dump truck driver, and that this negligence was
the proximate cause of the accident and Dionisio's injuries. We note, however, that both courts failed to pass upon
the defense raised by Carbonel and Phoenix that the true legal and proximate cause of the accident was not the
way in which the dump truck had been parked but rather the reckless way in which Dionisio had driven his car
that night when he smashed into the dump truck. The Intermediate Appellate Court in its questioned decision
casually conceded that Dionisio was "in some way, negligent" but apparently failed to see the relevance of
Dionisio's negligence and made no further mention of it. We have examined the record both before the trial court
and the Intermediate Appellate Court and we find that both parties had placed into the record sufficient evidence
on the basis of which the trial court and the appellate court could have and should have made findings of fact
relating to the alleged reckless manner in which Dionisio drove his car that night. The petitioners Phoenix and
Carbonel contend that if there was negligence in the manner in which the dump truck was parked, that negligence
was merely a "passive and static condition" and that private respondent Dionisio's recklessness constituted an
intervening, efficient cause determinative of the accident and the injuries he sustained. The need to administer
substantial justice as between the parties in this case, without having to remand it back to the trial court after
eleven years, compels us to address directly the contention put forward by the petitioners and to examine for

ourselves the record pertaining to Dionisio's alleged negligence which must bear upon the liability, or extent of
liability, of Phoenix and Carbonel.
There are four factual issues that need to be looked into: (a) whether or not private respondent Dionisio had a
curfew pass valid and effective for that eventful night; (b) whether Dionisio was driving fast or speeding just
before the collision with the dump truck; (c) whether Dionisio had purposely turned off his car's headlights
before contact with the dump truck or whether those headlights accidentally malfunctioned moments before the
collision; and (d) whether Dionisio was intoxicated at the time of the accident.
As to the first issue relating to the curfew pass, it is clear that no curfew pass was found on the person of Dionisio
immediately after the accident nor was any found in his car. Phoenix's evidence here consisted of the testimony
of Patrolman Cuyno who had taken Dionisio, unconscious, to the Makati Medical Center for emergency
treatment immediately after the accident. At the Makati Medical Center, a nurse took off Dionisio's clothes and
examined them along with the contents of pockets together with Patrolman Cuyno. 1 Private respondent Dionisio
was not able to produce any curfew pass during the trial. Instead, he offered the explanation that his family may
have misplaced his curfew pass. He also offered a certification (dated two years after the accident) issued by one
Major Benjamin N. Libarnes of the Zone Integrated Police Intelligence Unit of Camp Olivas, San Fernando,
Pampanga, which was said to have authority to issue curfew passes for Pampanga and Metro Manila. This
certification was to the effect that private respondent Dionisio had a valid curfew pass. This certification did not,
however, specify any pass serial number or date or period of effectivity of the supposed curfew pass. We find that
private respondent Dionisio was unable to prove possession of a valid curfew pass during the night of the
accident and that the preponderance of evidence shows that he did not have such a pass during that night. The
relevance of possession or non-possession of a curfew pass that night lies in the light it tends to shed on the other
related issues: whether Dionisio was speeding home and whether he had indeed purposely put out his headlights
before the accident, in order to avoid detection and possibly arrest by the police in the nearby police station for
travelling after the onset of curfew without a valid curfew pass.
On the second issue whether or not Dionisio was speeding home that night both the trial court and the
appellate court were completely silent.
The defendants in the trial court introduced the testimony of Patrolman Cuyno who was at the scene of the
accident almost immediately after it occurred, the police station where he was based being barely 200 meters
away. Patrolman Cuyno testified that people who had gathered at the scene of the accident told him that
Dionisio's car was "moving fast" and did not have its headlights on. 2 Dionisio, on the other hand, claimed that
he was travelling at a moderate speed at 30 kilometers per hour and had just crossed the intersection of General
Santos and General Lacuna Streets and had started to accelerate when his headlights failed just before the
collision took place. 3
Private respondent Dionisio asserts that Patrolman Cuyno's testimony was hearsay and did not fag within any of
the recognized exceptions to the hearsay rule since the facts he testified to were not acquired by him through
official information and had not been given by the informants pursuant to any duty to do so. Private respondent's
objection fails to take account of the fact that the testimony of Patrolman Cuyno is admissible not under the
official records exception to the hearsay rule 4 but rather as part of the res gestae. 5 Testimonial evidence under
this exception to the hearsay rule consists of excited utterances made on the occasion of an occurrence or event
sufficiently startling in nature so as to render inoperative the normal reflective thought processes of the observer
and hence made as a spontaneous reaction to the occurrence or event, and not the result of reflective thought. 6
We think that an automobile speeding down a street and suddenly smashing into a stationary object in the dead of
night is a sufficiently startling event as to evoke spontaneous, rather than reflective, reactions from observers who
happened to be around at that time. The testimony of Patrolman Cuyno was therefore admissible as part of
the res gestae and should have been considered by the trial court. Clearly, substantial weight should have been
ascribed to such testimony, even though it did not, as it could not, have purported to describe quantitatively the
precise velocity at winch Dionisio was travelling just before impact with the Phoenix dump truck.

A third related issue is whether Dionisio purposely turned off his headlights, or whether his headlights
accidentally malfunctioned, just moments before the accident. The Intermediate Appellate Court expressly found
that the headlights of Dionisio's car went off as he crossed the intersection but was non-committal as to why they
did so. It is the petitioners' contention that Dionisio purposely shut off his headlights even before he reached the
intersection so as not to be detected by the police in the police precinct which he (being a resident in the area)
knew was not far away from the intersection. We believe that the petitioners' theory is a more credible
explanation than that offered by private respondent Dionisio i.e., that he had his headlights on but that, at the
crucial moment, these had in some mysterious if convenient way malfunctioned and gone off, although he
succeeded in switching his lights on again at "bright" split seconds before contact with the dump truck.
A fourth and final issue relates to whether Dionisio was intoxicated at the time of the accident. The evidence here
consisted of the testimony of Patrolman Cuyno to the effect that private respondent Dionisio smelled of liquor at
the time he was taken from his smashed car and brought to the Makati Medical Center in an unconscious
condition. 7 This testimony has to be taken in conjunction with the admission of Dionisio that he had taken "a
shot or two" of liquor before dinner with his boss that night. We do not believe that this evidence is sufficient to
show that Dionisio was so heavily under the influence of liquor as to constitute his driving a motor vehicle per se
an act of reckless imprudence. 8There simply is not enough evidence to show how much liquor he had in fact
taken and the effects of that upon his physical faculties or upon his judgment or mental alertness. We are also
aware that "one shot or two" of hard liquor may affect different people differently.
The conclusion we draw from the factual circumstances outlined above is that private respondent Dionisio was
negligent the night of the accident. He was hurrying home that night and driving faster than he should have been.
Worse, he extinguished his headlights at or near the intersection of General Lacuna and General Santos Streets
and thus did not see the dump truck that was parked askew and sticking out onto the road lane.
Nonetheless, we agree with the Court of First Instance and the Intermediate Appellate Court that the legal and
proximate cause of the accident and of Dionisio's injuries was the wrongful or negligent manner in which the
dump truck was parked in other words, the negligence of petitioner Carbonel. That there was a reasonable
relationship between petitioner Carbonel's negligence on the one hand and the accident and respondent's injuries
on the other hand, is quite clear. Put in a slightly different manner, the collision of Dionisio's car with the dump
truck was a natural and foreseeable consequence of the truck driver's negligence.
The petitioners, however, urge that the truck driver's negligence was merely a "passive and static condition" and
that private respondent Dionisio's negligence was an "efficient intervening cause and that consequently Dionisio's
negligence must be regarded as the legal and proximate cause of the accident rather than the earlier negligence of
Carbonel. We note that the petitioners' arguments are drawn from a reading of some of the older cases in various
jurisdictions in the United States but we are unable to persuade ourselves that these arguments have any validity
for our jurisdiction. We note, firstly, that even in the United States, the distinctions between "cause" and
"condition" which the 'petitioners would have us adopt have already been "almost entirely discredited."
Professors and Keeton make this quite clear:
Cause and condition. Many courts have sought to distinguish between the active "cause" of the
harm and the existing "conditions" upon which that cause operated. If the defendant has created
only a passive static condition which made the damage possible, the defendant is said not to be
liable. But so far as the fact of causation is concerned, in the sense of necessary antecedents which
have played an important part in producing the result it is quite impossible to distinguish between
active forces and passive situations, particularly since, as is invariably the case, the latter are the
result of other active forces which have gone before. The defendant who spills gasoline about the
premises creates a "condition," but the act may be culpable because of the danger of fire. When a
spark ignites the gasoline, the condition has done quite as much to bring about the fire as the
spark; and since that is the very risk which the defendant has created, the defendant will not escape
responsibility. Even the lapse of a considerable time during which the "condition" remains static

will not necessarily affect liability; one who digs a trench in the highway may still be liable to
another who fans into it a month afterward. "Cause" and "condition" still find occasional mention
in the decisions; but the distinction is now almost entirely discredited. So far as it has any validity
at all, it must refer to the type of case where the forces set in operation by the defendant have come
to rest in a position of apparent safety, and some new force intervenes. But even in such cases, it is
not the distinction between "cause" and "condition" which is important but the nature of the risk
and the character of the intervening cause. 9
We believe, secondly, that the truck driver's negligence far from being a "passive and static condition" was rather
an indispensable and efficient cause. The collision between the dump truck and the private respondent's car
would in an probability not have occurred had the dump truck not been parked askew without any warning lights
or reflector devices. The improper parking of the dump truck created an unreasonable risk of injury for anyone
driving down General Lacuna Street and for having so created this risk, the truck driver must be held responsible.
In our view, Dionisio's negligence, although later in point of time than the truck driver's negligence and therefore
closer to the accident, was not an efficient intervening or independent cause. What the Petitioners describe as an
"intervening cause" was no more than a foreseeable consequent manner which the truck driver had parked the
dump truck. In other words, the petitioner truck driver owed a duty to private respondent Dionisio and others
similarly situated not to impose upon them the very risk the truck driver had created. Dionisio's negligence was
not of an independent and overpowering nature as to cut, as it were, the chain of causation in fact between the
improper parking of the dump truck and the accident, nor to sever the juris vinculum of liability. It is helpful to
quote once more from Professor and Keeton:
Foreseeable Intervening Causes. If the intervening cause is one which in ordinary human
experience is reasonably to be anticipated or one which the defendant has reason to anticipate
under the particular circumstances, the defendant may be negligence among other reasons,
because of failure to guard against it; or the defendant may be negligent only for that reason. Thus
one who sets a fire may be required to foresee that an ordinary, usual and customary wind arising
later wig spread it beyond the defendant's own property, and therefore to take precautions to
prevent that event. The person who leaves the combustible or explosive material exposed in a
public place may foresee the risk of fire from some independent source. ... In all of these cases
there is an intervening cause combining with the defendant's conduct to produce the result and in
each case the defendant's negligence consists in failure to protect the plaintiff against that very
risk.
Obviously the defendant cannot be relieved from liability by the fact that the risk or a substantial
and important part of the risk, to which the defendant has subjected the plaintiff has indeed come
to pass. Foreseeable intervening forces are within the scope original risk, and hence of the
defendant's negligence. The courts are quite generally agreed that intervening causes which fall
fairly in this category will not supersede the defendant's responsibility.
Thus it has been held that a defendant will be required to anticipate the usual weather of the
vicinity, including all ordinary forces of nature such as usual wind or rain, or snow or frost or fog
or even lightning; that one who leaves an obstruction on the road or a railroad track should
foresee that a vehicle or a train will run into it; ...
The risk created by the defendant may include the intervention of the foreseeable negligence of
others. ... [The standard of reasonable conduct may require the defendant to protect the plaintiff
against 'that occasional negligence which is one of the ordinary incidents of human life, and
therefore to be anticipated.' Thus, a defendant who blocks the sidewalk and forces the plaintiff to
walk in a street where the plaintiff will be exposed to the risks of heavy traffic becomes liable
when the plaintiff is run down by a car, even though the car is negligently driven; and one who

parks an automobile on the highway without lights at night is not relieved of responsibility when
another negligently drives into it. --- 10
We hold that private respondent Dionisio's negligence was "only contributory," that the "immediate and
proximate cause" of the injury remained the truck driver's "lack of due care" and that consequently respondent
Dionisio may recover damages though such damages are subject to mitigation by the courts (Article 2179, Civil
Code of the Philippines).
Petitioners also ask us to apply what they refer to as the "last clear chance" doctrine. The theory here of
petitioners is that while the petitioner truck driver was negligent, private respondent Dionisio had the "last clear
chance" of avoiding the accident and hence his injuries, and that Dionisio having failed to take that "last clear
chance" must bear his own injuries alone. The last clear chance doctrine of the common law was imported into
our jurisdiction by Picart vs. Smith 11 but it is a matter for debate whether, or to what extent, it has found its way
into the Civil Code of the Philippines. The historical function of that doctrine in the common law was to mitigate
the harshness of another common law doctrine or rule that of contributory negligence. 12 The common law rule
of contributory negligence prevented any recovery at all by a plaintiff who was also negligent, even if the
plaintiff's negligence was relatively minor as compared with the wrongful act or omission of the
defendant. 13 The common law notion of last clear chance permitted courts to grant recovery to a plaintiff who
had also been negligent provided that the defendant had the last clear chance to avoid the casualty and failed to
do so. 14 Accordingly, it is difficult to see what role, if any, the common law last clear chance doctrine has to
play in a jurisdiction where the common law concept of contributory negligence as an absolute bar to recovery by
the plaintiff, has itself been rejected, as it has been in Article 2179 of the Civil Code of the Philippines. 15
Is there perhaps a general concept of "last clear chance" that may be extracted from its common law matrix and
utilized as a general rule in negligence cases in a civil law jurisdiction like ours? We do not believe so. Under
Article 2179, the task of a court, in technical terms, is to determine whose negligence the plaintiff's or the
defendant's was the legal or proximate cause of the injury. That task is not simply or even primarily an
exercise in chronology or physics, as the petitioners seem to imply by the use of terms like "last" or "intervening"
or "immediate." The relative location in the continuum of time of the plaintiff's and the defendant's negligent acts
or omissions, is only one of the relevant factors that may be taken into account. Of more fundamental importance
are the nature of the negligent act or omission of each party and the character and gravity of the risks created by
such act or omission for the rest of the community. The petitioners urge that the truck driver (and therefore his
employer) should be absolved from responsibility for his own prior negligence because the unfortunate plaintiff
failed to act with that increased diligence which had become necessary to avoid the peril precisely created by the
truck driver's own wrongful act or omission. To accept this proposition is to come too close to wiping out the
fundamental principle of law that a man must respond for the forseeable consequences of his own negligent act or
omission. Our law on quasi-delicts seeks to reduce the risks and burdens of living in society and to allocate them
among the members of society. To accept the petitioners' pro-position must tend to weaken the very bonds of
society.
Petitioner Carbonel's proven negligence creates a presumption of negligence on the part of his employer
Phoenix 16 in supervising its employees properly and adequately. The respondent appellate court in effect found,
correctly in our opinion, that Phoenix was not able to overcome this presumption of negligence. The
circumstance that Phoenix had allowed its truck driver to bring the dump truck to his home whenever there was
work to be done early the following morning, when coupled with the failure to show any effort on the part of
Phoenix to supervise the manner in which the dump truck is parked when away from company premises, is an
affirmative showing of culpa in vigilando on the part of Phoenix.
Turning to the award of damages and taking into account the comparative negligence of private respondent
Dionisio on one hand and petitioners Carbonel and Phoenix upon the other hand, 17 we believe that the demands
of substantial justice are satisfied by allocating most of the damages on a 20-80 ratio. Thus, 20% of the damages
awarded by the respondent appellate court, except the award of P10,000.00 as exemplary damages and P4,500.00

as attorney's fees and costs, shall be borne by private respondent Dionisio; only the balance of 80% needs to be
paid by petitioners Carbonel and Phoenix who shall be solidarity liable therefor to the former. The award of
exemplary damages and attorney's fees and costs shall be borne exclusively by the petitioners. Phoenix is of
course entitled to reimbursement from Carbonel. 18 We see no sufficient reason for disturbing the reduced award
of damages made by the respondent appellate court.
WHEREFORE, the decision of the respondent appellate court is modified by reducing the aggregate amount of
compensatory damages, loss of expected income and moral damages private respondent Dionisio is entitled to by
20% of such amount. Costs against the petitioners.
SO ORDERED.
Republic of the Philippines
Supreme Court
Manila
THIRD DIVISION

DY TEBAN TRADING, INC., G.R. No. 161803


Petitioner,
Present:
YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CORONA,*
NACHURA, and
REYES, JJ.
JOSE CHING AND/OR LIBERTY
FOREST, INC. and CRESILITO Promulgated:
M. LIMBAGA,
Respondents. February 4, 2008
x--------------------------------------------------x
DECISION

REYES, R.T., J.:

THE vehicular collision resulting in damages and injuries in this case could have been avoided if the stalled
prime mover with trailer were parked properly and equipped with an early warning device. It is high time We
sounded the call for strict enforcement of the law and regulation on traffic and vehicle registration. Panahon na
para mahigpit na ipatupad ang batas at regulasyon sa trapiko at pagpapatala ng sasakyan.
Before Us is a petition for review on certiorari of the Decision[1] of the Court of Appeals (CA) modifying
that[2] of the Regional Trial Court (RTC) in

Butuan City finding private respondents Liberty Forest, Inc. and Cresilito Limbaga liable to petitioner Dy Teban
Trading, Inc. for damages.
Facts
On July 4, 1995, at around 4:45 a.m., Rogelio Ortiz, with helper Romeo Catamora, was driving a Nissan van
owned by petitioner Dy Teban Trading, Inc. along the National Highway in Barangay Sumilihon, Butuan City,
going to Surigao City. They were delivering commercial ice to nearby barangays and municipalities. A Joana
Paula passenger bus was cruising on the opposite lane towards the van. In between the two vehicles was a parked
prime mover with a trailer, owned by private respondent Liberty Forest, Inc.[3]
The night before, at around 10:00 p.m., the prime mover with trailer suffered a tire blowout. The driver, private
respondent Cresilito Limbaga, parked the prime mover askew occupying a substantial portion of the national
highway, on the lane of the passenger bus. He parked the prime mover with trailer at the shoulder of the road with
the left wheels still on the cemented highway and the right wheels on the sand and gravel shoulder of the
highway.[4] The prime mover was not equipped with triangular, collapsible reflectorized plates, the early
warning device required under Letter of Instruction No. 229. As substitute, Limbaga placed a banana trunk with
leaves on the front and the rear portion of the prime mover to warn incoming motorists. It is alleged that Limbaga
likewise placed kerosene lighted tin cans on the front and rear of the trailer.[5]
To avoid hitting the parked prime mover occupying its lane, the incoming passenger bus swerved to the right,
onto the lane of the approaching Nissan van. Ortiz saw two bright and glaring headlights and the approaching
passenger bus. He pumped his break slowly, swerved to the left to avoid the oncoming bus but the van hit the
front of the stationary prime mover. The passenger bus hit the rear of the prime mover.[6]
Ortiz and Catamora only suffered minor injuries. The Nissan van, however, became inoperable as a result of the
incident. After the collision, SPO4 Teofilo Pame conducted an investigation and submitted a police traffic
incident investigation report.[7]
On October 31, 1995, petitioner Nissan van owner filed a complaint for damages[8] against private respondents
prime mover owner and driver with the RTC in Butuan City. The Joana Paula passenger bus was not impleaded
as defendant in the complaint.
RTC Disposition
On August 7, 2001, the RTC rendered a decision in favor of petitioner Dy Teban Trading, Inc. with
a fallo reading:
WHEREFORE, judgment is hereby rendered directing, ordaining and ordering:

a) That defendants Liberty Forest, Inc. and Cresilito M. Limbaga pay, jointly
and solidarily, plaintiff Dy Teban Trading, Inc. the amounts of P279,832.00 as
actual and compensatory damages, P30,000.00 as attorneys fees and P5,000.00
as expenses of litigation;
b) That all money claims of plaintiff Rogelio C. Ortiz are dismissed;
c) That defendant Jose Ching is absolved from any civil liability or the case
against him dismissed;
d) That the counterclaim of all the defendants is dismissed; and
e) That defendants Liberty Forest, Inc. and Cresilito M. Limbaga to pay,
jointly and solidarily, the costs.
SO ORDERED.[9]

The RTC held that the proximate cause of the three-way vehicular collision was improper parking of the prime
mover on the national highway and the absence of an early warning device on the vehicle, thus:
The court finds that the proximate cause of the incidents is the negligence and carelessness
attributable to the defendants. When the trailer being pulled by the prime mover suffered two (2)
flat tires at Sumilihon, the prime mover and trailer were parked haphazardly, as the right tires of
the prime mover were the only ones on the sand and gravel shoulder of the highway while the left
tires and all the tires of the trailer were on the cemented pavement of the highway, occupying
almost the whole of the right lane on the direction the prime mover and trailer were traveling. The
statement of Limbaga that he could not park the prime mover and trailer deeper into the sand and
gravel shoulder of the highway to his right because there were banana plants is contradicted by the
picture marked Exhibit F. The picture shows that there was ample space on the shoulder. If
defendant Limbaga was careful and prudent enough, he should have the prime mover and trailer
traveled more distance forward so that the bodies of the prime mover and trailer would be far
more on the shoulder rather than on the cemented highway when they were parked. x x x The
court has some doubts on the statement of witness-driver Limbaga that there were banana trunks
with leaves and lighted tin cans with crude oil placed 3 strides in front of the prime mover and
behind the trailer because the testimonies of witnesses Rogelio C. Ortiz, driver of the ice van,
Romeo D. Catamora, helper of the ice van, and Police Traffic Investigator SPO3 Teofilo M. Pame
show that there were no banana trunks with leaves and lighted tin cans at the scene of the
incident. But even assuming that there were banana trunks with leaves but they were placed close
to the prime mover and trailer as they were placed 3 strides away which to the mind of the court is
equivalent approximately to 3 meters and with this distance, approaching vehicles would have no
sufficient time and space to make a complete stop, especially if the vehicles are heavy and
loaded. If there were lighted tin cans, it was not explained by the defendants why the driver,
especially driver witness Ortiz, did not see them.
xxxx
Defendant Liberty Forest, Inc. did not exercise the diligence of a good father of a family in
managing and running its business. The evidence on record shows that it failed to provide its
prime mover and trailer with the required early warning devices with reflectors and it did not keep

proper maintenance and condition of the prime mover and the trailer. The circumstances show that
the trailer were provided with wornout tires and with only one (1) piece of spare tire. The pictures
marked Exhibit 3 and 4 show that two (2) flat tires suffered by the trailer and these two (2) tires
were attached to one of the two (2) I-beams or axles attached to the rear of the trailer which axle is
very near but behind the other axle and with the location of the 2 I-beams, it would have the other
I-beam that would have suffered the flat tires as it has to bear the brunt of weight of the D-8
bulldozer. The bulldozer was not loaded directly above the two (2) I-beams as 2 I-beams, as a pair,
were attached at the far rear end of the trailer.
xxxx
However, defendant Jose Ching should be absolved of any liability as there is no showing that he
is the manager or CEO of defendant Liberty Forest, Inc. Although in the answer, it is admitted that
he is an officer of the defendant corporation, but it is not clarified what kind of position he is
holding, as he could be an officer as one of the members of the Board of Directors or a cashier and
treasurer of the corporation. Witness Limbaga in his testimony mentioned a certain Boy Ching as
the Manager but it was never clarified whether or not Boy Ching and defendant Jose Ching is one
and the same person.[10]

Private respondents appealed to the CA.


CA Disposition
On August 28, 2003, the CA reversed the RTC decision, disposing as follows:
WHEREFORE, premises considered, the decision dated August 7, 2001 of the Regional Trial
Court, Branch 2, Butuan City in Civil Case No. 4360 is hereby PARTLY MODIFIED by
absolving the defendants-appellants/appellees of any liability to plaintiffs-appellants/appellees by
reason of the incident on July 4, 1995.
The dismissal of the case against Jose Ching, the counterclaim of defendants-appellants/appellees
and the money claim of Rogelio Ortiz STANDS.
SO ORDERED.[11]

In partly reversing or partly modifying the RTC decision, the CA held that the proximate cause of the vehicular
collision was the failure of the Nissan van to give way or yield to the right of way of the passenger bus, thus:

It was stated that the Joana Paula bus in trying to avoid a head-on collision with the truck,
sideswept the parked trailer loaded with bulldozer.

Evidently, the driver of the Joana Paula bus was aware of the presence on its lane of the parked
trailer with bulldozer. For this reason, it proceeded to occupy what was left of its lane and part of
the opposite lane. The truck occupying the opposite lane failed to give way or yield the right of
way to the oncoming bus by proceeding with the same speed. The two vehicles were, in effect,
trying to beat each other in occupying a single lane. The bus was the first to occupy the said lane
but upon realizing that the truck refused to give way or yield the right of way, the bus, as a
precaution, geared to its right where the trailer was parked. Unfortunately, the bus miscalculated
its distance from the parked trailer and its rear right side hit the protruding blade of the bulldozer
then on the top of the parked trailer. The impact of the collision on its right rear side with the blade
of the bulldozer threw the bus further to the opposite lane, landing its rear portion on the shoulder
of the opposite lane.
xxxx
Facts of the case reveal that when Ortiz, the driver of the truck, failed to give the Joana Paula bus
the space on the road it needed, the latter vehicle scraped its rear right side on the protruded
bulldozer blade and the impact threw the bus directly on the path of the oncoming truck.This made
plaintiffs-appellants/appellees conclude that the Joana Paula bus occupied its lane which forced
Ortiz, the driver of the truck, to swerve to its left and ram the front of the parked trailer.
xxxx
The trailer was parked because its two (2) rear-left tires were blown out. With a bulldozer on top
of the trailer and two (2) busted tires, it would be dangerous and quite impossible for the trailer to
further park on the graveled shoulder of the road. To do so will cause the flat car to tilt and may
cause the bulldozer to fall from where it was mounted. In fact, it appeared that the driver of the
trailer tried its best to park on the graveled shoulder since the right-front tires were on the graveled
shoulder of the road.
The lower court erred in stating that the Joana Paula bus swerved to the left of the truck because it
did not see the parked trailer due to lack of warning sign of danger of any kind that can be seen
from a distance. The damage suffered by the Joana Paula bus belied this assessment.As stated
before, the Joana Paula bus, with the intention of passing first which it did, first approached the
space beside the parked trailer, veered too close to the parked trailer thereby hitting its rear right
side on the protruding bulldozer blade. Since the damage was on the rear right most of the bus, it
was clearly on the space which was wide enough for a single passing vehicle but not sufficient for
two (2) passing vehicles. The bus was thrown right to the path of the truck by the impact of the
collision of its rear right side with the bulldozer blade.[12]

The CA disagreed with the RTC that the prime mover did not have an early warning device. The appellate court
accepted the claim of private respondent that Limbaga placed kerosene lighted tin cans on the front and rear of
the trailer which, in Baliwag Transit, Inc. v. Court of Appeals,[13] may act as substitute early warning
device. The CA stated:
Likewise, it was incorrect for the lower court to state that there was no warning sign of danger of
any kind, most probably referring to the absence of the triangular reflectorized plates. The police

sketch clearly indicated the stack of banana leaves placed at the rear of the parked trailer. The
trailers driver testified that they placed kerosene lighted tin can at the back of the parked trailer.
A pair of triangular reflectorized plates is not the only early warning device allowed by law. The
Supreme Court (in Baliwag Transit, Inc. v. Court of Appeals) held that:
x x x Col. Dela Cruz and Romano testified that they did not see any early warning
device at the scene of the accident. They were referring to the triangular
reflectorized plates in red and yellow issued by the Land Transportation
Office. However, the evidence shows that Recontique and Ecala placed a kerosene
lamp or torch at the edge of the road, near the rear portion of the truck to serve as
an early warning device. This substantially complies with Section 34(g) of the Land
Transportation and Traffic Code x x x
Baliwags argument that the kerosene lamp or torch does not substantially comply
with the law is untenable. The aforequoted law clearly allows the use not only of an
early warning device of the triangular reflectorized plates variety but also parking
lights or flares visible one hundred meters away. x x x.
This Court holds that the defendants-appellants/appellees were not negligent in parking the trailer
on the scene of the accident. It would have been different if there was only one flat tire and
defendant-appellant/appellee Limbaga failed to change the same and left immediately.
As such, defendants-appellants/appellees are not liable for the damages suffered by plaintiffsappellants/appellees. Whatever damage plaintiffs-appellants/appellees suffered, they alone must
bear them.[14]

Issues
Petitioner raises two issues[15] for Our consideration, to wit:
I.
THE HONORABLE COURT OF APPEALS, WITHOUT ANY AVAILABLE CONCRETE
EVIDENCE, ERRONEOUSLY DETERMINED THAT THERE WERE EARLY WARNING
DEVICES PLACED IN FRONT OF THE DEFENDANT-APPELLANTS/APPELLEES
TRUCK AND FLAT CAR TO WARN PLAINTIFF-APPELLANT/APPELLEE ROGELIO
ORTIZ OF THEIR PRESENCE.
II.
WITH DUE RESPECT, IT IS HIGH TIME TO ENFORCE THE LAW ON EARLY WARNING
DEVICES IN THE PUBLIC INTEREST.

Our Ruling

The petition is meritorious.


The meat of the petition is whether or not the prime mover is liable for the damages suffered by the Nissan
van. The RTCruled in the affirmative holding that the proximate cause of the vehicular collision was the
negligence of Limbaga in parking the prime mover on the national highway without an early warning device on
the vehicle. The CA reversed the RTC decision, holding that the proximate cause of the collision was the
negligence of Ortiz in not yielding to the right of way of the passenger bus.
Article 2176 of the Civil Code provides that 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. To sustain a claim based on quasi-delict, the
following requisites must concur: (a) damage suffered by plaintiff; (b) fault or negligence of defendant; and (c)
connection of cause and effect between the fault or negligence of defendant and the damage incurred by plaintiff.
[16]
There is no dispute that the Nissan van suffered damage. That is borne by the records and conceded by the
parties. The outstanding issues are negligence and proximate cause. Tersely put, the twin issues are: (a) whether
or not prime mover driver Limbaga was negligent in parking the vehicle; and (b) whether or not his negligence
was the proximate cause of the damage to the Nissan van.
Limbaga was negligent in parking the prime mover on the
national highway; he failed to prevent or minimize the risk to
oncoming motorists.

Negligence is defined as the failure to observe for the protection of the interests of another person that degree of
care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury.
[17] The Supreme Court stated the test of negligence in the landmark case Picart v. Smith[18] as follows:
The test by which to determine the existence or negligence in a particular case may be stated as
follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution
which an ordinary person would have used in the same situation? If not, then he is guilty of
negligence. The law here in effect adopts the standard supposed to be supplied by the imaginary
conduct of the discreet paterfamilias of the Roman law. The existence of negligence in a given
case is not determined by reference to the personal judgment of the actor in the situation before
him. The law considers what would be reckless, blameworthy, or negligent in the man of ordinary
intelligence and prudence and determines liability by that. (Underscoring supplied)

The test of negligence is objective. We measure the act or omission of the tortfeasor with that of an ordinary
reasonable person in the same situation. The test, as applied to this case, is whether Limbaga, in parking the
prime mover, used that reasonable care and caution which an ordinary reasonable person would have used in the
same situation.

We find that Limbaga was utterly negligent in parking the prime mover askew on the right side of the national
highway. The vehicle occupied a substantial portion of the national road on the lane of the passenger bus. It was
parked at the shoulder of the road with its left wheels still on the cemented highway and the right wheels on the
sand and gravel shoulder of the highway. It is common sense that the skewed parking of the prime mover on the
national road posed a serious risk to oncoming motorists. It was incumbent upon Limbaga to take some measures
to prevent that risk, or at least minimize it.
We are unable to agree with the CA conclusion it would have been dangerous and quite impossible to further park
the prime mover on the graveled shoulder of the road because the prime mover may tilt and the bulldozer may
fall off. The photographs taken after the incident show that it could have been possible for Limbaga to park the
prime mover completely on the shoulder of the national road without risk to oncoming motorists. We agree with
the RTC observation on this point, thus:
x x x The statement of Limbaga that he could not park the prime mover and trailer deeper into the
sand and gravel shoulder of the highway to his right because there were banana plants is
contradicted by the picture marked Exhibit F. The picture shows that there was ample space on the
shoulder. If defendant Limbaga was careful and prudent enough, he should have the prime mover
and trailer traveled more distance forward so that the bodies of the prime mover and trailer would
be far more on the shoulder rather than on the cemented highway when they were
parked. Although at the time of the incident, it was about 4:45 in the morning and it was drizzling
but there is showing that it was pitch dark that whoever travels along the highway must be extra
careful. If the Joana Paula bus swerved to the lane on which the Nissan ice van was properly
traveling, as prescribed by Traffic Rules and Regulations, it is because the driver of the bus did not
see at a distance the parked prime mover and trailer on the bus proper lane because there was no
warning signs of danger of any kind that can be seen from a distance.[19]

Limbaga also failed to take proper steps to minimize the risk posed by the improperly parked prime mover. He
did not immediately inform his employer, private respondent Liberty Forest, Inc., that the prime mover suffered
two tire blowouts and that he could not have them fixed because he had only one spare tire. Instead of calling for
help, Limbaga took it upon himself to simply place banana leaves on the front and rear of the prime mover to
serve as warning to oncoming motorists. Worse, Limbaga slept on the prime mover instead of standing guard
beside the vehicle. By his own account, Limbaga was sleeping on the prime mover at the time of the collision and
that he was only awakened by the impact of the Nissan van and the passenger bus on the prime mover.[20]
Limbaga also admitted on cross-examination that it was his first time to drive the prime mover with trailer loaded
with a D-8 caterpillar bulldozer.[21] We find that private respondent Liberty Forest, Inc. was utterly negligent in
allowing a novice driver, like Limbaga, to operate a vehicle, such as a truck loaded with a bulldozer, which
required highly specialized driving skills. Respondent employer clearly failed to properly supervise Limbaga in
driving the prime mover.

The RTC noted that private respondent Liberty Forest, Inc. also failed to keep the prime mover in proper
condition at the time of the collision. The prime mover had worn out tires. It was only equipped with one spare
tire. It was for this reason that Limbaga was unable to change the two blown out tires because he had only one
spare. The bulldozer was not even loaded properly on the prime mover, which caused the tire blowouts.
All told, We agree with the RTC that private respondent Limbaga was negligent in parking the prime mover on
the national highway. Private respondent Liberty Forest, Inc. was also negligent in failing to supervise Limbaga
and in ensuring that the prime mover was in proper condition.
The case of Baliwag Transit, Inc. v. Court of Appeals is
inapplicable; Limbaga did not put lighted kerosene tin cans on the
front and rear of the prime mover.

Anent the absence of an early warning device on the prime mover, the CA erred in accepting the bare testimony
of Limbaga that he placed kerosene lighted tin cans on the front and rear of the prime mover. The evidence on
records belies such claim. The CA reliance on Baliwag Transit, Inc. v. Court of Appeals[22] as authority for the
proposition that kerosene lighted tin cans may act as substitute early warning device is misplaced.
First, the traffic incident report did not mention any lighted tin cans on the prime mover or within the immediate
vicinity of the accident. Only banana leaves were placed on the prime mover. The report reads:
VIII RESULT OF INVESTIGATION: A Joana Paula Bus, with Body No. 7788, with Plate No.
LVA-137, driven by one Temestocles Relova v. Antero, of legal age, married and a resident of San
Roque, Kitcharao, Agusan del Norte, while traveling along the National Highway, coming from
the east going to the west direction, as it moves along the way and upon reaching Brgy.
Sumilihon, Butuan City to evade bumping to the approaching Nissan Ice Van with Plate No. PNT247, driven by one Rogelio Cortez y Ceneza. As the result, the Joana Paula Bus accidentally
busideswept (sic) to the parked Prime Mover with Trailer loaded with Bulldozer without early
warning device, instead placing only dry banana leaves three (3) meters at the rear portion of the
Trailer, while failure to place at the front portion, and the said vehicle occupied the whole lane. As
the result, the Joana Paula Bus hit to the left edge blade of the Bulldozer. Thus, causing the said
bus swept to the narrow shouldering, removing the rear four (4) wheels including the differential
and injuring the above-stated twelve (12) passengers and damaged to the right side fender above
the rear wheel. Thus, causing damage on it. While the Nissan Ice Van in evading, accidentally
swerved to the left lane and accidentally bumped to the front bumper of the parked Prime Mover
with Trailer loaded with Bulldozer. Thus, causing heavy damage to said Nissan Ice Van including
the cargoes of the said van.[23]

Second, SPO4 Pame, who investigated the collision, testified[24] that only banana leaves were placed on the
front and rear of the prime mover. He did not see any lighted tin cans in the immediate vicinity of the collision.

Third, the claim of Limbaga that he placed lighted tin cans on the front and rear of the prime mover belatedly
surfaced only during his direct examination. No allegation to this effect was made by private respondents in their
Answer to the complaint for damages. Petitioners counsel promptly objected to the testimony of Limbaga, thus:
ATTY. ROSALES:
Q. Now you mentioned about placing some word signs in front and at the rear of the prime
mover with trailer, will you please describe to us what this word signs are?
A. We placed a piece of cloth on tin cans and filled them with crude oil. And these tin cans
were lighted and they are like torches. These two lights or torches were placed in front and at
the rear side of the prime mover with trailer. After each torch, we placed banana trunk. The
banana trunk is placed between the two (2) torches and the prime mover, both on the rear and
on the front portion of the prime mover.
Q. How far was the lighted tin cans with wick placed in front of the prime mover.
ATTY. ASIS:
At this point, we will be objecting to questions particularly referring to the alleged tin cans as
some of the warning-sign devices, considering that there is no allegation to that effect in the
answer of the defendants. The answer was just limited to the numbers 4 & 5 of the
answer. And, therefore, if we follow the rule of the binding effect of an allegation in the
complaint, then the party will not be allowed to introduce evidence to attack jointly or rather
the same, paragraph 5 states, warning device consisting of 3 banana trunks, banana items and
leaves were filed. He can be cross-examined in the point, Your Honor.
COURT:
Q. Put that on record that as far as this tin cans are concerned, the plaintiffs are interposing
continuing objections. But the Court will allow the question.[25]

We thus agree with the RTC that Limbaga did not place lighted tin cans on the front and rear of the prime
mover. We give more credence to the traffic incident report and the testimony of SPO4 Pame that only banana
leaves were placed on the vehicle. Baliwag Transit, Inc. v. Court of Appeals[26] thus finds no application to the
case at bar.
The skewed parking of the prime mover was the proximate cause
of the collision.

Proximate cause is defined as that cause, which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury, and without which the result would not have occurred. More
comprehensively, proximate cause is that cause acting first and producing the injury, either immediately or by
setting other events in motion, all constituting a natural and continuous chain of events, each having a close
causal connection with its immediate predecessor, the final event in the chain immediately effecting the injury as
natural and probable result of the cause which first acted, under such circumstances that the person responsible

for the first event should, as an ordinarily prudent and intelligent person, have reasonable ground to expect at the
moment of his act or default that an injury to some person might probably result therefrom.[27]
There is no exact mathematical formula to determine proximate cause. It is based upon mixed considerations of
logic, common sense, policy and precedent.[28] Plaintiff must, however, establish a sufficient link between the
act or omission and the damage or injury. That link must not be remote or far-fetched; otherwise, no liability will
attach. The damage or injury must be a natural and probable result of the act or omission. In the precedentsetting Vda. de Bataclan v. Medina,[29] this Court discussed the necessary link that must be established between
the act or omission and the damage or injury, viz.:

It may be that ordinarily, when a passenger bus overturns, and pins down a passenger, merely
causing him physical injuries, if through some event, unexpected and extraordinary, the
overturned bus is set on fire, say, by lightning, or if some highwaymen after looting the vehicle
sets it on fire, and the passenger is burned to death, one might still contend that the proximate
cause of his death was the fire and not the overturning of the vehicle. But in the present case and
under the circumstances obtaining in the same, we do not hesitate to hold that the proximate cause
of the death of Bataclan was the overturning of the bus, this for the reason that when the vehicle
turned not only on its side but completely on its back, the leaking of the gasoline from the tank
was not unnatural or unexpected; that the coming of the men with a lighted torch was in response
to the call for help, made not only by the passengers, but most probably, by the driver and the
conductor themselves, and that because it was very dark (about 2:30 in the morning), the rescuers
had to carry a light with them; and coming as they did from a rural area where lanterns and
flashlights were not available, they had to use a torch, the most handy and available; and what was
more natural than that said rescuers should innocently approach the overturned vehicle to extend
the aid and effect the rescue requested from them. In other words, the coming of the men with the
torch was to be expected and was natural sequence of the overturning of the bus, the trapping of
some of its passengers bus, the trapping of some of its passengers and the call for outside help.

The ruling in Bataclan has been repeatedly cited in subsequent cases as authority for the proposition that the
damage or injury must be a natural or probable result of the act or omission. Here, We agree with the RTC that
the damage caused to the Nissan van was a natural and probable result of the improper parking of the prime
mover with trailer. As discussed, the skewed parking of the prime mover posed a serious risk to oncoming
motorists. Limbaga failed to prevent or minimize that risk. The skewed parking of the prime mover triggered the
series of events that led to the collision, particularly the swerving of the passenger bus and the Nissan van.
Private respondents Liberty Forest, Inc. and Limbaga are liable for all damages that resulted from the skewed
parking of the prime mover. Their liability includes those damages resulting from precautionary measures taken
by other motorist in trying to avoid collision with the parked prime mover. As We see it, the passenger bus
swerved to the right, onto the lane
of the Nissan van, to avoid colliding with the improperly parked prime mover. The driver of the Nissan van,
Ortiz, reacted swiftly by swerving to the left, onto the lane of the passenger bus, hitting the parked prime

mover. Ortiz obviously would not have swerved if not for the passenger bus abruptly occupying his vans
lane. The passenger bus, in turn, would not have swerved to the lane of the Nissan van if not for the prime mover
improperly parked on its lane. The skewed parking is the proximate cause of the damage to the Nissan van.
In Phoenix Construction, Inc. v. Intermediate Appellate Court,[30] this Court held that a similar vehicular
collision was caused by the skewed parking of a dump truck on the national road, thus:
The conclusion we draw from the factual circumstances outlined above is that private respondent
Dionisio was negligent the night of the accident. He was hurrying home that night and driving
faster than he should have been. Worse, he extinguished his headlights at or near the intersection
of General Lacuna and General Santos Streets and thus did not see the dump truck that was parked
askew and sticking out onto the road lane.
Nonetheless, we agree with the Court of First Instance and the Intermediate Appellate Court that
the legal and proximate cause of the accident and of Dionisios injuries was the wrongful or
negligent manner in which the dump truck was parked in other words, the negligence of petitioner
Carbonel. That there was a reasonable relationship between petitioner Carbonels negligence on the
one hand and the accident and respondents injuries on the other hand, is quite clear. Put in a
slightly different manner, the collision of Dionisios car with the dump truck was a natural and
foreseeable consequence of the truck drivers negligence.
xxxx
We believe, secondly, that the truck drivers negligence far from being a passive and static
condition was rather an indispensable and efficient cause. The collision between the dump truck
and the private respondents car would in all probability not have occurred had the dump truck not
been parked askew without any warning lights or reflector devices. The improper parking of the
dump truck created an unreasonable risk of injury for anyone driving down General Lacuna
Street and for having so created this risk, the truck driver must be held responsible. In our view,
Dionisios negligence, although later in point of time than the truck drivers negligence and,
therefore, closer to the accident, was not an efficient intervening or independent cause. What the
Petitioner describes as an intervening cause was no more than a foreseeable consequence of the
risk created by the negligent manner in which the truck driver had parked the dump truck. In other
words, the petitioner truck driver owed a duty to private respondent Dionisio and others similarly
situated not to impose upon them the very risk the truck driver had created. Dionisios negligence
was not of an independent and overpowering nature as to cut, as it were, the chain of causation in
fact between the improper parking of the dump truck and the accident, nor to sever the juris
vinculum of liability. x x x(Underscoring supplied)
We cannot rule on the proportionate or contributory liability of the
passenger bus, if any, because it was not a party to the case; joint
tortfeasors are solidarily liable.

The CA also faults the passenger bus for the vehicular collision. The appellate court noted that the passenger bus
was aware of the presence of the prime mover on its lane, but it still proceeded to occupy the lane of the Nissan
van. The passenger bus also miscalculated its distance from the prime mover when it hit the vehicle.

We cannot definitively rule on the proportionate or contributory liability of the Joana Paula passenger bus vis-vis the prime mover because it was not a party to the complaint for damages. Due process dictates that the
passenger bus must be given an opportunity to present its own version of events before it can be held liable. Any
contributory or proportionate liability of the passenger bus must be litigated in a separate action, barring any
defense of prescription or laches. Insofar as petitioner is concerned, the proximate cause of the collision was the
improper parking of the prime mover. It was the improper parking of the prime mover which set in motion the
series of events that led to the vehicular collision.
Even granting that the passenger bus was at fault, its fault will not necessarily absolve private respondents from
liability. If at fault, the passenger bus will be a joint tortfeasor along with private respondents. The liability of
joint tortfeasors is joint and solidary. This means that petitioner may hold either of them liable for damages from
the collision. In Philippine National Construction Corporation v. Court of Appeals,[31] this Court held:
According to the great weight of authority, where the concurrent or successive negligent acts or
omission of two or more persons, although acting independently of each other, are, in
combination, the direct and proximate cause of a single injury to a third person and it is impossible
to determine in what proportion each contributed to the injury, either is responsible for the whole
injury, even though his act alone might not have caused the entire injury, or the same damage
might have resulted from the acts of the other tort-feasor x x x.

In Far Eastern Shipping Company v. Court of Appeals, the Court declared that the liability of joint tortfeasors is
joint and solidary, to wit:
It may be said, as a general rule, that negligence in order to render a person liable need not be the
sole cause of an injury. It is sufficient that his negligence, concurring with one or more efficient
causes other than plaintiffs, is the proximate cause of the injury. Accordingly, where several causes
combine to produce injuries, a person is not relieved from liability because he is responsible for
only one of them, it being sufficient that the negligence of the person charged with injury is an
efficient cause without which the injury would not have resulted to as great an extent, and that
such cause is not attributable to the person injured. It is no defense to one of the concurrent
tortfeasors that the injury would not have resulted from his negligence alone, without the
negligence or wrongful acts of the other concurrent tortfeasors. Where several causes producing
an injury are concurrent and each is an efficient cause without which the injury would not have
happened, the injury may be attributed to all or any of the causes and recovery may be had against
any or all of the responsible persons although under the circumstances of the case, it may appear
that one of them was more culpable, and that the duty owed by them to the injured person was not
the same. No actors negligence ceases to be a proximate cause merely because it does not exceed
the negligence of other actors. Each wrongdoer is responsible for the entire result and is liable as
though his acts were the sole cause of the injury.
There is no contribution between joint tortfeasors whose liability is solidary since both of them are
liable for the total damage. Where the concurrent or successive negligent acts or omissions of two
or more persons, although acting independently, are in combination with the direct and proximate
cause of a single injury to a third person, it is impossible to determine in what proportion each

contributed to the injury and either of them is responsible for the whole injury. Where their
concurring negligence resulted in injury or damage to a third party, they become joint tortfeasors
and are solidarily liable for the resulting damage under Article 2194 of the Civil
Code. (Underscoring supplied)

All told, all the elements of quasi delict have been proven by clear and convincing evidence. The CA erred in
absolving private respondents from liability for the vehicular collision.

Final Note

It is lamentable that the vehicular collision in this case could have been easily avoided by following basic traffic
rules and regulations and road safety standards. In hindsight, private respondent Limbaga could have prevented
the three-way vehicular collision if he had properly parked the prime mover on the shoulder of the national
road. The improper parking of vehicles, most especially along the national highways, poses a serious and
unnecessary risk to the lives and limbs of other motorists and passengers. Drivers owe a duty of care to follow
basic traffic rules and regulations and to observe road safety standards. They owe that duty not only for their own
safety, but also for that of other motorists. We can prevent most vehicular accidents by simply following basic
traffic rules and regulations.

We also note a failure of implementation of basic safety standards, particularly the law on early warning
devices. This applies even more to trucks and big vehicles, which are prone to mechanical breakdown on the
national highway. The law, as crafted, requires vehicles to be equipped with triangular reflectorized plates.
[32] Vehicles without the required early warning devices are ineligible for registration.[33] Vehicle owners may
also be arrested and fined for non-compliance with the law.[34]

The Land Transportation Office (LTO) owes a duty to the public to ensure that all vehicles on the road meet basic
and minimum safety features, including that of early warning devices. It is most unfortunate that We still see
dilapidated and rundown vehicles on the road with substandard safety features. These vehicles not only pose a
hazard to the safety of their occupants but that of other motorists. The prime mover truck in this case should not
have been granted registration because it failed to comply with the minimum safety features required for vehicles
on the road.
It is, indeed, time for traffic enforcement agencies and the LTO to strictly enforce all pertinent laws and
regulations within their mandate.

WHEREFORE, the petition is GRANTED. The Court of Appeals decision dated August 28, 2003 is
hereby SET ASIDE. The RTC decision dated August 7, 2001 is REINSTATED IN FULL.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 70493 May 18, 1989
GLAN PEOPLE'S LUMBER AND HARDWARE, GEORGE LIM, FABIO S. AGAD, FELIX LIM and
PAUL ZACARIAS y INFANTE, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, CECILIA ALFEREZ VDA. DE CALIBO, Minors ROYCE
STEPHEN, JOYCE JOAN, JANISE MARIE, JACQUELINE BRIGITTE JOCELINE CORAZON,
JULIET GERALDINE, JENNIFER JILL, all surnamed CALIBO, represented by their mother, CECILIA
A. VDA. DE CALIBO,respondents.
Rufino Mayor and Isidro M. Ampig for petitioners.
Manuel L. Hontanosas for private respondents.

NARVASA, J.:
There is a two-fold message in this judgment that bears stating at the outset. The first, an obvious one, is that it is
the objective facts established by proofs presented in a controversy that determine the verdict, not the plight of
the persons involved, no matter how deserving of sympathy and commiseration because, for example, an accident
of which they are the innocent victims has brought them to. reduced circumstances or otherwise tragically altered
their lives. The second is that the doctrine laid done many, many years ago in Picart vs. Smith 1continues to be
good law to this day.
The facts giving rise to the controversy at bar are tersely and quite accurately recounted by the Trial Court as
follows: 2
Engineer Orlando T. Calibo, Agripino Roranes, and Maximo Patos were on the jeep owned by the
Bacnotan Consolidated Industries, Inc., with Calibo at the wheel, as it approached from the South
Lizada Bridge going towards the direction of Davao City at about 1:45 in the afternoon of July
4,1979. At about that time, the cargo track, loaded with cement bags, GI sheets, plywood, driven
by defendant Paul Zacarias y Infants, coming from the opposite direction of Davao City and bound
for Glan, South Cotabato, had just crossed said bridge. At about 59 yards after crossing the bridge,
the cargo truck and the jeep collided as a consequence of which Engineer Calibo died while
Roranes and Patos sustained physical injuries. Zacarias was unhurt. As a result of the impact, the
left side of the truck was slightly damaged while the left side of the jeep, including its fender and
hood, was extensively damaged. After the impact, the jeep fell and rested on its right side on the
asphalted road a few meters to the rear of the truck, while the truck stopped on its wheels on the
road.
On November 27, 1979, the instant case for damages was filed by the surviving spouse and
children of the late Engineer Calibo who are residents of Tagbilaran City against the driver and
owners of the cargo truck.

For failure to file its answer to the third party complaint, third party defendant, which insured the
cargo truck involved, was declared in default.
The case filed by the heirs of Engineer Calibo his widow and minor children, private respondents herein was
docketed as
Civil Case No. 3283 of the Court of First Instance of Bohol. 3 Named defendants in the complaint were "Felix S.
Agad, George Lim and Felix Lim . . . (who) appear to be the co-owners of the Glan People's Lumber and
Hardware . . . (and) Paul Zacarias y Infante." 4 The defendants' answer however alleged that the lumber and
hardware business was exclusively owned by George Y. Lim, this being evidenced by the Certificate of
Registration issued by the Bureau of Domestic Trade; Fabio S. Agad was not a co-owner thereof but "merely
employed by . . . George Y. Lim as bookkeeper"; and Felix Lim had no connection whatever with said business,
"he being a child only eight (8) years of age." 5
"After (trial, and) a careful evaluation of the evidence, both testimonial and documentary," the Court reached the
conclusion "that the plaintiffs failed to establish by preponderance of evidence the negligence, and thus the
liability, of the defendants." Accordingly, the Court dismissed the complaint (and defendants' counterclaim) "for
insufficiency of evidence." Likewise dismissed was third-party complaint presented by the defendants against the
insurer of the truck. The circumstances leading to the Court's conclusion just mentioned, are detailed in the
Court's decision, as follows:
1. Moments before its collission with the truck being operated by Zacarias, the jeep of the
deceased Calibo was "zigzagging." 6
2. Unlike Zacarias who readily submitted himself to investigation by the police, Calibo's
companions, Roranes (an accountant), and Patos, who suffered injuries on account of the collision,
refused to be so investigated or give statements to the police officers. This, plus Roranes' waiver of
the right to institute criminal proceedings against Zacarias, and the fact that indeed no criminal
case was ever instituted in Court against Zacarias, were "telling indications that they did not
attribute the happening to defendant Zacarias' negligence or fault." 7
3. Roranes' testimony, given in plaintiffs' behalf, was "not as clear and detailed as that of . . .
Zacarias," and was "uncertain and even contradicted by the physical facts and the police
investigators Dimaano and Esparcia." 8
4. That there were skid marks left by the truck's tires at the scene, and none by the jeep,
demonstrates that the driver of the truck had applied the brakes and the jeep's driver had not; and
that the jeep had on impact fallen on its right side is indication that it was running at high speed.
Under the circumstances, according to the Court, given "the curvature of the road and the
descending grade of the jeep's lane, it was negligence on the part of the driver of the jeep, Engr.
Calibo, for not reducing his speed upon sight of the truck and failing to apply the brakes as he got
within collision range with the truck."
5. Even if it be considered that there was some antecedent negligence on the part of Zacarias
shortly before the collision, in that he had caused his truck to run some 25 centimeters to the left of
the center of the road, Engr. Calibo had the last clear chance of avoiding the accident because he
still had ample room in his own lane to steer clear of the truck, or he could simply have braked to a
full stop.
The Court of Appeals saw things differently. It rendered judgment 9 on the plaintiffs' appeal, l0 reversing the
decision of the Trial Court. It found Zacarias to be negligent on the basis of the following circumstances, to wit:
1) "the truck driven by defendant Zacarias occupied the lane of the jeep when the collision
occurred,' and although Zacarias saw the jeep from a distance of about 150 meters, he "did not
drive his truck back to his lane in order to avoid collision with the oncoming jeep . . .;" 11 what is

worse, "the truck driver suddenly applied his brakes even as he knew that he was still within the
lane of the jeep;" 12 had both vehicles stayed in their respective lanes, the collision would never
have occurred, they would have passed "along side each other safely;" 13
2) Zacarias had no license at the time; what he handed to Pfc. Esparcia, on the latter's demand, was
the 'driver's license of his co-driver Leonardo Baricuatro;" 14
3) the waiver of the right to file criminal charges against Zacarias should not be taken against
"plaintiffs" Roranes and Patos who had the right, under the law, to opt merely to bring a civil
suit. 15
The Appellate Court opined that Zacarias' negligence "gave rise to the presumption of negligence on the part of
his employer, and their liability is both primary and solidary." It therefore ordered "the defendants jointly and
solidarily to indemnify the plaintiffs the following amounts:
(1) P30,000.00 for the death of Orlando Calibo;
(2) P378,000.00 for the loss of earning capacity of the deceased
(3) P15,000.00 for attorney's fees;
(4) Cost of suit. 16
The defendants George Lim, Felix Lim, Fabio S. Agad and Paul Zacarias have appealed to this Court
on certiorariand pray for a reversal of the judgment of the Intermediate Appellate Court which, it is claimed,
ignored or ran counter to the established facts. A review of the record confirms the merit of this assertion and
persuades this Court that said judgment indeed disregarded facts clearly and undisputably demonstrated by the
proofs. The appealed judgment, consequently, will have to be reversed.
The finding that "the truck driven by defendant Paul Zacarias occupied the lane of the jeep when the collision
occurred" is a loose one, based on nothing more than the showing that at the time of the accident, the truck driven
by Zacarias had edged over the painted center line of the road into the opposite lane by a width of twenty-five
(25) centimeters. It ignores the fact that by the uncontradicted evidence, the actual center line of the road was not
that indicated by the painted stripe but, according to measurements made and testified by Patrolman Juanita
Dimaano, one of the two officers who investigated the accident, correctly lay thirty-six (36) centimeters farther to
the left of the truck's side of said stripe.
The unimpugned testimony of Patrolman Dimaano, a witness for the private respondents, is to the effect that the
jeep's lane was three (3) meters and seventy-five (75) centimeters wide, and that of the truck three (3) meters and
three (3) centimeters, measured from the center stripe to the corresponding side lines or outer edges of the
road. 17 The total width of the road being, therefore, six (6) meters and seventy-eight (78) centimeters, the true
center line equidistant from both side lines would divide the road into two lanes each three (meters) and thirtynine (39) centimeters wide. Thus, although it was not disputed that the truck overrode the painted stripe by
twenty-five (25) centimeters, it was still at least eleven (11) centimeters away from its side of the true center line
of the road and well inside its own lane when the accident occurred. By this same reckoning, since it was
unquestionably the jeep that rammed into the stopped truck, it may also be deduced that it (the jeep) was at the
time travelling beyond its own lane and intruding into the lane of the truck by at least the same 11-centimeter
width of space.
Not only was the truck's lane, measured from the incorrectly located center stripe uncomfortably narrow, given
that vehicle's width of two (2) meters and forty-six (46) centimeters; the adjacent road shoulder was also virtually
impassable, being about three (3) inches lower than the paved surface of the road and "soft--not firm enough to
offer traction for safe passage besides which, it sloped gradually down to a three foot-deep ravine with a river
below. 18 The truck's lane as erroneously demarcated by the center stripe gave said vehicle barely half a meter of
clearance from the edge of the road and the dangerous shoulder and little room for maneuver, in case this was
made necessary by traffic contingencies or road conditions, if it always kept to said lane. It being also shown that

the accident happened at or near the point of the truck's approach to a curve, 19 which called for extra
precautions against driving too near the shoulder, it could hardly be accounted negligent on the part of its driver
to intrude temporarily, and by only as small as a twenty-five centimeter wide space (less than ten inches), into the
opposite lane in order to insure his vehicle's safety. This, even supposing that said maneuver was in fact an
intrusion into the opposite lane, which was not the case at all as just pointed out.
Nor was the Appellate Court correct in finding that Paulino Zacarias had acted negligently in applying his brakes
instead of getting back inside his lane upon qqqespying the approaching jeep. Being well within his own lane, as
has already been explained, he had no duty to swerve out of the jeep's way as said Court would have had him do.
And even supposing that he was in fact partly inside the opposite lane, coming to a full stop with the jeep still
thirty (30) meters away cannot be considered an unsafe or imprudent action, there also being uncontradicted
evidence that the jeep was "zigzagging" 20 and hence no way of telling in which direction it would go as it
approached the truck.
Also clearly erroneous is the finding of the Intermediate Appellate Court that Zacarias had no driver's license at
the time. The traffic accident report attests to the proven fact that Zacarias voluntarily surrendered to the
investigating officers his driver's license, valid for 1979, that had been renewed just the day before the accident,
on July 3, 1979. 21 The Court was apparently misled by the circumstance that when said driver was first asked to
show his license by the investigators at the scene of the collision, he had first inadvertently produced the license
of a fellow driver, Leonardo Baricuatro, who had left said license in Davao City and had asked Zacarias to bring
it back to him in Glan, Cotabato. 22
The evidence not only acquits Zacarias of any negligence in the matter; there are also quite a few significant
indicators that it was rather Engineer Calibo's negligence that was the proximate cause of the accident. Zacarias
had told Patrolman Dimaano at the scene of the collision and later confirmed in his written statement at the police
headquarters 23 that the jeep had been "zigzagging," which is to say that it was travelling or being driven
erratically at the time. The other investigator, Patrolman Jose Esparcia, also testified that eyewitnesses to the
accident had remarked on the jeep's "zigzagging." 24 There is moreover more than a suggestion that Calibo had
been drinking shortly before the accident. The decision of the Trial Court adverts to further testimony of Esparcia
to the effect that three of Calibo's companions at the beach party he was driving home from when the collision
occurred, who, having left ahead of him went to the scene when they heard about the accident, had said that there
had been a drinking spree at the party and, referring to Calibo, had remarked: "Sabi na huag nang mag drive . . . .
pumipilit," (loosely translated, "He was advised not to drive, but he insisted.")
It was Calibo whose driver's license could not be found on his person at the scene of the accident, and was
reported by his companions in the jeep as having been lost with his wallet at said scene, according to the traffic
accident report, Exhibit "J". Said license unexplainedly found its way into the record some two years later.
Reference has already been made to the finding of the Trial Court that while Zacarias readily submitted to
interrogation and gave a detailed statement to the police investigators immediately after the accident, Calibo's
two companions in the jeep and supposed eyewitnesses, Agripino Roranes and Maximo Patos, refused to give
any statements. Furthermore, Roranes who, together with Patos, had sustained injuries as a result of the collision,
waived his right to file a criminal case against Zacarias. 25
Even, however, ignoring these telltale indicia of negligence on the part of Calibo, and assuming some antecedent
negligence on the part of Zacarias in failing to keep within his designated lane, incorrectly demarcated as it was,
the physical facts, either expressly found by the Intermediate Appellate Court or which may be deemed conceded
for lack of any dispute, would still absolve the latter of any actionable responsibility for the accident under the
rule of the last clear chance.
Both drivers, as the Appellate Court found, had had a full view of each other's vehicle from a distance of one
hundred fifty meters. Both vehicles were travelling at a speed of approximately thirty kilometers per hour. 26 The
private respondents have admitted that the truck was already at a full stop when the jeep plowed into it. And they

have not seen fit to deny or impugn petitioners' imputation that they also admitted the truck had been brought to a
stop while the jeep was still thirty meters away. 27 From these facts the logical conclusion emerges that the driver
of the jeep had what judicial doctrine has appropriately called the last clear chance to avoid the accident, while
still at that distance of thirty meters from the truck, by stopping in his turn or swerving his jeep away from the
truck, either of which he had sufficient time to do while running at a speed of only thirty kilometers per hour. In
those circumstances, his duty was to seize that opportunity of avoidance, not merely rely on a supposed right to
expect, as the Appellate Court would have it, the truck to swerve and leave him a clear path.
The doctrine of the last clear chance provides as valid and complete a defense to accident liability today as it did
when invoked and applied in the 1918 case of Picart vs. Smith, supra, which involved a similar state of facts. Of
those facts, which should be familiar to every student of law, it is only necessary to recall the summary made in
the syllabus of this Court's decision that:
(t)he plaintiff was riding a pony on a bridge. Seeing an automobile ahead he improperly pulled his
horse over to the railing on the right. The driver of the automobile, however guided his car toward
the plaintiff without diminution of speed until he was only few feet away. He then turned to the
right but passed so closely to the horse that the latter being frightened, jumped around and was
killed by the passing car. . . . .
Plaintiff Picart was thrown off his horse and suffered contusions which required several days of medical
attention. He sued the defendant Smith for the value of his animal, medical expenses and damage to his apparel
and obtained judgment from this Court which, while finding that there was negligence on the part of both parties,
held that that of the defendant was the immediate and determining cause of the accident and that of the plaintiff ".
. . the more remote factor in the case":
It goes without saying that the plaintiff himself was not free from fault, for he was guilty of
antecedent negligence in planting himself on the wrong side of the road. But as we have already
stated, the defendant was also negligent; and in such case the problem always is to discover which
agent is immediately and directly responsible. It will be noted that the negligent acts of the two
parties were not contemporaneous, since the negligence of the defendant succeeded the negligence
of the plaintiff by an appreciable interval. Under these circumstances the law is that the person
who has the last fair chance to avoid the impending harm and fails to do so is chargeable with the
consequences, without reference to the prior negligence of the other party.
Since said ruling clearly applies to exonerate petitioner Zacarias and his employer (and co-petitioner) George
Lim, an inquiry into whether or not the evidence supports the latter's additional defense of due diligence in the
selection and supervision of said driver is no longer necessary and wig not be undertaken. The fact is that there is
such evidence in the record which has not been controverted.
It must be pointed out, however, that the Intermediate Appellate Court also seriously erred in holding the
petitioners Pablo S. Agad and Felix Lim solidarily liable for the damages awarded in its appealed decision, as
alleged owners, with petitioner George Lim, of Glan People's Lumber and Hardware, employer of petitioner
Zacarias. This manifestly disregarded, not only the certificate of registration issued by the Bureau of Domestic
Trade identifying Glan People's Lumber and Hardware as a business name registered by George Lim, 28 but also
unimpugned allegations into the petitioners' answer to the complaint that Pablo S. Agad was only an employee of
George Lim and that Felix Lim, then a child of only eight (8) years, was in no way connected with the business.
In conclusion, it must also be stated that there is no doubt of this Court's power to review the assailed decision of
the Intermediate Appellate Court under the authority of precedents recognizing exceptions to the familiar rule
binding it to observe and respect the latter's findings of fact. Many of those exceptions may be cited to support
the review here undertaken, but only the most obvious that said findings directly conflict with those of the
Trial Court will suffice. 29 In the opinion of this Court and after a careful review of the record, the evidence
singularly fails to support the findings of the Intermediate Appellate Court which, for all that appears, seem to

have been prompted rather by sympathy for the heirs of the deceased Engineer Calibo than by an objective
appraisal of the proofs and a correct application of the law to the established facts. Compassion for the plight of
those whom an accident has robbed of the love and support of a husband and father is an entirely natural and
understandable sentiment. It should not, however, be allowed to stand in the way of, much less to influence, a just
verdict in a suit at law.
WHEREFORE, the appealed judgment of the Intermediate Appellate Court is hereby REVERSED, and the
complaint against herein petitioners in Civil Case No. 3283 of the Court of First Instance of Bohol, Branch IV, is
DISMISSED. No pronouncement as to costs.
SO ORDERED.
THIRD DIVISION
[G.R. No. 112160. February 28, 2000]
OSMUNDO S. CANLAS and ANGELINA CANLAS, petitioner, vs. COURT OF APPEALS, ASIAN
SAVINGS BANK, MAXIMO C. CONTRERAS and VICENTE MAOSCA, respondents.
DECISION
PURISIMA, J.: Mi-so
At bar is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to review and set aside
the Decision[1] of the Court of Appeals in CA-G.R. CV No. 25242, which reversed the Decision[2] of Branch 59
of the Regional Trial Court of Makati City in Civil Case No. M-028; the dispositive portion of which reads:
"WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE and a new one
is hereby entered DISMISSING the complaint of the spouses Osmundo and Angelina Canlas. On
the counterclaim of defendant Asian Savings Bank, the plaintiffs Canlas spouses are hereby
ordered to pay the defendant Asian Savings Bank the amount of P50,000.00 as moral and
exemplary damages plus P15,000.00 as and for attorney's fees.
With costs against appellees.
SO ORDERED."[3]
The facts that matter:
Sometime in August, 1982, the petitioner, Osmundo S. Canlas, and private respondent, Vicente Maosca, decided
to venture in business and to raise the capital needed therefor. The former then executed a Special Power of
Attorney authorizing the latter to mortgage two parcels of land situated in San Dionisio, (BF Homes) Paranaque,
Metro Manila, each lot with semi-concrete residential house existing thereon, and respectively covered by
Transfer Certificate of Title No. 54366 in his (Osmundo's) name and Transfer Certificate of Title No. S-78498 in
the name of his wife Angelina Canlas.
Subsequently, Osmundo Canlas agreed to sell the said parcels of land to Vicente Manosca, for and in
consideration of P850,000.00,P500,000.00 of which payable within one week, and the balance of P350,000.00 to
serve as his (Osmundo's) investment in the business. Thus, Osmundo Canlas delivered to Vicente Maosca the
transfer certificates of title of the parcels of land involved. Vicente Maosca, as his part of the transaction, issued
two postdated checks in favor of Osmundo Canlas in the amounts of P40,000.00 and P460,000.00, respectively,
but it turned out that the check covering the bigger amount was not sufficiently funded.[4]Ne-xold
On September 3, 1982, Vicente Maosca was able to mortgage the same parcels of land for P100,000.00 to a
certain Attorney Manuel Magno, with the help of impostors who misrepresented themselves as the spouses,
Osmundo Canlas and Angelina Canlas.[5]
On September 29, 1982, private respondent Vicente Maosca was granted a loan by the respondent Asian Savings
Bank (ASB) in the amount of P500,000.00, with the use of subject parcels of land as security, and with the

involvement of the same impostors who again introduced themselves as the Canlas spouses.[6] When the loan it
extended was not paid, respondent bank extrajudicially foreclosed the mortgaged.
On January 15, 1983, Osmundo Canlas wrote a letter informing the respondent bank that the execution of subject
mortgage over the two parcels of land in question was without their (Canlas spouses) authority, and request that
steps be taken to annul and/or revoke the questioned mortgage. On January 18, 1983, petitioner Osmundo Canlas
also wrote the office of Sheriff Maximo C. Contreras, asking that the auction sale scheduled on February 3, 1983
be cancelled or held in abeyance. But respondents Maximo C. Contreras and Asian Savings Bank refused to heed
petitioner Canlas' stance and proceeded with the scheduled auction sale.[7]
Consequently, on February 3, 1983 the herein petitioners instituted the present case for annulment of deed of real
estate mortgage with prayer for the issuance of a writ of preliminary injunction; and on May 23, 1983, the trial
court issued an Order restraining the respondent sheriff from issuing the corresponding Certificate of Sheriffs
Sale.[8]
For failure to file his answer, despite several motions for extension of time for the filing thereof, Vicente Maosca
was declared in default.[9]
On June 1, 1989, the lower court a quo came out with a decision annulling subject deed of mortgage and
disposing, thus:
"Premises considered, judgment is hereby rendered as follows:
1. Declaring the deed of real estate mortgage (Exhibit 'L) involving the properties of the plaintiffs
as null and void; Man-ikx
2. Declaring the public auction sale conducted by the defendant Sheriff, involving the same
properties as illegal and without binding effect;
3. Ordering the defendants, jointly and severally, to pay the plaintiffs the sum of P20,000.00
representing attorney's fees;
4. On defendant ASB's crossclaim: ordering the cross-defendant Vicente Maosca to pay the
defendant ASB the sum of P350,000.00, representing the amount which he received as proceeds of
the loan secured by the void mortgage, plus interest at the legal rate, starting February 3, 1983,
the date when the original complaint was filed, until the amount is fully paid;
5. With costs against the defendants.
SO ORDERED."[10]
From such Decision below, Asian Savings Bank appealed to the Court of Appeals, which handed down the
assailed judgment of reversal, dated September 30, 1983, in CA-G.R. CV No. 25242. Dissatisfied therewith, the
petitioners found their way to this Court via the present Petition; theorizing that:
"I
RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT THE MORTGAGE OF THE
PROPERTIES SUBJECT OF THIS CASE WAS VALID.
II
RESPONDENT COURT OF APPEALS ERRED IN HIOLDING THAT PETITIONERS ARE NOT
ENTITLED TO RELIEF BECAUSE THEY WERE NEGLIGENT AND THEREFORE MUST BEAR
THE LOSS.
III

RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENT ASB


EXERCISED DUE DILIGENCE IN GRANTING THE LOAN APPLICATION OF
RESPONDENT. Manik-s
IV
RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENT ASB DID NOT
ACT WITH BAD FAITH IN PROCEEDING WITH THE FORECLOSURE SALE OF THE
PROPERTIES.
V
RESPONDENT COURT OF APPEALS ERRED IN AWARDING RESPONDENT ASB MORAL
DAMAGES."[11]
The Petition is impressed with merit.
Article 1173 of the Civil Code, provides:
"Article 1173. The fault or negligence of the obligor consist 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.
If the law or contract does not state the diligence which is to be observed in the performance, that
which is expected of a good father of a family shall be required. (1104)"
The degree of diligence required of banks is more than that of a good father of a family;[12] in keeping with their
responsibility to exercise the necessary care and prudence in dealing even on a register or titled property. The
business of a bank is affected with public interest, holding in trust the money of the depositors, which bank
deposits the bank should guard against loss due to negligence or bad faith, by reason of which the bank would be
denied the protective mantle of the land registration law, accorded only to purchases or mortgagees for value and
in good faith.[13]Man-ikan
In the case under consideration, from the evidence on hand it can be gleaned unerringly that respondent bank did
not observe the requisite diligence in ascertaining or verifying the real identity of the couple who introduced
themselves as the spouses Osmundo Canlas and Angelina Canlas. It is worthy to note that not even a single
identification card was exhibited by the said impostors to show their true identity; and yet, the bank acted on their
representations simply on the basis of the residence certificates bearing signatures which tended to match the
signatures affixed on a previous deed of mortgage to a certain Atty. Magno, covering the same parcels of land in
question. Felizado Mangubat, Assistant Vice President of Asian Savings Bank, thus testified inter alia:
"x x x
Q:.....According to you, the basis for your having recommended for the approval of MANASCO's
(sic) loan particularly that one involving the property of plaintiff in this case, the spouses
OSMUNDO CANLAS and ANGELINA CANLAS, the basis for such approval was that according
to you all the signatures and other things taken into account matches with that of the document
previously executed by the spouses CANLAS?
A:.....That is the only basis for accepting the signature on the mortgage, the basis for the
recommendation of the approval of the loan are the financial statement of MAOSCA?
A:.....Yes, among others the signature and TAX Account Number, Residence Certificate appearing
on the previous loan executed by the spouses CANLAS, I am referring to EXHIBIT 5, mortgage to
ATTY. MAGNO, those were made the basis.

A:.....That is just the basis of accepting the signature, because at that time the loan have been
approved already on the basis of the financial statement of the client the Bank Statement. Wneh
(sic) it was approved we have to base it on the Financial statement of the client, the signatures
were accepted only for the purpose of signing the mortgage not for the approval, we don't (sic)
approve loans on the signature.
ATTY. CLAROS:
.....Would you agree that as part of ascertaining the identify of the parties particularly the
mortgage, you don't consider also the signature, the Residence Certificate, the particular address
of the parties involved.
A:.....I think the question defers (sic) from what you asked a while ago.
Q:.....Among others?
A:.....We have to accept the signature on the basis of the other signatures given to us it being a
public instrument. Ol-dmiso
ATTY. CARLOS:
.....You mean to say the criteria of ascertaining the identity of the mortgagor does not depend so
much on the signature on the residence certificate they have presented.
A:.....We have to accept that
xxx.....xxx.....xxx
A:.....We accepted the signature on the basis of the mortgage in favor of ATTY. MAGNO duly
notarized which I have been reiterrting (sic) entitled to full faith considering that it is a public
instrument.
ATTY. CARLOS:
.....What other requirement did you take into account in ascertaining the identification of the
parties particularly the mortgagor in this case.
A:.....Residence Certificate.
Q:.....Is that all, is that the only requirement?
A:.....We requested for others but they could not produce, and because they presented to us the
Residence Certificate which matches on the signature on the Residence Certificate in favor of Atty.
Magno."[14]M-isjuris
Evidently, the efforts exerted by the bank to verify the identity of the couple posing as Osmundo Canlas and
Angelina Canlas fell short of the responsibility of the bank to observe more than the diligence of a good father of
a family. The negligence of respondent bank was magnified by the fact that the previous deed of
mortgage (which was used as the basis for checking the genuineness of the signatures of the suppose Canlas
spouses) did not bear the tax account number of the spouses,[15] as well as the Community Tax Certificate of
Angelina Canlas.[16]But such fact notwithstanding, the bank did not require the impostors to submit additional
proof of their true identity.
Under the doctrine of last clear chance, which is applicable here, the respondent bank must suffer the resulting
loss. In essence, the doctrine of last clear chance is to the effect that where both parties are negligent but the
negligent act of one is appreciably later in point of time than that of the other, or where it is impossible to
determine whose fault or negligence brought about the occurrence of the incident, the one who had the last clear
opportunity to avoid the impending harm but failed to do so, is chargeable with the consequences arising
therefrom. Stated differently, the rule is that the antecedent negligence of a person does not preclude recovery of

damages caused by the supervening negligence of the latter, who had the last fair chance to prevent the
impending harm by the exercise of due diligence.[17]
Assuming that Osmundo Canlas was negligent in giving Vicente Maosca the opportunity to perpetrate the fraud,
by entrusting to latter the owner's copy of the transfer certificates of title of subject parcels of land, it cannot be
denied that the bank had the last clear chance to prevent the fraud, by the simple expedient of faithfully
complying with the requirements for banks to ascertain the identity of the persons transacting with them.
For not observing the degree of diligence required of banking institutions, whose business is impressed with
public interest, respondent Asian Savings Bank has to bear the loss sued upon.
In ruling for respondent bank, the Court of Appeals concluded that the petitioner Osmundo Canlas was a party to
the fraudulent scheme of Maosca and therefore, estopped from impugning the validity of subject deed of
mortgage; ratiocinating thus: Sd-aamiso
"x x x
Thus, armed with the titles and the special power of attorney, Manosca went to the defendant bank
and applied for a loan. And when Maosca came over to the bank to submit additional documents
pertinent to his loan application, Osmundo Canlas was with him, together with a certain Rogelio
Viray. At that time, Osmundo Canlas was introduced to the bank personnel as 'Leonardo Rey.
When he was introduced as 'Leonardo Rey for the first time Osmundo should have corrected
Maosca right away. But he did not. Instead, he even allowed Maosca to avail of his (Osmundo's)
membership privileges at the Metropolitan Club when Maosca invited two officers of the
defendant bank to a luncheon meeting which Osmundo also attended. And during that meeting,
Osmundo did not say who he really is, but even let Maosca introduced him again as 'Leonardo
Rey, which all the more indicates that he connived with Maosca in deceiving the defendant bank.
Finally after the loan was finally approved, Osmundo accompanied Maosca to the bank when the
loan was released. At that time a manger's check for P200,000.00 was issued in the name of
Oscar Motorworks, which Osmundo admits he owns and operates.
Collectively, the foregoing circumstances cannot but conjure to a single conclusion that Osmundo
actively participated in the loan application of defendant Asian Savings Bank, which culminated
in his receiving a portion of the process thereof."[18]
A meticulous and painstaking scrutiny of the Records on hand, reveals, however, that the findings arrived at by
the Court of Appeals are barren of any sustainable basis. For instance, the execution of the deeds of mortgages
constituted by Maosca on subject pieces of property of petitioners were made possible not by the Special Power
of Attorney executed by Osmundo Canlas in favor of Maosca but through the use of impostors who
misrepresented themselves as the spouses Angelina Canlas and Osmundo Canlas. It cannot be said therefore, that
the petitioners authorized Vicente Maosca to constitute the mortgage on their parcels of land.
What is more, Osmundo Canlas was introduced as "Leonardo Rey" by Vicente Maosca, only on the occasion of
the luncheon meeting at the Metropolitan Club.[19] Thereat, the failure of Osmundo Canlas to rectify Maosca's
misrepresentations could not be taken as a fraudulent act. As well explained by the former, he just did not want to
embarrass Maosca, so that he waited for the end of the meeting to correct Maosca.[20]
Then, too, Osmundo Canlas recounted that during the said luncheon meeting, they did not talk about the security
or collateral for the loan of Maosca with ASB.[21] So also, Mrs. Josefina Rojo, who was the Account Officer of
Asian Savings Bank when Maosca applied for subject loan, corroborated the testimony of Osmundo Canlas, she
testified: S-daad
"xxx.....xxx.....xxx

QUESTION:.....Now could you please describe out the lunch conference at the
Metro Club in Makati?
ANSWER:.....Mr. Mangubat, Mr. Maosca and I did not discuss with respect to the
loan application and discuss primarily his business.
xxx.....xxx.....xxx
xxx.....xxx.....xxx
QUESTION:..... So, what is the main topic of your discussion during the meeting?
ANSWER:..... The main topic was then, about his business although, Mr, Leonardo Rey, who
actually turned out as Mr. Canlas, supplier of Mr. Maosca.
QUESTION:..... I see ... other than the business of Mr. Maosca, were there any other topic
discussed?
ANSWER:..... YES.
QUESTION:..... And what was the topic?
ANSWER:..... General Economy then.
x x x"[22]
Verily, Osmundo Canlas was left unaware of the illicit plan of Maosca, explaining thus why he (Osmundo) did
not bother to correct what Maosca misrepresented and to assert ownership over the two parcels of land in
question. Scs-daad
Not only that; while it is true that Osmundo Canlas was with Vicente Maosca when the latter submitted the
documents needed for his loan application, and when the check of P200,000.000 was released, the former did not
know that the collateral used by Maosca for the said loan were their (Canlas spouses) properties. Osmundo
happened to be with Maosca at the time because he wanted to make sure that Maosca would make good his
promise to pay the balance of the purchase price of the said lots out of the proceeds of the loan.[23]
The receipt by Osmundo Canlas of the P200,000.00 check from ASB could not estop him from assailing the
validity of the mortgage because the said amount was in payment of the parcels of land he sold to Maosca.[24]
What is decisively clear on record is that Maosca managed to keep Osmundo Canlas uninformed of
his (Maosca's) intention to use the parcels of land of the Canlas spouses as security for the loan obtained from
Asian Savings Bank. Since Vicente Maosca showed Osmundo Canlas several certificates of title of lots which,
according to Maosca were the collaterals, Osmundo Canlas was confident that their (Canlases) parcels of land
were not involved in the loan transaction with the Asian Savings Bank.[25] Under the attendant facts and
circumstances, Osmundo Canlas was undoubtedly negligent, which negligence made
them (petitioners) undeserving of an award of Attorneys fees.
Settled is the rule that a contract of mortgage must be constituted only by the absolute owner on the property
mortgaged;[26] a mortgage, constituted by an impostor is void.[27] Considering that it was established
indubitably that the contract of mortgage sued upon was entered into and signed by impostors who
misrepresented themselves as the spouses Osmundo Canlas and Angelina Canlas, the Court is of the ineluctible
conclusion and finding that subject contract of mortgage is a complete nullity.
WHEREFORE, the Petition is GRANTED and the Decision of the Court of Appeals, dated September 30, 1993,
in CA-G.R. CV No. 25242 SET ASIDE. The Decision of Branch 59 of the Regional Trial Court of Makati City in
Civil Case No. M-028 is hereby REINSTATED. No pronouncement as to costs.
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 153076

June 21, 2007

LAPANDAY AGRICULTURAL and DEVELOPMENT CORPORATION (LADECO), HENRY


BERENGUEL, and APOLONIO R. DEOCAMPO, petitioners,
vs.
MICHAEL RAYMOND ANGALA, respondent.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review1 assailing the 25 July 2001 Decision2 and 11 March 2002
Resolution3 of the Court of Appeals in CA-G.R. CV No. 51134.
The Antecedent Facts
On 4 May 1993, at about 2:45 p.m., a Datsun crewcab with plate no. PEC-903 driven by Apolonio Deocampo
(Deocampo) bumped into a 1958 Chevy pick-up with plate no. MAM-475 owned by Michael Raymond Angala
(respondent) and driven by Bernulfo Borres (Borres). Lapanday Agricultural and Development Corporation
(LADECO) owned the crewcab which was assigned to its manager Manuel Mendez (Mendez). Deocampo was
the driver and bodyguard of Mendez. Both vehicles were running along Rafael Castillo St., Agdao, Davao City
heading north towards Lanang, Davao City. The left door, front left fender, and part of the front bumper of the
pick-up were damaged.
Respondent filed an action for Quasi-Delict, Damages, and Attorneys Fees against LADECO, its administrative
officer Henry Berenguel4 (Berenguel) and Deocampo. Respondent alleged that his pick-up was slowing down to
about five to ten kilometers per hour (kph) and was making a left turn preparatory to turning south when it was
bumped from behind by the crewcab which was running at around 60 to 70 kph. The crewcab stopped 21 meters
from the point of impact. Respondent alleged that he heard a screeching sound before the impact. Respondent
was seated beside the driver and was looking at the speedometer when the accident took place. Respondent
testified that Borres made a signal because he noticed a blinking light while looking at the speedometer.5
Respondent sent a demand letter to LADECO for the payment of the damages he incurred because of the accident
but he did not receive any reply. Thus, respondent filed the case against LADECO, Berenguel, and Deocampo.
Deocampo alleged that the pick-up and the crewcab he was driving were both running at about 40 kph. The pickup was running along the outer lane. The pick-up was about 10 meters away when it made a U-turn towards the
left. Deocampo testified that he did not see any signal from the pick-up.6 Deocampo alleged that he tried to avoid
the pick-up but he was unable to avoid the collision. Deocampo stated that he did not apply the brakes because he
knew the collision was unavoidable. Deocampo admitted that he stepped on the brakes only after the collision.
The Ruling of the Trial Court
In its 3 March 1995 Decision,7 the Regional Trial Court of Davao City, Branch 15 (trial court) ruled:
WHEREFORE, judgment is hereby rendered ordering the defendants LADECO and Apolonio Deocampo
to solidarily pay the plaintiffs the following sums:
1. Twenty three thousand two hundred (P23,200.00) pesos as actual damages.
2. Ten thousand (P10,000.00) pesos as moral damages.

3. Ten thousand (P10,000.00) pesos as attorneys fees.


4. Costs of suit.
SO ORDERED.8
The trial court found that the crewcab was running very fast while following the pick-up and that the crewcabs
speed was the proximate cause of the accident. The trial court observed that the crewcab stopped 21 meters away
from the point of impact despite Deocampos claim that he stepped on the brakes moments after the collision.
The trial court ruled that Deocampo had the last opportunity to avoid the accident.
The trial court found that Berenguel was not liable because he was not the owner of the crewcab.
LADECO and Deocampo (petitioners)9 filed a motion for reconsideration. The trial court denied petitioners
motion in its 13 June 1995 Order.10
Petitioners filed an appeal before the Court of Appeals.
The Ruling of the Court of Appeals
The Court of Appeals affirmed in toto the trial courts decision.
The Court of Appeals sustained the finding of the trial court that Deocampo was negligent. The Court of Appeals
applied the doctrine of last clear chance and ruled that Deocampo had the responsibility of avoiding the pick-up.
The Court of Appeals also sustained the solidary liability of LADECO and Deocampo. The Court of Appeals
ruled that under Article 2180 of the Civil Code, the negligence of the driver is presumed to be the negligence of
the owner of the vehicle.
The dispositive portion of the Court of Appeals Decision reads:
WHEREFORE, premises considered, the appeal is DISMISSED for lack of merit, and the assailed
Decision of the Court a quo in Civil Case No. 22067-93 is AFFIRMED in toto. Costs against defendantsappellants.
SO ORDERED.11
Petitioners filed a motion for reconsideration. In its 11 March 2002 Resolution, the Court of Appeals denied the
motion for lack of merit.
Hence, the petition before this Court.
The Issues
The issues before the Court are the following:
1. Whether the provisions of Section 45(b) of Republic Act No. 413612 (RA 4136) and Article 2185 of the
Civil Code apply to this case; and
2. Whether respondent is entitled to the damages awarded.
The Ruling of this Court
The petition is partly meritorious.
Both Drivers are Negligent
Both the trial court and the Court of Appeals found that Deocampo was at fault because he was driving very fast
prior to the collision. The Court of Appeals sustained the trial courts finding that Deocampo was running more
than the normal cruising speed. Both the trial court and the Court of Appeals noted that the crewcab stopped 21
meters away from the point of impact. Deocampo admitted that he stepped on the brakes only after the collision.

Petitioners allege that Borres did not take the proper lane before executing the U-turn. Petitioners allege that
Borres violated Section 45(b) of RA 4136 and it was his recklessness that was the proximate cause of the
accident.
Section 45(b) of RA 4136 states:
Sec. 45. Turning at intersections. x x x
(b) The driver of a vehicle intending to turn to the left shall approach such intersection in the lane for
traffic to the right of and nearest to the center line of the highway, and, in turning, shall pass to the left of
the center of the intersection, except that, upon highways laned for traffic and upon one-way highways, a
left turn shall be made from the left lane of traffic in the direction in which the vehicle is proceeding.
Petitioners further allege that since Borres was violating a traffic rule at the time of the accident, respondent and
Borres were the parties at fault. Petitioners cite Article 2185 of the Civil Code, thus:
Art. 2185. Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has
been negligent if at the time of the mishap, he was violating any traffic regulation.
We rule that both parties were negligent in this case. Borres was at the outer lane when he executed a U-turn.
Following Section 45(b) of RA 4136, Borres should have stayed at the inner lane which is the lane nearest to the
center of the highway. However, Deocampo was equally negligent. Borres slowed down the pick-up preparatory
to executing the U-turn. Deocampo should have also slowed down when the pick-up slowed down. Deocampo
admitted that he noticed the pick-up when it was still about 20 meters away from him.13 Vehicular traffic was
light at the time of the incident. The pick-up and the crewcab were the only vehicles on the road. 14 Deocampo
could have avoided the crewcab if he was not driving very fast before the collision, as found by both the trial
court and the Court of Appeals. We sustain this finding since factual findings of the Court of Appeals affirming
those of the trial court are conclusive and binding on this Court.15 Further, the crewcab stopped 21 meters from
the point of impact. It would not have happened if Deocampo was not driving very fast.
Doctrine of Last Clear Chance Applies
Since both parties are at fault in this case, the doctrine of last clear chance applies.
The doctrine of last clear chance states that where both parties are negligent but the negligent act of one is
appreciably later than that of the other, or where it is impossible to determine whose fault or negligence caused
the loss, the one who had the last clear opportunity to avoid the loss but failed to do so is chargeable with the
loss.16 In this case, Deocampo had the last clear chance to avoid the collision. Since Deocampo was driving the
rear vehicle, he had full control of the situation since he was in a position to observe the vehicle in front of
him.17Deocampo had the responsibility of avoiding bumping the vehicle in front of him.18 A U-turn is done at a
much slower speed to avoid skidding and overturning, compared to running straight ahead.19 Deocampo could
have avoided the vehicle if he was not driving very fast while following the pick-up. Deocampo was not only
driving fast, he also admitted that he did not step on the brakes even upon seeing the pick-up. He only stepped on
the brakes after the collision.
Petitioners are Solidarily Liable
LADECO alleges that it should not be held jointly and severally liable with Deocampo because it exercised due
diligence in the supervision and selection of its employees. Aside from this statement, LADECO did not proffer
any proof to show how it exercised due diligence in the supervision and selection of its employees. LADECO did
not show its policy in hiring its drivers, or the manner in which it supervised its drivers. LADECO failed to
substantiate its allegation that it exercised due diligence in the supervision and selection of its employees.
Hence, we hold LADECO solidarily liable with Deocampo.
Respondent is Entitled to Moral Damages

We sustain the award of moral damages. Moral damages are awarded to allow a plaintiff to obtain means,
diversion, or amusement that will serve to alleviate the moral suffering he has undergone due to the defendants
culpable action.20 The trial court found that respondent, who was on board the pick-up when the collision took
place, suffered shock, serious anxiety, and fright when the crewcab bumped his pick-up. We sustain the trial court
and the Court of Appeals in ruling that respondent sufficiently showed that he suffered shock, serious anxiety,
and fright which entitle him to moral damages.
Both the trial court and the Court of Appeals failed to give any justification for the award of attorneys fees.
Awards of attorneys fees must be based on findings of fact and of law and stated in the decision of the trial
court.21Further, no premium should be placed on the right to litigate.22 Hence, we delete the award of attorneys
fees.
WHEREFORE, we AFFIRM the 25 July 2001 Decision and 11 March 2002 Resolution of the Court of Appeals
in CA-G.R. CV No. 51134 with MODIFICATION by deleting the award of attorneys fees.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 97626 March 14, 1997


PHILIPPINE BANK OF COMMERCE, now absorbed by PHILIPPINE COMMERCIAL
INTERNATIONAL BANK, ROGELIO LACSON, DIGNA DE LEON, MARIA ANGELITA PASCUAL, et
al., petitioners,
vs.
THE COURT OF APPEALS, ROMMEL'S MARKETING CORP., represented by ROMEO LIPANA, its
President & General Manager, respondents.

HERMOSISIMA, JR., J.:


Challenged in this petition for review is the Decision dated February 28, 1991 1 rendered by public respondent
Court of Appeals which affirmed the Decision dated November 15, 1985 of the Regional Trial Court, National
Capital Judicial Region, Branch CLX (160), Pasig City, in Civil Case No. 27288 entitled "Rommel's Marketing
Corporation, etc. v. Philippine Bank of Commerce, now absorbed by Philippine Commercial and Industrial
Bank."
The case stemmed from a complaint filed by the private respondent Rommel's Marketing Corporation (RMC for
brevity), represented by its President and General Manager Romeo Lipana, to recover from the former Philippine
Bank of Commerce (PBC for brevity), now absorbed by the Philippine Commercial International Bank, the sum
of P304,979.74 representing various deposits it had made in its current account with said bank but which were
not credited to its account, and were instead deposited to the account of one Bienvenido Cotas, allegedly due to
the gross and inexcusable negligence of the petitioner bank.
RMC maintained two (2) separate current accounts, Current Account Nos. 53-01980-3 and 53-01748-7, with the
Pasig Branch of PBC in connection with its business of selling appliances.
In the ordinary and usual course of banking operations, current account deposits are accepted by the bank on the
basis of deposit slips prepared and signed by the depositor, or the latter's agent or representative, who indicates
therein the current account number to which the deposit is to be credited, the name of the depositor or current

account holder, the date of the deposit, and the amount of the deposit either in cash or checks. The deposit slip
has an upper portion or stub, which is detached and given to the depositor or his agent; the lower portion is
retained by the bank. In some instances, however, the deposit slips are prepared in duplicate by the depositor. The
original of the deposit slip is retained by the bank, while the duplicate copy is returned or given to the depositor.
From May 5, 1975 to July 16, 1976, petitioner Romeo Lipana claims to have entrusted RMC funds in the form of
cash totalling P304,979.74 to his secretary, Irene Yabut, for the purpose of depositing said funds in the current
accounts of RMC with PBC. It turned out, however, that these deposits, on all occasions, were not credited to
RMC's account but were instead deposited to Account No. 53-01734-7 of Yabut's husband, Bienvenido Cotas
who likewise maintains an account with the same bank. During this period, petitioner bank had, however, been
regularly furnishing private respondent with monthly statements showing its current accounts balances.
Unfortunately, it had never been the practice of Romeo Lipana to check these monthly statements of account
reposing complete trust and confidence on petitioner bank.
Irene Yabut's modus operandi is far from complicated. She would accomplish two (2) copies of the deposit slip,
an original and a duplicate. The original showed the name of her husband as depositor and his current account
number. On the duplicate copy was written the account number of her husband but the name of the account
holder was left blank. PBC's teller, Azucena Mabayad, would, however, validate and stamp both the original and
the duplicate of these deposit slips retaining only the original copy despite the lack of information on the
duplicate slip. The second copy was kept by Irene Yabut allegedly for record purposes. After validation, Yabut
would then fill up the name of RMC in the space left blank in the duplicate copy and change the account number
written thereon, which is that of her husband's, and make it appear to be RMC's account number, i.e., C.A. No.
53-01980-3. With the daily remittance records also prepared by Ms. Yabut and submitted to private respondent
RMC together with the validated duplicate slips with the latter's name and account number, she made her
company believe that all the while the amounts she deposited were being credited to its account when, in truth
and in fact, they were being deposited by her and credited by the petitioner bank in the account of Cotas. This
went on in a span of more than one (1) year without private respondent's knowledge.
Upon discovery of the loss of its funds, RMC demanded from petitioner bank the return of its money, but as its
demand went unheeded, it filed a collection suit before the Regional Trial Court of Pasig, Branch 160. The trial
court found petitioner bank negligent and ruled as follows:
WHEREFORE, judgment is hereby rendered sentencing defendant Philippine Bank of Commerce,
now absorbed by defendant Philippine Commercial & Industrial Bank, and defendant Azucena
Mabayad to pay the plaintiff, jointly and severally, and without prejudice to any criminal action
which may be instituted if found warranted:
1. The sum of P304,979.72, representing plaintiffs lost deposit, plus interest thereon at the legal
rate from the filing of the complaint;
2. A sum equivalent to 14% thereof, as exemplary damages;
3. A sum equivalent to 25% of the total amount due, as and for attorney's fees; and
4. Costs.
Defendants' counterclaim is hereby dismissed for lack of merit. 2
On appeal, the appellate court affirmed the foregoing decision with modifications, viz:
WHEREFORE, the decision appealed from herein is MODIFIED in the sense that the awards of
exemplary damages and attorney's fees specified therein are eliminated and instead, appellants are
ordered to pay plaintiff, in addition to the principal sum of P304,979.74 representing plaintiff's lost
deposit plus legal interest thereon from the filing of the complaint, P25,000.00 attorney's fees and
costs in the lower court as well as in this Court. 3

Hence, this petition anchored on the following grounds:


1) The proximate cause of the loss is the negligence of respondent Rommel Marketing Corporation
and Romeo Lipana in entrusting cash to a dishonest employee.
2) The failure of respondent Rommel Marketing Corporation to cross-check the bank's statements
of account with its own records during the entire period of more than one (1) year is the proximate
cause of the commission of subsequent frauds and misappropriation committed by Ms. Irene
Yabut.
3) The duplicate copies of the deposit slips presented by respondent Rommel Marketing
Corporation are falsified and are not proof that the amounts appearing thereon were deposited to
respondent Rommel Marketing Corporation's account with the bank,
4) The duplicate copies of the deposit slips were used by Ms. Irene Yabut to cover up her
fraudulent acts against respondent Rommel Marketing Corporation, and not as records of deposits
she made with the bank. 4
The petition has no merit.
Simply put, the main issue posited before us is: What is the proximate cause of the loss, to the tune of
P304,979.74, suffered by the private respondent RMC petitioner bank's negligence or that of private
respondent's?
Petitioners submit that the proximate cause of the loss is the negligence of respondent RMC and Romeo Lipana
in entrusting cash to a dishonest employee in the person of Ms. Irene Yabut. 5 According to them, it was
impossible for the bank to know that the money deposited by Ms. Irene Yabut belong to RMC; neither was the
bank forewarned by RMC that Yabut will be depositing cash to its account. Thus, it was impossible for the bank
to know the fraudulent design of Yabut considering that her husband, Bienvenido Cotas, also maintained an
account with the bank. For the bank to inquire into the ownership of the cash deposited by Ms. Irene Yabut would
be irregular. Otherwise stated, it was RMC's negligence in entrusting cash to a dishonest employee which
provided Ms. Irene Yabut the opportunity to defraud RMC. 6
Private respondent, on the other hand, maintains that the proximate cause of the loss was the negligent act of the
bank, thru its teller Ms. Azucena Mabayad, in validating the deposit slips, both original and duplicate, presented
by Ms. Yabut to Ms. Mabayad, notwithstanding the fact that one of the deposit slips was not completely
accomplished.
We sustain the private respondent.
Our law on quasi-delicts states:
Art. 2176. 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.
There are three elements of a quasi-delict: (a) damages suffered by the plaintiff; (b) fault or negligence of the
defendant, or some other person for whose acts he must respond; and (c) the connection of cause and effect
between the fault or negligence of the defendant and the damages incurred by the plaintiff. 7
In the case at bench, there is no dispute as to the damage suffered by the private respondent (plaintiff in the trial
court) RMC in the amount of P304,979.74. It is in ascribing fault or negligence which caused the damage where
the parties point to each other as the culprit.
Negligence is the omission to do something which a reasonable man, guided by those considerations which
ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent and

reasonable man would do. The seventy-eight (78)-year-old, yet still relevant, case of Picart v. Smith, 8 provides
the test by which to determine the existence of negligence in a particular case which may be stated as follows:
Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily
prudent person would have used in the same situation? If not, then he is guilty of negligence. The law here in
effect adopts the standard supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the
Roman law. The existence of negligence in a given case is not determined by reference to the personal judgment
of the actor in the situation before him. The law considers what would be reckless, blameworthy, or negligent in
the man of ordinary intelligence and prudence and determines liability by that.
Applying the above test, it appears that the bank's teller, Ms. Azucena Mabayad, was negligent in validating,
officially stamping and signing all the deposit slips prepared and presented by Ms. Yabut, despite the glaring fact
that the duplicate copy was not completely accomplished contrary to the self-imposed procedure of the bank with
respect to the proper validation of deposit slips, original or duplicate, as testified to by Ms. Mabayad herself,
thus:
Q: Now, as teller of PCIB, Pasig Branch, will you please tell us Mrs. Mabayad your
important duties and functions?
A: I accept current and savings deposits from depositors and encashments.
Q: Now in the handling of current account deposits of bank clients, could you tell us
the procedure you follow?
A: The client or depositor or the authorized representative prepares a deposit slip
by filling up the deposit slip with the name, the account number, the date, the cash
breakdown, if it is deposited for cash, and the check number, the amount and then
he signs the deposit slip.
Q: Now, how many deposit slips do you normally require in accomplishing current
account deposit, Mrs. Mabayad?
A: The bank requires only one copy of the deposit although some of our clients
prepare the deposit slip in duplicate.
Q: Now in accomplishing current account deposits from your clients, what do you
issue to the depositor to evidence the deposit made?
A: We issue or we give to the clients the depositor's stub as a receipt of the deposit.
Q: And who prepares the deposit slip?
A: The depositor or the authorized representative sir?
Q: Where does the depositor's stub comes (sic) from Mrs. Mabayad, is it with the
deposit slip?
A: The depositor's stub is connected with the deposit slip or the bank's copy. In a
deposit slip, the upper portion is the depositor's stub and the lower portion is the
bank's copy, and you can detach the bank's copy from the depositor's stub by tearing
it sir.
Q: Now what do you do upon presentment of the deposit slip by the depositor or the
depositor's authorized representative?
A: We see to it that the deposit slip 9 is properly accomplished and then we count
the money and then we tally it with the deposit slip sir.
Q: Now is the depositor's stub which you issued to your clients validated?

A: Yes, sir. 10 [Emphasis ours]


Clearly, Ms. Mabayad failed to observe this very important procedure. The fact that the duplicate slip was
not compulsorily required by the bank in accepting deposits should not relieve the petitioner bank of
responsibility. The odd circumstance alone that such duplicate copy lacked one vital information that
of the name of the account holder should have already put Ms. Mabayad on guard. Rather than readily
validating the incomplete duplicate copy, she should have proceeded more cautiously by being more
probing as to the true reason why the name of the account holder in the duplicate slip was left blank while
that in the original was filled up. She should not have been so naive in accepting hook, line and sinker the
too shallow excuse of Ms. Irene Yabut to the effect that since the duplicate copy was only for her personal
record, she would simply fill up the blank space later on. 11 A "reasonable man of ordinary
prudence" 12 would not have given credence to such explanation and would have insisted that the space
left blank be filled up as a condition for validation. Unfortunately, this was not how bank teller Mabayad
proceeded thus resulting in huge losses to the private respondent.
Negligence here lies not only on the part of Ms. Mabayad but also on the part of the bank itself in its
lackadaisical selection and supervision of Ms. Mabayad. This was exemplified in the testimony of Mr. Romeo
Bonifacio, then Manager of the Pasig Branch of the petitioner bank and now its Vice-President, to the effect that,
while he ordered the investigation of the incident, he never came to know that blank deposit slips were validated
in total disregard of the bank's validation procedures, viz:
Q: Did he ever tell you that one of your cashiers affixed the stamp mark of the bank
on the deposit slips and they validated the same with the machine, the fact that those
deposit slips were unfilled up, is there any report similar to that?
A: No, it was not the cashier but the teller.
Q: The teller validated the blank deposit slip?
A: No it was not reported.
Q: You did not know that any one in the bank tellers or cashiers validated the blank
deposit slip?
A: I am not aware of that.
Q: It is only now that you are aware of that?
A: Yes, sir. 13
Prescinding from the above, public respondent Court of Appeals aptly observed:
xxx xxx xxx
It was in fact only when he testified in this case in February, 1983, or after the lapse of more than
seven (7) years counted from the period when the funds in question were deposited in plaintiff's
accounts (May, 1975 to July, 1976) that bank manager Bonifacio admittedly became aware of the
practice of his teller Mabayad of validating blank deposit slips. Undoubtedly, this is gross, wanton,
and inexcusable negligence in the appellant bank's supervision of its employees. 14
It was this negligence of Ms. Azucena Mabayad, coupled by the negligence of the petitioner bank in the selection
and supervision of its bank teller, which was the proximate cause of the loss suffered by the private respondent,
and not the latter's act of entrusting cash to a dishonest employee, as insisted by the petitioners.
Proximate cause is determined on the facts of each case upon mixed considerations of logic, common sense,
policy and precedent. 15 Vda. de Bataclan v. Medina, 16 reiterated in the case of Bank of the Phil. Islands
v. Court of Appeals, 17 defines proximate cause as "that cause, which, in natural and continuous sequence,
unbroken by any efficient intervening cause, produces the injury, and without which the result would not have

occurred. . . ." In this case, absent the act of Ms. Mabayad in negligently validating the incomplete duplicate copy
of the deposit slip, Ms. Irene Yabut would not have the facility with which to perpetrate her fraudulent scheme
with impunity. Apropos, once again, is the pronouncement made by the respondent appellate court, to wit:
. . . . Even if Yabut had the fraudulent intention to misappropriate the funds entrusted to her by
plaintiff, she would not have been able to deposit those funds in her husband's current account, and
then make plaintiff believe that it was in the latter's accounts wherein she had deposited them, had
it not been for bank teller Mabayad's aforesaid gross and reckless negligence. The latter's
negligence was thus the proximate, immediate and efficient cause that brought about the loss
claimed by plaintiff in this case, and the failure of plaintiff to discover the same soon enough by
failing to scrutinize the monthly statements of account being sent to it by appellant bank could not
have prevented the fraud and misappropriation which Irene Yabut had already completed when she
deposited plaintiff's money to the account of her husband instead of to the latter's accounts. 18
Furthermore, under the doctrine of "last clear chance" (also referred to, at times as "supervening negligence" or
as "discovered peril"), petitioner bank was indeed the culpable party. This doctrine, in essence, states that where
both parties are negligent, but the negligent act of one is appreciably later in time than that of the other, or when it
is impossible to determine whose fault or negligence should be attributed to the incident, the one who had the last
clear opportunity to avoid the impending harm and failed to do so is chargeable with the consequences
thereof. 19 Stated differently, the rule would also mean that an antecedent negligence of a person does not
preclude the recovery of damages for the supervening negligence of, or bar a defense against liability sought by
another, if the latter, who had the last fair chance, could have avoided the impending harm by the exercise of due
diligence. 20 Here, assuming that private respondent RMC was negligent in entrusting cash to a dishonest
employee, thus providing the latter with the opportunity to defraud the company, as advanced by the petitioner,
yet it cannot be denied that the petitioner bank, thru its teller, had the last clear opportunity to avert the injury
incurred by its client, simply by faithfully observing their self-imposed validation procedure.
At this juncture, it is worth to discuss the degree of diligence ought to be exercised by banks in dealing with their
clients.
The New Civil Code provides:
Art. 1173. 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.
If the law or contract does not state the diligence which is to be observed in the performance, that
which is expected of a good father of a family shall be required. (1104a)
In the case of banks, however, the degree of diligence required is more than that of a good father of a family.
Considering the fiduciary nature of their relationship with their depositors, banks are duty bound to treat the
accounts of their clients with the highest degree of care. 21
As elucidated in Simex International (Manila), Inc. v. Court of Appeals, 22 in every case, the depositor expects
the bank to treat his account with the utmost fidelity, whether such account consists only of a few hundred pesos
or of millions. The bank must record every single transaction accurately, down to the last centavo, and as
promptly as possible. This has to be done if the account is to reflect at any given time the amount of money the
depositor can dispose as he sees fit, confident that the bank will deliver it as and to whomever he directs. A
blunder on the part of the bank, such as the failure to duly credit him his deposits as soon as they are made, can
cause the depositor not a little embarrassment if not financial loss and perhaps even civil and criminal litigation.
The point is that as a business affected with public interest and because of the nature of its functions, the bank is
under obligation to treat the accounts of its depositors with meticulous care, always having in mind the fiduciary

nature of their relationship. In the case before us, it is apparent that the petitioner bank was remiss in that duty
and violated that relationship.
Petitioners nevertheless aver that the failure of respondent RMC to cross-check the bank's statements of account
with its own records during the entire period of more than one (1) year is the proximate cause of the commission
of subsequent frauds and misappropriation committed by Ms. Irene Yabut.
We do not agree.
While it is true that had private respondent checked the monthly statements of account sent by the petitioner bank
to RMC, the latter would have discovered the loss early on, such cannot be used by the petitioners to escape
liability. This omission on the part of the private respondent does not change the fact that were it not for the
wanton and reckless negligence of the petitioners' employee in validating the incomplete duplicate deposit slips
presented by Ms. Irene Yabut, the loss would not have occurred. Considering, however, that the fraud was
committed in a span of more than one (1) year covering various deposits, common human experience dictates
that the same would not have been possible without any form of collusion between Ms. Yabut and bank teller
Mabayad. Ms. Mabayad was negligent in the performance of her duties as bank teller nonetheless. Thus, the
petitioners are entitled to claim reimbursement from her for whatever they shall be ordered to pay in this case.
The foregoing notwithstanding, it cannot be denied that, indeed, private respondent was likewise negligent in not
checking its monthly statements of account. Had it done so, the company would have been alerted to the series of
frauds being committed against RMC by its secretary. The damage would definitely not have ballooned to such
an amount if only RMC, particularly Romeo Lipana, had exercised even a little vigilance in their financial affairs.
This omission by RMC amounts to contributory negligence which shall mitigate the damages that may be
awarded to the private respondent 23 under Article 2179 of the New Civil Code, to wit:
. . . When the plaintiff's own negligence was the immediate and proximate cause of his injury, he
cannot recover damages. But if his negligence was only contributory, the immediate and proximate
cause of the injury being the defendant's lack of due care, the plaintiff may recover damages, but
the courts shall mitigate the damages to be awarded.
In view of this, we believe that the demands of substantial justice are satisfied by allocating the damage
on a 60-40 ratio. Thus, 40% of the damage awarded by the respondent appellate court, except the award of
P25,000.00 attorney's fees, shall be borne by private respondent RMC; only the balance of 60% needs to
be paid by the petitioners. The award of attorney's fees shall be borne exclusively by the petitioners.
WHEREFORE, the decision of the respondent Court of Appeals is modified by reducing the amount of actual
damages private respondent is entitled to by 40%. Petitioners may recover from Ms. Azucena Mabayad the
amount they would pay the private respondent. Private respondent shall have recourse against Ms. Irene Yabut. In
all other respects, the appellate court's decision is AFFIRMED.
Proportionate costs.
SO ORDERED.
FIRST DIVISION

[G.R. No. 138569. September 11, 2003]

THE CONSOLIDATED BANK and TRUST CORPORATION, petitioner, vs. COURT OF APPEALS and
L.C. DIAZ and COMPANY, CPAs, respondents.

DECISION
CARPIO, J.:

The Case

Before us is a petition for review of the Decision[1] of the Court of Appeals dated 27 October 1998 and its
Resolution dated 11 May 1999. The assailed decision reversed the Decision[2] of the Regional Trial Court of
Manila, Branch 8, absolving petitioner Consolidated Bank and Trust Corporation, now known as Solidbank
Corporation (Solidbank), of any liability. The questioned resolution of the appellate court denied the motion for
reconsideration of Solidbank but modified the decision by deleting the award of exemplary damages, attorneys
fees, expenses of litigation and cost of suit.

The Facts

Solidbank is a domestic banking corporation organized and existing under Philippine laws. Private
respondent L.C. Diaz and Company, CPAs (L.C. Diaz), is a professional partnership engaged in the practice of
accounting.
Sometime in March 1976, L.C. Diaz opened a savings account with Solidbank, designated as Savings
Account No. S/A 200-16872-6.
On 14 August 1991, L.C. Diaz through its cashier, Mercedes Macaraya (Macaraya), filled up a savings (cash)
deposit slip for P990 and a savings (checks) deposit slip for P50. Macaraya instructed the messenger of L.C.
Diaz, Ismael Calapre (Calapre), to deposit the money with Solidbank. Macaraya also gave Calapre the Solidbank
passbook.
Calapre went to Solidbank and presented to Teller No. 6 the two deposit slips and the passbook. The teller
acknowledged receipt of the deposit by returning to Calapre the duplicate copies of the two deposit slips. Teller
No. 6 stamped the deposit slips with the words DUPLICATE and SAVING TELLER 6 SOLIDBANK HEAD
OFFICE. Since the transaction took time and Calapre had to make another deposit for L.C. Diaz with Allied
Bank, he left the passbook with Solidbank. Calapre then went to Allied Bank. When Calapre returned to
Solidbank to retrieve the passbook, Teller No. 6 informed him that somebody got the passbook.[3] Calapre went
back to L.C. Diaz and reported the incident to Macaraya.
Macaraya immediately prepared a deposit slip in duplicate copies with a check of P200,000. Macaraya,
together with Calapre, went to Solidbank and presented to Teller No. 6 the deposit slip and check. The teller
stamped the words DUPLICATE and SAVING TELLER 6 SOLIDBANK HEAD OFFICE on the duplicate copy
of the deposit slip. When Macaraya asked for the passbook, Teller No. 6 told Macaraya that someone got the
passbook but she could not remember to whom she gave the passbook. When Macaraya asked Teller No. 6 if
Calapre got the passbook, Teller No. 6 answered that someone shorter than Calapre got the passbook. Calapre
was then standing beside Macaraya.
Teller No. 6 handed to Macaraya a deposit slip dated 14 August 1991 for the deposit of a check for P90,000
drawn on Philippine Banking Corporation (PBC). This PBC check of L.C. Diaz was a check that it had long
closed.[4] PBC subsequently dishonored the check because of insufficient funds and because the signature in the

check differed from PBCs specimen signature. Failing to get back the passbook, Macaraya went back to her
office and reported the matter to the Personnel Manager of L.C. Diaz, Emmanuel Alvarez.
The following day, 15 August 1991, L.C. Diaz through its Chief Executive Officer, Luis C. Diaz (Diaz),
called up Solidbank to stop any transaction using the same passbook until L.C. Diaz could open a new account.
[5] On the same day, Diaz formally wrote Solidbank to make the same request. It was also on the same day that
L.C. Diaz learned of the unauthorized withdrawal the day before, 14 August 1991, of P300,000 from its savings
account. The withdrawal slip for the P300,000 bore the signatures of the authorized signatories of L.C. Diaz,
namely Diaz and Rustico L. Murillo. The signatories, however, denied signing the withdrawal slip. A certain
Noel Tamayo received the P300,000.
In an Information[6] dated 5 September 1991, L.C. Diaz charged its messenger, Emerano Ilagan (Ilagan) and
one Roscon Verdazola with Estafa through Falsification of Commercial Document. The Regional Trial Court of
Manila dismissed the criminal case after the City Prosecutor filed a Motion to Dismiss on 4 August 1992.
On 24 August 1992, L.C. Diaz through its counsel demanded from Solidbank the return of its
money. Solidbank refused.
On 25 August 1992, L.C. Diaz filed a Complaint[7] for Recovery of a Sum of Money against Solidbank with
the Regional Trial Court of Manila, Branch 8. After trial, the trial court rendered on 28 December 1994 a decision
absolving Solidbank and dismissing the complaint.
L.C. Diaz then appealed[8] to the Court of Appeals. On 27 October 1998, the Court of Appeals issued its
Decision reversing the decision of the trial court.
On 11 May 1999, the Court of Appeals issued its Resolution denying the motion for reconsideration of
Solidbank. The appellate court, however, modified its decision by deleting the award of exemplary damages and
attorneys fees.

The Ruling of the Trial Court

In absolving Solidbank, the trial court applied the rules on savings account written on the passbook. The
rules state that possession of this book shall raise the presumption of ownership and any payment or payments
made by the bank upon the production of the said book and entry therein of the withdrawal shall have the same
effect as if made to the depositor personally.[9]
At the time of the withdrawal, a certain Noel Tamayo was not only in possession of the passbook, he also
presented a withdrawal slip with the signatures of the authorized signatories of L.C. Diaz. The specimen
signatures of these persons were in the signature cards. The teller stamped the withdrawal slip with the words
Saving Teller No. 5. The teller then passed on the withdrawal slip to Genere Manuel (Manuel) for
authentication. Manuel verified the signatures on the withdrawal slip. The withdrawal slip was then given to
another officer who compared the signatures on the withdrawal slip with the specimen on the signature cards. The
trial court concluded that Solidbank acted with care and observed the rules on savings account when it allowed
the withdrawal of P300,000 from the savings account of L.C. Diaz.
The trial court pointed out that the burden of proof now shifted to L.C. Diaz to prove that the signatures on
the withdrawal slip were forged. The trial court admonished L.C. Diaz for not offering in evidence the National
Bureau of Investigation (NBI) report on the authenticity of the signatures on the withdrawal slip

for P300,000. The trial court believed that L.C. Diaz did not offer this evidence because it is derogatory to its
action.
Another provision of the rules on savings account states that the depositor must keep the passbook under
lock and key.[10] When another person presents the passbook for withdrawal prior to Solidbanks receipt of the
notice of loss of the passbook, that person is considered as the owner of the passbook. The trial court ruled that
the passbook presented during the questioned transaction was now out of the lock and key and presumptively
ready for a business transaction.[11]
Solidbank did not have any participation in the custody and care of the passbook. The trial court believed
that Solidbanks act of allowing the withdrawal of P300,000 was not the direct and proximate cause of the loss.
The trial court held that L.C. Diazs negligence caused the unauthorized withdrawal. Three facts establish L.C.
Diazs negligence: (1) the possession of the passbook by a person other than the depositor L.C. Diaz; (2) the
presentation of a signed withdrawal receipt by an unauthorized person; and (3) the possession by an unauthorized
person of a PBC check long closed by L.C. Diaz, which check was deposited on the day of the fraudulent
withdrawal.
The trial court debunked L.C. Diazs contention that Solidbank did not follow the precautionary procedures
observed by the two parties whenever L.C. Diaz withdrew significant amounts from its account. L.C. Diaz
claimed that a letter must accompany withdrawals of more than P20,000. The letter must request Solidbank to
allow the withdrawal and convert the amount to a managers check. The bearer must also have a letter authorizing
him to withdraw the same amount. Another person driving a car must accompany the bearer so that he would not
walk from Solidbank to the office in making the withdrawal. The trial court pointed out that L.C. Diaz
disregarded these precautions in its past withdrawal. On 16 July 1991, L.C. Diaz withdrew P82,554 without any
separate letter of authorization or any communication with Solidbank that the money be converted into a
managers check.
The trial court further justified the dismissal of the complaint by holding that the case was a last ditch effort
of L.C. Diaz to recover P300,000 after the dismissal of the criminal case against Ilagan.
The dispositive portion of the decision of the trial court reads:
IN VIEW OF THE FOREGOING, judgment is hereby rendered DISMISSING the complaint.
The Court further renders judgment in favor of defendant bank pursuant to its counterclaim the amount of Thirty
Thousand Pesos (P30,000.00) as attorneys fees.
With costs against plaintiff.
SO ORDERED.[12]

The Ruling of the Court of Appeals

The Court of Appeals ruled that Solidbanks negligence was the proximate cause of the unauthorized
withdrawal of P300,000 from the savings account of L.C. Diaz. The appellate court reached this conclusion after
applying the provision of the Civil Code on quasi-delict, to wit:
Article 2176. 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.

The appellate court held that the three elements of a quasi-delict are present in this case, namely: (a) damages
suffered by the plaintiff; (b) fault or negligence of the defendant, or some other person for whose acts he must
respond; and (c) the connection of cause and effect between the fault or negligence of the defendant and the
damage incurred by the plaintiff.
The Court of Appeals pointed out that the teller of Solidbank who received the withdrawal slip for P300,000
allowed the withdrawal without making the necessary inquiry. The appellate court stated that the teller, who was
not presented by Solidbank during trial, should have called up the depositor because the money to be withdrawn
was a significant amount. Had the teller called up L.C. Diaz, Solidbank would have known that the withdrawal
was unauthorized. The teller did not even verify the identity of the impostor who made the withdrawal.Thus, the
appellate court found Solidbank liable for its negligence in the selection and supervision of its employees.
The appellate court ruled that while L.C. Diaz was also negligent in entrusting its deposits to its messenger
and its messenger in leaving the passbook with the teller, Solidbank could not escape liability because of the
doctrine of last clear chance. Solidbank could have averted the injury suffered by L.C. Diaz had it called up L.C.
Diaz to verify the withdrawal.
The appellate court ruled that the degree of diligence required from Solidbank is more than that of a good
father of a family. The business and functions of banks are affected with public interest. Banks are obligated to
treat the accounts of their depositors with meticulous care, always having in mind the fiduciary nature of their
relationship with their clients. The Court of Appeals found Solidbank remiss in its duty, violating its fiduciary
relationship with L.C. Diaz.
The dispositive portion of the decision of the Court of Appeals reads:
WHEREFORE, premises considered, the decision appealed from is hereby REVERSED and a new one entered.
1. Ordering defendant-appellee Consolidated Bank and Trust Corporation to pay plaintiff-appellant the sum of
Three Hundred Thousand Pesos (P300,000.00), with interest thereon at the rate of 12% per annum from the date
of filing of the complaint until paid, the sum of P20,000.00 as exemplary damages, and P20,000.00 as attorneys
fees and expenses of litigation as well as the cost of suit; and
2. Ordering the dismissal of defendant-appellees counterclaim in the amount of P30,000.00 as attorneys fees.
SO ORDERED.[13]
Acting on the motion for reconsideration of Solidbank, the appellate court affirmed its decision but modified the
award of damages. The appellate court deleted the award of exemplary damages and attorneys fees. Invoking
Article 2231[14] of the Civil Code, the appellate court ruled that exemplary damages could be granted if the
defendant acted with gross negligence. Since Solidbank was guilty of simple negligence only, the award of
exemplary damages was not justified. Consequently, the award of attorneys fees was also disallowed pursuant to
Article 2208 of the Civil Code. The expenses of litigation and cost of suit were also not imposed on Solidbank.
The dispositive portion of the Resolution reads as follows:
WHEREFORE, foregoing considered, our decision dated October 27, 1998 is affirmed with modification by
deleting the award of exemplary damages and attorneys fees, expenses of litigation and cost of suit.
SO ORDERED.[15]
Hence, this petition.

The Issues

Solidbank seeks the review of the decision and resolution of the Court of Appeals on these grounds:
I. THE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER BANK SHOULD SUFFER THE
LOSS BECAUSE ITS TELLER SHOULD HAVE FIRST CALLED PRIVATE RESPONDENT BY
TELEPHONE BEFORE IT ALLOWED THE WITHDRAWAL OF P300,000.00 TO RESPONDENTS
MESSENGER EMERANO ILAGAN, SINCE THERE IS NO AGREEMENT BETWEEN THE PARTIES IN
THE OPERATION OF THE SAVINGS ACCOUNT, NOR IS THERE ANY BANKING LAW, WHICH
MANDATES THAT A BANK TELLER SHOULD FIRST CALL UP THE DEPOSITOR BEFORE ALLOWING
A WITHDRAWAL OF A BIG AMOUNT IN A SAVINGS ACCOUNT.
II. THE COURT OF APPEALS ERRED IN APPLYING THE DOCTRINE OF LAST CLEAR CHANCE AND
IN HOLDING THAT PETITIONER BANKS TELLER HAD THE LAST OPPORTUNITY TO WITHHOLD
THE WITHDRAWAL WHEN IT IS UNDISPUTED THAT THE TWO SIGNATURES OF RESPONDENT ON
THE WITHDRAWAL SLIP ARE GENUINE AND PRIVATE RESPONDENTS PASSBOOK WAS DULY
PRESENTED, AND CONTRARIWISE RESPONDENT WAS NEGLIGENT IN THE SELECTION AND
SUPERVISION OF ITS MESSENGER EMERANO ILAGAN, AND IN THE SAFEKEEPING OF ITS
CHECKS AND OTHER FINANCIAL DOCUMENTS.
III. THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE INSTANT CASE IS A LAST DITCH
EFFORT OF PRIVATE RESPONDENT TO RECOVER ITS P300,000.00 AFTER FAILING IN ITS EFFORTS
TO RECOVER THE SAME FROM ITS EMPLOYEE EMERANO ILAGAN.
IV. THE COURT OF APPEALS ERRED IN NOT MITIGATING THE DAMAGES AWARDED AGAINST
PETITIONER UNDER ARTICLE 2197 OF THE CIVIL CODE, NOTWITHSTANDING ITS FINDING THAT
PETITIONER BANKS NEGLIGENCE WAS ONLY CONTRIBUTORY.[16]

The Ruling of the Court

The petition is partly meritorious.

Solidbanks Fiduciary Duty under the Law

The rulings of the trial court and the Court of Appeals conflict on the application of the law. The trial court
pinned the liability on L.C. Diaz based on the provisions of the rules on savings account, a recognition of the
contractual relationship between Solidbank and L.C. Diaz, the latter being a depositor of the former. On the other
hand, the Court of Appeals applied the law on quasi-delict to determine who between the two parties was
ultimately negligent. The law on quasi-delict or culpa aquiliana is generally applicable when there is no preexisting contractual relationship between the parties.
We hold that Solidbank is liable for breach of contract due to negligence, or culpa contractual.
The contract between the bank and its depositor is governed by the provisions of the Civil Code on simple
loan.[17] Article 1980 of the Civil Code expressly provides that x x x savings x x x deposits of money in banks
and similar institutions shall be governed by the provisions concerning simple loan. There is a debtor-creditor
relationship between the bank and its depositor. The bank is the debtor and the depositor is the creditor. The
depositor lends the bank money and the bank agrees to pay the depositor on demand. The savings deposit
agreement between the bank and the depositor is the contract that determines the rights and obligations of the
parties.

The law imposes on banks high standards in view of the fiduciary nature of banking. Section 2 of Republic
Act No. 8791 (RA 8791),[18]which took effect on 13 June 2000, declares that the State recognizes the fiduciary
nature of banking that requires high standards of integrity and performance.[19] This new provision in the
general banking law, introduced in 2000, is a statutory affirmation of Supreme Court decisions, starting with the
1990 case of Simex International v. Court of Appeals,[20] holding that the bank is under obligation to treat the
accounts of its depositors with meticulous care, always having in mind the fiduciary nature of their relationship.
[21]
This fiduciary relationship means that the banks obligation to observe high standards of integrity and
performance is deemed written into every deposit agreement between a bank and its depositor. The fiduciary
nature of banking requires banks to assume a degree of diligence higher than that of a good father of a
family. Article 1172 of the Civil Code states that the degree of diligence required of an obligor is that prescribed
by law or contract, and absent such stipulation then the diligence of a good father of a family.[22] Section 2 of
RA 8791 prescribes the statutory diligence required from banks that banks must observe high standards of
integrity and performance in servicing their depositors. Although RA 8791 took effect almost nine years after the
unauthorized withdrawal of the P300,000 from L.C. Diazs savings account, jurisprudence[23] at the time of the
withdrawal already imposed on banks the same high standard of diligence required under RA No. 8791.
However, the fiduciary nature of a bank-depositor relationship does not convert the contract between the
bank and its depositors from a simple loan to a trust agreement, whether express or implied. Failure by the bank
to pay the depositor is failure to pay a simple loan, and not a breach of trust.[24] The law simply imposes on the
bank a higher standard of integrity and performance in complying with its obligations under the contract of
simple loan, beyond those required of non-bank debtors under a similar contract of simple loan.
The fiduciary nature of banking does not convert a simple loan into a trust agreement because banks do not
accept deposits to enrich depositors but to earn money for themselves. The law allows banks to offer the lowest
possible interest rate to depositors while charging the highest possible interest rate on their own borrowers. The
interest spread or differential belongs to the bank and not to the depositors who are not cestui que trust of
banks. If depositors are cestui que trust of banks, then the interest spread or income belongs to the depositors, a
situation that Congress certainly did not intend in enacting Section 2 of RA 8791.

Solidbanks Breach of its Contractual Obligation

Article 1172 of the Civil Code provides that responsibility arising from negligence in the performance of
every kind of obligation is demandable. For breach of the savings deposit agreement due to negligence, or culpa
contractual, the bank is liable to its depositor.
Calapre left the passbook with Solidbank because the transaction took time and he had to go to Allied Bank
for another transaction. The passbook was still in the hands of the employees of Solidbank for the processing of
the deposit when Calapre left Solidbank. Solidbanks rules on savings account require that the deposit book
should be carefully guarded by the depositor and kept under lock and key, if possible. When the passbook is in
the possession of Solidbanks tellers during withdrawals, the law imposes on Solidbank and its tellers an even
higher degree of diligence in safeguarding the passbook.
Likewise, Solidbanks tellers must exercise a high degree of diligence in insuring that they return the
passbook only to the depositor or his authorized representative. The tellers know, or should know, that the rules
on savings account provide that any person in possession of the passbook is presumptively its owner. If the tellers
give the passbook to the wrong person, they would be clothing that person presumptive ownership of the

passbook, facilitating unauthorized withdrawals by that person. For failing to return the passbook to Calapre, the
authorized representative of L.C. Diaz, Solidbank and Teller No. 6 presumptively failed to observe such high
degree of diligence in safeguarding the passbook, and in insuring its return to the party authorized to receive the
same.
In culpa contractual, once the plaintiff proves a breach of contract, there is a presumption that the defendant
was at fault or negligent.The burden is on the defendant to prove that he was not at fault or negligent. In contrast,
in culpa aquiliana the plaintiff has the burden of proving that the defendant was negligent. In the present case,
L.C. Diaz has established that Solidbank breached its contractual obligation to return the passbook only to the
authorized representative of L.C. Diaz. There is thus a presumption that Solidbank was at fault and its teller was
negligent in not returning the passbook to Calapre. The burden was on Solidbank to prove that there was no
negligence on its part or its employees.
Solidbank failed to discharge its burden. Solidbank did not present to the trial court Teller No. 6, the teller
with whom Calapre left the passbook and who was supposed to return the passbook to him. The record does not
indicate that Teller No. 6 verified the identity of the person who retrieved the passbook. Solidbank also failed to
adduce in evidence its standard procedure in verifying the identity of the person retrieving the passbook, if there
is such a procedure, and that Teller No. 6 implemented this procedure in the present case.
Solidbank is bound by the negligence of its employees under the principle of respondeat superior or
command responsibility. The defense of exercising the required diligence in the selection and supervision of
employees is not a complete defense in culpa contractual, unlike in culpa aquiliana.[25]
The bank must not only exercise high standards of integrity and performance, it must also insure that its
employees do likewise because this is the only way to insure that the bank will comply with its fiduciary
duty. Solidbank failed to present the teller who had the duty to return to Calapre the passbook, and thus failed to
prove that this teller exercised the high standards of integrity and performance required of Solidbanks employees.

Proximate Cause of the Unauthorized Withdrawal

Another point of disagreement between the trial and appellate courts is the proximate cause of the
unauthorized withdrawal. The trial court believed that L.C. Diazs negligence in not securing its passbook under
lock and key was the proximate cause that allowed the impostor to withdraw the P300,000. For the appellate
court, the proximate cause was the tellers negligence in processing the withdrawal without first verifying with
L.C. Diaz. We do not agree with either court.
Proximate cause is that cause which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury and without which the result would not have occurred.[26] Proximate
cause is determined by the facts of each case upon mixed considerations of logic, common sense, policy and
precedent.[27]
L.C. Diaz was not at fault that the passbook landed in the hands of the impostor. Solidbank was in possession
of the passbook while it was processing the deposit. After completion of the transaction, Solidbank had the
contractual obligation to return the passbook only to Calapre, the authorized representative of L.C.
Diaz. Solidbank failed to fulfill its contractual obligation because it gave the passbook to another person.
Solidbanks failure to return the passbook to Calapre made possible the withdrawal of the P300,000 by the
impostor who took possession of the passbook. Under Solidbanks rules on savings account, mere possession of

the passbook raises the presumption of ownership. It was the negligent act of Solidbanks Teller No. 6 that gave
the impostor presumptive ownership of the passbook. Had the passbook not fallen into the hands of the impostor,
the loss of P300,000 would not have happened. Thus, the proximate cause of the unauthorized withdrawal was
Solidbanks negligence in not returning the passbook to Calapre.
We do not subscribe to the appellate courts theory that the proximate cause of the unauthorized withdrawal
was the tellers failure to call up L.C. Diaz to verify the withdrawal. Solidbank did not have the duty to call up
L.C. Diaz to confirm the withdrawal. There is no arrangement between Solidbank and L.C. Diaz to this
effect. Even the agreement between Solidbank and L.C. Diaz pertaining to measures that the parties must observe
whenever withdrawals of large amounts are made does not direct Solidbank to call up L.C. Diaz.
There is no law mandating banks to call up their clients whenever their representatives withdraw significant
amounts from their accounts. L.C. Diaz therefore had the burden to prove that it is the usual practice of Solidbank
to call up its clients to verify a withdrawal of a large amount of money. L.C. Diaz failed to do so.
Teller No. 5 who processed the withdrawal could not have been put on guard to verify the withdrawal. Prior
to the withdrawal of P300,000, the impostor deposited with Teller No. 6 the P90,000 PBC check, which later
bounced. The impostor apparently deposited a large amount of money to deflect suspicion from the withdrawal of
a much bigger amount of money. The appellate court thus erred when it imposed on Solidbank the duty to call up
L.C. Diaz to confirm the withdrawal when no law requires this from banks and when the teller had no reason to
be suspicious of the transaction.
Solidbank continues to foist the defense that Ilagan made the withdrawal. Solidbank claims that since Ilagan
was also a messenger of L.C. Diaz, he was familiar with its teller so that there was no more need for the teller to
verify the withdrawal. Solidbank relies on the following statements in the Booking and Information Sheet of
Emerano Ilagan:
xxx Ilagan also had with him (before the withdrawal) a forged check of PBC and indicated the amount of
P90,000 which he deposited in favor of L.C. Diaz and Company. After successfully withdrawing this large sum
of money, accused Ilagan gave alias Rey (Noel Tamayo) his share of the loot. Ilagan then hired a taxicab in the
amount of P1,000 to transport him (Ilagan) to his home province at Bauan, Batangas. Ilagan extravagantly and
lavishly spent his money but a big part of his loot was wasted in cockfight and horse racing. Ilagan was
apprehended and meekly admitted his guilt.[28] (Emphasis supplied.)
L.C. Diaz refutes Solidbanks contention by pointing out that the person who withdrew the P300,000 was a
certain Noel Tamayo. Both the trial and appellate courts stated that this Noel Tamayo presented the passbook
with the withdrawal slip.
We uphold the finding of the trial and appellate courts that a certain Noel Tamayo withdrew
the P300,000. The Court is not a trier of facts. We find no justifiable reason to reverse the factual finding of the
trial court and the Court of Appeals. The tellers who processed the deposit of the P90,000 check and the
withdrawal of the P300,000 were not presented during trial to substantiate Solidbanks claim that Ilagan deposited
the check and made the questioned withdrawal. Moreover, the entry quoted by Solidbank does not categorically
state that Ilagan presented the withdrawal slip and the passbook.

Doctrine of Last Clear Chance

The doctrine of last clear chance states that where both parties are negligent but the negligent act of one is
appreciably later than that of the other, or where it is impossible to determine whose fault or negligence caused

the loss, the one who had the last clear opportunity to avoid the loss but failed to do so, is chargeable with the
loss.[29] Stated differently, the antecedent negligence of the plaintiff does not preclude him from recovering
damages caused by the supervening negligence of the defendant, who had the last fair chance to prevent the
impending harm by the exercise of due diligence.[30]
We do not apply the doctrine of last clear chance to the present case. Solidbank is liable for breach of
contract due to negligence in the performance of its contractual obligation to L.C. Diaz. This is a case of culpa
contractual, where neither the contributory negligence of the plaintiff nor his last clear chance to avoid the loss,
would exonerate the defendant from liability.[31] Such contributory negligence or last clear chance by the
plaintiff merely serves to reduce the recovery of damages by the plaintiff but does not exculpate the defendant
from his breach of contract.[32]

Mitigated Damages

Under Article 1172, liability (for culpa contractual) may be regulated by the courts, according to the
circumstances. This means that if the defendant exercised the proper diligence in the selection and supervision of
its employee, or if the plaintiff was guilty of contributory negligence, then the courts may reduce the award of
damages. In this case, L.C. Diaz was guilty of contributory negligence in allowing a withdrawal slip signed by its
authorized signatories to fall into the hands of an impostor. Thus, the liability of Solidbank should be reduced.
In Philippine Bank of Commerce v. Court of Appeals,[33] where the Court held the depositor guilty of
contributory negligence, we allocated the damages between the depositor and the bank on a 40-60 ratio. Applying
the same ruling to this case, we hold that L.C. Diaz must shoulder 40% of the actual damages awarded by the
appellate court. Solidbank must pay the other 60% of the actual damages.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED with MODIFICATION. Petitioner
Solidbank Corporation shall pay private respondent L.C. Diaz and Company, CPAs only 60% of the actual
damages awarded by the Court of Appeals. The remaining 40% of the actual damages shall be borne by private
respondent L.C. Diaz and Company, CPAs. Proportionate costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 89880

February 6, 1991

EMMA ADRIANO BUSTAMANTE, in her own behalf as Guardian-Ad-Litem of minors: ROSSEL,


GLORIA, YOLANDA, ERIC SON and EDERIC, all surnamed BUSTAMANTE, Spouses SALVADOR
JOCSON and PATRIA BONE-JOCSON, Spouses JOSE RAMOS and ENRIQUETA CEBU-RAMOS,
Spouses NARCISO-HIMAYA and ADORACION MARQUEZ-HIMAYA, and Spouses JOSE
BERSAMINA
and
MA.
COMMEMORACION
PEREA-BUSTAMANTE, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, FEDERICO DEL PILAR AND EDILBERTO
MONTESIANO,respondents.
Dolorfino and Dominguez Law Offices for petitioners.
J.C. Baldoz & Associates for private respondents.

MEDIALDEA, J.:
This is a petition for review on certiorari seeking the reversal of the decision of the respondent Court of Appeals
dated February 15, 1989 which reversed and set aside the decision of the Regional Trial Court of Cavite, Branch
XV ordering the defendants to pay jointly and severally the plaintiffs indemnity for death and damages; and in
further dismissing the complaint insofar as defendants-appellants Federico del Pilar and Edilberto Montesiano are
concerned; and its resolution dated August 17, 1989 denying the motion for reconsideration for lack of merit.
The facts giving rise to the controversy at bar are recounted by the trial court as follows:
At about 6:30 in the morning of April 20, 1983, a collision occurred between a gravel and sand truck, with
Plate No. DAP 717, and a Mazda passenger bus with Motor No. Y2231 and Plate No. DVT 259 along the
national road at Calibuyo, Tanza, Cavite. The front left side portion (barandilla) of the body of the truck
sideswiped the left side wall of the passenger bus, ripping off the said wall from the driver's seat to the
last rear seat.
Due to the impact, several passengers of the bus were thrown out and died as a result of the injuries they
sustained, Among those killed were the following:
1. Rogelio Bustamante, 40, husband of plaintiff Emma Adriano Bustamante and father of plaintiffs
Rossel, Gloria, Yolanda, Ericson, and Ederic, all surnamed Bustamante;
2. Maria Corazon Jocson, 16, daughter of plaintiffs spouses Salvador and Patria Jocson;
3. Jolet C. Ramos, 16, daughter of plaintiffs spouses Jose and Enriqueta Ramos;
4. Enrico Himaya, 18, son of plaintiffs spouses Narciso and Adoracion Himaya; and
5. Noel Bersamina, 17, son of plaintiffs spouses Jose and Ma. Commemoracion Bersamina. (Rollo, p. 48)
During the incident, the cargo truck was driven by defendant Montesiano and owned by defendant Del Pilar;
while the passenger bus was driven by defendant Susulin. The vehicle was registered in the name of defendant
Novelo but was owned and/or operated as a passenger bus jointly by defendants Magtibay and Serrado, under a
franchise, with a line from Naic, Cavite, to Baclaran, Paranaque, Metro Manila, and vice versa, which Novelo
sold to Magtibay on November 8, 1981, and which the latter transferred to Serrado (Cerrado) on January 18,
1983.
Immediately before the collision, the cargo truck and the passenger bus were approaching each other, coming
from the opposite directions of the highway. While the truck was still about 30 meters away, Susulin, the bus
driver, saw the front wheels of the vehicle wiggling. He also observed that the truck was heading towards his
lane. Not minding this circumstance due to his belief that the driver of the truck was merely joking, Susulin
shifted from fourth to third gear in order to give more power and speed to the bus, which was ascending the
inclined part of the road, in order to overtake or pass a Kubota hand tractor being pushed by a person along the
shoulder of the highway. While the bus was in the process of overtaking or passing the hand tractor and the truck
was approaching the bus, the two vehicles sideswiped each other at each other's left side. After the impact, the
truck skidded towards the other side of the road and landed on a nearby residential lot, hitting a coconut tree and
felling it." (Rollo, pp. 48-50)
After a careful perusal of the circumstances of the case, the trial court reached the conclusion "that the negligent
acts of both drivers contributed to or combined with each other in directly causing the accident which led to the
death of the aforementioned persons. It could not be determined from the evidence that it was only the negligent
act of one of them which was the proximate cause of the collision. In view of this, the liability of the two drivers
for their negligence must be solidary. (Rollo, pp. 50-51) Accordingly, the trial court rendered a decision on March
7, 1986, the dispositive portion is hereunder quoted as follows:

WHEREFORE, defendants Valeriano Magtibay, Simplicio Serrado, Ricardo Susulin, Efren Novelo,
Federico del Pilar and Edilberto Montesiano are hereby ordered to pay jointly and severally to the
plaintiffs, as follows:
1. To plaintiffs Emma Adriano Bustamante and her minor children, the sum of P30,000.00 as indemnity
for the death of Rogelio Bustamante; U.S. $127,680.00 as indemnity for the loss of the earning capacity
of the said deceased, at its prevailing rate in pesos at the time this decision shall have become final and
executory; P10,000.00 as moral damages; and P5,000.00 as exemplary damages;
2. To plaintiffs Salvador and Patria Jocson, the sum of P30,000.00 as indemnity for the death of their
daughter, Maria Corazon Jocson; P10,000.00 as moral damages; and P5,000.00 as exemplary damages;
3. To plaintiffs Jose and Enriqueta Ramos, the sum of P30,000.00 as indemnity for the death of their
daughter, Jolet Ramos; P10,000.00 as moral damages; and P5,000.00 as exemplary damages; and
4. To plaintiffs Narciso and Adoracion Himaya, the amount of P30,000.00 as indemnity for the death of
their son, Enrico Himaya, P10,000.00 as moral damages; and P5,000.00 as exemplary damages; and
5. To plaintiffs Jose and Ma. Commemoracion Bersamina, the sum of P30,000.00 as indemnity for the
death of their son, Noel Bersamina, P10,000.00 as moral damages and P5,000.00 as exemplary damages.
The defendants are also required to pay the plaintiffs the sum of P10,000.00 as attorney's fees and to pay
the costs of the suit.
The cross-claim of defendant Novelo is hereby allowed, and defendants Magtibay and Serrado, the actual
owners and/or operators of the passenger bus concerned, are hereby ordered to indemnify Novelo in such
amount as he may be required to pay as damages to the plaintiffs.
The cross-claims and counter-claims of the other defendants are hereby dismissed for lack of merit.
SO ORDERED. (pp. 55-57, Rollo)
From said decision, only defendants Federico del Pilar and Edilberto Montesiano, owner and driver, respectively,
of the sand and gravel truck have interposed an appeal before the respondent Court of Appeals. The Court of
Appeals decided the appeal on a different light. It rendered judgment on February 15, 1989, to wit:
WHEREFORE, the appealed judgment is hereby REVERSED and SET ASIDE and the complaint
dismissed insofar as defendants-appellants Federico del Pilar and Edilberto Montesiano are concerned. No
costs in this instance.
SO ORDERED. (p. 96, Rollo)
On March 9, 1989, the plaintiffs-appellees filed a motion for reconsideration of the aforementioned Court of
Appeals' decision. However, respondent Court of Appeals in a resolution dated August 17, 1989 denied the
motion for lack of merit. Hence, this petition.
Petitioners raised the following questions of law, namely:
First. Whether the respondent Court can legally and validly absolve defendants-appellants from liability
despite its own finding, as well as that of the trial court that defendant-appellant Edilberto Montesiano, the
cargo truck driver, was driving an old vehicle very fast, with its wheels already wiggling, such that he had
no more control of his truck.
Second. Whether the respondent court can validly and legally disregard the findings of fact made by the
trial court which was in a better position to observe the conduct and demeanor of the witnesses,
particularly appellant Edilberto Montesiano, cargo truck driver, and which conclusively found appellant
Montesiano as jointly and severally negligent in driving his truck very fast and had lost control of his
truck.

Third. Whether the respondent court has properly and legally applied the doctrine of "last clear chance" in
the present case despite its own finding that appellant cargo truck driver Edilberto Montesiano was
admittedly negligent in driving his cargo truck very fast on a descending road and in the presence of the
bus driver coming from the opposite direction.
Fourth. Whether the respondent court has applied the correct law and the correct doctrine so as to reverse
and set aside the judgment with respect to defendants-appellants. (Rollo, pp. 133-134)
As a rule, findings of fact of the Court of Appeals are final and conclusive and cannot be reviewed on appeal,
provided, they are borne out by the record or are based on substantial evidence However, this rule admits of
certain exceptions, as when the findings of facts are conclusions without citation of specific evidence on which
they are based; or the appellate court's findings are contrary to those of the trial court. (Sese v. Intermediate
Appellate Court, G.R. 66168, 31 July 1987, 152 SCRA 585).
Furthermore, only questions of law may be raised in a petition for review on certiorari under Rule 45 of the
Revised Rules of Court. The jurisdiction of the Supreme Court in cases brought to it from the Court of Appeals is
limited to reviewing and revising the errors of law imputed to it, its findings of fact being conclusive. It is not the
function of the Supreme Court to analyze or weigh such evidence all over again, its jurisdiction being limited to
reviewing errors of law that might have been committed. Barring, therefore, a showing that the findings
complained of are totally devoid of support in the records, or that they are so glaringly erroneous as to constitute
serious abuse of discretion, such findings must stand for the Supreme Court is not expected or required to
examine or contrast the oral and documentary evidence submitted by the parties. (Andres v. Manufacturers
Hanover and Trust Corp., G.R. 82670, 15 September 1989, 177 SCRA 618).
Bearing in mind these basic principles, We have opted to re-examine the findings of fact mainly because the
appellate court's findings are contrary to those of the trial court.
The trial court, in declaring that the negligent acts of both drivers directly caused the accident which led to the
death of the aforementioned persons, considered the following:
It was negligent on the part of driver Montesiano to have driven his truck fast, considering that it was an
old vehicle, being a 1947 model as admitted by its owner, defendant Del Pilar; that its front wheels were
wiggling; that the road was descending; and that there was a passenger bus approaching it. Likewise,
driver Susulin was also guilty of negligence in not taking the necessary precaution to avoid the collision,
in the light of his admission that, at a distance of 30 meters, he already saw the front wheels of the truck
wiggling and that the vehicle was usurping his lane coming towards his direction. Had he exercised
ordinary prudence, he could have stopped his bus or swerved it to the side of the road even down to its
shoulder. And yet, Susulin shifted to third gear so as to, as claimed by him, give more power and speed to
his bus in overtaking or passing a hand tractor which was being pushed along the shoulder of the road.
(Rollo, p. 50)
The respondent Court of Appeals ruling on the contrary, opined that "the bus driver had the last clear chance to
avoid the collision and his reckless negligence in proceeding to overtake the hand tractor was the proximate
cause of the collision." (Rollo, p. 95). Said court also noted that "the record also discloses that the bus driver was
not a competent and responsible driver. His driver's license was confiscated for a traffic violation on April 17,
1983 and he was using a ticket for said traffic violation on the day of the accident in question (pp. 16-18, TSN,
July 23, 1984). He also admitted that he was not a regular driver of the bus that figured in the mishap and was not
given any practical examination. (pp. 11, 96, TSN, supra)." (Rollo, p96)
The respondent Court quoting People v. Vender, CA-G.R. 11114-41-CR, August 28, 1975 held that "We are not
prepared to uphold the trial court's finding that the truck was running fast before the impact. The national road,
from its direction, was descending. Courts can take judicial notice of the fact that a motor vehicle going down or
descending is more liable to get out of control than one that is going up or ascending for the simple reason that

the one which is going down gains added momentum while that which is going up loses its initial speeding in so
doing."
On the other hand, the trial court found and We are convinced that the cargo truck was running fast. It did not
overlook the fact that the road was descending as in fact it mentioned this circumstance as one of the factors
disregarded by the cargo truck driver along with the fact that he was driving an old 1947 cargo truck whose front
wheels are already wiggling and the fact that there is a passenger bus approaching it. In holding that the driver of
the cargo truck was negligent, the trial court certainly took into account all these factors so it was incorrect for the
respondent court to disturb the factual findings of the trial court, which is in a better position to decide the
question, having heard the witness themselves and observed their deportment.
The respondent court adopted the doctrine of "last clear chance." The doctrine, stated broadly, is that the
negligence of the plaintiff does not preclude a recovery for the negligence of the defendant where it appears that
the defendant, by exercising reasonable care and prudence, might have avoided injurious consequences to the
plaintiff notwithstanding the plaintiff's negligence. In other words, the doctrine of last clear chance means that
even though a person's own acts may have placed him in a position of peril, and an injury results, the injured
person is entitled to recovery. As the doctrine is usually stated, a person who has the last clear chance or
opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent or that of a third person
imputed to the opponent is considered in law solely responsible for the consequences of the accident.
(Sangco, Torts and Damages, 4th Ed., 1986, p. 165).
The practical import of the doctrine is that a negligent defendant is held liable to a negligent plaintiff, or even to a
plaintiff who has been grossly negligent in placing himself in peril, if he, aware of the plaintiffs peril, or
according to some authorities, should have been aware of it in the reasonable exercise of due case, had in fact an
opportunity later than that of the plaintiff to avoid an accident (57 Am. Jur., 2d, pp. 798-799).
In the recent case of Philippine Rabbit Bus Lines, Inc. v. Intermediate Appellate Court, et al. (G.R. Nos. 6610204, August 30, 1990), the Court citing the landmark decision held in the case of Anuran, et al. v. Buno, et al. (123
Phil. 1073) ruled that the principle of "last clear chance" applies "in a suit between the owners and drivers of
colliding vehicles. It does not arise where a passenger demands responsibility from the carrier to enforce its
contractual obligations. For it would be inequitable to exempt the negligent driver of the jeepney and its owners
on the ground that the other driver was likewise guilty of negligence."
Furthermore, "as between defendants: The doctrine cannot be extended into the field of joint tortfeasors as a test
of whether only one of them should be held liable to the injured person by reason of his discovery of the latter's
peril, and it cannot be invoked as between defendants concurrently negligent. As against third persons, a
negligent actor cannot defend by pleading that another had negligently failed to take action which could have
avoided the injury." (57 Am. Jur. 2d, pp. 806-807).
All premises considered, the Court is convinced that the respondent Court committed an error of law in applying
the doctrine of last clear chance as between the defendants, since the case at bar is not a suit between the owners
and drivers of the colliding vehicles but a suit brought by the heirs of the deceased passengers against both
owners and drivers of the colliding vehicles. Therefore, the respondent court erred in absolving the owner and
driver of the cargo truck from liability.
Pursuant to the new policy of this Court to grant an increased death indemnity to the heirs of the deceased, their
respective awards of P30,000.00 are hereby increased to P50,000.00.
ACCORDINGLY, the petition is GRANTED; the appealed judgment and resolution of the Court of Appeals are
hereby REVERSED and SET ASIDE and the judgment of the lower court is REINSTATED with the
modification on the indemnity for death of each of the victims which is hereby increased to P50,000.00 each. No
pronouncement as to costs.
SO ORDERED.

THIRD DIVISION
[G.R. Nos. 79050-51. November 14, 1989.]
PANTRANCO NORTH EXPRESS, INC., Petitioner, v. MARICAR BASCOS BAESA, thru her personal
guardian FRANCISCA O. BASCOS, FE O. ICO, in her behalf and in behalf of her minor children, namely
ERWIN, OLIVE, EDMUNDO and SHARON ICO, Respondents.
Efren N. Ambrosio & Associates for petitioner PNEI.
Emiliano S. Micu for Respondents.
SYLLABUS
1. CIVIL LAW; DAMAGES; LAST CLEAR CHANCE DOCTRINE; WHEN APPLICABLE. The doctrine of
last clear chance applies only in a situation where the defendant, having the last fair chance to avoid the
impending harm and failed to do so, becomes liable for all the consequences of the accident notwithstanding the
prior
negligence
of
the
plaintiff.
2. ID.; ID.; ID.; CONDITION TO MAKE DOCTRINE APPLICABLE. In order that the doctrine of last clear
chance may be applied, it must be shown that the person who allegedly had the last opportunity to avert the
accident was aware of the existence of the peril or with exercise of due care should have been aware of it.
3. ID.; ID.; ID.; NOT APPLICABLE TO PERSON ACTING INSTANTANEOUSLY OR BY AVAILABLE
MEANS. This doctrine of last chance has no application to a case where a person is to act instantaneously, and
if the injury cannot be avoided by using all means available after the peril is or should have been discovered.
4. ID.; ID.; PROVISION OF R.A. NO. 4136 RE VEHICLE ENTERING A THROUGH HIGHWAY OR A STOP
INTERSECTION. Section 43 (c), Article III, Chapter IV of Republic Act No. 1436 cannot apply to case a bar
where at the time of the accident, the jeepney had already crossed the intersection.
5. ID.; ID.; NEGLIGENCE; BURDEN OF PROOF LIES ON THE EMPLOYER. A finding of negligence on
the part of the driver establishes a presumption that the employer has been negligent and the latter has the burden
of proof that it has exercised due negligence not only in the selection of its employees but also in adequately
supervising
their
work.
6. ID.; ID.; FAILURE TO PRESENT EVIDENCE TO SUPPORT CLAIM FOR DAMAGES. Plaintiffs
failure to present documentary evidence to support their claim for damages for loss of earning capacity of the
deceased victim does not bar recovery of the damages, if such loss may be based sufficiently on their testimonies.
7. ID.; ID.; INDEMNITY FIXED AT P30,000. The indemnity for the death of a person was fixed by this
Court at (P30,000.00).
DECISION
CORTES, J.:
In this Petition, Pantranco North Express Inc. (PANTRANCO), asks the Court to review the decision of the Court
of Appeals in CA-G.R. No. 05494-95 which affirmed the decisions of the Court of First Instance of Rosales,
Pangasinan in Civil Case No. 561-R and Civil Case No. 589-R wherein PANTRANCO was ordered to pay
damages and attorneys fees to herein private respondents.chanrobles virtual lawlibrary
The

pertinent

fact

are

as

follows:chanrob1es

virtual

1aw

library

At about 7:00 oclock in the morning of June 12, 1981, the spouses Ceasar and Marilyn Baesa and their children
Harold Jim, Marcelino and Maricar, together with spouses David Ico and Fe O. Ico with their son Erwin Ico and
seven other persons, were aboard a passenger jeepney on their way to a picnic at Malalam River, Ilagan, Isabela,
to
celebrate
the
fifth
wedding
anniversary
of
Ceasar
and
Marilyn
Baesa.
The group, numbering fifteen (15) persons, rode in the passenger jeepney driven by David Ico, who was also the
registered owner thereof. From Ilagan, Isabela, they proceeded to Barrio Capayacan to deliver some viands to
one Mrs. Bascos and thenceforth to San Felipe, taking the highway going to Malalam River. Upon reaching the
highway, the jeepney turned right and proceeded to Malalam River at a speed of about 20 kph. While they were
proceeding towards Malalam River, a speeding PANTRANCO bus from Aparri, on its regular route to Manila,
encroached on the jeepneys lane while negotiating a curve, and collided with it.
As a result of the accident David Ico, spouses Ceasar Baesa and Marilyn Baesa and their children, Harold Jim
and Marcelino Baesa, died while the rest of the passengers suffered injuries. The jeepney was extensively
damaged. After the accident the driver of the PANTRANCO Bus, Ambrosio Ramirez, boarded a car and
proceeded to Santiago, Isabela. From that time on up to the present, Ramirez has never been seen and has
apparently
remained
in
hiding.
All the victims and/or their surviving heirs except herein private respondents settled the case amicably under the
"No
Fault"
insurance
coverage
of
PANTRANCO.
Maricar Baesa through her guardian Francisca O. Bascos and Fe O. Ico for herself and for her minor children,
filed separate actions for damages arising from quasi-delict against PANTRANCO, respectively docketed as Civil
Case
No.
561-R
and
589-R
of
the
Court
of
First
Instance
of
Pangasinan.
In its answer, PANTRANCO, aside from pointing to the late David Icos alleged negligence as the proximate
cause of the accident, invoked the defense of due diligence in the selection and supervision of its driver,
Ambrosio
Ramirez.chanroblesvirtualawlibrary
On July 3, 1984, the CFI of Pangasinan rendered a decision against PANTRANCO awarding the total amount of
Two Million Three Hundred Four Thousand Six Hundred Forty-Seven (P2,304,647.00) as damages, plus 10%
thereof as attorneys fees and costs to Maricar Baesa in Civil Case No. 561-R, and the total amount of Six
Hundred Fifty Two Thousand Six Hundred Seventy-Two Pesos (P652,672.00) as damages, plus 10% thereof as
attorneys fees and costs to Fe Ico and her children in Civil Case No. 589-R. On appeal, the cases were
consolidated and the Court of Appeals modified the decision of the trial court by ordering PANTRANCO to pay
the total amount of One Million One Hundred Eighty-Nine Thousand Nine Hundred Twenty Seven Pesos
(P1,189,927.00) as damages, plus Twenty Thousand Pesos (P20,000.00) as attorneys fees to Maricar Baesa, and
the total amount of Three Hundred Forty-Four Thousand Pesos (P344,000.00) plus Ten Thousand Pesos
(P10,000.00) as attorneys fees to Fe Ico and her children, and to pay the costs in both cases. The dispositive
portion
of
the
assailed
decision
reads
as
follows:chanrob1es
virtual
1aw
library
WHEREFORE, the decision appealed from is hereby modified by ordering the defendant PANTRANCO North
Express,
Inc.
to
pay:chanrob1es
virtual
1aw
library
I. The plaintiff in Civil Case No. 561-R, Maricar Bascos Baesa, the following damages:chanrob1es virtual 1aw
library
A)

As

compensatory

damages

for

the

death

B)

As

compensatory

damages

for

the

death

of
of

Ceasar

Baesa

P30,000.00;

Marilyn

Baesa

P30,000.00;

C) As compensatory damages for the death of Harold Jim Baesa and Marcelino Baesa P30,000.00;
D)
E)
F)

For
For
For

the
the

the

loss
loss

burial

of
of

expenses

earnings

earnings
of

the

of
deceased

of
Marilyn
Ceasar

Ceasar

Baesa

Bascos
and

Baesa

Marilyn

P630,000.00;

Baesa

P375,000.00;

P41,200.00;

G)

For

hospitalization

expenses

H)

As

moral

I)

As

attorneys

of

Maricar

Baesa

P3,727.00;

damages

P50,000.00;

fees

P20,000.00;

II. The plaintiffs in Civil Case No. 589-R, the following damages:chanrob1es virtual 1aw library
A)
B)

As

compensatory

For

loss

damages

of

for

earning

the

death

capacity

of

of

David

David

Ico

Ico

P30,000.00;
P252,000.00;

C) As moral damages for the death of David Ico and the injury of Fe Ico P30,000.00
D)
E)

As

payment

For

the

F)

And

and

to

for

hospitalization
for
pay

the
of

Fe

attorneys
the

jeepney

P20,000.00;

P12,000.000;

Ico
fees

costs

in

P10,000.00;
both

cases.

The amount of P25,000 paid to Maricar Bascos Baesa, plaintiff in Civil Case No. 561-R, and the medical
expenses in the sum of P3,273.55, should be deducted from the award in her favor.chanrobles virtual lawlibrary
All the foregoing amounts herein awarded except the costs shall earn interest at the legal rate from date of this
decision
until
fully
paid.
[CA
Decision,
pp.
14-15;
Rollo,
pp.
57-58.]
PANTRANCO filed a motion for reconsideration of the Court of Appeals decision, but on June 26, 1987, it
denied the same for lack of merit. PANTRANCO then filed the instant petition for review.
I
Petitioner faults the Court of Appeals for not applying the doctrine of the "last clear chance" against the jeepney
driver. Petitioner claims that under the circumstances of the case, it was the driver of the passenger jeepney who
had the last clear chance to avoid the collision and was therefore negligent in failing to utilize with reasonable
care
and
competence
his
then
existing
opportunity
to
avoid
the
harm.
The doctrine of the last clear chance was defined by this Court in the case of Ong v. Metropolitan Water District,
104
Phil.
397
(1958),
in
this
wise:chanrob1es
virtual
1aw
library
The doctrine of the last clear chance simply, means that the negligence of a claimant does not preclude a recovery
for the negligence of defendant where it appears that the latter, by exercising reasonable care and prudence, might
have
avoided
injurious
consequences
to
claimant
notwithstanding
his
negligence.
The doctrine applies only in a situation where the plaintiff was guilty of prior or antecedent negligence but the
defendant, who had the last fair chance to avoid the impending harm and failed to do so, is made liable for all the
consequences of the accident notwithstanding the prior negligence of the plaintiff [Picart v. Smith, 37 Phil. 809
(1918); Glan Peoples Lumber and Hardware, Et. Al. v. Intermediate Appellate Court, Cecilia Alferez Vda. de
Calibo, Et Al., G.R. No. 70493, May 18, 1989]. The subsequent negligence of the defendant in failing to exercise
ordinary care to avoid injury to plaintiff becomes the immediate or proximate cause of the accident which
intervenes between the accident and the more remote negligence of the plaintiff, thus making the defendant liable
to
the
plaintiff
[Picart
v.
Smith,
supra].
Generally, the last clear chance doctrine is invoked for the purpose of making a defendant liable to a plaintiff who
was guilty of prior or antecedent negligence, although it may also be raised as a defense to defeat claim for
damages.chanrobles
lawlibrary
:
rednad

To avoid liability for the negligence of its driver, petitioner claims that the original negligence of its driver was
not the proximate cause of the accident and that the sole proximate cause was the supervening negligence of the
jeepney driver David Ico in failing to avoid the accident. It is petitioners position that even assuming arguendo,
that the bus encroached into the lane of the jeepney, the driver of the latter could have swerved the jeepney
towards the spacious dirt shoulder on his right without danger to himself or his passengers.
The

above

contention

of

petitioner

is

manifestly

devoid

of

merit.

Contrary to the petitioners contention, the doctrine of "last clear chance" finds no application in this case. For
the doctrine to be applicable, it is necessary to show that the person who allegedly had the last opportunity to
avert the accident was aware of the existence of the peril or should, with exercise of due care, have been aware of
it. One cannot be expected to avoid an accident or injury if he does not know or could not have known the
existence of the peril. In this case, there is nothing to show that the jeepney driver David Ico knew of the
impending danger. When he saw at a distance that the approaching bus was encroaching on his lane, he did not
immediately swerve the jeepney to the dirt shoulder on his right since he must have assumed that the bus driver
will return the bus to its own lane upon seeing the jeepney approaching from the opposite direction. As held by
this Court in the case of Vda. De Bonifacio v. BLTB, G.R. No. L-26810, August 31, 1970, 34 SCRA 618, a
motorist who is properly proceeding on his own side of the highway is generally entitled to assume that an
approaching vehicle coming towards him on the wrong side, will return to his proper lane of traffic. There was
nothing to indicate to David Ico that the bus could not return to its own lane or was prevented from returning to
the proper lane by anything beyond the control of its driver. Leo Marantan, an alternate driver of the Pantranco
bus who was seated beside the driver Ramirez at the time of the accident, testified that Ramirez had no choice but
to swerve the steering wheel to the left and encroach on the jeepneys lane because there was a steep precipice on
the right [CA Decision, p. 2; Rollo, p. 45]. However, this is belied by the evidence on record which clearly shows
that there was enough space to swerve the bus back to its own lane without any danger [CA Decision, p. 7; Rollo,
p.
50].
Moreover, both the trial court and the Court of Appeals found that at the time of the accident the Pantranco bus
was speeding towards Manila [CA Decision, p. 2; Rollo, p. 45]. By the time David Ico must have realized that the
bus was not returning to its own lane, it was already too late to swerve the jeepney to his right to prevent an
accident. The speed at which the approaching bus was running prevented David Ico from swerving the jeepney to
the right shoulder of the road in time to avoid the collision. Thus, even assuming that the jeepney driver
perceived the danger a few seconds before the actual collision, he had no opportunity to avoid it. This Court has
held that the last clear chance doctrine "can never apply where the party charged is required to act
instantaneously, and if the injury cannot be avoided by the application of all means at hand after the peril is or
should have been discovered" [Ong v. Metropolitan Water District, supra].chanrobles.com : virtual law library
Petitioner likewise insists that David Ico was negligent in failing to observe Section 43 (c), Article III Chapter IV
of Republic Act No. 4136 * which provides that the driver of a vehicle entering a through highway or a stop
intersection shall yield the right of way to all vehicles approaching in either direction on such through highway.
Petitioners misplaced reliance on the aforesaid law is readily apparent in this case. The cited law itself provides
that it applies only to vehicles entering a through highway or a stop intersection. At the time of the accident, the
jeepney had already crossed the intersection and was on its way to Malalam River. Petitioner itself cited Fe Icos
testimony that the accident occurred after the jeepney had travelled a distance of about two (2) meters from the
point of intersection [Petition p. 10; Rollo, p. 27]. In fact, even the witness for the petitioner, Leo Marantan,
testified that both vehicles were coming from opposite directions [CA Decision, p. 7; Rollo, p. 50], clearly
indicating
that
the
jeepney
had
already
crossed
the
intersection.
Considering the foregoing, the Court finds that the negligence of petitioners driver in encroaching into the lane
of the incoming jeepney and in failing to return the bus to its own lane immediately upon seeing the jeepney
coming from the opposite direction was the sole and proximate cause of the accident without which the collision
would not have occurred. There was no supervening or intervening negligence on the part of the jeepney driver
which would have made the prior negligence of petitioners driver a mere remote cause of the accident.
II
On the issue of its liability as an employer, petitioner claims that it had observed the diligence of a good father of

a family to prevent damage, conformably to the last paragraph of Article 2180 of the Civil Code. Petitioner
adduced evidence to show that in hiring its drivers, the latter are required to have professional drivers license
and police clearance. The drivers must also pass written examinations, interviews and practical driving tests, and
are required to undergo a six-month training period. Rodrigo San Pedro, petitioners Training Coordinator,
testified on petitioners policy of conducting regular and continuing training programs and safety seminars for its
drivers, conductors, inspectors and supervisors at a frequency rate of at least two (2) seminars a month.
On this point, the Court quotes with approval the following findings of the trial court which was adopted by the
Court
of
Appeals
in
its
challenged
decision:chanrob1es
virtual
1aw
library
When an injury is caused by the negligence of an employee, there instantly arises a presumption that the
employer has been negligent either in the selection of his employees or in the supervision over their acts.
Although this presumption is only a disputable presumption which could be overcome by proof of diligence of a
good father of a family, this Court believes that the evidence submitted by the defendant to show that it exercised
the diligence of a good father of a family in the case of Ramirez, as a company driver is far from sufficient. No
support evidence has been adduced. The professional drivers license of Ramirez has not been produced. There is
no proof that he is between 25 to 38 years old. There is also no proof as to his educational attainment, his age, his
weight and the fact that he is married or not. Neither are the result of the written test, psychological and physical
test, among other tests, have been submitted in evidence [sic]. His NBI or police clearances and clearances from
previous employment were not marked in evidence. No evidence was presented that Ramirez actually and really
attended the seminars. Vital evidence should have been the certificate of attendance or certificate of participation
or evidence of such participation like a logbook signed by the trainees when they attended the seminars. If such
records are not available, the testimony of the classmates that Ramirez was their classmate in said seminar
(should have been presented) [CA Decision, pp. 8-9; Rollo, pp. 51-52].chanrobles law library
Petitioner contends that the fact that Ambrosio Ramirez was employed and remained as its driver only means that
he underwent the same rigid selection process and was subjected to the same strict supervision imposed by
petitioner on all applicants and employees. It is argued by the petitioner that unless proven otherwise, it is
presumed that petitioner observed its usual recruitment procedure and company polices on safety and efficiency
[Petition,
p.
20;
Rollo,
p.
37].
The

Court

finds

the

above

contention

unmeritorious.

The finding of negligence on the part of its driver Ambrosio Ramirez gave rise to the presumption of negligence
on the part of petitioner and the burden of proving that it exercised due diligence not only in the selection of its
employees but also in adequately supervising their work rests with the petitioner [Lilius v. Manila Railroad
Company, 59 Phil. 758 (1934); Umali v. Bacani, G.R. No. L-40570, June 30, 1976, 69 SCRA 623]. Contrary to
petitioners claim, there is no presumption that the usual recruitment procedures and safety standards were
observed. The mere issuance of rules and regulations and the formulation of various company policies on safety,
without showing that they are being complied with, are not sufficient to exempt petitioner from liability arising
from the negligence of its employee. It is incumbent upon petitioner to show that in recruiting and employing the
erring driver, the recruitment procedures and company policies on efficiency and safety were followed. Petitioner
failed to do this. Hence, the Court finds no cogent reason to disturb the finding of both the trial court and the
Court of Appeals that the evidence presented by the petitioner, which consists mainly of the uncorroborated
testimony of its Training Coordinator, is insufficient to overcome the presumption of negligence against
petitioner.cralawnad
III
On the question of damages, petitioner claims that the Court of Appeals erred in fixing the damages for the loss
of earning capacity of the deceased victims. Petitioner assails respondent courts findings because no
documentary evidence in support thereof, such as income tax returns, pay-rolls, pay slips or invoices obtained in
the usual course of business, were presented [Petition, p. 22; Rollo, p. 39]. Petitioner argues that the "bare and
self-serving testimonies of the wife of the deceased David Ico and the mother of the deceased Marilyn Baesa . . .
have no probative value to sustain in law the Court of Appeals conclusion on the respective earnings of the
deceased victims." [Petition, pp. 21-22; Rollo, pp. 38-39.] It is petitioners contention that the evidence presented
by the private respondent does not meet the requirements of clear and satisfactory evidence to prove actual and
compensatory
damages.

The Court finds that the Court of Appeals committed no reversible error in fixing the amount of damages for the
loss of earning capacity of the deceased victims. While it is true that private respondents should have presented
documentary evidence to support their claim for damages for loss of earning capacity of the deceased victims, the
absence thereof does not necessarily bar the recovery of the damages in question. The testimony of Fe Ico and
Francisca Bascos as to the earning capacity of David Ico, and the spouses Baesa, respectively, are sufficient to
establish a basis from which the court can make a fair and reasonable estimate of the damages for the loss of
earning capacity of the three deceased victims. Moreover, in fixing the damages for loss of earning capacity of a
deceased victim, the court can consider the nature of his occupation, his educational attainment and the state of
his
health
at
the
time
of
death.
In the instant case, David Ico was thirty eight (38) years old at the time of his death in 1981 and was driving his
own passenger jeepney. The spouses Ceasar and Marilyn Baesa were both thirty (30) years old at the time of their
death. Ceasar Baesa was a commerce degree holder and the proprietor of the Cauayan Press, printer of the
Cauayan Valley Newspaper and the Valley Times at Cauayan, Isabela. Marilyn Baesa graduated as a nurse in
1976 and at the time of her death, was the company nurse, personnel manager, treasurer and cashier of the Ilagan
Press at Ilagan, Isabela. Respondent court duly considered these factors, together with the uncontradicted
testimonies of Fe Ico and Francisca Bascos, in fixing the amount of damages for the loss of earning capacity of
David
Ico
and
the
spouses
Baesa.chanrobles.com:cralaw:red
However, it should be pointed out that the Court of Appeals committed error in fixing the compensatory damages
for the death of Harold Jim Baesa and Marcelino Baesa. Respondent court awarded to plaintiff (private
respondent) Maricar Baesa Thirty Thousand Pesos (P30,000.00) as "compensatory damages for the death of
Harold Jim Baesa and Marcelino Baesa." [CA Decision, p. 14; Rollo, 57]. In other words, the Court of Appeals
awarded only Fifteen Thousand Pesos (P15,000.00) as indemnity for the death of Harold Jim Baesa and another
Fifteen Thousand Pesos (P15,000.00) for the death of Marcelino Baesa. This is clearly erroneous. In the case of
People v. de la Fuente, G.R. Nos. 63251-52, December 29, 1983, 126 SCRA 518, the indemnity for the death of a
person was fixed by this Court at Thirty Thousand Pesos (P30,000.00). Plaintiff Maricar Baesa should therefore
be awarded Sixty Thousand Pesos (P60,000.00) as indemnity for the death of her brothers, Harold Jim Baesa and
Marcelino Baesa or Thirty Thousand Pesos (P30,000.00) for the death of each brother.
The other items of damages awarded by respondent court which were not challenged by the petitioner are hereby
affirmed.
WHEREFORE, premises considered, the petition is DENIED, and the decision of respondent Court of Appeals is
hereby AFFIRMED with the modification that the amount of compensatory damages for the death of Harold Jim
Baesa and Marcelino Baesa are increased to Thirty Thousand Pesos (P30,000.00) each.chanrobles law library
SO ORDERED.
SECOND DIVISION

[G.R. No. 140698. June 20, 2003]

ROGELIO ENGADA, petitioner, vs. HON. COURT OF APPEALS, Former Fourteenth Division, Manila,
and PEOPLE OF THE PHILIPPINES, respondents.
DECISION
QUISUMBING, J.:

This petition for review seeks the reversal of the decision[1] dated May 31, 1999 of the Court of Appeals in
CA-G.R. CR No. 18358, which affirmed with modification the judgment[2] dated August 25, 1994, of the
Regional Trial Court of Iloilo City, Branch 29, in Criminal Case No. 36223. The RTC found petitioner guilty
beyond reasonable doubt of simple imprudence resulting in physical injuries and damage to property, and
sentenced him to (a) suffer imprisonment for one month and one day of arresto mayor, (b) pay private
complainant, Mrs. Sheila Seyan, the amount of fifty one thousand pesos (P51,000) for the total destruction of the
Toyota Tamaraw jeepney, and one hundred ten thousand pesos (P110,000) for her hospital and medical expenses,
and (c) pay the costs of suit. The CA increased the prison term imposed on petitioner to four months of arresto
mayor.
The facts culled from the records are as follows:
On November 29, 1989, at about 1:30 in the afternoon, Edwin Iran was driving a blue Toyota Tamaraw
jeepney bound for Iloilo City. On board was Sheila Seyan, the registered owner of the Tamaraw. While traversing
the road along Barangay Acquit, Barotac Nuevo, the Tamaraw passengers allegedly saw from the opposite
direction a speeding Isuzu pick-up, driven by petitioner Rogelio Engada. The pick-up had just negotiated a hilly
gradient on the highway. When it was just a few meters away from the Tamaraw, the Isuzu pick-ups right signal
light flashed, at the same time, it swerved to its left, encroaching upon the lane of the Tamaraw and headed
towards a head-on collision course with it. Seyan shouted at Iran to avoid the pick-up. Iran swerved to his left but
the pick-up also swerved to its right. Thus, the pick-up collided with the Tamaraw, hitting the latter at its right
front passenger side. The impact caused the head and chassis of the Tamaraw to separate from its body. Seyan
was thrown out of the Tamaraw and landed on a ricefield. The pick-up stopped diagonally astride the center of
the road.
Seyan and Iran were brought to Barotac Nuevo Medicare Hospital.[3] Seyan was profusely bleeding from
her nose and was in a state of shock with her eyes closed. In the afternoon of the same day, November 29, 1989,
she was transferred to St. Pauls Hospital in Iloilo City where she was confined. Her medical certificate revealed
that she suffered a fracture on the right femur, lacerated wound on the right foot, multiple contusions, abrasions,
blunt abdominal injury, and lacerations of the upper-lower pole of the right kidney.[4] She was discharged from
the hospital only on January 15, 1990.
Seyan incurred P130,000 in medical expenses. The Toyota Tamaraw jeepney ended up in the junk heap. Its
total loss was computed at P80,000.
A criminal complaint for damage to property through reckless imprudence with serious physical injuries was
filed with the Municipal Trial Court of Barotac Nuevo against petitioner Rogelio Engada and Edwin Iran.
[5] Probable cause was found against petitioner, while the complaint against Iran was dismissed.[6]
Consequently, an Information was filed against petitioner charging him with serious physical injuries and
damage to property through reckless imprudence, thus:
That on or about November 29, 1989, in the Municipality of Barotac Nuevo, Province of Iloilo, Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused Rogelio Engada driving an Isuzu Pickup with Plate No. SAR 117 owned by the Land Bank of the Philippines, did then and there wilfully, unlawfully
and with reckless imprudence drive said pick-up in a careless, reckless and imprudent manner with disregard of
traffic laws and regulations, and as a result of such negligent and reckless driving the Isuzu Pick-up driven by the
accused bumped a Toyota Tamaraw jeep with Plate No. FBF 601 owned by Joelito and Sheila Seyan and driven
by Edwin Iran thereby causing damage to the Toyota Tamaraw in the amount of P80,000.00 and serious physical
injuries to Mrs. Sheila Seyan who was riding said vehicle, the injuries barring complications will heal in more
than 30 days.

CONTRARY TO LAW.[7]
After trial, the court rendered on August 25, 1994 a decision, disposing as follows:
WHEREFORE, the Court, finding the accused guilty beyond reasonable doubt of Simple Imprudence resulting
[in] physical injuries and damage to property defined and penalized in Article 263, paragraph 4 and in relation
with Article 365, paragraph 2 of the Revised Penal Code, hereby sentences the accused Rogelio Engada to suffer
imprisonment of ONE (1) MONTH and ONE (1) DAY of arresto mayor.
Accused is further ordered to pay complainant Mrs. Sheila Seyan the amount of P51,000.00 for the total
destruction of the Toyota Tamaraw Jeepney and P110,000.00 for indemnification of hospital and medical
expenses, and to pay the cost of the suit.
SO ORDERED.[8]
Petitioner appealed to the Court of Appeals. On May 31, 1999, the CA dismissed the appeal and affirmed
with modification the trial courts decision, thus:
WHEREFORE, the instant appeal is hereby DISMISSED. Accordingly, the appealed decision is hereby
AFFIRMED with modification as to the penalty imposed upon the accused who is hereby sentenced to suffer
imprisonment of FOUR (4) MONTHS of arresto mayor.
SO ORDERED.[9]
Petitioner filed a motion for reconsideration, but it was denied. Hence, the instant petition, wherein petitioner
raises the issue of:
WHETHER OR NOT THE FINDINGS OF RESPONDENT COURT OF APPEALS ARE SUPPORTED BY
THE EVIDENCE OR BASED ON A MISAPPREHENSION OF FACTS RESULTING IN A MANIFESTLY
MISTAKEN INFERENCE SPECIFICALLY ON WHAT WAS THE PROXIMATE CAUSE OF THE
ACCIDENT AND WHOSE ACT WAS IT.[10]
Petitioner claims innocence and seeks acquittal. He contends that in this case we should relax the rule that
only legal questions can be raised in a petition for review under Rule 45 of the Rules of Court. According to him,
the Court of Appeals misapprehended the facts, and erred in its conclusion as to the proximate cause of the
collision. He insists that the Court of Appeals erred when it found him negligent for occupying the lane of the
Tamaraw jeepney, and then failing to return to his original lane at the safest and earliest opportunity.
Petitioner further contends that the CA failed to consider that he already relayed his intention to go back to
his lane by flashing the pick-ups right signal light. He submits that at that moment Iran, the driver of the
Tamaraw, had no more reason to swerve to his left. Had Iran not swerved to the left, according to petitioner, the
collision would have been avoided. It was Iran who was clearly negligent, says petitioner. Citing our ruling
in McKee v. Intermediate Appellate Court,[11] petitioner avers that although his act of occupying the Tamaraws
lane was the initial act in the chain of events, Irans swerving to the left after petitioner flashed his right turn
signal, constituted a sufficient intervening event, which proximately caused the eventual injuries and damages to
private complainant.
Petitioner also claims that the Court of Appeals erred when it found that the pick-up approached the
Tamaraw at a fast speed. He maintains that this was not borne by the evidence on record.
The Office of the Solicitor General, as counsel for the state, counters that the Court of Appeals did not err in
convicting the accused, now petitioner herein. Petitioners negligence was the proximate cause of the accident,
according to the OSG, for the following reasons: First, petitioner for no justifiable reason occupied the opposite
lane. Second, while on the wrong lane, petitioner was driving the Isuzu pick-up fast, and he returned to his own

lane only at the last minute. This left Iran, the driver of the Tamaraw, with no opportunity to reflect on the safest
way to avoid the accident. Irans swerving to the left was his reaction to petitioners wrongful act, which
appropriately calls for the application of the emergency rule. The rationale of this rule is that a person who is
confronted with a sudden emergency might have no time for thought, and he must make a prompt decision based
largely upon impulse or instinct. Thus, he cannot be held to the same standard of conduct as one who had an
opportunity to reflect, even though it later appears that he made the wrong decision. Clearly, under the emergency
rule petitioner cannot shift the blame to Iran, concludes the OSG.
As to petitioners claim that there was no evidence showing that the pick-up was running very fast, the OSG
avers that this is rebutted by the testimony of Seyan and Iran who both testified that petitioner drove the pick-up
at a fast speed when it encroached on their lane immediately before the collision.
Did the Court of Appeals err in finding that the action of petitioner, Rogelio Engada, was the proximate
cause of the collision? This is the crux of the present petition.
In our view, petitioners attempt to pin the blame on Edwin Iran, the driver of the Tamaraw, for the vehicular
collision is unfounded. Iran swerved to the left only to avoid petitioners pick-up, which was already on a head to
head position going against Irans Tamaraw jeepney immediately before the vehicles collided. This fact has been
established by the evidence on record. No convincing proof was adduced by petitioner that the driver of the
Tamaraw, Iran, could have avoided a head-on collision.
We note that petitioner admitted his Isuzu pick-up intruded into the lane of the Tamaraw
jeepney. Prosecution witness Nelson Alobin, one of those who went to the scene of the incident immediately,
testified that when he arrived at the place where the collision took place, he saw the pick-up positioned
diagonally at the center of the road.[12] Its head was towards the direction of Barotac Nuevo and the rear tires
were just a few inches beyond the center of the lane.[13] Moving backwards facing Barotac Nuevo, at two arms
length away from the pick-up, Alobin also saw a tire mark, 12 inches long and located at the left side of the
center line going to the right side.[14]
The above circumstance corroborates the testimony of both Seyan and Iran that, immediately before the
collision, the pick-up was not on its proper lane but on the other lane (the left lane rather than the right) directly
on collision course with the Tamaraw jeepney. The tire mark reveals the short distance between the two vehicles
when the Isuzu pick-up attempted to return to its proper lane.
It is a settled rule that a driver abandoning his proper lane for the purpose of overtaking another vehicle in an
ordinary situation has the duty to see to it that the road is clear and he should not proceed if he cannot do so in
safety.[15] This rule is consistent with Section 41, paragraph (a) of R.A. 4136 as amended, otherwise known
as The Land Transportation and Traffic Code, which provides:
Sec. 41. Restrictions on overtaking and passing. (a) The driver of a vehicle shall not drive to the left side of the
center line of a highway in overtaking or passing another vehicle proceeding in the same direction, unless such
left side is clearly visible and is free of oncoming traffic for a sufficient distance ahead to permit such overtaking
or passing to be made in safety.
In the present case, there was only a distance of 30 meters from the Tamaraw jeepney when the Isuzu pickup abandoned its lane and swerved to the left of the center line.[16] In addition, petitioner was running at a fast
clip while traversing this lane. This was testified to by Seyan and Iran, unrebutted by petitioner. The resulting
damage to the Tamaraw jeepney, at the point where the head and chassis were separated from the body, bolsters
this conclusion that petitioner was speeding. In our view, petitioner was negligent in several ways, and his
negligence was the proximate cause of the collision. In abandoning his lane, he did not see to it first that the
opposite lane was free of oncoming traffic and was available for a safe passage. Further, after seeing the Tamaraw

jeepney ahead, petitioner did not slow down, contrary to the rule set in Batangas Laguna Tayabas Bus Co. v. IAC,
[17] thus:
[O]r if, after attempting to pass, the driver of the overtaking vehicle finds that he cannot make the passage in
safety, the latter must slacken his speed so as to avoid the danger of a collision, even bringing his car to a stop if
necessary.
For failing to observe the duty of diligence and care imposed on drivers of vehicles abandoning their lane,
petitioner must be held liable.
Iran could not be faulted when in his attempt to avoid the pick-up, he swerved to his left. Petitioners acts had
put Iran in an emergency situation which forced him to act quickly. An individual who suddenly finds himself in
a situation of danger and is required to act without much time to consider the best means that may be adopted to
avoid the impending danger, is not guilty of negligence if he fails to undertake what subsequently and upon
reflection may appear to be a better solution, unless the emergency was brought by his own negligence.[18]
Petitioner tries to extricate himself from liability by invoking the doctrine of last clear chance. He avers that
between him and Iran, the latter had the last clear chance to avoid the collision, hence Iran must be held liable.
The doctrine of last clear chance states that a person who has the last clear chance or opportunity of avoiding
an accident, notwithstanding the negligent acts of his opponent, is considered in law solely responsible for the
consequences of the accident.[19] But as already stated on this point, no convincing evidence was adduced by
petitioner to support his invocation of the abovecited doctrine. Instead, what has been shown is the presence of an
emergency and the proper application of the emergency rule. Petitioners act of swerving to the Tamaraws lane at
a distance of 30 meters from it and driving the Isuzu pick-up at a fast speed as it approached the Tamaraw, denied
Iran time and opportunity to ponder the situation at all. There was no clear chance to speak of. Accordingly, the
Court of Appeals did not err in holding petitioner responsible for the vehicular collision and the resulting
damages, including the injuries suffered by Mrs. Sheila Seyan and the total loss of the Tamaraw jeepney. It also
did not err in imposing on petitioner the sentence of four (4) months of arresto mayor.[20]
WHEREFORE, the instant petition is DENIED for lack of merit. The assailed decision of the Court of
Appeals in CA-G.R. CR No. 18358 is AFFIRMED. Costs against petitioner.
SO ORDERED.
EN BANC
[G.R. No. 70890. September 18, 1992.]
CRESENCIO LIBI * and AMELIA YAP LIBI, Petitioners, v. HON. INTERMEDIATE APPELLATE COURT,
FELIPE GOTIONG and SHIRLEY GOTIONG, Respondents.
Alex Y. Tan, for Petitioners.
Mario D. Ortiz and Danilo V. Ortiz for Private Respondents.
SYLLABUS
1. CIVIL LAW; QUASI DELICT; LIABILITY OF PARENTS FOR CIVIL LIABILITY ARISING FROM
CRIMINAL OFFENSES COMMITTED BY THEIR MINOR CHILDREN; RULE. The parents are and
should be held primarily liable for the civil liability arising from criminal offenses committed by their minor
children under their legal authority or control, or who live in their company, unless it is proven that the former

acted with the diligence of a good father of a family to prevent such damages. That primary liability is premised
on the provisions of Article 101 of the Revised Penal Code with respect to damages ex delicto caused by their
children 9 years of age or under, or over 9 but under 15 years of age who acted without discernment; and, with
regard to their children over 9 but under 15 years of age who acted with discernment, or 15 years or over but
under 21 years of age, such primary liability shall be imposed pursuant to Article 2180 of the Civil Code. Under
said Article 2180, the enforcement of such liability shall be effected against the father and, in case of his death or
incapacity, the mother. This was amplified by the Child and Youth Welfare Code which provides that the same
shall devolve upon the father and, in case of his death or incapacity, upon the mother or, in case of her death or
incapacity, upon the guardian, but the liability may also be voluntarily assumed by a relative or family friend of
the youthful offender. However, under the Family Code, this civil liability is now, without such alternative
qualification, the responsibility of the parents and those who exercise parental authority over the minor offender.
For civil liability arising from quasi-delicts committed by minors, the same rules shall apply in accordance with
Articles 2180 and 2182 of the Civil Code, as so modified.
DECISION
REGALADO, J.:
One of the ironic verities of life, it has been said, is that sorrow is sometimes a touchstone of love. A tragic
illustration is provided by the instant case, wherein two lovers died while still in the prime of their years, a bitter
episode for those whose lives they have touched. While we cannot expect to award complete assuagement to their
families through seemingly prosaic legal verbiage, this disposition should at least terminate the acrimony and
rancor
of
an
extended
judicial
contest
resulting
from
the
unfortunate
occurrence.
In this final denouement of the judicial recourse the stages whereof were alternately initiated by the parties,
petitioners are now before us seeking the reversal of the judgment of respondent court promulgated on January 2,
1985 in AC-G.R. CV No. 69060 with the following decretal portion:jgc:chanrobles.com.ph
"WHEREFORE, the decision of the lower court dismissing plaintiffs complaint is hereby reversed; and instead,
judgment is hereby rendered sentencing defendants, jointly and solidarily, to pay to plaintiffs the following
amounts:chanrobles.com
:
virtual
law
library
1.

Moral

2.

damages,

Exemplary

3.

Attorneys

However,

denial

damages,
fees,

of

P30,000.000;

defendants-appellees

P10,000.00;

P20,000.00,
counterclaims

and
is

costs.
affirmed."

Synthesized from the findings of the lower courts, it appears that respondent spouses are the legitimate parents of
Julie Ann Gotiong who, at the time of the deplorable incident which took place and from which she died on
January 14, 1979, was an 18-year old first year commerce student of the University of San Carlos, Cebu City;
while petitioners are the parents of Wendell Libi, then a minor between 18 and 19 years of age living with his
aforesaid
parents,
and
who
also
died
in
the
same
event
on
the
same
date.
For more than two (2) years before their deaths, Julie Ann Gotiong and Wendell Libi were sweethearts until
December, 1978 when Julie Ann broke up her relationship with Wendell after she supposedly found him to be
sadistic and irresponsible. During the first and second weeks of January, 1979, Wendell kept pestering Julie Ann
with demands for reconciliation but the latter persisted in her refusal, prompting the former to resort to threats
against her. In order to avoid him, Julie Ann stayed in the house of her best friend, Malou Alfonso, at the corner
of Maria Cristina and Juana Osmea Streets, Cebu City, from January 7 to 13, 1978.
On January 14, 1979, Julie Ann and Wendell died, each from a single gunshot wound inflicted with the same
firearm, a Smith and Wesson revolver licensed in the name of petitioner Cresencio Libi, which was recovered
from the scene of the crime inside the residence of private respondents at the corner of General Maxilom and D.

Jakosalem

streets

of

the

same

city.

Due to the absence of an eyewitness account of the circumstances surrounding the death of both minors, their
parents, who are the contending parties herein, posited their respective theories drawn from their interpretation of
circumstantial
evidence,
available
reports,
documents
and
evidence
of
physical
facts.
Private respondents, bereaved over the death of their daughter, submitted that Wendell caused her death by
shooting her with the aforesaid firearm and, thereafter, turning the gun on himself to commit suicide. On the
other hand, Petitioners, puzzled and likewise distressed over the death of their son, rejected the imputation and
contended that an unknown third party, whom Wendell may have displeased or antagonized by reason of his work
as a narcotics informer of the Constabulary Anti-Narcotics Unit (CANU), must have caused Wendells death and
then shot Julie Ann to eliminate any witness and thereby avoid identification.chanrobles.com:cralaw:red
As a result of the tragedy, the parents of Julie Ann filed Civil Case No. R-17774 in the then Court of First
Instance of Cebu against the parents of Wendell to recover damages arising from the latters vicarious liability
under Article 2180 of the Civil Code. After trial, the court below rendered judgment on October 20, 1980 as
follows:jgc:chanrobles.com.ph
"WHEREFORE, premises duly considered, judgment is hereby rendered dismissing plaintiffs complaint for
insufficiency of the evidence. Defendants counterclaim is likewise denied for lack of sufficient merit." 2
On appeal to respondent court, said judgment of the lower court dismissing the complaint of therein plaintiffsappellants was set aside and another judgment was rendered against defendants-appellees who, as petitioners in
the present appeal by certiorari, now submit for resolution the following issues in this case:chanrob1es virtual
1aw
library
1. Whether or not respondent court correctly reversed the trial court in accordance with established decisional
laws;
and
2. Whether or not Article 2180 of the Civil Code was correctly interpreted by respondent court to make
petitioners
liable
for
vicarious
liability.
3
In the proceedings before the trial court, Dr. Jesus P. Cerna, Police Medico-Legal Officer of Cebu, submitted his
findings and opinions on some postulates for determining whether or not the gunshot wound was inflicted on
Wendell Libi by his own suicidal act. However, undue emphasis was placed by the lower court on the absence of
gunpowder or tattooing around the wound at the point of entry of the bullet. It should be emphasized, however,
that this is not the only circumstance to be taken into account in the determination of whether it was suicide or
not.
It is true that said witness declared that he found no evidence of contact or close-contact of an explosive
discharge in the entrance wound. However, as pointed out by private respondents, the body of deceased Wendell
Libi must have been washed at the funeral parlor, considering the hasty interment thereof a little after eight (8)
hours from the occurrence wherein he died. Dr. Cerna himself could not categorically state that the body of
Wendell Libi was left untouched at the funeral parlor before he was able to conduct his autopsy. It will also be
noted that Dr. Cerna was negligent in not conducting a paraffin test on Wendell Libi, hence possible evidence of
gunpowder residue on Wendells hands was forever lost when Wendell was hastily buried.cralawnad
More specifically, Dr. Cerna testified that he conducted an autopsy on the body of Wendell Libi about eight (8)
hours after the incident or, to be exact, eight (8) hours and twenty (20) minutes based on the record of death; that
when he arrived at the Cosmopolitan Funeral Homes, the body of the deceased was already on the autopsy table
and in the stage of rigor mortis; and that said body was not washed, but it was dried. 4 However, on redirect
examination, he admitted that during the 8-hour interval, he never saw the body nor did he see whether said body
was wiped or washed in the area of the wound on the head which he examined because the deceased was inside
the morgue. 5 In fact, on cross-examination, he had earlier admitted that as far as the entrance of the wound, the
trajectory of the bullet and the exit of the wound are concerned, it is possible that Wendell Libi shot himself. 6
He further testified that the muzzle of the gun was not pressed on the head of the victim and that he found no
burning or singeing of the hair or extensive laceration on the gunshot wound of entrance which are general
characteristics of contact or near-contact fire. On direct examination, Dr. Cerna nonetheless made these

clarification:jgc:chanrobles.com.ph
"Q Is it not a fact that there are certain guns which are so made that there would be no black residue or tattooing
that
could
result
from
these
guns
because
they
are
what
we
call
clean?
A

Yes,

sir.

ATTY.

know

that

there

are

ORTIZ:chanrob1es

what

we

call

virtual

smokeless

1aw

powder.
library

Q Yes. So, in cases, therefore, of guns where the powder is smokeless, those indications that you said may not
rule out the possibility that the gun was closer than 24 inches, is that correct?
A If the . . . assuming that the gun used was .. the bullet used was a smokeless powder.
Q At any rate, doctor, from . . . disregarding those other matters that you have noticed, the singeing, etc., from the
trajectory, based on the trajectory of the bullet as shown in your own sketch, is it not a fact that the gun could
have been fired by the person himself, the victim himself, Wendell Libi, because it shows a point of entry a little
above the right ear and point of exit a little above that, to be very fair and on your oath?
A As far as the point of entrance is concerned and as far as the trajectory of the bullet is concerned and as far as
the angle or the manner of fire is concerned, it could have been fired by the victim." 7
As shown by the evidence, there were only two used bullets 8 found at the scene of the crime, each of which
were the bullets that hit Julie Ann Gotiong and Wendell Libi, respectively. Also, the sketch prepared by the
Medico-Legal Division of the National Bureau of Investigation, 9 shows that there is only one gunshot wound of
entrance located at the right temple of Wendell Libi. The necropsy report prepared by Dr. Cerna
states:chanrob1es virtual 1aw library
x

"Gunshot wound, ENTRANCE, ovaloid, 0.5 x 0.4 cm., with contusion collar widest inferiorly by 0.2 cm., edges
inverted, oriented upward, located at the head, temporal region, right, 2.8 cms. behind and 5.5 cms. above right
external auditory meatus, directed slightly forward, upward and to the left, involving skin and soft tissues,
making a punch-in fracture on the temporal bone, right, penetrating cranial cavity, lacerating extensively along its
course the brain tissues, fracturing parietal bone, left, and finally making an EXIT wound, irregular, 2.0 x 1.8
cms., edges (e)verted, parietal region, left, 2.0 cms. behind and 12.9 cms. above left external auditory
meatus.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
x

"Evidence of contact or close-contact fire, such as burning around the gunshot wound of entrance, gunpowder
tatooing (sic), smudging, singeing of hair, extensive laceration or bursting of the gunshot wound of entrance, or
separation
of
the
skin
from
the
underlying
tissue,
are
absent."
10
On cross-examination, Dr. Cerna demonstrated his theory which was made of record, thus:jgc:chanrobles.com.ph
"Q Now, will you please use yourself as Wendell Libi, and following the entrance of the wound, the trajectory of
the bullet and the exit of the wound, and measuring yourself 24 inches, will you please indicate to the Honorable
Court how would it have been possible for Wendell Libi to kill himself? Will you please indicate the 24 inches?
WITNESS:chanrob1es
A
ATTY.

Actually,

virtual

sir,

the

24

SENINING:chanrob1es

inches

1aw
is

approximately
virtual

library
one
1aw

arms

length.
library

I would like to make of record that the witness has demonstrated by extending his right arm almost straight

towards

his

head."

11

Private respondents assail the fact that the trial court gave credence to the testimonies of defendants witnesses
Lydia Ang and James Enrique Tan, the first being a resident of an apartment across the street from the Gotiongs
and the second, a resident of the house adjacent to the Gotiong residence, who declared having seen a "shadow"
of a person at the gate of the Gotiong house after hearing shots therefrom.
On cross-examination, Lydia Ang testified that the apartment where she was staying faces the gas station; that it
is the second apartment; that from her window she can see directly the gate of the Gotiongs and, that there is a
firewall between her apartment and the gas station. 12 After seeing a man jump from the gate of the Gotiongs to
the rooftop of the Tans, she called the police station but the telephone lines were busy. Later on, she talked with
James Enrique Tan and told him that she saw a man leap from the gate towards his rooftop. 13
However, James Enrique Tan testified that he saw a "shadow" on top of the gate of the Gotiongs, but denied
having talked with anyone regarding what he saw. He explained that he lives in a duplex house with a garden in
front of it; that his house is next to Felipe Gotiongs house; and he further gave the following answers to these
questions:chanrobles.com
:
virtual
law
library
"ATTY.
Q

ORTIZ:

What

is

the

height

of

the

WITNESS:chanrob1es
A

It

of

the

Gotiongs

is

And

were

Your

WITNESS:chanrob1es
Yes,

but

very

looking

clear

from?
library

my

living

room.
WITNESS)

window,

virtual
not

WITNESS)

(TO
room

is

that

correct?

1aw
because

the

house?

feet.

1aw
in

living

your

library

you

ORTIZ
From

to

(TO

upstairs

ATTY.

relation

virtual

From

in

about

where

WITNESS:chanrob1es

WITNESS).

1aw

ORTIZ:

wall

virtual

ATTY.

(TO

wall

library
is

high."

14

Analyzing the foregoing testimonies, we agree with respondent court that the same do not inspire credence as to
the reliability and accuracy of the witnesses observations, since the visual perceptions of both were obstructed by
high walls in their respective houses in relation to the house of herein private respondents. On the other hand,
witness Manolo Alfonso, testifying on rebuttal, attested without contradiction that he and his sister, Malou
Alfonso, were waiting for Julie Ann Gotiong when they heard her scream; that when Manolo climbed the fence
to see what was going on inside the Gotiong house, he heard the first shot; and, not more than five (5) seconds
later, he heard another shot. Consequently, he went down from the fence and drove to the police station to report
the incident. 15 Manolos direct and candid testimony establishes and explains the fact that it was he whom Lydia
Ang and James Enrique Tan saw as the "shadow" of a man at the gate of the Gotiong house.
We have perforce to reject petitioners effete and unsubstantiated pretension that it was another man who shot
Wendell and Julie Ann. It is significant that the Libi family did not even point to or present any suspect in the
crime nor did they file any case against any alleged "John Doe." Nor can we sustain the trial courts dubious
theory that Wendell Libi did not die by his own hand because of the overwhelming evidence testimonial,
documentary and pictorial the confluence of which point to Wendell as the assailant of Julie Ann, his motive
being revenge for her rejection of his persistent pleas for a reconciliation.chanrobles.com:cralaw:red

Petitioners defense that they had exercised the due diligence of a good father of a family, hence they should not
be civilly liable for the crime committed by their minor son, is not borne out by the evidence on record either.
Petitioner Amelita Yap Libi, mother of Wendell, testified that her husband, Cresencio Libi, owns a gun which he
kept in a safety deposit box inside a drawer in their bedroom. Each of these petitioners holds a key to the safety
deposit box and Amelitas key is always in her bag, all of which facts were known to Wendell. They have never
seen their son Wendell taking or using the gun. She admitted, however, that on that fateful night the gun was no
longer in the safety deposit box. 16 We, accordingly, cannot but entertain serious doubts that petitioner spouses
had really been exercising the diligence of a good father of a family by safely locking the fatal gun away.
Wendell could not have gotten hold thereof unless one of the keys to the safety deposit box was negligently left
lying around or he had free access to the bag of his mother where the other key was.
The diligence of a good father of a family required by law in a parent and child relationship consists, to a large
extent, of the instruction and supervision of the child. Petitioners were gravely remiss in their duties as parents in
not diligently supervising the activities of their son, despite his minority and immaturity, so much so that it was
only at the time of Wendells death that they allegedly discovered that he was a CANU agent and that Cresencios
gun was missing from the safety deposit box. Both parents were sadly wanting in their duty and responsibility in
monitoring and knowing the activities of their children who, for all they know, may be engaged in dangerous
work such as being drug informers, 17 or even drug users. Neither was a plausible explanation given for the
photograph of Wendell, with a handwritten dedication to Julie Ann at the back thereof, 18 holding upright what
clearly appears as a revolver and on how or why he was in possession of that firearm.
In setting aside the judgment of the court a quo and holding petitioners civilly liable, as explained at the start of
this opinion, respondent court waved aside the protestations of diligence on the part of petitioners and had this to
say:jgc:chanrobles.com.ph
". . . It is still the duty of parents to know the activity of their children who may be engaged in this dangerous
activity involving the menace of drugs. Had the defendants-appellees been diligent in supervising the activities of
their son, Wendell, and in keeping said gun from his reach, they could have prevented Wendell from killing Julie
Ann Gotiong. Therefore, appellants are liable under Article 2180 of the Civil Code which provides:chanrob1es
virtual
1aw
library
The father, and in case of his death or incapacity, the mother, are responsible for the damages caused by their
minor
children
who
live
in
their
company.
"Having been grossly negligent in preventing Wendell Libi from having access to said gun which was allegedly
kept in a safety deposit box, defendants-appellees are subsidiarily liable for the natural consequence of the
criminal act of said minor who was living in their company. This vicarious liability of herein defendantsappellees has been reiterated by the Supreme Court in many cases, prominent of which is the case of Fuellas v.
Cadano, et. al. (L-14409, Oct. 31, 1961, 3 SCRA 361-367), which held that:chanrob1es virtual 1aw library
The subsidiary liability of parents for damages caused by their minor children imposed by Article 2180 of the
New Civil Code covers obligations arising from both quasi-delicts and criminal offenses.
The subsidiary liability of parents arising from the criminal acts of their minor children who acted with
discernment is determined under the provisions of Article 2180, N.C.C. and under Article 101 of the Revised
Penal Code, because to hold that the former only covers obligations which arise from quasi-delicts and not
obligations which arise from criminal offenses, would result in the absurdity that while for an act where mere
negligence intervenes the father or mother may stand subsidiarily liable for the damages caused by his or her son,
no liability would attach if the damage is caused with criminal intent. (3 SCRA 361-362).
". . . In the instant case, minor son of herein defendants-appellees, Wendell Libi somehow got hold of the key to
the drawer where said gun was kept under lock without defendant-spouses ever knowing that said gun had been
missing from that safety box since 1978 when Wendell Libi had) a picture taken wherein he proudly displayed
said gun and dedicated this picture to his sweetheart, Julie Ann Gotiong; also since then, Wendell Libi was said to
have kept said gun in his car, in keeping up with his supposed role of a CANU agent . . ." chanrobles lawlibrary :
rednad
x

"Based on the foregoing discussions of the assigned errors, this Court holds that the lower court was not correct
in dismissing herein plaintiffs-appellants complaint because as preponderantly shown by evidence, defendantsappellees utterly failed to exercise all the diligence of a good father of the family in preventing their minor son
from committing this crime by means of the gun of defendants-appellees which was freely accessible to Wendell
Libi for they have not regularly checked whether said gun was still under lock, but learned that it was missing
from the safety deposit box only after the crime had been committed." (Emphases ours.) 19
We agree with the conclusion of respondent court that petitioners should be held liable for the civil liability based
on what appears from all indications was a crime committed by their minor son. We take this opportunity,
however, to digress and discuss its ratiocination therefor on jurisprudential dicta which we feel require
clarification.
In imposing sanctions for the so-called vicarious liability of petitioners, respondent court cites Fuellas v. Cadano,
Et. Al. 20 which supposedly holds that" (t)he subsidiary liability of parents for damages caused by their minor
children imposed by Article 2180 of the New Civil Code covers obligations arising from both quasi-delicts and
criminal offenses," followed by an extended quotation ostensibly from the same case explaining why under
Article 2180 of the Civil Code and Article 101 of the Revised Penal Code parents should assume subsidiary
liability for damages caused by their minor children. The quoted passages are set out two paragraphs back, with
pertinent underscoring for purposes of the discussion hereunder.chanrobles law library
Now, we do not have any objection to the doctrinal rule holding, the parents liable, but the categorization of their
liability as being subsidiary, and not primary, in nature requires a hard second look considering previous
decisions of this court on the matter which warrant comparative analyses. Our concern stems from our readings
that if the liability of the parents for crimes or quasi-delicts of their minor children is subsidiary, then the parents
can neither invoke nor be absolved of civil liability on the defense that they acted with the diligence of a good
father of a family to prevent damages. On the other hand, if such liability imputed to the parents is considered
direct and primary, that diligence would constitute a valid and substantial defense.
We believe that the civil liability of parents for quasi-delicts of their minor children, as contemplated in Article
2180 of the Civil Code, is primary and not subsidiary. In fact, if we apply Article 2194 of said code which
provides for solidary liability of joint tortfeasors, the persons responsible for the act or omission, in this case the
minor and the father and, in case of his death of incapacity, the mother, are solidarily liable. Accordingly, such
parental liability is primary and not subsidiary, hence the last paragraph of Article 2180 provides that" (t)he
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 damages."cralaw virtua1aw library
We are also persuaded that the liability of the parents for felonies committed by their minor children is likewise
primary, not subsidiary. Article 101 of the Revised Penal Code provides:jgc:chanrobles.com.ph
"ARTICLE 101. Rules regarding civil liability in certain cases.
x

First. In cases of subdivisions . . . 2, and 3 of Article 12, the civil liability for acts committed by . . . a person
under nine years of age, or by one over nine but under fifteen years of age, who has acted without discernment,
shall devolve upon those having such person under their legal authority or control, unless it appears that there
was
no
fault
or
negligence
on
their
part."
(Emphasis
supplied.)
21
Accordingly, just like the rule in Article 2180 of the Civil Code, under the foregoing provision the civil liability
of the parents for crimes committed by their minor children is likewise direct and primary, and also subject to the
defense of lack of fault or negligence on their part, that is, the exercise of the diligence of a good father of a
family.
That in both quasi-delicts and crimes the parents primarily respond for such damages is buttressed by the
corresponding provisions in both codes that the minor transgressor shall be answerable or shall respond with his
own property only in the absence or in case of insolvency of the former. Thus, for civil liability ex quasi delicto

of minors, Article 2182 of the Civil Code states that" (i)f the minor causing damage has no parents or guardian,
the minor . . . shall be answerable with his own property in an action against him where a guardian ad litem shall
be appointed." For civil liability ex delicto of minors, an equivalent provision is found in the third paragraph of
Article
101
of
the
Revised
Penal
Code,
to
wit:jgc:chanrobles.com.ph
"Should there be no person having such . . . minor under his authority, legal guardianship or control, or if such
person be insolvent, said . . . minor shall respond with (his) own property, excepting property exempt from
execution,
in
accordance
with
civil
law."cralaw
virtua1aw
library
The civil liability of parents for felonies committed by their minor children contemplated in the aforesaid rule in
Article 101 of the Revised Penal Code in relation to Article 2180 of the Civil Code has, aside from the aforecited
case of Fuellas, been the subject of a number of cases adjudicated by this Court, viz.: Exconde v. Capuno, Et Al.,
22 Araneta v. Arreglado, 23 Salen, Et. Al. v. Balce, 24 Paleyan, etc., Et. Al. v. Bangkili, Et Al., 25 and Elcano, et
al, v. Hill, Et. Al. 26 Parenthetically, the aforesaid cases were basically on the issue of the civil liability of parents
for crimes committed by their minor children over 9 but under 15 years of age, who acted with discernment, and
also of minors 15 years of aye or over, since these situations are not covered by Article 101, Revised Penal Code.
In both instances, this Court held that the issue of parental civil liability should be resolved in accordance with
the provisions of Article 2180 of the Civil Code for the reasons well expressed in Salen and adopted in the cases
hereinbefore enumerated that to hold that the civil liability under Article 2180 would apply only to quasi-delicts
and not to criminal offenses would result in the absurdity that in an act involving mere negligence the parents
would be liable but not where the damage is caused with criminal intent. In said cases, however, there are
unfortunate variances resulting in a regrettable inconsistency in the Courts determination of whether the liability
of the parents, in cases involving either crimes or quasi-delicts of their minor children, is primary or subsidiary.
In Exconde, where the 15-year old minor was convicted of double homicide through reckless imprudence, in a
separate civil action arising from the crime the minor and his father were held jointly and severally liable for
failure of the latter to prove the diligence of a good father of a family. The same liability in solidum and,
therefore, primary liability was imposed in a separate civil action in Araneta on the parents and their 14-year old
son who was found guilty of frustrated homicide, but on the authority of Article 2194 of the Civil Code providing
for solidary responsibility of two or more persons who are liable for a quasi-delict.
However, in Salen, the father was declared subsidiarily liable for damages arising from the conviction of his son,
who was over 15 but less than 18 years of age, by applying Article 2180 but, this time, disregarding Article 2194
of the Civil Code. In the present case, as already explained, the petitioners herein were also held liable but
supposedly in line with Fuellas which purportedly declared the parents subsidiarily liable for the civil liability for
serious physical injuries committed by their 13-year old son. On the other hand, in Paleyan, the mother and her
19-year old son were adjudged solidarily liable for damages arising from his conviction for homicide by the
application of Article 2180 of the Civil Code since this is likewise not covered by Article 101 of the Revised
Penal Code. Finally, in Elcano, although the son was acquitted in a homicide charge due to "lack of intent,
coupled with mistake," it was ruled that while under Article 2180 of the Civil Code there should be solidary
liability for damages, since the son, "although married, was living with his father and getting subsistence from
him at the time of the occurrence," but "is now of age, as a matter of equity" the father was only held subsidiarily
liable.
It bears stressing, however, that the Revised Penal Code provides for subsidiary liability only for persons causing
damages under the compulsion of irresistible force or under the impulse of an uncontrollable fear; 27 innkeepers,
tavernkeepers and proprietors of establishments; 28 employers, teachers, persons and corporations engaged in
industry; 29 and principals, accomplices and accessories for the unpaid civil liability of their co-accused in the
other
classes.
30
Also, coming back to respondent courts reliance on Fuellas in its decision in the present case, it is not exactly
accurate to say that Fuellas provided for subsidiary liability of the parents therein. A careful scrutiny shows that
what respondent court quoted verbatim in its decision now on appeal in the present case, and which it attributed
to Fuellas, was the syllabus on the law report of said case which spoke of "subsidiary" liability. However, such
categorization does not specifically appear in the text of the decision in Fuellas. In fact, after reviewing therein
the cases of Exconde, Araneta and Salen and the discussions in said cases of Article 101 of the Revised Penal
Code in relation to Article 2180 of the Civil Code, this Court concluded its decision in this
wise:jgc:chanrobles.com.ph

"Moreover, the case at bar was decided by the Court of Appeals on the basis of evidence submitted therein by
both parties, independent of the criminal case. And responsibility for fault or negligence under Article 2176 upon
which the present action was instituted, is entirely separate and distinct from the civil liability arising from fault
or negligence under the Penal Code (Art. 2177), and having in mind the reasons behind the law as heretofore
stated, any discussion as to the minors criminal responsibility is of no moment."cralaw virtua1aw library
Under the foregoing considerations, therefore, we hereby rule that the parents are and should be held primarily
liable for the civil liability arising from criminal offenses committed by their minor children under their legal
authority or control, or who live in their company, unless it is proven that the former acted with the diligence of a
good father of a family to prevent such damages. That primary liability is premised on the provisions of Article
101 of the Revised Penal Code with respect to damages ex delicto caused by their children 9 years of age or
under, or over 9 but under 15 years of age who acted without discernment; and, with regard to their children over
9 but under 15 years of age who acted with discernment, or 15 years or over but under 21 years of age, such
primary liability shall be imposed pursuant to Article 2180 of the Civil Code. 31
Under said Article 2180, the enforcement of such liability shall be effected against the father and, in case of his
death or incapacity, the mother. This was amplified by the Child and Youth Welfare Code which provides that the
same shall devolve upon the father and, in case of his death or incapacity, upon the mother or, in case of her death
or incapacity, upon the guardian, but the liability may also be voluntarily assumed by a relative or family friend
of the youthful offender. 32 However, under the Family Code, this civil liability is now, without such alternative
qualification, the responsibility of the parents and those who exercise parental authority over the minor offender.
33 For civil liability arising from quasi-delicts committed by minors, the same rules shall apply in accordance
with
Articles
2180
and
2182
of
the
Civil
Code,
as
so
modified.
In the case at bar, whether the death of the hapless Julie Ann Gotiong was caused by a felony or a quasi-delict
committed by Wendell Libi, respondent court did not err in holding petitioners liable for damages arising
therefrom. Subject to the preceding modifications of the premises relied upon by it therefor and on the bases of
the legal imperatives herein explained, we conjoin in its findings that said petitioners failed to duly exercise the
requisite
diligentissimi
patris
familias
to
prevent
such
damages.
ACCORDINGLY, the instant Petition is DENIED and the assailed judgment of respondent Court of Appeals is
hereby
AFFIRMED,
with
costs
against
petitioners.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 85044 June 3, 1992


MACARIO TAMARGO, CELSO TAMARGO and AURELIA TAMARGO, petitioners,
vs.
HON. COURT OF APPEALS, THE HON. ARISTON L. RUBIO, RTC Judge, Branch 20, Vigan, Ilocos
Sur; VICTOR BUNDOC; and CLARA BUNDOC, respondents.

FELICIANO, J.:
On 20 October 1982, Adelberto Bundoc, then a minor of 10 years of age, shot Jennifer Tamargo with an air rifle
causing injuries which resulted in her death. Accordingly, a civil complaint for damages was filed with the
Regional Trial Court, Branch 20, Vigan, Ilocos Sur, docketed as Civil Case No. 3457-V, by petitioner Macario
Tamargo, Jennifer's adopting parent, and petitioner spouses Celso and Aurelia Tamargo, Jennifer's natural parents
against respondent spouses Victor and Clara Bundoc, Adelberto's natural parents with whom he was living at the

time of the tragic incident. In addition to this case for damages, a criminal information or Homicide through
Reckless Imprudence was filed [Criminal Case No. 1722-V] against Adelberto Bundoc. Adelberto, however, was
acquitted and exempted from criminal liability on the ground that he bad acted without discernment.
Prior to the incident, or on 10 December 1981, the spouses Sabas and Felisa Rapisura had filed a petition to adopt
the minor Adelberto Bundoc in Special Proceedings No. 0373-T before the then Court of First Instance of Ilocos
Sur. This petition for adoption was grunted on, 18 November 1982, that is, after Adelberto had shot and killed
Jennifer.
In their Answer, respondent spouses Bundoc, Adelberto's natural parents, reciting the result of the foregoing
petition for adoption, claimed that not they, but rather the adopting parents, namely the spouses Sabas and Felisa
Rapisura, were indispensable parties to the action since parental authority had shifted to the adopting parents
from the moment the successful petition for adoption was filed.
Petitioners in their Reply contended that since Adelberto Bundoc was then actually living with his natural
parents, parental authority had not ceased nor been relinquished by the mere filing and granting of a petition for
adoption.
The trial court on 3 December 1987 dismissed petitioners' complaint, ruling that respondent natural parents of
Adelberto indeed were not indispensable parties to the action.
Petitioners received a copy of the trial court's Decision on 7 December 1987. Within the 15-day reglementary
period, or on 14 December 1987, petitioners filed a motion for reconsideration followed by a supplemental
motion for reconsideration on 15 January 1988. It appearing, however, that the motions failed to comply with
Sections 4 and 5 of Rule 15 of the Revised Rules of Court that notice of the motion shall be given to all parties
concerned at least three (3) days before the hearing of said motion; and that said notice shall state the time and
place of hearing both motions were denied by the trial court in an Order dated 18 April 1988. On 28 April
1988, petitioners filed a notice of appeal. In its Order dated 6 June 1988, the trial court dismissed the notice at
appeal, this time ruling that the notice had been filed beyond the 15-day reglementary period ending 22
December 1987.
Petitioners went to the Court of Appeals on a petition for mandamus and certiorari questioning the trial court's
Decision dated 3 December 1987 and the Orders dated 18 April 1988 and 6 June 1988, The Court of Appeals
dismissed the petition, ruling that petitioners had lost their right to appeal.
In the present Petition for Review, petitioners once again contend that respondent spouses Bundoc are the
indispensable parties to the action for damages caused by the acts of their minor child, Adelberto Bundoc.
Resolution of this Petition hinges on the following issues: (1) whether or not petitioners, notwithstanding loss of
their right to appeal, may still file the instant Petition; conversely, whether the Court may still take cognizance of
the case even through petitioners' appeal had been filed out of time; and (2) whether or not the effects of
adoption, insofar as parental authority is concerned may be given retroactive effect so as to make the adopting
parents the indispensable parties in a damage case filed against their adopted child, for acts committed by the
latter, when actual custody was yet lodged with the biological parents.
1. It will be recalled that, petitioners' motion (and supplemental motion) for reconsideration filed before the trial
court, not having complied with the requirements of Section 13, Rule 41, and Section 4, Rule 15, of the Revised
Rules of Court, were considered pro forma and hence did not interrupt and suspend the reglementary period to
appeal: the trial court held that the motions, not having contained a notice of time and place of hearing, had
become useless pieces of paper which did not interrupt the reglementary period. 1 As in fact repeatedly held by
this Court, what is mandatory is the service of the motion on the opposing counsel indicating the time and place
of hearing. 2
In view, however, of the nature of the issue raised in the instant. Petition, and in order that substantial justice may
be served, the Court, invoking its right to suspend the application of technical rules to prevent manifest injustice,
elects to treat the notice of appeal as having been seasonably filed before the trial court, and the motion (and

supplemental motion) for reconsideration filed by petitioner in the trial court as having interrupted the
reglementary period for appeal. As the Court held in Gregorio v. Court of Appeals: 3
Dismissal of appeal; purely on technical grounds is frowned upon where the policy of the courts is
to encourage hearings of appeal on their merits. The rules of procedure ought not be applied in a
very rigid technical sense, rules of procedure are used only to help secure not override, substantial
justice. if d technical and rigid enforcement of the rules is made their aim would be defeated. 4
2. It is not disputed that Adelberto Bundoc's voluntary act of shooting Jennifer Tamargo with an air rifle gave rise
to a cause of action on quasi-delict against him. As Article 2176 of the Civil Code 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 contractual
relation between the parties, is called a quasi-delict . . .
Upon the other hand, the law imposes civil liability upon the father and, in case of his death or incapacity, the
mother, for any damages that may be caused by a minor child who lives with them. Article 2180 of the Civil
Code reads:
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.
The father and, in case of his death or incapacity, the mother, are responsible for the damages
caused by the minor children who live in their company.
xxx xxx xxx
The responsibility treated of in this Article shall cease when the person herein mentioned prove
that they observed all the diligence of a good father of a family to prevent damage. (Emphasis
supplied)
This principle of parental liability is a species of what is frequently designated as vicarious liability, or the
doctrine of "imputed negligence" under Anglo-American tort law, where a person is not only liable for torts
committed by himself, but also for torts committed by others with whom he has a certain relationship and for
whom he is responsible. Thus, parental liability is made a natural or logical consequence of the duties and
responsibilities of parents their parental authority which includes the instructing, controlling and
disciplining of the child. 5 The basis for the doctrine of vicarious liability was explained by the Court in Cangco
v. Manila Railroad Co. 6 in the following terms:
With respect to extra-contractual obligation arising from negligence, whether of act or omission, it
is competent for the legislature to elect and our Legislature has so elected to limit such
liability to cases in which the person upon whom such an obligation is imposed is morally culpable
or, on the contrary, for reasons of public policy. to extend that liability, without regard to the lack
of moral culpability, so as to include responsibility for the negligence of those persons whose acts
or omissions are imputable, by a legal fiction, to others who are in a position to exercise an
absolute or limited control over them. The legislature which adopted our Civil Code has elected
to limit extra-contractual liability with certain well-defined exceptions to cases in which
moral culpability can be directly imputed to the persons to be charged. This moral responsibility
may consist in having failed to exercise due care in one's own acts, or in having failed to exercise
due care in the selection and control of one's agent or servants, or in the control of persons who, by
reasons of their status, occupy a position of dependency with respect to the person made liable for
their conduct. 7(Emphasis Supplied)
The civil liability imposed upon parents for the torts of their minor children living with them, may be seen
to be based upon the parental authority vested by the Civil Code upon such parents. The civil law assumes
that when an unemancipated child living with its parents commits a tortious acts, the parents were

negligent in the performance of their legal and natural duty closely to supervise the child who is in their
custody and control. Parental liability is, in other words, anchored upon parental authority coupled with
presumed parental dereliction in the discharge of the duties accompanying such authority. The parental
dereliction is, of course, only presumed and the presumption can be overtuned under Article 2180 of the
Civil Code by proof that the parents had exercised all the diligence of a good father of a family to prevent
the damage.
In the instant case, the shooting of Jennifer by Adelberto with an air rifle occured when parental authority was
still lodged in respondent Bundoc spouses, the natural parents of the minor Adelberto. It would thus follow that
the natural parents who had then actual custody of the minor Adelberto, are the indispensable parties to the suit
for damages.
The natural parents of Adelberto, however, stoutly maintain that because a decree of adoption was issued by the
adoption court in favor of the Rapisura spouses, parental authority was vested in the latter as adopting parents as
of the time of the filing of the petition for adoption that is, before Adelberto had shot Jennifer which an air rifle.
The Bundoc spouses contend that they were therefore free of any parental responsibility for Adelberto's allegedly
tortious conduct.
Respondent Bundoc spouses rely on Article 36 of the Child and Youth Welfare Code 8 which reads as follows:
Art. 36. Decree of Adoption. If, after considering the report of the Department of Social Welfare
or duly licensed child placement agency and the evidence submitted before it, the court is satisfied
that the petitioner is qualified to maintain, care for, and educate the child, that the trial custody
period has been completed, and that the best interests of the child will be promoted by the
adoption, a decree of adoption shall be entered, which shall be effective he date the original
petition was filed. The decree shall state the name by which the child is thenceforth to be known.
(Emphasis supplied)
The Bundoc spouses further argue that the above Article 36 should be read in relation to Article 39 of the
same Code:
Art. 39. Effect of Adoption. The adoption shall:
xxx xxx xxx
(2) Dissolve the authority vested in the natural parents, except where the adopter is the spouse of
the surviving natural parent;
xxx xxx xxx
(Emphasis supplied)
and urge that their Parental authority must be deemed to have been dissolved as of the time the Petition for
adoption was filed.
The Court is not persuaded. As earlier noted, under the Civil Code, the basis of parental liability for the torts of a
minor child is the relationship existing between the parents and the minor child living with them and over whom,
the law presumes, the parents exercise supervision and control. Article 58 of the Child and Youth Welfare Code,
re-enacted this rule:
Article 58 Torts Parents and guardians are responsible for the damage caused by the child under
their parental authority in accordance with the civil Code. (Emphasis supplied)
Article 221 of the Family Code of the Philippines 9 has similarly insisted upon the requisite that the child, doer of
the tortious act, shall have beer in the actual custody of the parents sought to be held liable for the ensuing
damage:

Art. 221. Parents and other persons exercising parental authority shall be civilly liable for the
injuries and damages caused by the acts or omissions of their unemancipated children living in
their company and under their parental authority subject to the appropriate defenses provided by
law. (Emphasis supplied)
We do not believe that parental authority is properly regarded as having been retroactively transferred to and
vested in the adopting parents, the Rapisura spouses, at the time the air rifle shooting happened. We do not
consider that retroactive effect may be giver to the decree of adoption so as to impose a liability upon the
adopting parents accruing at a time when adopting parents had no actual or physically custody over the adopted
child. Retroactive affect may perhaps be given to the granting of the petition for adoption where such is essential
to permit the accrual of some benefit or advantage in favor of the adopted child. In the instant case, however, to
hold that parental authority had been retroactively lodged in the Rapisura spouses so as to burden them with
liability for a tortious act that they could not have foreseen and which they could not have prevented (since they
were at the time in the United States and had no physical custody over the child Adelberto) would be unfair and
unconscionable. Such a result, moreover, would be inconsistent with the philosophical and policy basis
underlying the doctrine of vicarious liability. Put a little differently, no presumption of parental dereliction on the
part of the adopting parents, the Rapisura spouses, could have arisen since Adelberto was not in fact subject to
their control at the time the tort was committed.
Article 35 of the Child and Youth Welfare Code fortifies the conclusion reached above. Article 35 provides as
follows:
Art. 35. Trial Custody. No petition for adoption shall be finally granted unless and until the
adopting parents are given by the courts a supervised trial custody period of at least six months to
assess their adjustment and emotional readiness for the legal union. During the period of trial
custody, parental authority shall be vested in the adopting parents. (Emphasis supplied)
Under the above Article 35, parental authority is provisionally vested in the adopting parents during the period of
trial custody, i.e., before the issuance of a decree of adoption, precisely because the adopting parents are given
actual custody of the child during such trial period. In the instant case, the trial custody period either had not yet
begun or bad already been completed at the time of the air rifle shooting; in any case, actual custody of Adelberto
was then with his natural parents, not the adopting parents.
Accordingly, we conclude that respondent Bundoc spouses, Adelberto's natural parents, were indispensable
parties to the suit for damages brought by petitioners, and that the dismissal by the trial court of petitioners'
complaint, the indispensable parties being already before the court, constituted grave abuse of discretion
amounting to lack or excess of jurisdiction.
WHEREFORE, premises considered, the Petition for Review is hereby GRANTED DUE COURSE and the
Decision of the Court of Appeals dated 6 September 1988, in C.A.-G.R. No. SP-15016 is hereby REVERSED
and SET ASIDE. Petitioners' complaint filed before the trial court is hereby REINSTATED and this case is
REMANDED to that court for further proceedings consistent with this Decision. Costs against respondent
Bundoc spouses. This Decision is immediately executory.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. L-29025 October 4, 1971

Spouses MOISES P. PALISOC and BRIGIDA P. PALISOC, plaintiffs-appellants,


vs.
ANTONIO C. BRILLANTES and TEODOSIO V. VALENTON, owner and President, respectively, of a
school of arts and trades, known under the name and style of "Manila Technical Institute" (M.I.T.),
VIRGILIO L. DAFFON and SANTIAGO M. QUIBULUE, defendants-appellees.
Leovillo C. Agustin for plaintiffs-appellants. .
Honorato S. Reyes for appellee Brillantes, et al. .
Villareal, Almacen Navarra & Amores for appellee Daffon. .

TEEHANKEE, J.:
An appeal in forma pauperis on pure questions of law from a decision of the Court of First Instance of Manila. .
Plaintiffs-appellants as parents of their sixteen-year old son, Dominador Palisoc, and a student in automotive
mechanics at the Manila Technical Institute, Quezon Boulevard, Manila, had filed on May 19, 1966, the action
below for damages arising from the death on March 10, 1966 of their son at the hands of a fellow student,
defendant Virgilio L. Daffon, at the laboratory room of the said Institute. .
Defendants, per the trial court's decision, are: "(T)he defendant Antonio C. Brillantes, at the time when the
incident which gave rise to his action occurred was a member of the Board of Directors of the institute; 1 the
defendant Teodosio Valenton, the president thereof; the defendant Santiago M. Quibulue, instructor of the class to
which the deceased belonged; and the defendant Virgilio L. Daffon, a fellow student of the deceased. At the
beginning the Manila Technical Institute was a single proprietorship, but lately on August 2, 1962, it was duly
incorporated."
The facts that led to the tragic death of plaintiffs' son were thus narrated by the trial court: "(T)he deceased
Dominador Palisoc and the defendant Virgilio L. Daffon were classmates, and on the afternoon of March 10,
1966, between two and three o'clock, they, together with another classmate Desiderio Cruz were in the laboratory
room located on the ground floor. At that time the classes were in recess. Desiderio Cruz and Virgilio L. Daffon
were working on a machine while Dominador Palisoc was merely looking on at them. Daffon made a remark to
the effect that Palisoc was acting like a foreman. Because of this remark Palisoc slapped slightly Daffon on the
face. Daffon, in retaliation, gave Palisoc a strong flat blow on the face, which was followed by other fist blows on
the stomach. Palisoc retreated apparently to avoid the fist blows, but Daffon followed him and both exchanged
blows until Palisoc stumbled on an engine block which caused him to fall face downward. Palisoc became pale
and fainted. First aid was administered to him but he was not revived, so he was immediately taken to a hospital.
He never regained consciousness; finally he died. The foregoing is the substance of the testimony of Desiderio
Cruz, the lone witness to the incident."
The trial court expressly gave credence to this version of the incident, as testified to by the lone eyewitness,
Desiderio Cruz, a classmate of the protagonists, as that of a disinterested witness who "has no motive or reason to
testify one way or another in favor of any party" and rejected the self-exculpatory version of defendant Daffon
denying that he had inflicted any fist blows on the deceased. .
With the postmortem findings of Dr. Angelo Singian of the Manila Police Department who performed the
autopsy re "Cause of death: shock due to traumatic fracture of theribs (6th and 7th, left, contusion of the pancreas
and stomach with intra-gastric hemorrhage and slight subarachnoid hemorrhage on the brain," and his testimony
that these internal injuries of the deceased were caused "probably by strong fist blows," the trial court found
defendant Daffon liable for the quasi delict under Article 2176 of the Civil Code. 3 It held that "(T)he act,
therefore, of the accused Daffon in giving the deceased strong fistblows in the stomach which ruptured his
internal organs and caused his death falls within the purview of this article of the Code." 4

The trial court, however, absolved from liability the three other defendants-officials of the Manila Technical
Institute, in this wise:
... Their liabilities are based on the provisions of Article 2180 of the New Civil Code which reads:
Art. 2180. ... .
Lastly, teachers or heads of establishments of arts and trades shall be liable for
damages caused by their pupils and students and apprentices, so long as they remain
in their custody.
In the opinion of the Court, this article of the Code is not applicable to the case at bar, since this
contemplates the situation where the control or influence of the teachers and heads of school
establishments over the conduct and actions by the pupil supersedes those of the parents.
CIVIL LAW: DAMAGES ART 2180. NEW CIVIL CODE CONSTRUED: The
clause "so long as they remain in their custody" contained in Article 2180 of the
new civil code contemplated a situation where the pupil lives and boards with the
teacher, such that the control or influence on the pupil supersedes those of the
parents. In those circumstances the control or influence over the conduct and
actions of the pupil as well as the responsibilities for their sort would pass from the
father and mother to the teachers. (Ciriaco L. Mercado, Petitioner vs. the Court of
Appeals, Manuel Quisumbing, Jr., et al., respondents, G.R. No. L-14862, May 30,
1960). 5
There is no evidence that the accused Daffon lived and boarded with his teacher or the other
defendant officials of the school. These defendants cannot therefore be made responsible for the
tort of the defendant Daffon.
Judgment was therefore rendered by the trial court as follows:
1. Sentencing the defendant Virgilio L. Daffon to pay the plaintiffs as heirs of the deceased
Dominador Palisoc (a) P6,000.00 for the death of Dominador Palisoc; (b) P3,375.00 for actual and
compensatory expenses; (c) P5,000.00 for moral damages; (d) P10,000.00 for loss of earning
power, considering that the deceased was only between sixteen and seventeen years, and in good
health when he died, and (e) P2,000.00 for attorney's fee, plus the costs of this action. .
2. Absolving the other defendants. .
3. Dismissing the defendants' counterclaim for lack of merit.
Plaintiffs' appeal raises the principal legal question that under the factual findings of the trial court, which are
now beyond review, the trial court erred in absolving the defendants-school officials instead of holding them
jointly and severally liable as tortfeasors, with defendant Daffon, for the damages awarded them as a result of
their son's death. The Court finds the appeal, in the main, to be meritorious. .
1. The lower court absolved defendants-school officials on the ground that the provisions of Article 2180, Civil
Code, which expressly hold "teachers or heads of establishments of arts and trades ... liable for damages caused
by their pupils and students and apprentices, so long as they remain in their custody," are not applicable to to the
case at bar, since "there is no evidence that the accused Daffon [who inflicted the fatal fistblows] 6 lived and
boarded with his teacher or the other defendants-officials of the school. These defendants cannot therefore be
made responsible for the tort of the defendant Daffon."
The lower court based its legal conclusion expressly on the Court's dictum in Mercado vs. Court of
Appeals, 7 that "(I)t would seem that the clause "so long as they remain in their custody," contemplates a
situation where the pupil lives and boards with the teacher, such that the control, direction and influence on the
pupil supersedes those of the parents. In these circumstances the control or influence over the conduct and actions

of the pupil would pass from the father and mother to the teacher; and so would the responsibility for the torts of
the pupil. Such a situation does not appear in the case at bar; the pupils appear to go to school during school
hours and go back to their homes with their parents after school is over." This dictum had been made in rejecting
therein petitioner father's contention that his minor son's school, Lourdes Catholic School at Kanlaon, Quezon
City [which was not a party to the case] should be held responsible, rather than him as father, for the moral
damages of P2,000.00 adjudged against him for the physical injury inflicted by his son on a classmate. [A cut on
the right cheek with a piece of razor which costs only P50.00 by way of medical expenses to treat and cure, since
the wound left no scar.] The moral damages award was after all set aside by the Court on the ground that none of
the specific cases provided in Article 2219, Civil Code, for awarding moral damages had been established,
petitioner's son being only nine years old and not having been shown to have "acted with discernment" in
inflicting the injuries on his classmate. .
The dictum in Mercado was based in turn on another dictum in the earlier case of Exconde vs. Capuno, 8 where
the only issue involved as expressly stated in the decision, was whether the therein defendant-father could be
civilly liable for damages resulting from a death caused in a motor vehicle accident driven unauthorizedly and
negligently by his minor son, (which issue was resolved adversely against the father). Nevertheless, the dictum in
such earlier case that "It is true that under the law abovequoted, teachers or directors of arts and trades are liable
for any damage caused by their pupils or apprentices while they are under their custody, but this provision only
applies to an institution of arts and trades and not to any academic educational institution" was expressly cited
and quoted in Mercado. .
2. The case at bar was instituted directly against the school officials and squarely raises the issue of liability of
teachers and heads of schools under Article 2180, Civil Code, for damages caused by their pupils and students
against fellow students on the school premises. Here, the parents of the student at fault, defendant Daffon, are not
involved, since Daffon was already of age at the time of the tragic incident. There is no question, either, that the
school involved is a non-academic school, 9 the Manila Technical Institute being admittedly a technical
vocational and industrial school. .
The Court holds that under the cited codal article, defendants head and teacher of the Manila Technical Institute
(defendants Valenton and Quibulue, respectively) are liable jointly and severally for damages to plaintiffsappellants for the death of the latter's minor son at the hands of defendant Daffon at the school's laboratory room.
No liability attaches to defendant Brillantes as a mere member of the school's board of directors. The school itself
cannot be held similarly liable, since it has not been properly impleaded as party defendant. While plaintiffs
sought to so implead it, by impleading improperly defendant Brillantes, its former single proprietor, the lower
court found that it had been incorporated since August 2, 1962, and therefore the school itself, as thus
incorporated, should have been brought in as party defendant. Plaintiffs failed to do so, notwithstanding that
Brillantes and his co-defendants in their reply to plaintiffs' request for admission had expressly manifested and
made of record that "defendant Antonio C. Brillantes is not the registered owner/head of the "Manila Technical
Institute" which is now a corporation and is not owned by any individual person." 10
3. The rationale of such liability of school heads and teachers for the tortious acts of their pupils and students, so
long as they remain in their custody, is that they stand, to a certain extent, as to their pupils and students, in loco
parentis and are called upon to "exercise reasonable supervision over the conduct of the child." 11 This is
expressly provided for in Articles 349, 350 and 352 of the Civil Code. 12 In the law of torts, the governing
principle is that the protective custody of the school heads and teachers is mandatorily substituted for that of the
parents, and hence, it becomes their obligation as well as that of the school itself to provide proper supervision of
the students' activities during the whole time that they are at attendance in the school, including recess time, as
well as to take the necessary precautions to protect the students in their custody from dangers and hazards that
would reasonably be anticipated, including injuries that some student themselves may inflict willfully or through
negligence on their fellow students. .

4. As tersely summarized by Mr. Justice J.B.L. Reyes in his dissenting opinion in Exconde, "the basis of the
presumption of negligence of Art. 1903 [now 2180] is some culpa in vigilando that the parents, teachers, etc. are
supposed to have incurred in the exercise of their authority" 13 and "where the parent places the child under the
effective authority of the teacher, the latter, and not the parent, should be the one answerable for the torts
committed while under his custody, for the very reason that the parent is not supposed to interfere with the
discipline of the school nor with the authority and supervision of the teacher while the child is under instruction."
The school itself, likewise, has to respond for the fault or negligence of its school head and teachers under the
same cited article. 14
5. The lower court therefore erred in law in absolving defendants-school officials on the ground that they could
be held liable under Article 2180, Civil Code, only if the student who inflicted the fatal fistblows on his classmate
and victim "lived and boarded with his teacher or the other defendants officials of the school." As stated above,
the phrase used in the cited article "so long as (the students) remain in their custody" means the protective and
supervisory custody that the school and its heads and teachers exercise over the pupils and students for as long as
they are at attendance in the school, including recess time. There is nothing in the law that requires that for such
liability to attach the pupil or student who commits the tortious act must live and board in the school, as
erroneously held by the lower court, and the dicta in Mercado (as well as in Exconde) on which it relied, must
now be deemed to have been set aside by the present decision. .
6. Defendants Valenton and Quibulue as president and teacher-in-charge of the school must therefore be held
jointly and severally liable for the quasi-delict of their co-defendant Daffon in the latter's having caused the death
of his classmate, the deceased Dominador Palisoc. The unfortunate death resulting from the fight between the
protagonists-students could have been avoided, had said defendants but complied with their duty of providing
adequate supervision over the activities of the students in the school premises to protect their students from harm,
whether at the hands of fellow students or other parties. At any rate, the law holds them liable unless they relieve
themselves of such liability, in compliance with the last paragraph of Article 2180, Civil Code, by "(proving) that
they observed all the diligence of a good father of a family to prevent damage." In the light of the factual findings
of the lower court's decision, said defendants failed to prove such exemption from liability. .
7. Plaintiffs-appellees' contention that the award of P6,000.00 as indemnity for the death of their son should be
increased to P12,000.00 as set by the Court in People vs. Pantoja, 15 and observed in all death indemnity cases
thereafter is well taken. The Court, in Pantoja, after noting the decline in the purchasing power of the Philippine
peso, had expressed its "considered opinion that the amount of award of compensatory damages for death caused
by a crime or quasi-delict should now be P12,000.00." The Court thereby adjusted the minimum amount of
"compensatory damages for death caused by a crime or quasi-delict" as per Article 2206, Civil Code, from the
old stated minimum of P3,000.00 to P12,000.00, which amount is to be awarded "even though there may have
been mitigating circumstances" pursuant to the express provisions of said codal article. .
8. Plaintiffs-appellees' other claims on appeal that the lower court should have awarded exemplary damages and
imposed legal interest on the total damages awarded, besides increasing the award of attorney's fees all concern
matters that are left by law to the discretion of the trial court and the Court has not been shown any error or abuse
in the exercise of such discretion on the part of the trial court. 16 Decisive here is the touchstone provision of
Article 2231, Civil Code, that "In quasi-delicts, exemplary damages may be granted if the defendant acted
with gross negligence." No gross negligence on the part of defendants was found by the trial court to warrant the
imposition of exemplary damages, as well as of interest and increased attorney's fees, and the Court has not been
shown in this appeal any compelling reason to disturb such finding. .
ACCORDINGLY, the judgment appealed from is modified so as to provide as follows: .
1. Sentencing the defendants Virgilio L. Daffon, TeodosioV. Valenton and Santiago M. Quibulue jointly and
severally to pay plaintiffs as heirs of the deceased Dominador Palisoc (a) P12,000.00 for the death of Dominador
Palisoc; (b) P3,375.00 for actual and compensatory expenses; (c) P5,000.00 for moral, damages; (d) P10,000.00

for loss of earning power and (e) P2,000.00 for attorney's fee, plus the costs of this action in both instances; 2.
absolving defendant Antonio C. Brillantes from the complaint; and 3. dismissing defendants' counterclaims. .
Concepcion, C.J., Villamor and Makasiar, JJ., concur. .
Dizon, J., took no part. .
REYES, J.B.L., J., concurring: .
I concur with the opinion of Mr. Justice Teehankee but would like to clarify that the argument of the dissenting
opinion of the effect that the responsibility of teachers and school officers under Articles 2180 should be limited
to pupils who are minors (below the age of majority) is not in accord with the plain text of the law. Article 2180
of the Civil Code of the Philippines is to the following effect: .
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. .
The father and, in case of his death or incapacity, the mother, are responsible for the damages
caused by the minor children who live in their company. .
Guardians are liable for damages caused by the minors or incapacitated persons who are under
their authority and live in their company. .
The owners and managers of an establishment or enterprise are likewise responsible for damages
caused by their employees in the service of the branches in which the latter are employed or on the
occasion of their functions. .
Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks, even though the former are not engaged in any business or
industry. .
The State is responsible in like manner when it acts through a special agent; but not when the
damage has been caused by the official to whom the task done properly pertains, in which case
what is provided in article 2176 shall be applicable. .
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 observe all the diligence of a good father of a family to prevent damages.
Examination of the article shows that where the responsibility prescribed therein is limited to illegal acts during
minority, the article expressly so provides, as in the case of the parents and of the guardians. It is natural to expect
that if the law had intended to similarly restrict the civil responsibility of the other categories of persons
enumerated in the article, it would have expressly so stated. The fact that it has not done so indicates an intent
that the liability be not restricted to the case of persons under age. Further, it is not without significance that the
teachers and heads of scholarly establishments are not grouped with parents and guardians but ranged with
owners and managers of enterprises, employers and the state, as to whom no reason is discernible to imply that
they should answer only for minors. .
Giorgi, in his well-known "Teoria de las Obligaciones en el Derecho Moderno", Volume 5, page 404, No. 272
(Sp. Ed.), after noting the split among commentators on the point it issue, observes with considerable cogency
that
272. Ante esta variedad de opiniones, ninguna de las cuales se funds en argumentos merecedores
de seria ponderacion, no es facil tomar un partido. Esto no obstante, debiendo manisfestar nuestra
opinion, nos acercamos a la de los que no estiman necesaria la menor edad del discipulo o del
aprendiz; porque si el aforismo ubi voluit dixit, ubi noluit tacuit, no es siempre argumento seguro

para interpreter la ley, es infalible cuanto se refiere a una misma disposicion relative a varios
casos. Y tal es el art. 1.153. Lo que haya establecido important poco si, elevandones a los
principios de razon, puede dudarse de la oportunidad de semajante diferencia; porque la voluntad
cierta del legislador prevalece in iure condito a cualquier otra consideracion. Por otra parte, si bien
se considera, no puede parecer extrano o absurdo el suponer que un discipulo y un aprendiz,
aunque mayores de edad, acepten voluntariamente la entera vigilancia de su preceptor mientras
dura la educacion. Ni parece dudoso desde el momento que los artesanos y los preceptores deben,
al par de los padres, responder civilmente de los daos comitidos por sus discipulos, aun cuando
estos esten faltos de discernimiento.
Similarly, Planiol-Ripert, in their "Droit Civil Pratique," Volume VI, No. 635 (Spanish version), say that
635. Personas de quien responde. Si bien la responsibilidad del maestro es originalmente una
estension de la de los padres (1), el art. 1384 no especifica que los alumnos y aprendices han de ser
menores de edad, por lo que la presuncion de culpa funcionara aun cuando sean mayores (2); pero,
la vigilancia no tendra que ser ejercida en iguales terminos. Aun respecto a los menores variara
segun la edad, extremo que tendra que ternese en ceunta a los fines de apreciar si el maestro ha
podido impedir el acto nocivo o no. .
I submit, finally, that while in the case of parents and guardians, their authority and supervision over the children
and wards end by law upon the latter reaching majority age, the authority and custodial supervision over pupils
exist regardless of the age of the latter. A student over twenty-one, by enrolling and attending a school, places
himself under the custodial supervision and disciplinary authority of the school authorities, which is the basis of
the latter's correlative responsibility for his torts, committed while under such authority. Of course, the teachers'
control is not as plenary as when the student is a minor; but that circumstance can only affect the decree of the
responsibility but cannot negate the existence thereof. It is only a factor to be appreciated in determining whether
or not the defendant has exercised due diligence in endeavoring to prevent the injury, as prescribed in the last
paragraph of Article 2180. .
Barredo, J., concurs.
Republic
SUPREME
Manila

of

the

Philippines
COURT

EN BANC
G.R. No. L-47745 April 15, 1988
JOSE S. AMADORA, LORETA A. AMADORA, JOSE A. AMADORA JR., NORMA A. YLAYA
PANTALEON A. AMADORA, JOSE A. AMADORA III, LUCY A. AMADORA, ROSALINDA A.
AMADORA, PERFECTO A. AMADORA, SERREC A. AMADORA, VICENTE A. AMADORA and
MARIA TISCALINA A. AMADORA,petitioners
vs.
HONORABLE COURT OF APPEALS, COLEGIO DE SAN JOSE-RECOLETOS, VICTOR LLUCH
SERGIO P. DLMASO JR., CELESTINO DICON, ANIANO ABELLANA, PABLITO DAFFON thru his
parents and natural guardians, MR. and MRS. NICANOR GUMBAN, and ROLANDO VALENCIA, thru
his guardian, A. FRANCISCO ALONSO, respondents.
Jose S. Amadora & Associates for petitioners.
Padilla Law Office for respondents.

CRUZ, J.:

Like any prospective graduate, Alfredo Amadora was looking forward to the commencement exercises where he
would ascend the stage and in the presence of his relatives and friends receive his high school diploma. These
ceremonies were scheduled on April 16, 1972. As it turned out, though, fate would intervene and deny him that
awaited experience. On April 13, 1972, while they were in the auditorium of their school, the Colegio de San
Jose-Recoletos, a classmate, Pablito Damon, fired a gun that mortally hit Alfredo, ending all his expectations and
his life as well. The victim was only seventeen years old. 1
Daffon was convicted of homicide thru reckless imprudence . 2 Additionally, the herein petitioners, as the
victim's parents, filed a civil action for damages under Article 2180 of the Civil Code against the Colegio de San
Jose-Recoletos, its rector the high school principal, the dean of boys, and the physics teacher, together with
Daffon and two other students, through their respective parents. The complaint against the students was later
dropped. After trial, the Court of First Instance of Cebu held the remaining defendants liable to the plaintiffs in
the sum of P294,984.00, representing death compensation, loss of earning capacity, costs of litigation, funeral
expenses, moral damages, exemplary damages, and attorney's fees . 3 On appeal to the respondent court,
however, the decision was reversed and all the defendants were completely absolved . 4
In its decision, which is now the subject of this petition for certiorari under Rule 45 of the Rules of Court, the
respondent court found that Article 2180 was not applicable as the Colegio de San Jose-Recoletos was not a
school of arts and trades but an academic institution of learning. It also held that the students were not in the
custody of the school at the time of the incident as the semester had already ended, that there was no clear
identification of the fatal gun and that in any event the defendant, had exercised the necessary diligence in
preventing the injury. 5
The basic undisputed facts are that Alfredo Amadora went to the San Jose-Recoletos on April 13, 1972, and while
in its auditorium was shot to death by Pablito Daffon, a classmate. On the implications and consequences of these
facts, the parties sharply disagree.
The petitioners contend that their son was in the school to show his physics experiment as a prerequisite to his
graduation; hence, he was then under the custody of the private respondents. The private respondents submit that
Alfredo Amadora had gone to the school only for the purpose of submitting his physics report and that he was no
longer in their custody because the semester had already ended.
There is also the question of the identity of the gun used which the petitioners consider important because of an
earlier incident which they claim underscores the negligence of the school and at least one of the private
respondents. It is not denied by the respondents that on April 7, 1972, Sergio Damaso, Jr., the dean of boys,
confiscated from Jose Gumban an unlicensed pistol but later returned it to him without making a report to the
principal or taking any further action . 6 As Gumban was one of the companions of Daffon when the latter fired
the gun that killed Alfredo, the petitioners contend that this was the same pistol that had been confiscated from
Gumban and that their son would not have been killed if it had not been returned by Damaso. The respondents
say, however, that there is no proof that the gun was the same firearm that killed Alfredo.
Resolution of all these disagreements will depend on the interpretation of Article 2180 which, as it happens, is
invoked by both parties in support of their conflicting positions. The pertinent part of this article reads as follows:
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.
Three cases have so far been decided by the Court in connection with the above-quoted provision, to wit:
Exconde v. Capuno 7 Mercado v. Court of Appeals, 8 and Palisoc v. Brillantes. 9 These will be briefly reviewed
in this opinion for a better resolution of the case at bar.
In the Exconde Case, Dante Capuno, a student of the Balintawak Elementary School and a Boy Scout, attended a
Rizal Day parade on instructions of the city school supervisor. After the parade, the boy boarded a jeep, took over
its wheel and drove it so recklessly that it turned turtle, resulting in the death of two of its passengers. Dante was
found guilty of double homicide with reckless imprudence. In the separate civil action flied against them, his

father was held solidarily liable with him in damages under Article 1903 (now Article 2180) of the Civil Code for
the tort committed by the 15-year old boy.
This decision, which was penned by Justice Bautista Angelo on June 29,1957, exculpated the school in an obiter
dictum (as it was not a party to the case) on the ground that it was riot a school of arts and trades. Justice J.B.L.
Reyes, with whom Justices Sabino Padilla and Alex Reyes concurred, dissented, arguing that it was the school
authorities who should be held liable Liability under this rule, he said, was imposed on (1) teachers in general;
and (2) heads of schools of arts and trades in particular. The modifying clause "of establishments of arts and
trades" should apply only to "heads" and not "teachers."
Exconde was reiterated in the Mercado Case, and with an elaboration. A student cut a classmate with a razor
blade during recess time at the Lourdes Catholic School in Quezon City, and the parents of the victim sued the
culprits parents for damages. Through Justice Labrador, the Court declared in another obiter (as the school itself
had also not been sued that the school was not liable because it was not an establishment of arts and trades.
Moreover, the custody requirement had not been proved as this "contemplates a situation where the student lives
and boards with the teacher, such that the control, direction and influences on the pupil supersede those of the
parents." Justice J.B.L. Reyes did not take part but the other members of the court concurred in this decision
promulgated on May 30, 1960.
In Palisoc vs. Brillantes, decided on October 4, 1971, a 16-year old student was killed by a classmate with fist
blows in the laboratory of the Manila Technical Institute. Although the wrongdoer who was already of age
was not boarding in the school, the head thereof and the teacher in charge were held solidarily liable with him.
The Court declared through Justice Teehankee:
The phrase used in the cited article "so long as (the students) remain in their custody" means
the protective and supervisory custody that the school and its heads and teachers exercise over the
pupils and students for as long as they are at attendance in the school, including recess time. There
is nothing in the law that requires that for such liability to attach, the pupil or student who commits
the tortious act must live and board in the school, as erroneously held by the lower court, and
the dicta in Mercado (as well as in Exconde) on which it relied, must now be deemed to have been
set aside by the present decision.
This decision was concurred in by five other members, 10 including Justice J.B.L. Reyes, who stressed, in
answer to the dissenting opinion, that even students already of age were covered by the provision since they were
equally in the custody of the school and subject to its discipline. Dissenting with three others, 11 Justice
Makalintal was for retaining the custody interpretation in Mercado and submitted that the rule should apply only
to torts committed by students not yet of age as the school would be acting only in loco parentis.
In a footnote, Justice Teehankee said he agreed with Justice Reyes' dissent in the Exconde Case but added that
"since the school involved at bar is a non-academic school, the question as to the applicability of the cited codal
provision to academic institutions will have to await another case wherein it may properly be raised."
This is the case.
Unlike in Exconde and Mercado, the Colegio de San Jose-Recoletos has been directly impleaded and is sought to
be held liable under Article 2180; and unlike in Palisoc, it is not a school of arts and trades but an academic
institution of learning. The parties herein have also directly raised the question of whether or not Article 2180
covers even establishments which are technically not schools of arts and trades, and, if so, when the offending
student is supposed to be "in its custody."
After an exhaustive examination of the problem, the Court has come to the conclusion that the provision in
question should apply to all schools, academic as well as non-academic. Where the school is academic rather
than technical or vocational in nature, responsibility for the tort committed by the student will attach to the
teacher in charge of such student, following the first part of the provision. This is the general rule. In the case of
establishments of arts and trades, it is the head thereof, and only he, who shall be held liable as an exception to

the general rule. In other words, teachers in general shall be liable for the acts of their students except where the
school is technical in nature, in which case it is the head thereof who shall be answerable. Following the canon
of reddendo singula singulis "teachers" should apply to the words "pupils and students" and "heads of
establishments of arts and trades" to the word "apprentices."
The Court thus conforms to the dissenting opinion expressed by Justice J.B.L. Reyes in Exconde where he said in
part:
I can see no sound reason for limiting Art. 1903 of the Old Civil Code to teachers of arts and
trades and not to academic ones. What substantial difference is there between them insofar as
concerns the proper supervision and vice over their pupils? It cannot be seriously contended that
an academic teacher is exempt from the duty of watching that his pupils do not commit a tort to
the detriment of third Persons, so long as they are in a position to exercise authority and
Supervision over the pupil. In my opinion, in the phrase "teachers or heads of establishments of
arts and trades" used in Art. 1903 of the old Civil Code, the words "arts and trades" does not
qualify "teachers" but only "heads of establishments." The phrase is only an updated version of the
equivalent terms "preceptores y artesanos" used in the Italian and French Civil Codes.
If, as conceded by all commentators, the basis of the presumption of negligence of Art. 1903 in
some culpa in vigilando that the parents, teachers, etc. are supposed to have incurred in the
exercise of their authority, it would seem clear that where the parent places the child under the
effective authority of the teacher, the latter, and not the parent, should be the one answerable for
the torts committed while under his custody, for the very reason/that the parent is not supposed to
interfere with the discipline of the school nor with the authority and supervision of the teacher
while the child is under instruction. And if there is no authority, there can be no responsibility.
There is really no substantial distinction between the academic and the non-academic schools insofar as torts
committed by their students are concerned. The same vigilance is expected from the teacher over the students
under his control and supervision, whatever the nature of the school where he is teaching. The suggestion in the
Exconde and Mercado Cases is that the provision would make the teacher or even the head of the school of arts
and trades liable for an injury caused by any student in its custody but if that same tort were committed in an
academic school, no liability would attach to the teacher or the school head. All other circumstances being the
same, the teacher or the head of the academic school would be absolved whereas the teacher and the head of the
non-academic school would be held liable, and simply because the latter is a school of arts and trades.
The Court cannot see why different degrees of vigilance should be exercised by the school authorities on the
basis only of the nature of their respective schools. There does not seem to be any plausible reason for relaxing
that vigilance simply because the school is academic in nature and for increasing such vigilance where the school
is non-academic. Notably, the injury subject of liability is caused by the student and not by the school itself nor is
it a result of the operations of the school or its equipment. The injury contemplated may be caused by any student
regardless of the school where he is registered. The teacher certainly should not be able to excuse himself by
simply showing that he is teaching in an academic school where, on the other hand, the head would be held liable
if the school were non-academic.
These questions, though, may be asked: If the teacher of the academic school is to be held answerable for the
torts committed by his students, why is it the head of the school only who is held liable where the injury is caused
in a school of arts and trades? And in the case of the academic or non- technical school, why not apply the rule
also to the head thereof instead of imposing the liability only on the teacher?
The reason for the disparity can be traced to the fact that historically the head of the school of arts and trades
exercised a closer tutelage over his pupils than the head of the academic school. The old schools of arts and
trades were engaged in the training of artisans apprenticed to their master who personally and directly instructed
them on the technique and secrets of their craft. The head of the school of arts and trades was such a master and

so was personally involved in the task of teaching his students, who usually even boarded with him and so came
under his constant control, supervision and influence. By contrast, the head of the academic school was not as
involved with his students and exercised only administrative duties over the teachers who were the persons
directly dealing with the students. The head of the academic school had then (as now) only a vicarious
relationship with the students. Consequently, while he could not be directly faulted for the acts of the students,
the head of the school of arts and trades, because of his closer ties with them, could be so blamed.
It is conceded that the distinction no longer obtains at present in view of the expansion of the schools of arts and
trades, the consequent increase in their enrollment, and the corresponding diminution of the direct and personal
contract of their heads with the students. Article 2180, however, remains unchanged. In its present state, the
provision must be interpreted by the Court according to its clear and original mandate until the legislature, taking
into account the charges in the situation subject to be regulated, sees fit to enact the necessary amendment.
The other matter to be resolved is the duration of the responsibility of the teacher or the head of the school of arts
and trades over the students. Is such responsibility co-extensive with the period when the student is actually
undergoing studies during the school term, as contended by the respondents and impliedly admitted by the
petitioners themselves?
From a reading of the provision under examination, it is clear that while the custody requirement, to
repeat Palisoc v. Brillantes, does not mean that the student must be boarding with the school authorities, it does
signify that the student should be within the control and under the influence of the school authorities at the time
of the occurrence of the injury. This does not necessarily mean that such, custody be co-terminous with the
semester, beginning with the start of classes and ending upon the close thereof, and excluding the time before or
after such period, such as the period of registration, and in the case of graduating students, the period before the
commencement exercises. In the view of the Court, the student is in the custody of the school authorities as long
as he is under the control and influence of the school and within its premises, whether the semester has not yet
begun or has already ended.
It is too tenuous to argue that the student comes under the discipline of the school only upon the start of classes
notwithstanding that before that day he has already registered and thus placed himself under its rules. Neither
should such discipline be deemed ended upon the last day of classes notwithstanding that there may still be
certain requisites to be satisfied for completion of the course, such as submission of reports, term papers,
clearances and the like. During such periods, the student is still subject to the disciplinary authority of the school
and cannot consider himself released altogether from observance of its rules.
As long as it can be shown that the student is in the school premises in pursuance of a legitimate student
objective, in the exercise of a legitimate student right, and even in the enjoyment of a legitimate student right, and
even in the enjoyment of a legitimate student privilege, the responsibility of the school authorities over the
student continues. Indeed, even if the student should be doing nothing more than relaxing in the campus in the
company of his classmates and friends and enjoying the ambience and atmosphere of the school, he is still within
the custody and subject to the discipline of the school authorities under the provisions of Article 2180.
During all these occasions, it is obviously the teacher-in-charge who must answer for his students' torts, in
practically the same way that the parents are responsible for the child when he is in their custody. The teacher-incharge is the one designated by the dean, principal, or other administrative superior to exercise supervision over
the pupils in the specific classes or sections to which they are assigned. It is not necessary that at the time of the
injury, the teacher be physically present and in a position to prevent it. Custody does not connote immediate and
actual physical control but refers more to the influence exerted on the child and the discipline instilled in him as a
result of such influence. Thus, for the injuries caused by the student, the teacher and not the parent shag be held
responsible if the tort was committed within the premises of the school at any time when its authority could be
validly exercised over him.

In any event, it should be noted that the liability imposed by this article is supposed to fall directly on the teacher
or the head of the school of arts and trades and not on the school itself. If at all, the school, whatever its nature,
may be held to answer for the acts of its teachers or even of the head thereof under the general principle
of respondeat superior, but then it may exculpate itself from liability by proof that it had exercised the diligence
of a bonus paterfamilias.
Such defense is, of course, also available to the teacher or the head of the school of arts and trades directly held to
answer for the tort committed by the student. As long as the defendant can show that he had taken the necessary
precautions to prevent the injury complained of, he can exonerate himself from the liability imposed by Article
2180, which also states that:
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 damages.
In this connection, it should be observed that the teacher will be held liable not only when he is acting in loco
parentis for the law does not require that the offending student be of minority age. Unlike the parent, who wig be
liable only if his child is still a minor, the teacher is held answerable by the law for the act of the student under
him regardless of the student's age. Thus, in the Palisoc Case, liability attached to the teacher and the head of the
technical school although the wrongdoer was already of age. In this sense, Article 2180 treats the parent more
favorably than the teacher.
The Court is not unmindful of the apprehensions expressed by Justice Makalintal in his dissenting opinion in
Palisoc that the school may be unduly exposed to liability under this article in view of the increasing activism
among the students that is likely to cause violence and resulting injuries in the school premises. That is a valid
fear, to be sure. Nevertheless, it should be repeated that, under the present ruling, it is not the school that will be
held directly liable. Moreover, the defense of due diligence is available to it in case it is sought to be held
answerable as principal for the acts or omission of its head or the teacher in its employ.
The school can show that it exercised proper measures in selecting the head or its teachers and the appropriate
supervision over them in the custody and instruction of the pupils pursuant to its rules and regulations for the
maintenance of discipline among them. In almost all cases now, in fact, these measures are effected through the
assistance of an adequate security force to help the teacher physically enforce those rules upon the students. Ms
should bolster the claim of the school that it has taken adequate steps to prevent any injury that may be
committed by its students.
A fortiori, the teacher himself may invoke this defense as it would otherwise be unfair to hold him directly
answerable for the damage caused by his students as long as they are in the school premises and presumably
under his influence. In this respect, the Court is disposed not to expect from the teacher the same measure of
responsibility imposed on the parent for their influence over the child is not equal in degree. Obviously, the
parent can expect more obedience from the child because the latter's dependence on him is greater than on the
teacher. It need not be stressed that such dependence includes the child's support and sustenance whereas
submission to the teacher's influence, besides being coterminous with the period of custody is usually enforced
only because of the students' desire to pass the course. The parent can instill more las discipline on the child than
the teacher and so should be held to a greater accountability than the teacher for the tort committed by the child.
And if it is also considered that under the article in question, the teacher or the head of the school of arts and
trades is responsible for the damage caused by the student or apprentice even if he is already of age and
therefore less tractable than the minor then there should all the more be justification to require from the school
authorities less accountability as long as they can prove reasonable diligence in preventing the injury. After all, if
the parent himself is no longer liable for the student's acts because he has reached majority age and so is no
longer under the former's control, there is then all the more reason for leniency in assessing the teacher's
responsibility for the acts of the student.
Applying the foregoing considerations, the Court has arrived at the following conclusions:

1. At the time Alfredo Amadora was fatally shot, he was still in the custody of the authorities of Colegio de San
Jose-Recoletos notwithstanding that the fourth year classes had formally ended. It was immaterial if he was in the
school auditorium to finish his physics experiment or merely to submit his physics report for what is important is
that he was there for a legitimate purpose. As previously observed, even the mere savoring of the company of his
friends in the premises of the school is a legitimate purpose that would have also brought him in the custody of
the school authorities.
2. The rector, the high school principal and the dean of boys cannot be held liable because none of them was the
teacher-in-charge as previously defined. Each of them was exercising only a general authority over the student
body and not the direct control and influence exerted by the teacher placed in charge of particular classes or
sections and thus immediately involved in its discipline. The evidence of the parties does not disclose who the
teacher-in-charge of the offending student was. The mere fact that Alfredo Amadora had gone to school that day
in connection with his physics report did not necessarily make the physics teacher, respondent Celestino Dicon,
the teacher-in-charge of Alfredo's killer.
3. At any rate, assuming that he was the teacher-in-charge, there is no showing that Dicon was negligent in
enforcing discipline upon Daffon or that he had waived observance of the rules and regulations of the school or
condoned their non-observance. His absence when the tragedy happened cannot be considered against him
because he was not supposed or required to report to school on that day. And while it is true that the offending
student was still in the custody of the teacher-in-charge even if the latter was physically absent when the tort was
committed, it has not been established that it was caused by his laxness in enforcing discipline upon the student.
On the contrary, the private respondents have proved that they had exercised due diligence, through the
enforcement of the school regulations, in maintaining that discipline.
4. In the absence of a teacher-in-charge, it is probably the dean of boys who should be held liable especially in
view of the unrefuted evidence that he had earlier confiscated an unlicensed gun from one of the students and
returned the same later to him without taking disciplinary action or reporting the matter to higher authorities.
While this was clearly negligence on his part, for which he deserves sanctions from the school, it does not
necessarily link him to the shooting of Amador as it has not been shown that he confiscated and returned pistol
was the gun that killed the petitioners' son.
5. Finally, as previously observed, the Colegio de San Jose-Recoletos cannot be held directly liable under the
article because only the teacher or the head of the school of arts and trades is made responsible for the damage
caused by the student or apprentice. Neither can it be held to answer for the tort committed by any of the other
private respondents for none of them has been found to have been charged with the custody of the offending
student or has been remiss in the discharge of his duties in connection with such custody.
In sum, the Court finds under the facts as disclosed by the record and in the light of the principles herein
announced that none of the respondents is liable for the injury inflicted by Pablito Damon on Alfredo Amadora
that resulted in the latter's death at the auditorium of the Colegio de San Jose-Recoletos on April 13, 1972. While
we deeply sympathize with the petitioners over the loss of their son under the tragic circumstances here related,
we nevertheless are unable to extend them the material relief they seek, as a balm to their grief, under the law
they have invoked.
WHEREFORE, the petition is DENIED, without any pronouncement as to costs. It is so ordered.
Republic
SUPREME
Manila

of

the

SECOND DIVISION
G.R. No. 70458 October 5, 1988

Philippines
COURT

BENJAMIN SALVOSA and BAGUIO COLLEGES FOUNDATION, petitioners,


vs.
THE INTERMEDIATE APPELLATE COURT, EDUARDO B. CASTRO, DIOMEDES B. CASTRO,
VIRGINIA B. CASTRO and RODOLFO B. CASTRO., respondents.
Edilberto B. Tenefrancia for petitioners.
Leonardo L. Cocjin Jr. for respondents.

PADILLA, J.:
In
this
petition
for
review
on
certiorari,
petitioners
seek
the
reversal
of
the
decision 1 of respondent Intermediate Appellate Court, dated 7 December 1984, in AC-G.R. No. CV 69876, in so
far as it affirmed the decision 2 of the Court of First Instance of Tarlac (hereinafter referred to as the Trial Court),
which held, among others, petitioners solidarily hable with Jimmy B. Abon, under Art. 2180 of the Civil Code.
The relevant facts, as found by the Trial Court and adopted by reference by the respondent Court, are:
... Baguio Colleges Foundation (BCF, hereafter) is an academic institution ... [However], it is also an institution
of arts and trade. It has so advertised itself, as its own evidence shows. Its brochure (Exh. 2) shows that BCF has
a full-fledged technical-vocational department offer Communication, Broadcast and Teletype Technician courses
as well as Electronics Serviceman and Automotive Mechanics courses... these courses divest BCF of the nature
or character of being purely or exclusively an academic institution. 3
Within the premises of the BCF is an ROTC Unit, the Baguio Colleges Foundation Reserve Officers Training
Corps (ROTC) Unit, which is under the fifth control of the Armed Forces of the Philippines. 4 The ROTC Unit,
by way of accommodation to the Armed Forces of the Philippines (AFP), pursuant to Department Order No. 14,
Series of 1975 of the Department of Education and Culture, 5 is provided by the BCF an office and an armory
located at the basement of its main building. 6
The Baguio Colleges Foundation ROTC Unit had Jimmy B. Abon as its duly appointed armorer. 7 As armorer of
the ROTC Unit, Jimmy B. Abon received his appointment from the AFP. Not being an employee of the BCF, he
also received his salary from the AFP, 8 as well as orders from Captain Roberto C. Ungos, the Commandant of
the Baguio Colleges Foundation ROTC Unit, concurrent Commandant of other ROTC units in Baguio and an
employee (officer) of the AFP. 9Jimmy B. Abon was also a commerce student of the BCF. 10
On 3 March 1977, at around 8:00 p.m., in the parking space of BCF, Jimmy B. Abon shot Napoleon Castro a
student of the University of Baguio with an unlicensed firearm which the former took from the armory of the
ROTC Unit of the BCF. 11 As a result, Napoleon Castro died and Jimmy B. Abon was prosecuted for, and
convicted of the crime of Homicide by Military Commission No. 30, AFP. 12
Subsequently, the heirs of Napoleon Castro sued for damages, impleading Jimmy B. Abon, Roberto C. Ungos
(ROTC Commandant Benjamin Salvosa (President and Chairman of the Board of BCF), Jesus Salvosa
(Executive Vice President of BCF), Libertad D. Quetolio (Dean of the College of Education and Executive
Trustee of BCF) and the Baguio Colleges Foundation Inc. as party defendants. After hearing, the Trial Court
rendered a decision, (1) sentencing defendants Jimmy B. Abon, Benjamin Salvosa and Baguio Colleges
Foundation, Inc., jointly and severally, to pay private respondents, as heirs of Napoleon Castro: a) P12,000.00 for
the death of Napoleon Castro, (b) P316,000.00 as indemnity for the loss of earning capacity of the deceased, (c)
P5,000.00 as moral damages, (d) P6,000.00 as actual damages, and (e) P5,000.00 as attorney's fees, plus costs;
(2) absolving the other defendants; and (3) dismissing the defendants' counterclaim for lack of merit. 13 On
appeal by petitioners, the respondent Court affirmed with modification the decision of the Trial Court. The
modification consisted in reducing the award for loss of earning capacity of the deceased from P316,000.00 to
P30,000.00 by way of temperate damages, and increasing the indemnity for the death of Napoleon Castro from
P12,000.00 to P30,000.00.

Hence, this petition.


The central issue in this case is whether or not petitioners can be held solidarity hable with Jimmy B. Abon for
damages under Article 2180 of the Civil Code, as a consequence of the tortious act of Jimmy B. Abon.
Under the penultimate paragraph of Art. 2180 of the Civil Code, teachers or heads of establishments of arts and
trades are hable for "damages caused by their pupils and students or apprentices, so long as they remain in their
custody." The rationale of such liability is that so long as the student remains in the custody of a teacher, the latter
"stands, to a certain extent, in loco parentis [as to the student] and [is] called upon to exercise reasonable
supervision over the conduct of the [student]." 14 Likewise, "the phrase used in [Art. 2180 'so long as (the
students) remain in their custody means the protective and supervisory custody that the school and its heads and
teachers exercise over the pupils and students for as long as they are at attendance in the school, including recess
time." 15
In the case at bar, in holding that Jimmy B. Abon was stin in the protective and supervisory custody of the Baguio
Colleges Foundation when he shot Napoleon Castro, the respondent Court ruled that:
it is true that Abon was not attending any class or school function at the time of the shooting
incident, which was at about 8 o'clock in the evening; but considering that Abon was employed as
an armorer and property custodian of the BCF ROTC unit, he must have been attending night
classes and therefore that hour in the evening was just about dismissal time for him or soon
thereafter. The time interval is safely within the "recess time" that the trial court spoke of and
envisioned by the Palisoc case, supra. 16 (Emphasis supplied)
In line with the case of Palisoc, 17 a student not "at attendance in the school" cannot be in "recess" thereat. A
"recess," as the concept is embraced in the phrase "at attendance in the school," contemplates a situation of
temporary adjournment of school activities where the student still remains within call of his mentor and is not
permitted to leave the school premises, or the area within which the school activity is conducted. Recess by its
nature does not include dismissal. 18Likewise, the mere fact of being enrolled or being in the premises of a
school without more does not constitute "attending school" or being in the "protective and supervisory custody'
of the school, as contemplated in the law.
Upon the foregoing considerations, we hold that Jimmy B. Abon cannot be considered to have been "at
attendance in the school," or in the custody of BCF, when he shot Napoleon Castro. Logically, therefore,
petitioners cannot under Art. 2180 of the Civil Code be held solidarity liable with Jimmy B. Abon for damages
resulting from his acts.
Besides, the record shows that before the shooting incident, Roberto B. Ungos ROTC Unit Commandant, AFP,
had instructed Jimmy B. Abon "not to leave the office and [to keep the armory] well guarded." 19 Apart from
negating a finding that Jimmy B. Abon was under the custody of the school when he committed the act for which
the petitioners are sought to be held liable, this circumstance shows that Jimmy B. Abon was supposed to
be working in the armory with definite instructions from his superior, the ROTC Commandant, when he shot
Napoleon Castro.
Petitioners also raise the issue that, under Art. 2180 of the Civil Code, a school which offers both academic and
technical/vocational courses cannot be held liable for a tort committed by a student enrolled only in its academic
program; however, considering that Jimmy B. Abon was not in the custody of BCF when he shot Napoleon
Castro, the Court deems it unnecessary to pass upon such other issue. 20
WHEREFORE, the decision appealed from is hereby REVERSED in so far as it holds petitioners solidarily liable
with Jimmy B. Abon for his tortious act in the killing of Napoleon Castro. No costs.
SO ORDERED.
FIRST DIVISION

[G.R. No. 143363. February 6, 2002]

ST. MARYS ACADEMY, petitioner, vs. WILLIAM CARPITANOS and LUCIA S. CARPITANOS,
GUADA DANIEL, JAMES DANIEL II, JAMES DANIEL, SR., and VIVENCIO
VILLANUEVA, respondents.
DECISION
PARDO, J.:

The Case

The case is an appeal via certiorari from the decision[1] of the Court of Appeals as well as the resolution
denying reconsideration, holding petitioner liable for damages arising from an accident that resulted in the death
of a student who had joined a campaign to visit the public schools in Dipolog City to solicit enrollment.

The Facts

The facts, as found by the Court of Appeals, are as follows:


Claiming damages for the death of their only son, Sherwin Carpitanos, spouses William Carpitanos and Lucia
Carpitanos filed on June 9, 1995 a case against James Daniel II and his parents, James Daniel Sr. and Guada
Daniel, the vehicle owner, Vivencio Villanueva and St. Marys Academy before
the Regional Trial Court of Dipolog City.
On 20 February 1997, Branch 6 of the Regional Trial Court of Dipolog City rendered its decision the dispositive
portion of which reads as follows:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in the following manner:
1. Defendant St. Marys Academy of Dipolog City, is hereby ordered to pay plaintiffs William Carpitanos and
Luisa Carpitanos, the following sums of money:
a. FIFTY THOUSAND PESOS (P50,000.00) indemnity for the loss of life of Sherwin S.
Carpitanos;
b. FORTY THOUSAND PESOS (P40,000.00) actual damages incurred by plaintiffs for burial
and related expenses;
c. TEN THOUSAND PESOS (P10,000.00) for attorneys fees;
d. FIVE HUNDRED THOUSAND PESOS (P500,000.00) for moral damages; and to pay
costs.
2. Their liability being only subsidiary, defendants James Daniel, Sr. and Guada Daniel are hereby ordered to pay
herein plaintiffs the amount of damages above-stated in the event of insolvency of principal obligor St. Marys
Academy of Dipolog City;

3. Defendant James Daniel II, being a minor at the time of the commission of the tort and who was under special
parental authority of defendant St. Marys Academy, is ABSOLVED from paying the above-stated damages, same
being adjudged against defendants St. Marys Academy, and subsidiarily, against his parents;
4. Defendant Vivencio Villanueva is hereby ABSOLVED of any liability. His counterclaim not being in order as
earlier discussed in this decision, is hereby DISMISSED.
IT IS SO ORDERED. (Decision, pp. 32-33; Records, pp. 205-206).
From the records it appears that from 13 to 20 February 1995, defendant-appellant St. Marys Academy of
Dipolog City conducted an enrollment drive for the school year 1995-1996. A facet of the enrollment campaign
was the visitation of schools from where prospective enrollees were studying. As a student of St. Marys
Academy, Sherwin Carpitanos was part of the campaigning group. Accordingly, on the fateful day, Sherwin,
along with other high school students were riding in a Mitsubishi jeep owned by defendant Vivencio Villanueva
on their way to Larayan Elementary School, Larayan, Dapitan City.The jeep was driven by James Daniel II then
15 years old and a student of the same school. Allegedly, the latter drove the jeep in a reckless manner and as a
result the jeep turned turtle.
Sherwin Carpitanos died as a result of the injuries he sustained from the accident.[2]
In due time, petitioner St. Marys academy appealed the decision to the Court of Appeals.[3]
On February 29, 2000, the Court of Appeals promulgated a decision reducing the actual damages to
P25,000.00 but otherwise affirming the decision a quo, in toto.[4]
On February 29, 2000, petitioner St. Marys Academy filed a motion for reconsideration of the
decision. However, on May 22, 2000, the Court of Appeals denied the motion.[5]
Hence, this appeal.[6]

The Issues

1) Whether the Court of Appeals erred in holding the petitioner liable for damages for the death of
Sherwin Carpitanos.
2) Whether the Court of Appeals erred in affirming the award of moral damages against the petitioner.

The Courts Ruling

We reverse the decision of the Court of Appeals.


The Court of Appeals held petitioner St. Marys Academy liable for the death of Sherwin Carpitanos under
Articles 218[7] and 219[8] of the Family Code, pointing out that petitioner was negligent in allowing a minor to
drive and in not having a teacher accompany the minor students in the jeep.
Under Article 218 of the Family Code, the following shall have special parental authority over a minor child
while under their supervision, instruction or custody: (1) the school, its administrators and teachers; or (2) the
individual, entity or institution engaged in child care. This special parental authority and responsibility applies to
all authorized activities, whether inside or outside the premises of the school, entity or institution. Thus, such

authority and responsibility applies to field trips, excursions and other affairs of the pupils and students outside
the school premises whenever authorized by the school or its teachers.[9]
Under Article 219 of the Family Code, if the person under custody is a minor, those exercising special
parental authority are principally and solidarily liable for damages caused by the acts or omissions of the
unemancipated minor while under their supervision, instruction, or custody.[10]
However, for petitioner to be liable, there must be a finding that the act or omission considered as negligent
was the proximate cause of the injury caused because the negligence must have a causal connection to the
accident.[11]
In order that there may be a recovery for an injury, however, it must be shown that the injury for which recovery
is sought must be the legitimate consequence of the wrong done; the connection between the negligence and the
injury must be a direct and natural sequence of events, unbroken by intervening efficient causes. In other words,
the negligence must be the proximate cause of the injury. For, negligence, no matter in what it consists, cannot
create a right of action unless it is the proximate cause of the injury complained of. And the proximate cause of
an injury is that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause,
produces the injury, and without which the result would not have occurred.[12]
In this case, the respondents failed to show that the negligence of petitioner was the proximate cause of the
death of the victim.
Respondents Daniel spouses and Villanueva admitted that the immediate cause of the accident was not the
negligence of petitioner or the reckless driving of James Daniel II, but the detachment of the steering wheel guide
of the jeep.
In their comment to the petition, respondents Daniel spouses and Villanueva admitted the documentary
exhibits establishing that the cause of the accident was the detachment of the steering wheel guide of the
jeep. Hence, the cause of the accident was not the recklessness of James Daniel II but the mechanical defect in
the jeep of Vivencio Villanueva. Respondents, including the spouses Carpitanos, parents of the deceased Sherwin
Carpitanos, did not dispute the report and testimony of the traffic investigator who stated that the cause of the
accident was the detachment of the steering wheel guide that caused the jeep to turn turtle.
Significantly, respondents did not present any evidence to show that the proximate cause of the accident was
the negligence of the school authorities, or the reckless driving of James Daniel II. Hence, the respondents
reliance on Article 219 of the Family Code that those given the authority and responsibility under the preceding
Article shall be principally and solidarily liable for damages caused by acts or omissions of the unemancipated
minor was unfounded.
Further, there was no evidence that petitioner school allowed the minor James Daniel II to drive the jeep of
respondent Vivencio Villanueva. It was Ched Villanueva, grandson of respondent Vivencio Villanueva, who had
possession and control of the jeep. He was driving the vehicle and he allowed James Daniel II, a minor, to drive
the jeep at the time of the accident.
Hence, liability for the accident, whether caused by the negligence of the minor driver or mechanical
detachment of the steering wheel guide of the jeep, must be pinned on the minors parents primarily. The
negligence of petitioner St. Marys Academy was only a remote cause of the accident. Between the remote cause
and the injury, there intervened the negligence of the minors parents or the detachment of the steering wheel
guide of the jeep.
The proximate cause of an injury is that cause, which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces the injury, and without which the result would not have occurred.[13]

Considering that the negligence of the minor driver or the detachment of the steering wheel guide of the jeep
owned by respondent Villanueva was an event over which petitioner St. Marys Academy had no control, and
which was the proximate cause of the accident, petitioner may not be held liable for the death resulting from such
accident.
Consequently, we find that petitioner likewise cannot be held liable for moral damages in the amount of
P500,000.00 awarded by the trial court and affirmed by the Court of Appeals.
Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate
result of the defendants wrongful act or omission.[14] In this case, the proximate cause of the accident was not
attributable to petitioner.
For the reason that petitioner was not directly liable for the accident, the decision of the Court of Appeals
ordering petitioner to pay death indemnity to respondent Carpitanos must be deleted. Moreover, the grant of
attorneys fees as part of damages is the exception rather than the rule.[15] The power of the court to award
attorneys fees under Article 2208 of the Civil Code demands factual, legal and equitable justification.[16] Thus,
the grant of attorneys fees against the petitioner is likewise deleted.
Incidentally, there was no question that the registered owner of the vehicle was respondent Villanueva. He
never denied and in fact admitted this fact. We have held that the registered owner of any vehicle, even if not
used for public service, would primarily be responsible to the public or to third persons for injuries caused the
latter while the vehicle was being driven on the highways or streets.[17] Hence, with the overwhelming evidence
presented by petitioner and the respondent Daniel spouses that the accident occurred because of the detachment
of the steering wheel guide of the jeep, it is not the school, but the registered owner of the vehicle who shall be
held responsible for damages for the death of Sherwin Carpitanos.

The Fallo

WHEREFORE, the Court REVERSES and SETS ASIDE the decision of the Court of Appeals[18] and that
of the trial court.[19] The Court remands the case to the trial court for determination of the liability of defendants,
excluding petitioner St. Marys Academy, Dipolog City.
No costs.
SO ORDERED.

Republic of the Philippines


Supreme Court
Manila
SECOND DIVISION
ST. JOSEPHS COLLEGE, SR. JOSEPHINI
AMBATALI, SFIC, and ROSALINDA TABUGO,
Petitioners,

G.R. No. 182353


Present:

CARPIO, J.,
Chairperson,
NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.

- versus -

JAYSON MIRANDA, represented by his father,


RODOLFO S. MIRANDA,
Respondent.

Promulgated:
June 29, 2010

x------------------------------------------------------------------------------------x

DECISION
NACHURA, J.:

This petition for review on certiorari seeks to set aside the Decision[1] of the Court of Appeals (CA) in CA-G.R.
CV No. 68367, which affirmed in toto the decision[2] of the Regional Trial Court (RTC), Branch 221, Quezon
City, in Civil Case No. Q-95-22889.
The facts, as found by the CA, follow:

On November 17, 1994, at around 1:30 in the afternoon inside St. Joseph Colleges [SJCs]
premises, the class to which [respondent Jayson Val Miranda] belonged was conducting a science
experiment about fusion of sulphur powder and iron fillings under the tutelage of [petitioner]
Rosalinda Tabugo, she being the subject teacher and employee of [petitioner] SJC. The adviser of
[Jaysons] class is x x x Estefania Abdan.
Tabugo left her class while it was doing the experiment without having adequately secured it from
any untoward incident or occurrence. In the middle of the experiment, [Jayson], who was the
assistant leader of one of the class groups, checked the result of the experiment by looking into the
test tube with magnifying glass. The test tube was being held by one of his group mates who
moved it close and towards the eye of [Jayson]. At that instance, the compound in the test tube
spurted out and several particles of which hit [Jaysons] eye and the different parts of the bodies of
some of his group mates. As a result thereof, [Jaysons] eyes were chemically burned, particularly
his left eye, for which he had to undergo surgery and had to spend for his medication. Upon filing
of this case [in] the lower court, [Jaysons] wound had not completely healed and still had to
undergo another surgery.
Upon learning of the incident and because of the need for finances, [Jaysons] mother, who was
working abroad, had to rush back home for which she spent P36,070.00 for her fares and had to
forego her salary from November 23, 1994 to December 26, 1994, in the amount of at
least P40,000.00.

Then, too, [Jayson] and his parents suffered sleepless nights, mental anguish and wounded
feelings as a result of his injury due to [petitioners] fault and failure to exercise the degree of care
and diligence incumbent upon each one of them. Thus, they should be held liable for moral
damages. Also, [Jayson] sent a demand letter to [petitioners] for the payment of his medical
expenses as well as other expenses incidental thereto, which the latter failed to heed. Hence,
[Jayson] was constrained to file the complaint for damages. [Petitioners], therefore, should
likewise compensate [Jayson] for litigation expenses, including attorneys fees.
On the other hand, [petitioners SJC, Sr. Josephini Ambatali, SFIC, and Tabugo] alleged that
[Jayson] was a grade six pupil of SJC in the school year 1994-1995. On November 17, 1994, at
about 1:30 in the afternoon, the class to which [Jayson] belong[s] was conducting a science
experiment under the guidance and supervision of Tabugo, the class science teacher, about fusion
of sulphur powder and iron fillings by combining these elements in a test tube and heating the
same. Before the science experiment was conducted, [Jayson] and his classmates were given strict
instructions to follow the written procedure for the experiment and not to look into the test tube
until the heated compound had cooled off. [Jayson], however, a person of sufficient age and
discretion and completely capable of understanding the English language and the instructions of
his teacher, without waiting for the heated compound to cool off, as required in the written
procedure for the experiment and as repeatedly explained by the teacher, violated such instructions
and took a magnifying glass and looked at the compound, which at that moment spurted out of the
test tube, a small particle hitting one of [Jaysons] eyes.
Jayson was rushed by the school employees to the school clinic and thereafter transferred to St.
Lukes Medical Center for treatment. At the hospital, when Tabago visited [Jayson], the latter cried
and apologized to his teacher for violating her instructions not to look into the test tube until the
compound had cooled off.
After the treatment, [Jayson] was pronounced ready for discharge and an eye test showed that his
vision had not been impaired or affected. In order to avoid additional hospital charges due to the
delay in [Jaysons] discharge, Rodolfo S. Miranda, [Jaysons] father, requested SJC to advance the
amount of P26,176.35 representing [Jaysons] hospital bill until his wife could arrive from abroad
and pay back the money. SJC acceded to the request.
On December 6, 1994, however, the parents of [Jayson], through counsel, wrote SJC a letter
demanding that it should shoulder all the medical expenses of [Jayson] that had been incurred and
will be incurred further arising from the accident caused by the science experiment. In a letter
dated December 14, 1994, the counsel for SJC, represented by Sr. Josephini Ambatali, SFIC,
explained that the school cannot accede to the demand because the accident occurred by reason of
[Jaysons] failure to comply with the written procedure for the experiment and his teachers
repeated warnings and instruction that no student must face, much less look into, the opening of
the test tube until the heated compound has cooled.[3]
Since SJC did not accede to the demand, Rodolfo, Jaysons father, on Jaysons behalf, sued petitioners for
damages.
After trial, the RTC rendered judgment, to wit:

WHEREFORE, premises considered, judgment is hereby rendered in favor of [Jayson] and


against [petitioners]. This Court orders and holds the [petitioners] joint[ly] and solidarily liable to
pay [Jayson] the following amount:
1. To pay [Jayson] the amount of P77,338.25 as actual damages; However, [Jayson]
is ordered to reimburse [petitioner] St. Joseph College the amount of P26,176.36
representing the advances given to pay [Jaysons] initial hospital expenses or in the
alternative to deduct said amount of P26,176.36 from the P77,338.25 actual
damages herein awarded by way of legal compensation;
2. To pay [Jayson] the sum of P50,000.00 as mitigated moral damages;
3. To pay [Jayson] the sum of P30,000.00 as reasonable attorneys fees;
4. To pay the costs of suit.
SO ORDERED.[4]

Aggrieved, petitioners appealed to the CA. However, as previously adverted to, the CA affirmed in toto the ruling
of the RTC, thus:
WHEREFORE, in view of the foregoing, the assailed decision of the RTC of Quezon City,
Branch 221 dated September 6, 2000 is hereby AFFIRMED IN TOTO. Costs against
[petitioners].[5]

Undaunted, petitioners appealed` by certiorari to this Court, adamant that the CA grievously erred, thus:
I. THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT FINDING THAT THE
PROXIMATE CAUSE OF JAYSONS INJURY WAS HIS OWN ACT OF LOOKING AT THE
HEATED TEST TUBE BEFORE THE COMPOUND HAD COOLED IN COMPLETE
DISREGARD OF INSTRUCTIONS GIVEN PRIOR TO THE EXPERIMENT.
II. THE COURT OF APPEALS FAILED TO APPRECIATE THAT, IN LIGHT OF THE RULING
IN THE CASE OF ST. MARYS COLLEGE V. WILLIAM CARPITANOS, x x x JAYSONS
CONTRIBUTORY NEGLIGENCE OF PEEKING INTO THE TEST TUBE WAS IN FACT THE
PROXIMATE CAUSE OF HIS INJURY FOR WHICH THE PETITIONERS SHOULD NOT BE
HELD LIABLE.
III. THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE AWARD OF
ACTUAL DAMAGES DESPITE THE ABSENCE OF PROOF TO SUPPORT THE SAME.
IV. THE LOWER COURT GRIEVOUSLY ERRED IN AWARDING MORAL DAMAGES TO
[JAYSON].
V. THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE AWARD OF
ATTORNEYS FEES TO [JAYSON].

VI. THE LOWER COURT GRIEVOUSLY ERRED IN DENYING THE PETITIONERS


COUNTERCLAIM.[6]
We find no reason to depart from the uniform rulings of the lower courts that petitioners were negligent since
they all failed to exercise the required reasonable care, prudence, caution and foresight to prevent or avoid
injuries to the students.
Jurisprudence dictates that factual findings of the trial court, especially when affirmed by the appellate court, are
accorded the highest degree of respect and are considered conclusive between the parties.[7] A review of such
findings by this Court is not warranted except for highly meritorious circumstances when: (1) the findings of a
trial court are grounded entirely on speculation, surmises or conjectures; (2) a lower courts inference from its
factual findings is manifestly mistaken, absurd or impossible; (3) there is grave abuse of discretion in the
appreciation of facts; (4) the findings of the appellate court go beyond the issues of the case, or fail to notice
certain relevant facts which, if properly considered, will justify a different conclusion; (5) there is a
misappreciation of facts; (6) the findings of fact are conclusions without mention of the specific evidence on
which they are based, are premised on the absence of evidence, or are contradicted by evidence on record.
[8] None of the foregoing exceptions which would warrant a reversal of the assailed decision obtains in this
instance.
Yet, petitioners maintain that the proximate cause of Jaysons injury was his own negligence in disregarding the
instructions given by Tabugo prior to the experiment and peeking into the test tube. Petitioners invoke our ruling
in St. Marys Academy v. Carpitanos[9] which absolved St. Marys Academy from liability for the untimely death
of its student during a school sanctioned activity, declaring that the negligence of petitioner St. Marys Academy
was only a remote cause of the accident.
We are not convinced.
Contrary to petitioners assertions, the lower courts conclusions are borne out by the records of this case. Both
courts correctly concluded that the immediate and proximate cause of the accident which caused injury to Jayson
was the sudden and unexpected explosion of the chemicals, independent of any intervening cause. The assailed
Decision of the CA quotes with favor the RTC decision, thus:
In this case, [petitioners] failed to show that the negligence of [Jayson] was the proximate cause of
the latters injury. We find that the immediate cause of the accident was not the negligence of
[Jayson] when he curiously looked into the test tube when the chemicals suddenly exploded which
caused his injury, but the sudden and unexpected explosion of the chemicals independent of any
intervening cause. [Petitioners] could have prevented the mishap if they exercised a higher degree
of care, caution and foresight. The court a quocorrectly ruled that:
All of the [petitioners] are equally at fault and are liable for negligence because all
of them are responsible for exercising the required reasonable care, prudence,
caution and foresight to prevent or avoid injuries to the students. The individual
[petitioners] are persons charged with the teaching and vigilance over their students
as well as the supervision and ensuring of their well-being. Based on the facts

presented before this Court, these [petitioners] were remiss in their responsibilities
and lacking in the degree of vigilance expected of them. [Petitioner] subject teacher
Rosalinda Tabugo was inside the classroom when the class undertook the science
experiment although [Jayson] insisted that said [petitioner] left the classroom. No
evidence, however, was presented to establish that [petitioner] Tabugo was inside
the classroom for the whole duration of the experiment. It was unnatural in the
ordinary course of events that [Jayson] was brought to the school clinic for
immediate treatment not by [petitioner] subject teacher Rosalinda Tabugo but by
somebody else. The Court is inclined to believe that [petitioner] subject teacher
Tabugo was not inside the classroom at the time the accident happened. The Court
is also perplexed why none of the other students (who were eyewitnesses to the
incident) testified in Court to corroborate the story of the [petitioners]. The Court,
however, understands that these other students cannot testify for [Jayson] because
[Jayson] is no longer enrolled in said school and testifying for [Jayson] would incur
the ire of school authorities. Estefania Abdan is equally at fault as the subject
adviser or teacher in charge because she exercised control and supervision over
[petitioner] Tabugo and the students themselves. It was her obligation to insure that
nothing would go wrong and that the science experiment would be conducted
safely and without any harm or injury to the students. [Petitioner] Sr. Josephini
Ambatali is likewise culpable under the doctrine of command responsibility
because the other individual [petitioners] were under her direct control and
supervision. The negligent acts of the other individual [petitioners] were done
within the scope of their assigned tasks.
xxxx
The defense of due diligence of a good father of a family raised by [petitioner] St.
Joseph College will not exculpate it from liability because it has been shown that it
was guilty of inexcusable laxity in the supervision of its teachers (despite an
apparent rigid screening process for hiring) and in the maintenance of what should
have been a safe and secured environment for conducting dangerous experiments.
[Petitioner] school is still liable for the wrongful acts of the teachers and employees
because it had full information on the nature of dangerous science experiments but
did not take affirmative steps to avert damage and injury to students. The fact that
there has never been any accident in the past during the conduct of science
experiments is not a justification to be complacent in just preserving the
status quo and do away with creative foresight to install safety measures to protect
the students. Schools should not simply install safety reminders and distribute
safety instructional manuals. More importantly, schools should provide protective
gears and devices to shield students from expected risks and anticipated dangers.
Ordinarily, the liability of teachers does not extend to the school or university itself,
although an educational institution may be held liable under the principle of
RESPONDENT SUPERIOR. It has also been held that the liability of the employer
for the [tortuous] acts or negligence of its employees is primary and solidary, direct
and immediate and not conditioned upon the insolvency of or prior recourse against
the negligent employee.[10]

Under the foregoing circumstances, we are hard pressed to disturb the findings of the RTC, which the CA
affirmed.
Nonetheless, petitioners make much of the fact that Tabugo specifically instructed her students, including Jayson,
at the start of the experiment, not to look into the heated test tube before the compound had cooled off.
Petitioners would allocate all liability and place all blame for the accident on a twelve (12)-year-old student,
herein respondent Jayson.
We disagree.
As found by both lower courts, the proximate cause of Jaysons injury was the concurrent failure of petitioners to
prevent the foreseeable mishap that occurred during the conduct of the science experiment. Petitioners were
negligent by failing to exercise the higher degree of care, caution and foresight incumbent upon the school, its
administrators and teachers.
Article 218 of the Family Code, in relation to Article 2180 of the Civil Code, bestows special parental authority
on the following persons with the corresponding obligation, thus:
Art. 218. The school, its administrators and teachers, or the individual, entity or institution
engaged in child care shall have special parental authority and responsibility over the minor child
while under their supervision, instruction or custody.
Authority and responsibility shall apply to all authorized activities whether inside or outside the
premises of the school, entity or institution.

Art. 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or
omissions, but also for those of persons for whom one is responsible.
xxxx
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.

Petitioners negligence and failure to exercise the requisite degree of care and caution is demonstrated by the
following:
1. Petitioner school did not take affirmative steps to avert damage and injury to its students although it had full
information on the nature of dangerous science experiments conducted by the students during class;
2. Petitioner school did not install safety measures to protect the students who conduct experiments in class;

3. Petitioner school did not provide protective gears and devices, specifically goggles, to shield students from
expected risks and dangers; and
4. Petitioner Tabugo was not inside the classroom the whole time her class conducted the experiment,
specifically, when the accident involving Jayson occurred. In any event, the size of the classfifty (50) students
conducting the experiment is difficult to monitor.
Moreover, petitioners cannot simply deflect their negligence and liability by insisting that petitioner Tabugo gave
specific instructions to her science class not to look directly into the heated compound. Neither does our ruling
in St. Marys preclude their liability in this case.
Unfortunately for petitioners, St. Marys is not in point. In that case, respondents thereat admitted the
documentary exhibits establishing that the cause of the accident was a mechanical defect and not the recklessness
of the minor, James Daniel II, in driving the jeep. We held, thus:
Significantly, respondents did not present any evidence to show that the proximate cause of the
accident was the negligence of the school authorities, or the reckless driving of James Daniel II. x
x x.
Further, there was no evidence that petitioner school allowed the minor James Daniel II to drive
the jeep of respondent Vivencio Villanueva. It was Ched Villanueva, grandson of respondent
Vivencio Villanueva, who had possession and control of the jeep. He was driving the vehicle and
he allowed James Daniel II, a minor, to drive the jeep at the time of the accident.
Hence, liability for the accident, whether caused by the negligence of the minor driver or
mechanical detachment of the steering wheel guide of the jeep, must be pinned on the minors
parents primarily. The negligence of petitioner St. Marys Academy was only a remote cause of the
accident. Between the remote cause and the injury, there intervened the negligence of the minors
parents or the detachment of the steering wheel guide of the jeep.[11]

In marked contrast, both the lower courts similarly concluded that the mishap which happened during the science
experiment was foreseeable by the school, its officials and teachers. This neglect in preventing a foreseeable
injury and damage equates to neglect in exercising the utmost degree of diligence required of schools, its
administrators and teachers, and, ultimately, was the proximate cause of the damage and injury to Jayson. As we
have held in St. Marys, for petitioner [St. Marys Academy] to be liable, there must be a finding that the act or
omission considered as negligent was the proximate cause of the injury caused because the negligence must have
a causal connection to the accident.[12]
As regards the contributory negligence of Jayson, we see no need to disturb the lower courts identical rulings
thereon:

As earlier discussed, the proximate cause of [Jaysons] injury was the explosion of the heated
compound independent of any efficient intervening cause. The negligence on the part of
[petitioner] Tabugo in not making sure that the science experiment was correctly conducted was
the proximate cause or reason why the heated compound exploded and injured not only [Jayson]
but his classmates as well. However, [Jayson] is partly responsible for his own injury, hence, he
should not be entitled to recover damages in full but must likewise bear the consequences of his
own negligence. [Petitioners], therefore, should be held liable only for the damages actually
caused by their negligence.[13]

Lastly, given our foregoing ruling, we likewise affirm the lower courts award of actual and moral damages, and
grant of attorneys fees. The denial of petitioners counterclaim is also in order.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No. 68367
is AFFIRMED. Costs against petitioners.
SO ORDERED.
Republic
SUPREME
Manila

of

the

Philippines
COURT

SECOND DIVISION

G.R. No. L-25142 March 25, 1975


PHILIPPINE RABBIT BUS LINES, INC. and FELIX PANGALANGAN, plaintiffs-appellants,
vs.
PHIL-AMERICAN FORWARDERS, INC., ARCHIMEDES J. BALINGIT and FERNANDO
PINEDA, defendants-appellees.
Angel A. Sison for plaintiffs-appellants.
Fidel Zosimo U. Canilao for defendants-appellees.

AQUINO, J.:+.wph!1
Philippine Rabbit Bus Lines, Inc. and Felix Pangalangan appealed on pure questions of law from the order of the
Court of First Instance of Tarlac, dismissing their complaint against Archimedes J. Balingit.
The dismissal was based on the ground that Balingit as the manager of Phil-American Forwarders, Inc., which
together with Fernando Pineda and Balingit, was sued for damages in an action based on quasi-delict or culpa
aquiliana, is not the manager of an establishment contemplated in article 2180 of the Civil Code (Civil Case No.
3865).
In the complaint for damages filed by the bus company and Pangalangan against Phil-American Forwarders, Inc.,
Balingit and Pineda, it was alleged that on November 24, 1962, Pineda drove recklessly a freight truck, owned by
Phil-American Forwarders, Inc., along the national highway at Sto. Tomas, Pampanga. The truck bumped the bus

driven by Pangalangan, which was owned by Philippine Rabbit Bus Lines, Inc. As a result of the bumping,
Pangalangan suffered injuries and the bus was damaged and could not be used for seventy-nine days, thus
depriving the company of earnings amounting to P8,665.51. Balingit was the manager of Phil-American
Forwarders, Inc.
Among the defenses interposed by the defendants in their answer was that Balingit was not Pineda's employer.
Balingit moved that the complaint against him be dismissed on the ground that the bus company and the bus
driver had no cause of action against him. As already stated, the lower court dismissed the action as to Balingit.
The bus company and its driver appealed.
The Civil Code provides:t.hqw
ART. 2176. 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.
ART. 2180. 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 xxx xxx
The owners and managers of an establishment or enterprise are likewise responsible for damages
caused by their employees in the service of the branches in which the latter are employed or on the
occasion of their functions.
Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks, even though the former are not engaged in any business or
industry.
xxx xxx xxx
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. (1903a)
The novel and unprecedented legal issue in this appeal is whether the terms "employers" and "owners and
managers of an establishment or enterprise" (dueos o directores de un establicimiento o empresa) used in article
2180 of the Civil Code, formerly article 1903 of the old Code, embrace the manager of a corporation owning a
truck, the reckless operation of which allegedly resulted in the vehicular accident from which the damage arose.
We are of the opinion that those terms do not include the manager of a corporation. It may be gathered from the
context of article 2180 that the term "manager" ("director" in the Spanish version) is used in the sense of
"employer".
Hence, under the allegations of the complaint, no tortious or quasi-delictual liability can be fastened on Balingit
as manager of Phil-American Forwarders, Inc., in connection with the vehicular accident already mentioned
because he himself may be regarded as an employee or dependiente of his employer, Phil-American Forwarders,
Inc.
Thus, it was held "que es dependiente, a los efectos de la responsabilidad subsidiaria establecida en el num 3.0del
(art.) 1903, el director de un periodico explotado por una sociedad, porque cualquiera que sea su jerarquia y
aunque Ileve la direccion de determinadas convicciones politicas no por eso deja de estar subordinado a la
superior autoridad de la Empresa" (Decision of Spanish Supreme Court dated December 6, 1912 cited in 12
Manresa, Codigo Civil Espaol 5th Ed. 662; 1913 Enciclopedia Juridica Espaola 992).
The bus company and its driver, in their appellants' brief, injected a new factual issue which was not alleged in
their complaint. They argue that Phil- American Forwarders, Inc. is merely a business conduit of Balingit because

out of its capital stock with a par value of P41,200, Balingit and his wife had subscribed P40,000 and they paid
P10,000 on their subscription, while the other incorporators, namely, Rodolfo Limjuco, Ponciano Caparas and
Rafael Suntay paid P250.25 and P25, respectively.
That argument implies that the veil of corporate fiction should be pierced and that Phil-American Forwarders,
Inc. and Balingit and his wife should be treated as one and the same civil personality.
We cannot countenance that argument in this appeal. It was not raised in the lower court. The case has to be
decided on the basis of the pleadings filed in the trial court where it was assumed that Phil-American Forwarders,
Inc. has a personality separate and distinct from that of the Balingit spouses.
The legal issue, which the plaintiffs-appellants can ventilate in this appeal, is one which was raised in the lower
court and which is within the issues framed by the parties (Sec. 18, Rule 46, Rules of Court).
When a party deliberately adopts a certain theory and the case is decided upon that theory in the court below, he
will not be permitted to change his theory on appeal because, to permit him to do so, could be unfair to the
adverse party (2 Moran's Comments on the Rules of Court, 1970 Ed. p. 505).
WHEREFORE, the lower court's order of dismissal is affirmed. Costs against the plaintiffs-appellants.
SO ORDERED.
FIRST DIVISION

[G.R. No. 132266. December 21, 1999]

CASTILEX INDUSTRIAL CORPORATION, petitioner, vs. VICENTE VASQUEZ, JR. and LUISA SO
VASQUEZ, and CEBU DOCTORS HOSPITAL, INC., respondents.
DECISION
DAVIDE, JR., C.J.:
The pivotal issue in this petition is whether an employer may be held vicariously liable for the death
resulting from the negligent operation by a managerial employee of a company-issued vehicle.
The antecedents, as succinctly summarized by the Court of Appeals, are as follows:
On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So Vasquez, was driving a Honda motorcycle
around Fuente Osmea Rotunda. He was traveling counter-clockwise, (the normal flow of traffic in a rotunda) but
without any protective helmet or goggles. He was also only carrying a Students Permit to Drive at the time. Upon
the other hand, Benjamin Abad [was a] manager of Appellant Castilex Industrial Corporation, registered owner
[of] a Toyota Hi-Lux Pick-up with plate no. GBW-794. On the same date and time, Abad drove the said company
car out of a parking lot but instead of going around the Osmea rotunda he made a short cut against [the] flow of
the traffic in proceeding to his route to General Maxilom St. or to Belvic St.
In the process, the motorcycle of Vasquez and the pick-up of Abad collided with each other causing severe
injuries to the former. Abad stopped his vehicle and brought Vasquez to the Southern Islands Hospital and later to
the Cebu Doctors Hospital.

On September 5, 1988, Vasquez died at the Cebu Doctors Hospital. It was there that Abad signed an
acknowledgment of Responsible Party (Exhibit K) wherein he agreed to pay whatever hospital bills, professional
fees and other incidental charges Vasquez may incur.
After the police authorities had conducted the investigation of the accident, a Criminal Case was filed against
Abad but which was subsequently dismissed for failure to prosecute. So, the present action for damages was
commenced by Vicente Vasquez, Jr. and Luisa So Vasquez, parents of the deceased Romeo So Vasquez, against
Jose Benjamin Abad and Castilex Industrial Corporation. In the same action, Cebu Doctors Hospital intervened
to collect unpaid balance for the medical expense given to Romeo So Vasquez.[1]
The trial court ruled in favor of private respondents Vicente and Luisa Vasquez and ordered Jose
Benjamin Abad (hereafter ABAD) and petitioner Castilex Industrial Corporation (hereafter CASTILEX) to
pay jointly and solidarily (1) Spouses Vasquez, the amounts of P8,000.00 for burial expenses; P50,000.00 as
moral damages; P10,000.00 as attorneys fees; and P778,752.00 for loss of earning capacity; and (2) Cebu
Doctors Hospital, the sum of P50,927.83 for unpaid medical and hospital bills at 3% monthly interest from
27 July 1989 until fully paid, plus the costs of litigation.[2]
CASTILEX and ABAD separately appealed the decision.
In its decision[3] of 21 May 1997, the Court of Appeals affirmed the ruling of the trial court holding
ABAD and CASTILEX liable but held that the liability of the latter is only vicarious and not solidary with
the former. It reduced the award of damages representing loss of earning capacity from P778,752.00
to P214,156.80; and the interest on the hospital and medical bills, from 3% per month to 12% per annum
from 5 September 1988 until fully paid.
Upon CASTILEXs motion for reconsideration, the Court of Appeals modified its decision by (1)
reducing the award of moral damages from P50,000 to P30,000 in view of the deceaseds contributory
negligence; (b) deleting the award of attorneys fees for lack of evidence; and (c) reducing the interest on
hospital and medical bills to 6% per annum from 5 September 1988 until fully paid.[4]
Hence, CASTILEX filed the instant petition contending that the Court of Appeals erred in (1) applying
to the case the fifth paragraph of Article 2180 of the Civil Code, instead of the fourth paragraph thereof; (2)
that as a managerial employee, ABAD was deemed to have been always acting within the scope of his
assigned task even outside office hours because he was using a vehicle issued to him by petitioner; and (3)
ruling that petitioner had the burden to prove that the employee was not acting within the scope of his
assigned task.
Jose Benjamin ABAD merely adopted the statement of facts of petitioner which holds fast on the theory
of negligence on the part of the deceased.
On the other hand, respondents Spouses Vasquez argue that their sons death was caused by the
negligence of petitioners employee who was driving a vehicle issued by petitioner and who was on his way
home from overtime work for petitioner; and that petitioner is thus liable for the resulting injury and
subsequent death of their son on the basis of the fifth paragraph of Article 2180. Even if the fourth
paragraph of Article 2180 were applied, petitioner cannot escape liability therefor. They moreover argue that
the Court of Appeals erred in reducing the amount of compensatory damages when the award made by the
trial court was borne both by evidence adduced during the trial regarding deceaseds wages and by
jurisprudence on life expectancy. Moreover, they point out that the petition is procedurally not acceptable on
the following grounds: (1) lack of an explanation for serving the petition upon the Court of Appeals by
registered mail, as required under Section 11, Rule 13 of the Rules of Civil Procedure; and (2) lack of a

statement of the dates of the expiration of the original reglementary period and of the filing of the motion
for extension of time to file a petition for review.
For its part, respondent Cebu Doctors Hospital maintains that petitioner CASTILEX is indeed
vicariously liable for the injuries and subsequent death of Romeo Vasquez caused by ABAD, who was on
his way home from taking snacks after doing overtime work for petitioner. Although the incident occurred
when ABAD was not working anymore the inescapable fact remains that said employee would not have
been situated at such time and place had he not been required by petitioner to do overtime work. Moreover,
since petitioner adopted the evidence adduced by ABAD, it cannot, as the latters employer, inveigle itself
from the ambit of liability, and is thus estopped by the records of the case, which it failed to refute.
We shall first address the issue raised by the private respondents regarding some alleged procedural
lapses in the petition.
Private respondents contention of petitioners violation of Section 11 of Rule 13 and Section 4 of Rule
45 of the 1997 Rules of Civil Procedure holds no water.
Section 11 of Rule 13 provides:
SEC. 11. Priorities in modes of service and filing. -- Whenever practicable, the service and filing of pleadings
and other papers shall be done personally. Except with respect to papers emanating from the court, a resort to
other modes must be accompanied by a written explanation why the service or filing was not done personally. A
violation of this Rule may be cause to consider the paper as not filed.
The explanation why service of a copy of the petition upon the Court of Appeals was done by registered
mail is found on Page 28 of the petition.Thus, there has been compliance with the aforequoted provision.
As regards the allegation of violation of the material data rule under Section 4 of Rule 45, the same is
unfounded. The material dates required to be stated in the petition are the following: (1) the date of receipt
of the judgment or final order or resolution subject of the petition; (2) the date of filing of a motion for new
trial or reconsideration, if any; and (3) the date of receipt of the notice of the denial of the motion. Contrary
to private respondents claim, the petition need not indicate the dates of the expiration of the original
reglementary period and the filing of a motion for extension of time to file the petition. At any rate, aside
from the material dates required under Section 4 of Rule 45, petitioner CASTILEX also stated in the first
page of the petition the date it filed the motion for extension of time to file the petition.
Now on the merits of the case.
The negligence of ABAD is not an issue at this instance. Petitioner CASTILEX presumes said
negligence but claims that it is not vicariously liable for the injuries and subsequent death caused by ABAD.
Petitioner contends that the fifth paragraph of Article 2180 of the Civil Code should only apply to
instances where the employer is not engaged in business or industry. Since it is engaged in the business of
manufacturing and selling furniture it is therefore not covered by said provision.Instead, the fourth
paragraph should apply.
Petitioners interpretation of the fifth paragraph is not accurate. The phrase even though the former are
not engaged in any business or industry found in the fifth paragraph should be interpreted to mean that it is
not necessary for the employer to be engaged in any business or industry to be liable for the negligence of
his employee who is acting within the scope of his assigned task.[5]

A distinction must be made between the two provisions to determine what is applicable. Both
provisions apply to employers: the fourth paragraph, to owners and managers of an establishment or
enterprise; and the fifth paragraph, to employers in general, whether or not engaged in any business or
industry. The fourth paragraph covers negligent acts of employees committed either in the service of the
branches or on the occasion of their functions, while the fifth paragraph encompasses negligent acts of
employees acting within the scope of their assigned task. The latter is an expansion of the former in both
employer coverage and acts included. Negligent acts of employees, whether or not the employer is engaged
in a business or industry, are covered so long as they were acting within the scope of their assigned task,
even though committed neither in the service of the branches nor on the occasion of their functions. For,
admittedly, employees oftentimes wear different hats. They perform functions which are beyond their office,
title or designation but which, nevertheless, are still within the call of duty.
This court has applied the fifth paragraph to cases where the employer was engaged in a business or
industry such as truck operators[6] and banks.[7] The Court of Appeals cannot, therefore, be faulted in
applying the said paragraph of Article 2180 of the Civil Code to this case.
Under the fifth paragraph of Article 2180, whether or not engaged in any business or industry, an
employer is liable for the torts committed by employees within the scope of his assigned tasks. But it is
necessary to establish the employer-employee relationship; once this is done, the plaintiff must show, to
hold the employer liable, that the employee was acting within the scope of his assigned task when the tort
complained of was committed. It is only then that the employer may find it necessary to interpose the
defense of due diligence in the selection and supervision of the employee.[8]
It is undisputed that ABAD was a Production Manager of petitioner CASTILEX at the time of the tort
occurrence. As to whether he was acting within the scope of his assigned task is a question of fact, which
the court a quo and the Court of Appeals resolved in the affirmative.
Well-entrenched in our jurisprudence is the rule that the factual findings of the Court of Appeals are
entitled to great respect, and even finality at times. This rule is, however, subject to exceptions such as when
the conclusion is grounded on speculations, surmises, or conjectures.[9] Such exception obtain in the
present case to warrant review by this Court of the finding of the Court of Appeals that since ABAD was
driving petitioners vehicle he was acting within the scope of his duties as a manager.
Before we pass upon the issue of whether ABAD was performing acts within the range of his
employment, we shall first take up the other reason invoked by the Court of Appeals in holding petitioner
CASTILEX vicariously liable for ABADs negligence, i.e., that the petitioner did not present evidence that
ABAD was not acting within the scope of his assigned tasks at the time of the motor vehicle
mishap. Contrary to the ruling of the Court of Appeals, it was not incumbent upon the petitioner to prove the
same. It was enough for petitioner CASTILEX to deny that ABAD was acting within the scope of his
duties; petitioner was not under obligation to prove this negative averment. Ei incumbit probatio qui dicit,
non qui negat (He who asserts, not he who denies, must prove). The Court has consistently applied the
ancient rule that if the plaintiff, upon whom rests the burden of proving his cause of action, fails to show in
a satisfactory manner facts which he bases his claim, the defendant is under no obligation to prove his
exception or defense.[10]
Now on the issue of whether the private respondents have sufficiently established that ABAD was
acting within the scope of his assigned tasks.

ABAD, who was presented as a hostile witness, testified that at the time of the incident, he was driving
a company-issued vehicle, registered under the name of petitioner. He was then leaving the restaurant where
he had some snacks and had a chat with his friends after having done overtime work for the petitioner.
No absolutely hard and fast rule can be stated which will furnish the complete answer to the problem of
whether at a given moment, an employee is engaged in his employers business in the operation of a motor
vehicle, so as to fix liability upon the employer because of the employees action or inaction; but rather, the
result varies with each state of facts.[11]
In Filamer Christian Institute v. Intermediate Appellate Court,[12] this Court had the occasion to hold
that acts done within the scope of the employees assigned tasks includes any act done by an employee in
furtherance of the interests of the employer or for the account of the employer at the time of the infliction of
the injury or damages.
The court a quo and the Court of Appeals were one in holding that the driving by a manager of a
company-issued vehicle is within the scope of his assigned tasks regardless of the time and circumstances.
We do not agree. The mere fact that ABAD was using a service vehicle at the time of the injurious
incident is not of itself sufficient to charge petitioner with liability for the negligent operation of said vehicle
unless it appears that he was operating the vehicle within the course or scope of his employment.
The following are principles in American Jurisprudence on the employers liability for the injuries
inflicted by the negligence of an employee in the use of an employers motor vehicle:

I. Operation of Employers Motor Vehicle in Going to or from Meals

It has been held that an employee who uses his employers vehicle in going from his work to a place
where he intends to eat or in returning to work from a meal is not ordinarily acting within the scope of his
employment in the absence of evidence of some special business benefit to the employer. Evidence that by
using the employers vehicle to go to and from meals, an employee is enabled to reduce his time-off and so
devote more time to the performance of his duties supports the finding that an employee is acting within the
scope of his employment while so driving the vehicle.[13]

II. Operation of Employers Vehicle in Going to or from Work

In the same vein, traveling to and from the place of work is ordinarily a personal problem or concern of
the employee, and not a part of his services to his employer. Hence, in the absence of some special benefit to
the employer other than the mere performance of the services available at the place where he is needed, the
employee is not acting within the scope of his employment even though he uses his employers motor
vehicle.[14]
The employer may, however, be liable where he derives some special benefit from having the employee
drive home in the employers vehicle as when the employer benefits from having the employee at work
earlier and, presumably, spending more time at his actual duties. Where the employees duties require him to
circulate in a general area with no fixed place or hours of work, or to go to and from his home to various
outside places of work, and his employer furnishes him with a vehicle to use in his work, the courts have

frequently applied what has been called the special errand or roving commission rule, under which it can be
found that the employee continues in the service of his employer until he actually reaches home. However,
even if the employee be deemed to be acting within the scope of his employment in going to or from work
in his employers vehicle, the employer is not liable for his negligence where at the time of the accident, the
employee has left the direct route to his work or back home and is pursuing a personal errand of his own.

III. Use of Employers Vehicle Outside Regular Working Hours

An employer who loans his motor vehicle to an employee for the latters personal use outside of regular
working hours is generally not liable for the employees negligent operation of the vehicle during the period
of permissive use, even where the employer contemplates that a regularly assigned motor vehicle will be
used by the employee for personal as well as business purposes and there is some incidental benefit to the
employer.Even where the employees personal purpose in using the vehicle has been accomplished and he
has started the return trip to his house where the vehicle is normally kept, it has been held that he has not
resumed his employment, and the employer is not liable for the employees negligent operation of the
vehicle during the return trip.[15]
The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on the
doctrine of respondeat superior, not on the principle of bonus pater familias as in ours. Whether the fault or
negligence of the employee is conclusive on his employer as in American law or jurisprudence, or merely
gives rise to the presumption juris tantum of negligence on the part of the employer as in ours, it is
indispensable that the employee was acting in his employers business or within the scope of his assigned
task.[16]
In the case at bar, it is undisputed that ABAD did some overtime work at the petitioners office, which
was located in Cabangcalan, Mandaue City. Thereafter, he went to Goldies Restaurant in Fuente Osmea,
Cebu City, which is about seven kilometers away from petitioners place of business.[17] A witness for the
private respondents, a sidewalk vendor, testified that Fuente Osmea is a lively place even at dawn because
Goldies Restaurant and Back Street were still open and people were drinking thereat. Moreover, prostitutes,
pimps, and drug addicts littered the place.[18]
At the Goldies Restaurant, ABAD took some snacks and had a chat with friends. It was when ABAD
was leaving the restaurant that the incident in question occurred. That same witness for the private
respondents testified that at the time of the vehicular accident, ABAD was with a woman in his car, who
then shouted: Daddy, Daddy![19] This woman could not have been ABADs daughter, for ABAD was only
29 years old at the time.
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a personal
purpose not in line with his duties at the time he figured in a vehicular accident. It was then about 2:00 a.m.
of 28 August 1988, way beyond the normal working hours. ABADs working day had ended; his overtime
work had already been completed. His being at a place which, as petitioner put it, was known as a haven for
prostitutes, pimps, and drug pushers and addicts, had no connection to petitioners business; neither had it
any relation to his duties as a manager. Rather, using his service vehicle even for personal purposes was a
form of a fringe benefit or one of the perks attached to his position.
Since there is paucity of evidence that ABAD was acting within the scope of the functions entrusted to
him, petitioner CASTILEX had no duty to show that it exercised the diligence of a good father of a family

in providing ABAD with a service vehicle. Thus, justice and equity require that petitioner be relieved of
vicarious liability for the consequences of the negligence of ABAD in driving its vehicle.[20]
WHEREFORE, the petition is GRANTED, and the appealed decision and resolution of the Court of
Appeals is AFFIRMED with the modification that petitioner Castilex Industrial Corporation be absolved of
any liability for the damages caused by its employee, Jose Benjamin Abad.
SO ORDERED.
Republic
SUPREME
Manila

of

the

Philippines
COURT

THIRD DIVISION
G.R. No. 163609

November 27, 2008

SPS. BUENAVENTURA JAYME AND ROSARIO JAYME, petitioners,


vs.
RODRIGO APOSTOL, FIDEL LOZANO, ERNESTO SIMBULAN, MAYOR FERNANDO Q. MIGUEL,
MUNICIPALITY OF KORONADAL (NOW CITY OF KORONADAL), PROVINCE OF SOUTH
COTABATO, represented by the MUNICIPAL TREASURER and/or MUNICIPAL MAYOR FERNANDO
Q. MIGUEL, and THE FIRST INTEGRATED BONDING AND INSURANCE COMPANY,
INC., respondents.
DECISION
REYES, R.T., J.:
MAY a municipal mayor be held solidarily liable for the negligent acts of the driver assigned to him, which
resulted in the death of a minor pedestrian?
Challenged in this petition for review on certiorari is the Decision1 of the Court of Appeals (CA) which reversed
and set aside the decision of the Regional Trial Court (RTC), Polomolok, Cotabato City, Branch 39, insofar as
defendant Mayor Fernando Q. Miguel is concerned. The CA absolved Mayor Miguel from any liability since it
was not he, but the Municipality of Koronadal, that was the employer of the negligent driver.
The Facts
On February 5, 1989, Mayor Miguel of Koronadal, South Cotabato was on board the Isuzu pick-up truck driven
by Fidel Lozano, an employee of the Municipality of Koronadal. 2 The pick-up truck was registered under the
name of Rodrigo Apostol, but it was then in the possession of Ernesto Simbulan. 3 Lozano borrowed the pick-up
truck from Simbulan to bring Miguel to Buayan Airport at General Santos City to catch his Manila flight.4
The pick-up truck accidentally hit Marvin C. Jayme, a minor, who was then crossing the National Highway in
Poblacion, Polomolok, South Cotabato.5 The intensity of the collision sent Marvin some fifty (50) meters away
from the point of impact, a clear indication that Lozano was driving at a very high speed at the time of the
accident.6
Marvin sustained severe head injuries with subdural hematoma and diffused cerebral contusion. 7 He was initially
treated at the Howard Hubbard Memorial Hospital. 8 Due to the seriousness of his injuries, he was airlifted to the
Ricardo Limso Medical Center in Davao City for more intensive treatment. 9Despite medical attention, Marvin
expired six (6) days after the accident.10
Petitioners spouses Buenaventura and Rosario Jayme, the parents of Marvin, filed a complaint for damages with
the RTC against respondents.11 In their complaint, they prayed that all respondents be held solidarily liable for

their loss. They pointed out that that proximate cause of Marvin's death was Lozano's negligent and reckless
operation of the vehicle. They prayed for actual, moral, and exemplary damages, attorney's fees, and litigation
expenses.
In their respective Answers, all respondents denied liability for Marvin's death. Apostol and Simbulan averred
that Lozano took the pick-up truck without their consent. Likewise, Miguel and Lozano pointed out that Marvin's
sudden sprint across the highway made it impossible to avoid the accident. Yet, Miguel denied being on board the
vehicle when it hit Marvin. The Municipality of Koronadal adopted the answer of Lozano and Miguel. As for
First Integrated Bonding and Insurance Company, Inc., the vehicle insurer, it insisted that its liability is
contributory and is only conditioned on the right of the insured. Since the insured did not file a claim within the
prescribed period, any cause of action against it had prescribed.
RTC Disposition
On January 25, 1999, the RTC rendered judgment in favor of spouses Jayme, the dispositive portion of which
reads:
WHEREFORE, in view of the foregoing, the defendant Municipality of Koronadal cannot be held liable
for the damages incurred by other defendant (sic) being an agency of the State performing a (sic)
governmental functions. The same with defendant Hermogenes Simbulan, not being the owner of the
subject vehicle, he is absolved of any liability. The complaint against defendant First Integrated Bonding
Insurance Company, Inc. is hereby ordered dismissed there being no cause of action against said insurance
company.
However, defendants Fidel Lozano, Rodrigo Apostol, and Mayor Fernando Miguel of Koronadal, South
Cotabato, are hereby ordered jointly and severally to pay the plaintiff (sic) the following sums:
1. One Hundred Seventy Three Thousand One Hundred One and Forty Centavos (P173,101.40)
Pesos as actual damages with legal interest of 12% per annum computed from February 11, 1989
until fully paid;
2. Fifty Thousand (P50,000.00) Pesos as moral damages;
3. Twenty Thousand (P20,000.00) Pesos as exemplary damages;
4. Twenty Thousand (P20,000.00) Pesos as Attorney's fees;
5. Fifty Thousand (P50,000.00) Pesos for the death of Marvin Jayme;
6. Three Thousand (P3,000.00) as litigation expenses; and
7. To pay the cost of this suit.
SO ORDERED.12
Dissatisfied with the RTC ruling, Mayor Miguel interposed an appeal to the CA.
CA Disposition
In his appeal, Mayor Miguel contended that the RTC erred in ruling that he was Lozano's employer and, hence,
solidarily liable for the latter's negligent act. Records showed that the Municipality of Koronadal was the driver's
true and lawful employer. Mayor Miguel also denied that he did not exercise due care and diligence in the
supervision of Lozano. The incident, although unfortunate, was unexpected and cannot be attributed to him.
On October 22, 2003, the CA granted the appeal, disposing as follows:
WHEREFORE, the Decision appealed from is REVERSED and SET ASIDE, insofar as defendantappellant Mayor Fernando Q. Miguel is concerned, and the complaint against him is DISMISSED.
IT IS SO ORDERED.13

The CA held that Mayor Miguel should not be held liable for damages for the death of Marvin Jayme. Said the
appellate court:
Moreover, plaintiffs-appellees admitted that Mayor Miguel was not the employer of Lozano. Thus,
paragraph 9 of the complaint alleged that the Municipality of Koronadal was the employer of both
Mayor Miguel and Lozano. Not being the employer of Lozano, Mayor Miguel could not thus be held
liable for the damages caused by the former. Mayor Miguel was a mere passenger in the Isuzu pick-up
at the time of the accident.14 (Emphasis supplied)
The CA also reiterated the settled rule that it is the registered owner of a vehicle who is jointly and severally
liable with the driver for damages incurred by passengers or third persons as a consequence of injuries or death
sustained in the operation of the vehicle.
Issues
The spouses Jayme have resorted to the present recourse and assign to the CA the following errors:
I.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT MAYOR FERNANDO
MIGUEL CANNOT BE HELD LIABLE FOR THE DEATH OF MARVIN JAYME WHICH
CONCLUSION IS CONTRARY TO LAW AND THE SETTLED PRONOUNCEMENTS OF THIS
HONORABLE TRIBUNAL;
II.
THE FINDINGS OF FACTS OF THE HONORABLE COURT OF APPEALS ARE CONTRARY TO
THE FINDINGS OF THE TRIAL COURT AND ARE CONTRADICTED BY THE EVIDENCE ON
RECORD; MOREOVER, THE CONCLUSIONS DRAWN BY THE HONORABLE COURT OF
APPEALS ARE ALL BASED ON CONJECTURES AND SURMISES AND AGAINST ACCEPTED
COURSE OF JUDICIAL PROCEEDINGS WHICH URGENTLY CALL FOR AN EXERCISE OF THIS
HONORABLE COURT'S SUPERVISION.15
Our Ruling
The doctrine of vicarious liability or imputed liability finds no application in the present case.
Spouses Jayme contend, inter alia, that vicarious liability attaches to Mayor Miguel. He was not a mere
passenger, but instead one who had direct control and supervision over Lozano during the time of the accident.
According to petitioners, the element of direct control is not negated by the fact that Lozano's employer was the
Municipality of Koronadal. Mayor Miguel, being Lozano's superior, still had control over the manner the vehicle
was operated.
Article 218016 of the Civil Code provides that a person is not only liable for one's own quasi-delictual acts, but
also for those persons for whom one is responsible for. This liability is popularly known as vicarious or imputed
liability. To sustain claims against employers for the acts of their employees, the following requisites must be
established: (1) That the employee was chosen by the employer personally or through another; (2) That the
service to be rendered in accordance with orders which the employer has the authority to give at all times; and (3)
That the illicit act of the employee was on the occasion or by reason of the functions entrusted to him.17
Significantly, to make the employee liable under paragraphs 5 and 6 of Article 2180, it must be established that
the injurious or tortuous act was committed at the time the employee was performing his functions.18
Furthermore, the employer-employee relationship cannot be assumed. It is incumbent upon the plaintiff to prove
the relationship by preponderant evidence. In Belen v. Belen,19 this Court ruled that it was enough for defendant
to deny an alleged employment relationship. The defendant is under no obligation to prove the negative
averment. This Court said:

It is an old and well-settled rule of the courts that the burden of proving the action is upon the plaintiff,
and that if he fails satisfactorily to show the facts upon which he bases his claim, the defendant is under
no obligation to prove his exceptions. This rue is in harmony with the provisions of Section 297 of the
Code of Civil Procedure holding that each party must prove his own affirmative allegations, etc.20
In resolving the present controversy, it is imperative to find out if Mayor Miguel is, indeed, the employer of
Lozano and therefore liable for the negligent acts of the latter. To determine the existence of an employment
relationship, We rely on the four-fold test. This involves: (1) the employer's power of selection; (2) payment of
wages or other remuneration; (3) the employer's right to control the method of doing the work; and (4) the
employer's right of suspension or dismissal.21
Applying the foregoing test, the CA correctly held that it was the Municipality of Koronadal which was the
lawful employer of Lozano at the time of the accident. It is uncontested that Lozano was employed as a driver by
the municipality. That he was subsequently assigned to Mayor Miguel during the time of the accident is of no
moment. This Court has, on several occasions, held that an employer-employee relationship still exists even if the
employee was loaned by the employer to another person or entity because control over the employee
subsists.22 In the case under review, the Municipality of Koronadal remains to be Lozano's employer
notwithstanding Lozano's assignment to Mayor Miguel.
Spouses Jayme argued that Mayor Miguel had at least supervision and control over Lozano and how the latter
operated or drove the Isuzu pick-up during the time of the accident. They, however, failed to buttress this claim.
Even assuming arguendo that Mayor Miguel had authority to give instructions or directions to Lozano, he still
can not be held liable. In Benson v. Sorrell,23 the New England Supreme Court ruled that mere giving of
directions to the driver does not establish that the passenger has control over the vehicle. Neither does it render
one the employer of the driver. This Court, in Soliman, Jr. v. Tuazon,24 ruled in a similar vein, to wit:
x x x The fact that a client company may give instructions or directions to the security guards assigned to
it, does not, by itself, render the client responsible as an employer of the security guards concerned and
liable for their wrongful acts and omissions. Those instructions or directions are ordinarily no more than
requests commonly envisaged in the contract for services entered into with the security agency. x x
x25 (Emphasis supplied)
Significantly, no negligence may be imputed against a fellow employee although the person may have the right to
control the manner of the vehicle's operation. 26 In the absence of an employer-employee relationship
establishing vicarious liability, the driver's negligence should not be attributed to a fellow employee who only
happens to be an occupant of the vehicle.27 Whatever right of control the occupant may have over the driver is
not sufficient by itself to justify an application of the doctrine of vicarious liability. Handley v. Lombardi28 is
instructive on this exception to the rule on vicarious liability:
Plaintiff was not the master or principal of the driver of the truck, but only an intermediate and superior
employee or agent. This being so, the doctrine of respondeat superior or qui facit per alium is not
properly applicable to him. His power to direct and control the driver was not as master, but only by virtue
of the fact that they were both employed by Kruse, and the further fact that as Kruse's agent he was
delegated Kruse's authority over the driver. x x x
In the case of actionable negligence, the rule is well settled both in this state and elsewhere that the
negligence of a subordinate employee or subagent is not to be imputed to a superior employee or agent,
but only to the master or principal. (Hilton v. Oliver, 204 Cal. 535 [61 A. L. R. 297, 269 Pac. 425; Guild v.
Brown, 115 Cal. App. 374 [1 Pac. (2d) 528; Ellis v. Southern Ry. Co., 72 S. C. 464 [2 L. R. A. (N. S.) 378,
52 S. E. 228; Thurman v. Pittsburg & M. Copper Co., 41 Mont. 141 [108 Pac. 588]; 2 Cor. Jur., p. 829;
and see the elaborate note in 61 A. L. R. 277, and particularly that part commencing at p. 290.) We can see

no logical reason for drawing any distinction in this regard between actionable negligence and
contributory negligence. x x x29
The rule was reiterated in Bryant v. Pacific Elec. Ry. Co.[30 and again in Sichterman v. Hollingshead Co.31
In Swanson v. McQuown,32 a case involving a military officer who happened to be riding in a car driven by a
subordinate later involved in an accident, the Colorado Supreme Court adhered to the general rule that a public
official is not liable for the wrongful acts of his subordinates on a vicarious basis since the relationship is not a
true master-servant situation.33 The court went on to rule that the only exception is when they cooperate in the
act complained of, or direct or encourage it.34
In the case at bar, Mayor Miguel was neither Lozano's employer nor the vehicle's registered owner. There existed
no causal relationship between him and Lozano or the vehicle used that will make him accountable for Marvin's
death. Mayor Miguel was a mere passenger at the time of the accident.
Parenthetically, it has been held that the failure of a passenger to assist the driver, by providing him warnings or
by serving as lookout does not make the passenger liable for the latter's negligent acts. 35The driver's duty is not
one that may be delegated to others.36
As correctly held by the trial court, the true and lawful employer of Lozano is the Municipality of Koronadal.
Unfortunately for Spouses Jayme, the municipality may not be sued because it is an agency of the State engaged
in governmental functions and, hence, immune from suit. This immunity is illustrated in Municipality of San
Fernando, La Union v. Firme,37 where this Court held:
It has already been remarked that municipal corporations are suable because their charters grant them the
competence to sue and be sued. Nevertheless, they are generally not liable for torts committed by them in
the discharge of governmental functions and can only be held answerable only if it can be shown that they
were acting in proprietary capacity. In permitting such entities to be sued, the State merely gives the
claimant the right to show that the defendant was not acting in governmental capacity when the injury was
committed or that the case comes under the exceptions recognized by law. Failing this, the claimant
cannot recover.38
Verily, liability attaches to the registered owner, the negligent driver and his direct employer. The CA observation
along this line are worth restating:
Settled is the rule that the registered owner of a vehicle is jointly and severally liable with the driver for
damages incurred by passengers and third persons as a consequence of injuries or death sustained in the
operation of said vehicles. Regardless of who the actual owner of the vehicle is, the operator of record
continues to be the operator of the vehicle as regards the public and third persons, and as such is directly
and primarily responsible for the consequences incident (sic) to its operation x x x.39
The accidental death of Marvin Jayme is a tragic loss for his parents. However, justice demands that only those
liable under our laws be held accountable for Marvin's demise. Justice can not sway in favor of petitioners simply
to assuage their pain and loss. The law on the matter is clear: only the negligent driver, the driver's employer, and
the registered owner of the vehicle are liable for the death of a third person resulting from the negligent operation
of the vehicle.
WHEREFORE, the petition is DENIED and the appealed Decision AFFIRMED.
SO ORDERED.
Republic
SUPREME
Manila

of

the

FIRST DIVISION

Philippines
COURT

G.R. No. 126297

February 11, 2008

PROFESSIONAL SERVICES, INC., petitioner,


vs.
THE COURT OF APPEALS and NATIVIDAD and ENRIQUE AGANA, respondents,
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - x
G.R. No. 126467

February 11, 2008

NATIVIDAD (Substituted by her children MARCELINO AGANA III, ENRIQUE AGANA, JR., EMMA
AGANA ANDAYA, JESUS AGANA, and RAYMUND AGANA) and ENRIQUE AGANA, petitioners,
vs.
THE COURT OF APPEALS and JUAN FUENTES, respondents,
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - x
G.R. No. 127590

February 11, 2008

MIGUEL AMPIL, petitioner,


vs.
THE COURT OF APPEALS and NATIVIDAD AGANA and ENRIQUE AGANA, respondents.
RESOLUTION
SANDOVAL-GUTIERREZ, J.:
As the hospital industry changes, so must the laws and jurisprudence governing hospital liability. The immunity
from medical malpractice traditionally accorded to hospitals has to be eroded if we are to balance the interest of
the patients and hospitals under the present setting.
Before this Court is a motion for reconsideration filed by Professional Services, Inc. (PSI), petitioner in G.R. No.
126297, assailing the Courts First Division Decision dated January 31, 2007, finding PSI and Dr. Miguel Ampil,
petitioner in G.R. No. 127590, jointly and severally liable for medical negligence.
A brief revisit of the antecedent facts is imperative.
On April 4, 1984, Natividad Agana was admitted at the Medical City General Hospital (Medical City) because of
difficulty of bowel movement and bloody anal discharge. Dr. Ampil diagnosed her to be suffering from "cancer
of the sigmoid." Thus, on April 11, 1984, Dr. Ampil, assisted by the medical staff1 of Medical City, performed an
anterior resection surgery upon her. During the surgery, he found that the malignancy in her sigmoid area had
spread to her left ovary, necessitating the removal of certain portions of it. Thus, Dr. Ampil obtained the consent
of Atty. Enrique Agana, Natividads husband, to permit Dr. Juan Fuentes, respondent in G.R. No. 126467, to
perform hysterectomy upon Natividad.
Dr. Fuentes performed and completed the hysterectomy. Afterwards, Dr. Ampil took over, completed the
operation and closed the incision. However, the operation appeared to be flawed. In the corresponding Record of
Operation dated April 11, 1984, the attending nurses entered these remarks:
sponge count lacking 2
announced to surgeon searched done (sic) but to no avail continue for closure.
After a couple of days, Natividad complained of excruciating pain in her anal region. She consulted both Dr.
Ampil and Dr. Fuentes about it. They told her that the pain was the natural consequence of the surgical operation
performed upon her. Dr. Ampil recommended that Natividad consult an oncologist to treat the cancerous nodes
which were not removed during the operation.

On May 9, 1984, Natividad, accompanied by her husband, went to the United States to seek further treatment.
After four (4) months of consultations and laboratory examinations, Natividad was told that she was free of
cancer. Hence, she was advised to return to the Philippines.
On August 31, 1984, Natividad flew back to the Philippines, still suffering from pains. Two (2) weeks thereafter,
her daughter found a piece of gauze protruding from her vagina. Dr. Ampil was immediately informed. He
proceeded to Natividads house where he managed to extract by hand a piece of gauze measuring 1.5 inches in
width. Dr. Ampil then assured Natividad that the pains would soon vanish.
Despite Dr. Ampils assurance, the pains intensified, prompting Natividad to seek treatment at the Polymedic
General Hospital. While confined thereat, Dr. Ramon Gutierrez detected the presence of a foreign object in her
vagina -- a foul-smelling gauze measuring 1.5 inches in width. The gauze had badly infected her vaginal vault. A
recto-vaginal fistula had formed in her reproductive organ which forced stool to excrete through the vagina.
Another surgical operation was needed to remedy the situation. Thus, in October 1984, Natividad underwent
another surgery.
On November 12, 1984, Natividad and her husband filed with the Regional Trial Court, Branch 96, Quezon City
a complaint for damages against PSI (owner of Medical City), Dr. Ampil and Dr. Fuentes.
On February 16, 1986, pending the outcome of the above case, Natividad died. She was duly substituted by her
above-named children (the Aganas).
On March 17, 1993, the trial court rendered judgment in favor of spouses Agana finding PSI, Dr. Ampil and Dr.
Fuentes jointly and severally liable. On appeal, the Court of Appeals, in its Decision dated September 6, 1996,
affirmed the assailed judgment with modification in the sense that the complaint against Dr. Fuentes was
dismissed.
PSI, Dr. Ampil and the Aganas filed with this Court separate petitions for review on certiorari. On January 31,
2007, the Court, through its First Division, rendered a Decision holding that PSI is jointly and severally liable
with Dr. Ampil for the following reasons: first, there is an employer-employee relationship between Medical City
and Dr. Ampil. The Court relied on Ramos v. Court of Appeals,2 holding that for the purpose of apportioning
responsibility in medical negligence cases, an employer-employee relationship in effect exists between hospitals
and their attending and visiting physicians; second, PSIs act of publicly displaying in the lobby of the Medical
City the names and specializations of its accredited physicians, including Dr. Ampil, estopped it from denying the
existence of an employer-employee relationship between them under the doctrine of ostensible agency or
agency by estoppel; and third, PSIs failure to supervise Dr. Ampil and its resident physicians and nurses and to
take an active step in order to remedy their negligence rendered it directly liable under the doctrine of corporate
negligence.
In its motion for reconsideration, PSI contends that the Court erred in finding it liable under Article 2180 of the
Civil Code, there being no employer-employee relationship between it and its consultant, Dr. Ampil. PSI stressed
that the Courts Decision in Ramos holding that "an employer-employee relationship in effect exists between
hospitals and their attending and visiting physicians for the purpose of apportioning responsibility" had been
reversed in a subsequent Resolution.3 Further, PSI argues that the doctrine of ostensible agency or agency by
estoppelcannot apply because spouses Agana failed to establish one requisite of the doctrine, i.e., that Natividad
relied on the representation of the hospital in engaging the services of Dr. Ampil. And lastly, PSI maintains that
the doctrine of corporate negligence is misplaced because the proximate cause of Natividads injury was Dr.
Ampils negligence.
The motion lacks merit.
As earlier mentioned, the First Division, in its assailed Decision, ruled that an employer-employee
relationship "in effect" exists between the Medical City and Dr. Ampil. Consequently, both are jointly and
severally liable to the Aganas. This ruling proceeds from the following ratiocination in Ramos:

We now discuss the responsibility of the hospital in this particular incident. The unique practice (among
private hospitals) of filling up specialist staff with attending and visiting "consultants," who are allegedly
not hospital employees, presents problems in apportioning responsibility for negligence in medical
malpractice cases. However, the difficulty is only more apparent than real.
In the first place, hospitals exercise significant control in the hiring and firing of consultants and in
the conduct of their work within the hospital premises. Doctors who apply for "consultant" slots,
visiting or attending, are required to submit proof of completion of residency, their educational
qualifications; generally, evidence of accreditation by the appropriate board (diplomate), evidence of
fellowship in most cases, and references. These requirements are carefully scrutinized by members of the
hospital administration or by a review committee set up by the hospital who either accept or reject the
application. This is particularly true with respondent hospital.
After a physician is accepted, either as a visiting or attending consultant, he is normally required to
attend clinico-pathological conferences, conduct bedside rounds for clerks, interns and residents,
moderate grand rounds and patient audits and perform other tasks and responsibilities, for the
privilege of being able to maintain a clinic in the hospital, and/or for the privilege of admitting
patients into the hospital. In addition to these, the physicians performance as a specialist is generally
evaluated by a peer review committee on the basis of mortality and morbidity statistics, and
feedback from patients, nurses, interns and residents. A consultant remiss in his duties, or a
consultant who regularly falls short of the minimum standards acceptable to the hospital or its peer
review committee, is normally politely terminated.
In other words, private hospitals hire, fire and exercise real control over their attending and visiting
"consultant" staff. While "consultants" are not, technically employees, a point which respondent
hospital asserts in denying all responsibility for the patients condition, the control exercised, the
hiring, and the right to terminate consultants all fulfill the important hallmarks of an employeremployee relationship, with the exception of the payment of wages. In assessing whether such a
relationship in fact exists, the control test is determining. Accordingly, on the basis of the foregoing,
we rule that for the purpose of allocating responsibility in medical negligence cases, an employeremployee relationship in effect exists between hospitals and their attending and visiting
physicians. This being the case, the question now arises as to whether or not respondent hospital is
solidarily liable with respondent doctors for petitioners condition.
The basis for holding an employer solidarily responsible for the negligence of its employee is found in
Article 2180 of the Civil Code which considers a person accountable not only for his own acts but also for
those of others based on the formers responsibility under a relationship of partia ptetas.
Clearly, in Ramos, the Court considered the peculiar relationship between a hospital and its consultants on the
bases of certain factors. One such factor is the "control test" wherein the hospital exercises control in the hiring
and firing of consultants, like Dr. Ampil, and in the conduct of their work.
Actually, contrary to PSIs contention, the Court did not reverse its ruling in Ramos. What it clarified was that the
De Los Santos Medical Clinic did not exercise control over its consultant, hence, there is no employer-employee
relationship between them. Thus, despite the granting of the said hospitals motion for reconsideration, the
doctrine in Ramos stays, i.e., for the purpose of allocating responsibility in medical negligence cases, an
employer-employee relationship exists between hospitals and their consultants.
In the instant cases, PSI merely offered a general denial of responsibility, maintaining that consultants, like Dr.
Ampil, are "independent contractors," not employees of the hospital. Even assuming that Dr. Ampil is not an
employee of Medical City, but an independent contractor, still the said hospital is liable to the Aganas.
In Nograles, et al. v. Capitol Medical Center, et al.,4 through Mr. Justice Antonio T. Carpio, the Court held:

The question now is whether CMC is automatically exempt from liability considering that Dr. Estrada is
an independent contractor-physician.
In general, a hospital is not liable for the negligence of an independent contractor-physician. There is,
however, an exception to this principle. The hospital may be liable if the physician is the "ostensible"
agent of the hospital. (Jones v. Philpott, 702 F. Supp. 1210 [1988]) This exception is also known as the
"doctrine of apparent authority." (Sometimes referred to as the apparent or ostensible agency theory.
[King v. Mitchell, 31 A.D.3rd 958, 819 N.Y. S.2d 169 (2006)].
xxx
The doctrine of apparent authority essentially involves two factors to determine the liability of an
independent contractor-physician.
The first factor focuses on the hospitals manifestations and is sometimes described as an inquiry whether
the hospital acted in a manner which would lead a reasonable person to conclude that the individual who
was alleged to be negligent was an employee or agent of the hospital. (Diggs v. Novant Health, Inc., 628
S.E.2d 851 (2006) citing Hylton v. Koontz, 138 N.C. App. 629 (2000). In this regard, the hospital need
not make express representations to the patient that the treating physician is an employee of the
hospital; rather a representation may be general and implied. (Id.)
The doctrine of apparent authority is a specie of the doctrine of estoppel. Article 1431 of the Civil Code
provides that "[t]hrough estoppel, an admission or representation is rendered conclusive upon the person
making it, and cannot be denied or disproved as against the person relying thereon." Estoppel rests on this
rule: "Whether a party has, by his own declaration, act, or omission, intentionally and deliberately led
another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising
out of such declaration, act or omission, be permitted to falsify it. (De Castro v. Ginete, 137 Phil. 453
[1969], citing Sec. 3, par. A, Rule 131 of the Rules of Court. See also King v. Mitchell, 31 A.D.3rd 958,
819 N.Y.S.2d 169 [2006]).
xxx
The second factor focuses on the patients reliance. It is sometimes characterized as an inquiry on whether
the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care
and prudence. (Diggs v. Novant Health, Inc.)
PSI argues that the doctrine of apparent authority cannot apply to these cases because spouses Agana failed to
establish proof of their reliance on the representation of Medical City that Dr. Ampil is its employee.
The argument lacks merit.
Atty. Agana categorically testified that one of the reasons why he chose Dr. Ampil was that he knew him to be a
staff member of Medical City, a prominent and known hospital.
Q

Will you tell us what transpired in your visit to Dr. Ampil?

A Well, I saw Dr. Ampil at the Medical City, I know him to be a staff member there, and I told him
about the case of my wife and he asked me to bring my wife over so she could be examined. Prior to that,
I have known Dr. Ampil, first, he was staying in front of our house, he was a neighbor, second, my
daughter was his student in the University of the East School of Medicine at Ramon Magsaysay; and
when my daughter opted to establish a hospital or a clinic, Dr. Ampil was one of our consultants on how
to establish that hospital. And from there, I have known that he was a specialist when it comes to that
illness.
Atty. Agcaoili

On that particular occasion, April 2, 1984, what was your reason for choosing to contact Dr. Ampil in
connection with your wifes illness?
A First, before that, I have known him to be a specialist on that part of the body as a surgeon; second, I
have known him to be a staff member of the Medical City which is a prominent and known
hospital.And third, because he is a neighbor, I expect more than the usual medical service to be given to
us, than his ordinary patients.5
Clearly, PSI is estopped from passing the blame solely to Dr. Ampil. Its act of displaying his name and those of
the other physicians in the public directory at the lobby of the hospital amounts to holding out to the public that it
offers quality medical service through the listed physicians. This justifies Atty. Aganas belief that Dr. Ampil was
a member of the hospitals staff. It must be stressed that under the doctrine of apparent authority, the
question in every case is whether the principal has by his voluntary act placed the agent in such a situation
that a person of ordinary prudence, conversant with business usages and the nature of the particular
business, is justified in presuming that such agent has authority to perform the particular act in
question.6 In these cases, the circumstances yield a positive answer to the question.
The challenged Decision also anchors its ruling on the doctrine of corporate responsibility.7 The duty of
providing quality medical service is no longer the sole prerogative and responsibility of the physician. This is
because the modern hospital now tends to organize a highly-professional medical staff whose competence and
performance need also to be monitored by the hospital commensurate with its inherent responsibility to provide
quality medical care.8 Such responsibility includes the proper supervision of the members of its medical
staff. Accordingly, the hospital has the duty to make a reasonable effort to monitor and oversee the
treatment prescribed and administered by the physicians practicing in its premises.
Unfortunately, PSI had been remiss in its duty. It did not conduct an immediate investigation on the reported
missing gauzes to the great prejudice and agony of its patient. Dr. Jocson, a member of PSIs medical staff, who
testified on whether the hospital conducted an investigation, was evasive, thus:
Q We go back to the operative technique, this was signed by Dr. Puruganan, was this submitted
to the hospital?
A

Yes, sir, this was submitted to the hospital with the record of the patient.

Was the hospital immediately informed about the missing sponges?

That is the duty of the surgeon, sir.

Q As a witness to an untoward incident in the operating room, was it not your obligation, Dr., to
also report to the hospital because you are under the control and direction of the hospital?
A

The hospital already had the record of the two OS missing, sir.

If you place yourself in the position of the hospital, how will you recover.

You do not answer my question with another question.

Did the hospital do anything about the missing gauzes?

The hospital left it up to the surgeon who was doing the operation, sir.

Did the hospital investigate the surgeon who did the operation?

I am not in the position to answer that, sir.

Q You never did hear the hospital investigating the doctors involved in this case of those missing
sponges, or did you hear something?
xxxxxx

A I think we already made a report by just saying that two sponges were missing, it is up to the
hospital to make the move.
Atty. Agana
Precisely, I am asking you if the hospital did a move, if the hospital did a move.
A

I cannot answer that.

Court
By that answer, would you mean to tell the Court that you were aware if there was such a move
done by the hospital?
A I cannot answer that, your honor, because I did not have any more follow-up of the case that
happened until now.9
The above testimony obviously shows Dr. Jocsons lack of concern for the patients. Such conduct is reflective
of the hospitals manner of supervision. Not only did PSI breach its duty to oversee or supervise all persons
who practice medicine within its walls, it also failed to take an active step in fixing the negligence
committed. This renders PSI, not only vicariously liable for the negligence of Dr. Ampil under Article 2180 of
the Civil Code, but also directly liable for its own negligence under Article 2176.
Moreover, there is merit in the trial courts finding that the failure of PSI to conduct an investigation "established
PSIs part in the dark conspiracy of silence and concealment about the gauzes." The following testimony of
Atty. Agana supports such findings, thus:
Q You said you relied on the promise of Dr. Ampil and despite the promise you were not able to obtain
the said record. Did you go back to the record custodian?
A

I did not because I was talking to Dr. Ampil. He promised me.

After your talk to Dr. Ampil, you went to the record custodian?

A I went to the record custodian to get the clinical record of my wife, and I was given a portion of
the records consisting of the findings, among them, the entries of the dates, but not the operating
procedure and operative report.10
In sum, we find no merit in the motion for reconsideration.
WHEREFORE, we DENY PSIs motion for reconsideration with finality.
SO ORDERED.

EN BANC
PROFESSIONAL SERVICES, G.R. No. 126297
INC.,
Petitioner, Present:
PUNO, C.J.,
CARPIO,
CORONA,
CARPIO MORALES,
VELASCO, JR.,
NACHURA,
- v e r s u s - LEONARDO-DE CASTRO,
BRION,

PERALTA,
BERSAMIN,*
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ and
MENDOZA, JJ.**
THE COURT OF APPEALS and NATIVIDAD and ENRIQUE
AGANA,
Respondents.
x-------------------x
NATIVIDAD [substituted by her G.R. No. 126467
children Marcelino Agana III,
Enrique Agana, Jr.,
Emma Agana-Andaya,
Jesus Agana and Raymund
Agana] and ENRIQUE AGANA,
Petitioners,

versus-

THE COURT OF APPEALS and JUAN FUENTES,


Respondents.
x-------------------x
MIGUEL AMPIL, G.R. No. 127590
Petitioner,

-versus-

NATIVIDAD and ENRIQUE


AGANA,
Respondents.
Promulgated:
February 2, 2010
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
R ES OLUTIO N
CORONA, J.:
With prior leave of court,[1] petitioner Professional Services, Inc. (PSI) filed a second motion for
reconsideration[2] urging referral thereof to the Court en banc and seeking modification of the decision dated

January 31, 2007 and resolution dated February 11, 2008 which affirmed its vicarious and direct liability for
damages to respondents Enrique Agana and the heirs of Natividad Agana (Aganas).

Manila Medical Services, Inc. (MMSI),[3] Asian Hospital, Inc. (AHI),[4] and Private Hospital Association of the
Philippines (PHAP)[5] all sought to intervene in these cases invoking the common ground that, unless modified,
the assailed decision and resolution will jeopardize the financial viability of private hospitals and jack up the cost
of health care.

The Special First Division of the Court granted the motions for intervention of MMSI, AHI and PHAP (hereafter
intervenors),[6] and referred en consulta to the Court en banc the motion for prior leave of court and the second
motion for reconsideration of PSI.[7]

Due to paramount public interest, the Court en banc accepted the referral[8] and heard the parties on oral
arguments on one particular issue: whether a hospital may be held liable for the negligence of physiciansconsultants allowed to practice in its premises.[9]

To recall the salient facts, PSI, together with Dr. Miguel Ampil (Dr. Ampil) and Dr. Juan Fuentes (Dr. Fuentes),
was impleaded by Enrique Agana and Natividad Agana (later substituted by her heirs), in a complaint[10] for
damages filed in the Regional Trial Court (RTC) of Quezon City, Branch 96, for the injuries suffered by
Natividad when Dr. Ampil and Dr. Fuentes neglected to remove from her body two gauzes[11] which were used
in the surgery they performed on her on April 11, 1984 at the Medical City General Hospital. PSI was impleaded
as owner, operator and manager of the hospital.
In a decision[12] dated March 17, 1993, the RTC held PSI solidarily liable with Dr. Ampil and Dr. Fuentes for
damages.[13] On appeal, the Court of Appeals (CA), absolved Dr. Fuentes but affirmed the liability of Dr. Ampil
and PSI, subject to the right of PSI to claim reimbursement from Dr. Ampil.[14]

On petition for review, this Court, in its January 31, 2007 decision, affirmed the CA decision.[15] PSI filed a
motion for reconsideration[16] but the Court denied it in a resolution dated February 11, 2008.[17]

The Court premised the direct liability of PSI to the Aganas on the following facts and law:

First, there existed between PSI and Dr. Ampil an employer-employee relationship as contemplated in
the December 29, 1999decision in Ramos v. Court of Appeals[18] that for purposes of allocating responsibility in
medical negligence cases, an employer-employee relationship exists between hospitals and their consultants.
[19] Although the Court in Ramos later issued a Resolution dated April 11, 2002[20] reversing its earlier finding
on the existence of an employment relationship between hospital and doctor, a similar reversal was not warranted
in the present case because the defense raised by PSI consisted of a mere general denial of control or
responsibility over the actions of Dr. Ampil.[21]

Second, by accrediting Dr. Ampil and advertising his qualifications, PSI created the public impression that he
was its agent.[22] Enrique testified that it was on account of Dr. Ampil's accreditation with PSI that he conferred
with said doctor about his wife's (Natividad's) condition.[23] After his meeting with Dr. Ampil, Enrique asked
Natividad to personally consult Dr. Ampil.[24] In effect, when Enrigue and Natividad engaged the services of Dr.
Ampil, at the back of their minds was that the latter was a staff member of a prestigious hospital. Thus, under the
doctrine of apparent authority applied in Nogales, et al. v. Capitol MedicalCenter, et al.,[25] PSI was liable for
the negligence of Dr. Ampil.

Finally, as owner and operator of Medical City General Hospital, PSI was bound by its duty to provide
comprehensive medical services to Natividad Agana, to exercise reasonable care to protect her from harm,[26] to
oversee or supervise all persons who practiced medicine within its walls, and to take active steps in fixing any
form of negligence committed within its premises.[27] PSI committed a serious breach of its corporate duty when
it failed to conduct an immediate investigation into the reported missing gauzes.[28]

PSI is now asking this Court to reconsider the foregoing rulings for these reasons:
I
The declaration in the 31 January 2007 Decision vis-a-vis the 11 February 2009 Resolution that the
ruling in Ramos vs. Court of Appeals (G.R. No. 134354, December 29, 1999) that an employeremployee relations exists between hospital and their consultants stays should be set aside for being
inconsistent with or contrary to the import of the resolution granting the hospital's motion for
reconsideration in Ramos vs. Court of Appeals (G.R. No. 134354, April 11, 2002), which is
applicable to PSI since the Aganas failed to prove an employer-employee relationship between PSI
and Dr. Ampil and PSI proved that it has no control over Dr. Ampil. In fact, the trial court has found
that there is no employer-employee relationship in this case and that the doctor's are independent
contractors.
II

Respondents Aganas engaged Dr. Miguel Ampil as their doctor and did not primarily and
specifically look to the Medical City Hospital (PSI) for medical care and support; otherwise stated,
respondents Aganas did not select Medical City Hospital (PSI) to provide medical care because of
any apparent authority of Dr. Miguel Ampil as its agent since the latter was chosen primarily and
specifically based on his qualifications and being friend and neighbor.
III
PSI cannot be liable under doctrine of corporate negligence since the proximate cause of Mrs.
Agana's injury was the negligence of Dr. Ampil, which is an element of the principle of corporate
negligence.[29]

In their respective memoranda, intervenors raise parallel arguments that the Court's ruling on the existence of an
employer-employee relationship between private hospitals and consultants will force a drastic and complex
alteration in the long-established and currently prevailing relationships among patient, physician and hospital,
with burdensome operational and financial consequences and adverse effects on all three parties.[30]

The Aganas comment that the arguments of PSI need no longer be entertained for they have all been traversed in
the assailed decision and resolution.[31]

After gathering its thoughts on the issues, this Court holds that PSI is liable to the Aganas, not under the principle
of respondeat superior for lack of evidence of an employment relationship with Dr. Ampil but under the principle
of ostensible agency for the negligence of Dr. Ampil and, pro hac vice, under the principle of corporate
negligence for its failure to perform its duties as a hospital.
While in theory a hospital as a juridical entity cannot practice medicine,[32] in reality it utilizes doctors, surgeons
and medical practitioners in the conduct of its business of facilitating medical and surgical treatment.[33] Within
that reality, three legal relationships crisscross: (1) between the hospital and the doctor practicing within its
premises; (2) between the hospital and the patient being treated or examined within its premises and (3) between
the patient and the doctor. The exact nature of each relationship determines the basis and extent of the liability of
the hospital for the negligence of the doctor.

Where an employment relationship exists, the hospital may be held vicariously liable under Article 2176[34] in
relation to Article 2180[35] of the Civil Code or the principle of respondeat superior. Even when no employment
relationship exists but it is shown that the hospital holds out to the patient that the doctor is its agent, the hospital

may still be vicariously liable under Article 2176 in relation to Article 1431[36] and Article 1869[37] of the Civil
Code or the principle of apparent authority.[38] Moreover, regardless of its relationship with the doctor, the
hospital may be held directly liable to the patient for its own negligence or failure to follow established standard
of conduct to which it should conform as a corporation.[39]

This Court still employs the control test to determine the existence of an employer-employee relationship
between hospital and doctor. In Calamba Medical Center, Inc. v. National Labor Relations Commission, et al.
[40] it held:
Under the "control test", an employment relationship exists between a physician and a hospital if
the hospital controls both the means and the details of the process by which the physician is to
accomplish his task.
xx xx xx
As priorly stated, private respondents maintained specific work-schedules, as determined by
petitioner through its medical director, which consisted of 24-hour shifts totaling forty-eight hours
each week and which were strictly to be observed under pain of administrative sanctions.
That petitioner exercised control over respondents gains light from the undisputed fact that
in the emergency room, the operating room, or any department or ward for that matter,
respondents' work is monitored through its nursing supervisors, charge nurses and orderlies.
Without the approval or consent of petitioner or its medical director, no operations can be
undertaken in those areas. For control test to apply, it is not essential for the employer to
actually supervise the performance of duties of the employee, it being enough that it has the
right to wield the power. (emphasis supplied)

Even in its December 29, 1999 decision[41] and April 11, 2002 resolution[42] in Ramos, the Court found the
control test decisive.

In the present case, it appears to have escaped the Court's attention that both the RTC and the CA found no
employment relationship between PSI and Dr. Ampil, and that the Aganas did not question such finding. In
its March 17, 1993 decision, the RTC found that defendant doctors were not employees of PSI in its hospital,
they being merely consultants without any employer-employee relationship and in the capacity of independent
contractors.[43] The Aganas never questioned such finding.

PSI, Dr. Ampil and Dr. Fuentes appealed[44] from the RTC decision but only on the issues of negligence, agency
and corporate liability. In its September 6, 1996 decision, the CA mistakenly referred to PSI and Dr. Ampil as

employer-employee, but it was clear in its discussion on the matter that it viewed their relationship as one of
mere apparent agency.[45]

The Aganas appealed from the CA decision, but only to question the exoneration of Dr. Fuentes.[46] PSI also
appealed from the CA decision, and it was then that the issue of employment, though long settled, was
unwittingly resurrected.

In fine, as there was no dispute over the RTC finding that PSI and Dr. Ampil had no employer-employee
relationship, such finding became final and conclusive even to this Court.[47] There was no reason for PSI to
have raised it as an issue in its petition. Thus, whatever discussion on the matter that may have ensued was purely
academic.

Nonetheless, to allay the anxiety of the intervenors, the Court holds that, in this particular instance, the
concurrent finding of the RTC and the CA that PSI was not the employer of Dr. Ampil is correct. Control as a
determinative factor in testing the employer-employee relationship between doctor and hospital under which the
hospital could be held vicariously liable to a patient in medical negligence cases is a requisite fact to be
established by preponderance of evidence. Here, there was insufficient evidence that PSI exercised the power of
control or wielded such power over the means and the details of the specific process by which Dr. Ampil applied
his skills in the treatment of Natividad. Consequently, PSI cannot be held vicariously liable for the negligence of
Dr. Ampil under the principle of respondeat superior.
There is, however, ample evidence that the hospital (PSI) held out to the patient (Natividad)[48] that the doctor
(Dr. Ampil) was its agent. Present are the two factors that determine apparent authority: first, the hospital's
implied manifestation to the patient which led the latter to conclude that the doctor was the hospital's agent; and
second, the patients reliance upon the conduct of the hospital and the doctor, consistent with ordinary care and
prudence.[49]

Enrique testified that on April 2, 1984, he consulted Dr. Ampil regarding the condition of his wife; that after the
meeting and as advised by Dr. Ampil, he asked [his] wife to go to Medical City to be examined by [Dr. Ampil];
and that the next day, April 3, he told his daughter to take her mother to Dr. Ampil.[50] This timeline indicates
that it was Enrique who actually made the decision on whom Natividad should consult and where, and that the

latter merely acceded to it. It explains the testimony of Natividad that she consulted Dr. Ampil at the instigation
of her daughter.[51]

Moreover, when asked what impelled him to choose Dr. Ampil, Enrique testified:
Atty. Agcaoili
On that particular occasion, April 2, 1984, what was your reason for choosing Dr. Ampil to contact
with in connection with your wife's illness?
A. First, before that, I have known him to be a specialist on that part of the body as a surgeon,
second, I have known him to be a staff member of the Medical City which is a prominent and
known hospital. And third, because he is a neighbor, I expect more than the usual medical service
to be given to us, than his ordinary patients.[52] (emphasis supplied)

Clearly, the decision made by Enrique for Natividad to consult Dr. Ampil was significantly influenced by the
impression that Dr. Ampil was a staff member of Medical City General Hospital, and that said hospital was well
known and prominent. Enrique looked upon Dr. Ampil not as independent of but as integrally related
to Medical City.

PSI's acts tended to confirm and reinforce, rather than negate, Enrique's view. It is of record that PSI required a
consent for hospital care[53] to be signed preparatory to the surgery of Natividad. The form reads:
Permission is hereby given to the medical, nursing and laboratory staff of
the Medical City General Hospital to perform such diagnostic procedures and to administer such
medications and treatments as may be deemed necessary or advisable by the physicians of this
hospital for and during the confinement of xxx. (emphasis supplied)
By such statement, PSI virtually reinforced the public impression that Dr. Ampil was a physician of its hospital,
rather than one independently practicing in it; that the medications and treatments he prescribed were necessary
and desirable; and that the hospital staff was prepared to carry them out.

PSI pointed out in its memorandum that Dr. Ampil's hospital affiliation was not the exclusive basis of the Aganas
decision to have Natividad treated in Medical City General Hospital, meaning that, had Dr. Ampil been affiliated
with another hospital, he would still have been chosen by the Aganas as Natividad's surgeon.[54]

The Court cannot speculate on what could have been behind the Aganas decision but would rather adhere strictly
to the fact that, under the circumstances at that time, Enrique decided to consult Dr. Ampil for he believed him

to be a staff member of a prominent and known hospital. After his meeting with Dr. Ampil, Enrique advised his
wife Natividad to go to the Medical City GeneralHospital to be examined by said doctor, and the hospital acted in
a way that fortified Enrique's belief.

This Court must therefore maintain the ruling that PSI is vicariously liable for the negligence of Dr. Ampil as its
ostensible agent.

Moving on to the next issue, the Court notes that PSI made the following admission in its Motion for
Reconsideration:
51. Clearly, not being an agent or employee of petitioner PSI, PSI [sic] is not liable for Dr. Ampil's
acts during the operation. Considering further that Dr. Ampil was personally engaged as a doctor by
Mrs. Agana, it is incumbent upon Dr. Ampil, as Captain of the Ship, and as the Agana's doctor to
advise her on what to do with her situation vis-a-vis the two missing gauzes. In addition to noting
the missing gauzes, regular check-ups were made and no signs of complications were
exhibited during her stay at the hospital, which could have alerted petitioner PSI's hospital to
render and provide post-operation services to and tread on Dr. Ampil's role as the doctor of
Mrs. Agana. The absence of negligence of PSI from the patient's admission up to her
discharge is borne by the finding of facts in this case. Likewise evident therefrom is the
absence of any complaint from Mrs. Agana after her discharge from the hospital which had
she brought to the hospital's attention, could have alerted petitioner PSI to act accordingly
and bring the matter to Dr. Ampil's attention. But this was not the case. Ms. Agana
complained ONLY to Drs. Ampil and Fuentes, not the hospital. How then could PSI possibly
do something to fix the negligence committed by Dr. Ampil when it was not informed about it
at all.[55] (emphasis supplied)

PSI reiterated its admission when it stated that had Natividad Agana informed the hospital of her discomfort and
pain, the hospital would have been obliged to act on it.[56]

The significance of the foregoing statements is critical.


First, they constitute judicial admission by PSI that while it had no power to control the means or method by
which Dr. Ampil conducted the surgery on Natividad Agana, it had the power to review or cause the review of
what may have irregularly transpired within its walls strictly for the purpose of determining whether some form
of negligence may have attended any procedure done inside its premises, with the ultimate end of protecting its
patients.

Second, it is a judicial admission that, by virtue of the nature of its business as well as its prominence[57] in the
hospital industry, it assumed a duty to tread on the captain of the ship role of any doctor rendering services within
its premises for the purpose of ensuring the safety of the patients availing themselves of its services and facilities.

Third, by such admission, PSI defined the standards of its corporate conduct under the circumstances of this
case,specifically: (a) that it had a corporate duty to Natividad even after her operation to ensure her safety as a
patient; (b) that its corporate duty was not limited to having its nursing staff note or record the two missing
gauzes and (c) that its corporate duty extended to determining Dr. Ampil's role in it, bringing the matter to his
attention, and correcting his negligence.

And finally, by such admission, PSI barred itself from arguing in its second motion for reconsideration that the
concept of corporate responsibility was not yet in existence at the time Natividad underwent treatment;[58] and
that if it had any corporate responsibility, the same was limited to reporting the missing gauzes and did not
include taking an active step in fixing the negligence committed.[59] An admission made in the pleading cannot
be controverted by the party making such admission and is conclusive as to him, and all proofs submitted by him
contrary thereto or inconsistent therewith should be ignored, whether or not objection is interposed by a party.
[60]

Given the standard of conduct that PSI defined for itself, the next relevant inquiry is whether the hospital
measured up to it.

PSI excuses itself from fulfilling its corporate duty on the ground that Dr. Ampil assumed the personal
responsibility of informing Natividad about the two missing gauzes.[61] Dr. Ricardo Jocson, who was part of the
group of doctors that attended to Natividad, testified that toward the end of the surgery, their group talked about
the missing gauzes but Dr. Ampil assured them that he would personally notify the patient about it.
[62] Furthermore, PSI claimed that there was no reason for it to act on the report on the two missing gauzes
because Natividad Agana showed no signs of complications. She did not even inform the hospital about her
discomfort.[63]

The excuses proffered by PSI are totally unacceptable.

To begin with, PSI could not simply wave off the problem and nonchalantly delegate to Dr. Ampil the duty to
review what transpired during the operation. The purpose of such review would have been to pinpoint when, how
and by whom two surgical gauzes were mislaid so that necessary remedial measures could be taken to avert any
jeopardy to Natividads recovery. Certainly, PSI could not have expected that purpose to be achieved by merely
hoping that the person likely to have mislaid the gauzes might be able to retrace his own steps. By its own
standard of corporate conduct, PSI's duty to initiate the review was non-delegable.

While Dr. Ampil may have had the primary responsibility of notifying Natividad about the missing gauzes, PSI
imposed upon itself the separate and independent responsibility of initiating the inquiry into the missing gauzes.
The purpose of the first would have been to apprise Natividad of what transpired during her surgery, while the
purpose of the second would have been to pinpoint any lapse in procedure that led to the gauze count
discrepancy, so as to prevent a recurrence thereof and to determine corrective measures that would ensure the
safety of Natividad. That Dr. Ampil negligently failed to notify Natividad did not release PSI from its selfimposed separate responsibility.

Corollary to its non-delegable undertaking to review potential incidents of negligence committed within its
premises, PSI had the duty to take notice of medical records prepared by its own staff and submitted to its
custody, especially when these bear earmarks of a surgery gone awry. Thus, the record taken during the operation
of Natividad which reported a gauze count discrepancy should have given PSI sufficient reason to initiate a
review. It should not have waited for Natividad to complain.

As it happened, PSI took no heed of the record of operation and consequently did not initiate a review of what
transpired during Natividads operation. Rather, it shirked its responsibility and passed it on to others to Dr. Ampil
whom it expected to inform Natividad, and to Natividad herself to complain before it took any meaningful step.
By its inaction, therefore, PSI failed its own standard of hospital care. It committed corporate negligence.

It should be borne in mind that the corporate negligence ascribed to PSI is different from the medical negligence
attributed to Dr. Ampil. The duties of the hospital are distinct from those of the doctor-consultant practicing
within its premises in relation to the patient; hence, the failure of PSI to fulfill its duties as a hospital corporation
gave rise to a direct liability to the Aganas distinct from that of Dr. Ampil.

All this notwithstanding, we make it clear that PSIs hospital liability based on ostensible agency and corporate
negligence applies only to this case, pro hac vice. It is not intended to set a precedent and should not serve as a
basis to hold hospitals liable for every form of negligence of their doctors-consultants under any and all
circumstances. The ruling is unique to this case, for the liability of PSI arose from an implied agency with Dr.
Ampil and an admitted corporate duty to Natividad.[64]
Other circumstances peculiar to this case warrant this ruling,[65] not the least of which being that the agony
wrought upon the Aganas has gone on for 26 long years, with Natividad coming to the end of her days racked in
pain and agony. Such wretchedness could have been avoided had PSI simply done what was logical: heed the
report of a guaze count discrepancy, initiate a review of what went wrong and take corrective measures to ensure
the safety of Nativad. Rather, for 26 years, PSI hemmed and hawed at every turn, disowning any such
responsibility to its patient. Meanwhile, the options left to the Aganas have all but dwindled, for the status of Dr.
Ampil can no longer be ascertained.[66]

Therefore, taking all the equities of this case into consideration, this Court believes P15 million would be a fair
and reasonable liability of PSI, subject to 12% p.a. interest from the finality of this resolution to full satisfaction.

WHEREFORE, the second motion for reconsideration is DENIED and the motions for intervention
are NOTED.

Professional Services, Inc. is ORDERED pro hac vice to pay Natividad (substituted by her children Marcelino
Agana III, Enrique Agana, Jr., Emma Agana-Andaya, Jesus Agana and Raymund Agana) and Enrique Agana the
total amount of P15 million, subject to 12% p.a. interest from the finality of this resolution to full satisfaction.

No further pleadings by any party shall be entertained in this case.

Let the long-delayed entry of judgment be made in this case upon receipt by all concerned parties of this
resolution.
SO ORDERED.
SECOND DIVISION
G.R. No. 171127, March 11, 2015
NOEL CASUMPANG, RUBY SANGA-MIRANDA AND SAN JUAN DE DIOS
HOSPITAL, Petitioners, v.NELSON CORTEJO, Respondent.

[G.R. No. 171217]


DRA. RUBY SANGA-MIRANDA, Petitioner, v. NELSON CORTEJO, Respondent.
[G.R. No. 171228]
SAN JUAN DE DIOS HOSPITAL, Petitioner, v. NELSON CORTEJO, Respondent.
DECISION
BRION, J.:
We resolve the three (3) consolidated petitions for review on certiorari1 involving medical negligence, commonly
assailing the October 29, 2004 decision2 and the January 12, 2006 resolution3 of the Court of Appeals (CA) in
CA-G.R. CV No. 56400. This CA decision affirmed en toto the ruling of the Regional Trial Court (RTC), Branch
134,
Makati
City.
The RTC awarded Nelson Cortejo (respondent) damages in the total amount of P595,000.00, for the wrongful
death of his son allegedly due to the medical negligence of the petitioning doctors and the hospital.
Factual Antecedents
The

common

factual

antecedents

are

briefly

summarized

below.

On April 22, 1988, at about 11:30 in the morning, Mrs. Jesusa Cortejo brought her 11-year old son, Edmer
Cortejo (Edmer), to the Emergency Room of the San Juan de Dios Hospital (SJDH) because of difficulty in
breathing,
chest
pain,
stomach
pain,
and
fever.4
Dr. Ramoncito Livelo (Dr. Livelo) initially attended to and examined Edmer. In her testimony, Mrs. Cortejo
narrated that in the morning of April 20, 1988, Edmer had developed a slight fever that lasted for one day; a few
hours upon discovery, she brought Edmer to their family doctor; and two hours after administering medications,
Edmer's
fever
had
subsided.5
After taking Edmer's medical history, Dr. Livelo took his vital signs, body temperature, and blood
pressure.6 Based on these initial examinations and the chest x-ray test that followed, Dr. Livelo diagnosed Edmer
with "bronchopneumonia."7 Edmer's blood was also taken for testing, typing, and for purposes of administering
antibiotics. Afterwards, Dr. Livelo gave Edmer an antibiotic medication to lessen his fever and to loosen his
phlegm.
Mrs. Cortejo did not know any doctor at SJDH. She used her Fortune Care card and was referred to an accredited
Fortune Care coordinator, who was then out of town. She was thereafter assigned to Dr. Noel Casumpang (Dr.
Casumpang),
a
pediatrician
also
accredited
with
Fortune
Care.8
At 5:30 in the afternoon of the same day, Dr. Casumpang for the first time examined Edmer in his room. Using
only
a
stethoscope,
he
confirmed
the
initial
diagnosis
of
"Bronchopneumonia."9
At that moment, Mrs. Cortejo recalled entertaining doubts on the doctor's diagnosis. She immediately advised Dr.
Casumpang that Edmer had a high fever, and had no colds or cough 10 but Dr. Casumpang merely told her that
her son's "bloodpressure is just being active,"11 and remarked that "that's the usual bronchopneumonia, no colds,

phlegm."12

no

Dr. Casumpang next visited and examined Edmer at 9:00 in the morning the following day. 13 Still suspicious
about his son's illness, Mrs. Cortejo again called Dr. Casumpang's attention and stated that Edmer had a fever,
throat irritation, as well as chest and stomach pain. Mrs. Cortejo also alerted Dr. Casumpang about the traces of
blood in Edmer's sputum. Despite these pieces of information, however, Dr. Casumpang simply nodded, inquired
if Edmer has an asthma, and reassured Mrs. Cortejo that Edmer's illness is bronchopneumonia. 14
At around 11:30 in the morning of April 23, 1988, Edmer vomited "phlegm with blood streak" 15prompting the
respondent
(Edmer's
father)
to
request
for
a
doctor
at
the
nurses'
station.16
Forty-five minutes later, Dr. Ruby Sanga-Miranda (Dr. Miranda), one of the resident physicians of SJDH, arrived.
She claimed that although aware that Edmer had vomited "phlegm with blood streak," she failed to examine the
blood specimen because the respondent washed it away. She then advised the respondent to preserve the
specimen
for
examination.
Thereafter, Dr. Miranda conducted a physical check-up covering Edmer's head, eyes, nose, throat, lungs, skin and
abdomen; and found that Edmer had a low-grade non-continuing fever, and rashes that were not typical of dengue
fever.17 Her medical findings state:
the patient's rapid breathing and then the lung showed sibilant and the patient's nose is flaring which
is a sign that the patient is in respiratory distress; the abdomen has negative finding; the patient has
low grade fever and not continuing; and the rashes in the patient's skin were not "Herman's Rash" and
not typical of dengue fever.18
At 3:00 in the afternoon, Edmer once again vomited blood. Upon seeing Dr. Miranda, the respondent showed her
Edmer's blood specimen, and reported that Edmer had complained of severe stomach pain and difficulty in
moving
his
right
leg.19
Dr. Miranda then examined Edmer's "sputum with blood" and noted that he was bleeding. Suspecting that he
could be afflicted with dengue, she inserted a plastic tube in his nose, drained the liquid from his stomach with
ice cold normal saline solution, and gave an instruction not to pull out the tube, or give the patient any oral
medication.
Dr. Miranda thereafter conducted a tourniquet test, which turned out to be negative. 20 She likewise ordered the
monitoring of the patient's blood pressure and some blood tests. Edmer's blood pressure was later found to be
normal.21
At 4:40 in the afternoon, Dr. Miranda called up Dr. Casumpang at his clinic and told him about Edmer's
condition.22 Upon being informed, Dr. Casumpang ordered several procedures done including: hematocrit,
hemoglobin,
blood
typing,
blood
transfusion
and
tourniquet
tests.
The

blood

test

results

came

at

about

6:00

in

the

evening.

Dr. Miranda advised Edmer's parents that the blood test results showed that Edmer was suffering from "Dengue
Hemorrhagic Fever." One hour later, Dr. Casumpang arrived at Edmer's room and he recommended his transfer
to the Intensive Care Unit (ICU), to which the respondent consented. Since the ICU was then full, Dr.
Casumpang suggested to the respondent that they hire a private nurse. The respondent, however, insisted on
transferring
his
son
to
Makati
Medical
Center.

After the respondent had signed the waiver, Dr. Casumpang, for the last time, checked Edmer's condition, found
that his blood pressure was stable, and noted that he was "comfortable." The respondent requested for an
ambulance but he was informed that the driver was nowhere to be found. This prompted him to hire a private
ambulance
that
cost
him
P600.00.23
At 12:00 midnight, Edmer, accompanied by his parents and by Dr. Casumpang, was transferred to Makati
Medical
Center.
Dr. Casumpang immediately gave the attending physician the patient's clinical history and laboratory exam
results. Upon examination, the attending physician diagnosed "Dengue Fever Stage IV" that was already in its
irreversible
stage.
Edmer died at 4:00 in the morning of April 24, 1988. 24 His Death Certificate indicated the cause of death as
"Hypovolemic
Shock/hemorrhagic
shock;"
"Dengue
Hemorrhagic
Fever
Stage
IV."
Believing that Edmer's death was caused by the negligent and erroneous diagnosis of his doctors, the respondent
instituted an action for damages against SJDH, and its attending physicians: Dr. Casumpang and Dr. Miranda
(collectively referred to as the "petitioners") before the RTC of Makati City.
The Ruling of the Regional Trial Court
In a decision25 dated May 30, 1997, the RTC ruled in favor of the respondent, and awarded actual and moral
damages,
plus
attorney's
fees
and
costs.
In ruling that the petitioning doctors were negligent, the RTC found untenable the petitioning doctors' contention
that Edmer's initial symptoms did not indicate dengue fever. It faulted them for heavily relying on the chest x-ray
result and for not considering the other manifestations that Edmer's parents had relayed. It held that in diagnosing
and treating an illness, the physician's conduct should be judged not only by what he/she saw and knew, but also
by what he/she could have reasonably seen and known. It also observed that based on Edmer's signs and
symptoms, his medical history and physical examination, and also the information that the petitioning doctors
gathered from his family members, dengue fever was a reasonably foreseeable illness; yet, the petitioning doctors
failed
to
take
a
second
look,
much
less,
consider
these
indicators
of
dengue.
The trial court also found that aside from their self-serving testimonies, the petitioning doctors did not present
other evidence to prove that they exercised the proper medical attention in diagnosing and treating the patient,
leading
it
to
conclude
that
they
were
guilty
of
negligence.
The RTC also held SJDH solidarity liable with the petitioning doctors for damages based on the following
findings of facts: first, Dr. Casumpang, as consultant, is an ostensible agent of SJDH because before the hospital
engaged his medical services, it scrutinized and determined his fitness, qualifications, and competence as a
medical practitioner; and second, Dr. Miranda, as resident physician, is an employee of SJDH because like Dr.
Casumpang, the hospital, through its screening committee, scrutinized and determined her qualifications, fitness,
and competence before engaging her services; the hospital also exercised control over her work.
The dispositive portion of the decision reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants,
ordering the latter to pay solidarity and severally plaintiff the following:
(1)

Moral

damages

in

the

amount

of

P500,000.00;

(2)

Costs
(3)

of

burial

and

Attorney's
(4)

funeral

in

fees
Cost

the

amount

of

of

P50,000.00;

of

this

P45,000.00;
and
suit.

SO ORDERED.
The petitioners appealed the decision to the CA.
The Ruling of the Court of Appeals
In its decision dated October 29, 2004, the CA affirmed en toto the RTC's ruling, finding that SJDH and its
attending physicians failed to exercise the minimum medical care, attention, and treatment expected of an
ordinary
doctor
under
like
circumstances.
The CA found the petitioning doctors' failure to read even the most basic signs of "dengue fever" expected of an
ordinary doctor as medical negligence. The CA also considered the petitioning doctors' testimonies as selfserving, noting that they presented no other evidence to prove that they exercised due diligence in diagnosing
Edmer's
illness.
The CA likewise found Dr. Rodolfo Jaudian's (Dr. Jaudian) testimony admissible. It gave credence to his
opinion26 that: (1) given the exhibited symptoms of the patient, dengue fever should definitely be considered,
and bronchopneumonia could be reasonably ruled out; and (2) dengue fever could have been detected earlier than
7:30 in the evening of April 23, 1988 because the symptoms were already evident; and agreed with the RTC that
the petitioning doctors should not have solely relied on the chest-x-ray result, as it was not conclusive.
On SJDH's solidary liability, the CA ruled that the hospital's liability is based on Article 2180 of the Civil Code.
The CA opined that the control which the hospital exercises over its consultants, the hospital's power to hire and
terminate their services, all fulfill the employer-employee relationship requirement under Article 2180.
Lastly, the CA held that SJDH failed to adduce evidence showing that it exercised the diligence of a good father
of
a
family
in
the
hiring
and
the
supervision
of
its
physicians.
The petitioners separately moved to reconsider the CA decision, but the CA denied their motion in its resolution
of January 12, 2006; hence, the present consolidated petitions pursuant to Rule 45 of the Rules of Court.
The Petitions
I.

Dr.

Casumpang's

Position

(G.R.

No.

171127)

Dr. Casumpang contends that he gave his patient medical treatment and care to the best of his abilities, and
within the proper standard of care required from physicians under similar circumstances. He claims that his initial
diagnosis
of
bronchopneumonia
was
supported
by
the
chest
x-ray
result.
Dr. Casumpang also contends that dengue fever occurs only after several days of confinement. He alleged that
when he had suspected that Edmer might be suffering from dengue fever, he immediately attended and treated
him.
Dr. Casumpang likewise raised serious doubjs on Dr. Jaudian's credibility, arguing that the CA erred in
appreciating his testimony as an expert witness since he lacked the necessary training, skills, and experience as a

specialist
II.

in
Dr.

dengue

Miranda's

fever

Position

(G.R.

cases.
No.

171217)

In her petition, Dr. Miranda faults the CA for holding her responsible for Edmer's wrong diagnosis, stressing that
the function of making the diagnosis and undertaking the medical treatment devolved upon Dr. Casumpang, the
doctor
assigned
to
Edmer,
and
who
confirmed
"bronchopneumonia."
Dr. Miranda also alleged that she exercised prudence in performing her duties as a physician, underscoring that it
was her professional intervention that led to the correct diagnosis of "Dengue Hemorrhagic Fever." Furthermore,
Edmer's Complete Blood Count (CBC) showed leukopenia and an increase in balance as shown by the
differential count, demonstrating that Edmer's infection, more or less, is of bacterial and not viral in nature.
Dr. Miranda as well argued that there is no causal relation between the alleged erroneous diagnosis and
medication for "Bronchopneumonia," and Edmer's death due to "Dengue Hemorrhagic Fever."
Lastly, she claimed that Dr. Jaudian is not a qualified expert witness since he never presented any evidence of
formal
residency
training
and
fellowship
status
in
Pediatrics.
III.

SJDH's

Position

(G.R.

No.

171228)

SJDH, on the other hand, disclaims liability by asserting that Dr. Casumpang and Dr. Miranda are mere
independent contractors and "consultants" (not employees) of the hospital. SJDH alleges that since it did not
exercise control or supervision over the consultants' exercise of medical profession, there is no employeremployee relationship between them, and consequently, Article 2180 of the Civil Code does not apply.
SJDH likewise anchored the absence of, employer-employee relationship on the following circumstances: (1)
SJDH does not hire consultants; it only grants them privileges to admit patients in the hospital through
accreditation; (2) SJDH does not pay the consultants wages similar to an ordinary employee; (3) the consultants
earn their own professional fees directly from their patients; SJDH does not fire or terminate their services; and
(4) SJDH does not control or interfere with the manner and the means the consultants use in the treatment of their
patients. It merely provides them with adequate space in exchange for rental payment.
Furthermore, SJDH claims that the CA erroneously applied the control test when it treated the hospital's practice
of accrediting consultants as an exercise of control. It explained that the control contemplated by law is that
which the employer exercises over the: (i) end result; and the (ii) manner and means to be used to reach this end,
and
not
any kind
of
control,
however
significant,
in
accrediting
the
consultants.
SJDH moreover contends that even if the petitioning doctors are considered employees and not merely
consultants of the hospital, SJDH cannot still be held solidarity liable under Article 2180 of the Civil Code
because it observed the diligence of a good father of a family in their selection and supervision as shown by the
following: (1) the adequate measures that the hospital undertakes to ascertain the petitioning doctors'
qualifications and medical competence; and (2) the documentary evidence that the petitioning doctors presented
to
prove
their
competence
in
the
field
of
pediatrics.27
SJDH likewise faults the CA for ruling that the petitioning doctors are its agents, claiming that this theory, aside
from being inconsistent with the CA's finding of employment relationship, is unfounded because: first, the
petitioning doctors are independent contractors, not agents of SJDH; and second, as a medical institution, SJDH
cannot practice medicine, much more, extend its personality to physicians to practice medicine on its behalf.

Lastly, SJDH maintains that the petitioning doctors arrived at an intelligently deduced and correct diagnosis. It
claimed that based on Edmer's signs and symptoms at the time of admission (i.e., one day fever,28bacterial
infection,29 and lack of hemorrhagic manifestations30), there was no reasonable indication yet that he was
suffering from dengue fever, and accordingly, their failure to diagnose dengue fever, does not constitute
negligence on their part.
The Case for the Respondent
In his comment, the respondent submits that the issues the petitioners raised are mainly factual in nature, which a
petition for review on certiorari under Rule 45 of the Rules of Court does not allow.
In any case, he contends that the petitioning doctors were negligent in conducting their medical examination and
diagnosis based on the following: (1) the petitioning doctors failed to timely diagnose Edmer's correct illness due
to their non-observance of the proper and acceptable standard of medical examination; (2) the petitioning doctors'
medical examination was not comprehensive, as they were always in a rush; and (3) the petitioning doctors
employed
a
guessing
game
in
diagnosing
bronchopneumonia.
The respondent also alleges that there is a causal connection between the petitioning doctors' negligence and
Edmer's
untimely
death,
warranting
the
claim
for
damages.
The respondent, too, asserted that SJDH is also negligent because it was not equipped with proper paging system,
has no bronchoscope, and its doctors are not proportionate to the number of its patients. He also pointed out that
out of the seven resident physicians in the hospital, only two resident physicians were doing rounds at the time of
his son's confinement.
The Issues
The case presents to us the following issues:
1. Whether or not the petitioning doctors had committed "inexcusable lack of precaution" in diagnosing and
in treating the patient;
2. Whether or not the petitioner hospital is solidarity liable with the petitioning doctors;
3. Whether or not there is a causal connection between the petitioners' negligent act/omission and the
patient's resulting death; and
4. Whether or not the lower courts erred in considering Dr. Rodolfo Tabangcora Jaudian as an expert
witness.
Our Ruling
We

find

the

petition

partly

meritorious.

A Petition for Review on Certiorari under Rule 45 of the Rules of Court is Limited to Questions of Law.
The settled rule is that the Court's jurisdiction in a petition for review on certiorari under Rule 45 of the Rules of
Court is limited only to the review of pure questions of law. It is not the Court's function to inquire on the
veracity of the appellate court's factual findings and conclusions; this Court is not a trier of facts. 31
A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a
question of fact when the doubt arises as to the truth or falsity of the alleged facts. 32

These consolidated petitions before us involve mixed questions of fact and law. As a rule, we do not resolve
questions of fact. However, in determining the legal question of whether the respondent is entitled to claim
damages under Article 2176 of the Civil Code for the petitioners' alleged medical malpractice, the determination
of the factual issues - i.e., whether the petitioning doctors were grossly negligent in diagnosing the patient's
illness, whether there is causal relation between the petitioners' act/omission and the patient's resulting death, and
whether Dr. Jaudian is qualified as an expert witness- must necessarily be resolved. We resolve these factual
questions
solely
for
the
purpose
of
determining
the
legal
issues
raised.
Medical

Malpractice

Suit

as

Specialized

Area

of

Tort

Law

The claim for damages is based on the petitioning doctors' negligence in diagnosing and treating the deceased
Edmer, the child of the respondent. It is a medical malpractice suit, an action available to victims to redress a
wrong committed by medical professionals who caused bodily harm to, or the death of, a patient. 33 As the term
is used, the suit is brought whenever a medical practitioner or health care provider fails to meet the standards
demanded by his profession, or deviates from this standard, and causes injury to the patient.
To successfully pursue a medical malpractice suit, the plaintiff (in this case, the deceased patient's heir) must
prove that the doctor either failed to do what a reasonably prudent doctor would have done, or did what a
reasonably prudent doctor would not have done; and the act or omission had caused injury to the patient. 34 The
patient's
The

heir/s

bears

Elements

the
of

burden

of
a

proving
Medical

his/her

cause
Malpractice

of

action.
Suit

The elements of medical negligence are: (1) duty; (2) breach; (3) injury; and (4) proximate causation.
Duty refers to the standard of behavior that imposes restrictions on one's conduct. 35 It requires proof of
professional relationship between the physician and the patient. Without the professional relationship, a physician
owes
no
duty
to
the
patient,
and
cannot
therefore
incur
any
liability.
A physician-patient relationship is created when a patient engages the services of a physician, 36 and the latter
accepts or agrees to provide care to the patient. 37 The establishment of this relationship is consensual, 38 and the
acceptance by the physician essential. The mere fact that an individual approaches a physician and seeks
diagnosis, advice or treatment does not create the duty of care unless the physician agrees. 39
The consent needed to create the relationship does not always need to be express.40 In the absence of an express
agreement, a physician-patient relationship may be implied from the physician's affirmative action to diagnose
and/or treat a patient, or in his participation in such diagnosis and/or treatment. 41The usual illustration would be
the case of a patient who goes to a hospital or a clinic, and is examined and treated by the doctor. In this case, we
can infer, based on the established and customary practice in the medical community that a patient-physician
relationship
exists.
Once a physician-patient relationship is established, the legal duty of care follows. The doctor accordingly
becomes duty-bound to use at least the same standard of care that a reasonably competent doctor would use to
treat
a
medical
condition
under
similar
circumstances.
Breach of duty occurs when the doctor fails to comply with, or improperly performs his duties under professional
standards. This determination is both factual and legal, and is specific to each individual case. 42

If the patient, as a result of the breach of duty, is injured in body or in health, actionable malpractice is
committed,
entitling
the
patient
to
damages.43
To successfully claim damages, the patient must lastly prove the causal relation between the negligence and the
injury. This connection must be direct, natural, and should be unbroken by any intervening efficient causes. In
other words, the negligence must be the proximate cause of the injury.44 The injury or damage is proximately
caused by the physician's negligence when it appears, based on the evidence and the expert testimony, that the
negligence played an integral part in causing the injury or damage, and that the injury or damage was either a
direct result, or a reasonably probable consequence of the physician's negligence. 45
a.

The

Relationship

Between

Dr.

Casumpang

and

Edmer

In the present case, the physician-patient relationship between Dr. Casumpang and Edmer was created when the
latter's parents sought the medical services of Dr. Casumpang, and the latter knowingly accepted Edmer as a
patient. Dr. Casumpang's acceptance is implied from his affirmative examination, diagnosis and treatment of
Edmer. On the other hand, Edmer's parents, on their son's behalf, manifested their consent by availing of the
benefits of their health care plan, and by accepting the hospital's assigned doctor without objections.
b.

The

Relationship

Between

Dr.

Miranda

and

Edmer

With respect to Dr. Miranda, her professional relationship with Edmer arose when she assumed the obligation to
provide resident supervision over the latter. As second year resident doctor tasked to do rounds and assist other
physicians, Dr. Miranda is deemed to have agreed to the creation of physician-patient relationship with the
hospital's patients when she participated in the diagnosis and prescribed a course of treatment for Edmer.
The undisputed evidence shows that Dr. Miranda examined Edmer twice (at around 12:00 and 3:30 in the
afternoon of April 23, 1988), and in both instances, she prescribed treatment and participated in the diagnosis of
Edmer's medical condition. Her affirmative acts amounted to her acceptance of the physician-patient relationship,
and
incidentally,
the
legal
duty
of
care
that
went
with
it.
In Jarcia, Jr. v. People of the Philippines,46 the Court found the doctors who merely passed by and were
requested to attend to the patient, liable for medical malpractice. It held that a physician-patient relationship was
established when they examined the patient, and later assured the mother that everything was fine.
In the US case of Mead v. Legacy Health System,47 the Court also considered the rendering of an opinion in the
course of the patient's care as the doctor's assent to the physician-patient relationship. It ruled that the relationship
was
formed
because
of
the
doctor's
affirmative
action.
Likewise, in Wax v. Johnson,48 the court found that a physician-patient relationship was formed between a
physician who "contracts, agrees, undertakes, or otherwise assumes" the obligation to provide resident
supervision at a teaching hospital, and the patient with whom the doctor had no direct or indirect contract.
Standard

of

Care

and

Breach

of

Duty

A determination of whether or not the petitioning doctors met the required standard of care involves a question of
mixed fact and law; it is factual as medical negligence cases are highly technical in nature, requiring the
presentation of expert witnesses to provide guidance to the court on matters clearly falling within the domain of
medical science, and legal, insofar as the Court, after evaluating the expert testimonies, and guided by medical

literature, learned treatises, and its fund of common knowledge, ultimately determines whether breach of duty
took
place.
Whether or not Dr. Casumpang and Dr. Miranda committed a breach of duty is to be measured by the yardstick of
professional standards observed by the other members of the medical profession in good standing under similar
circumstances.49 It is in this aspect of medical malpractice that expert testimony is essential to establish not only
the professional standards observed in the medical community, but also that the physician's conduct in the
treatment
of
care
falls
below
such
standard.50
In the present case, expert testimony is crucial in determining first, the standard medical examinations, tests, and
procedures that the attending physicians should have undertaken in the diagnosis and treatment of dengue fever;
and second, the dengue fever signs and symptoms that the attending physicians should have noticed and
considered.
Both the RTC and the CA relied largely on Dr. Jaudian's expert testimony on dengue diagnosis and management
to support their finding that the petitioning doctors were guilty of breach of duty of care.
Dr. Jaudian testified that Edmer's rapid breathing, chest and stomach pain, fever, and the presence of blood in his
saliva are classic symptoms of dengue fever. According to him, if the patient was admitted for chest pain,
abdominal pain, and difficulty in breathing coupled with fever, dengue fever should definitely be considered; 51 if
the patient spits coffee ground with the presence of blood, and the patient's platelet count drops to 47,000, it
becomes a clear case of dengue fever, and bronchopneumonia can be reasonably ruled out. 52
Furthermore, the standard of care according to Dr. Jaudian is to administer oxygen inhalation, analgesic, and fluid
infusion or dextrose.53 If the patient had twice vomited fresh blood and thrombocytopenia has already occurred,
the doctor should order blood transfusion, monitoring of the patient every 30 minutes, hemostatic to stop
bleeding,
and
oxygen
if
there
is
difficulty
in
breathing.54
We find that Dr. Casumpang, as Edmer's attending physician, did not act according to these standards and, hence,
was guilty of breach of duty. We do not find Dr. Miranda liable for the reasons discussed below.
Dr.

Casumpang's

a.

Negligence

Negligence

in

the

Diagnosis

At the trial, Dr. Casumpang declared that a doctor's impression regarding a patient's illness is 90% based on the
physical examination, the information given by the patient or the latter's parents, and the patient's medical
history.55 He testified that he did not consider either dengue fever or dengue hemorrhagic fever because the
patient's history showed that Edmer had low breath and voluntary submission, and that he was up and about
playing basketball.56 He based his diagnosis of bronchopneumonia on the following observations: "difficulty in
breathing,

clearing

run

nostril,

harsh

breath

sound,

tight

air,

and

sivilant

sound."57

It will be recalled that during Dr. Casumpang's first and second visits to Edmer, he already had knowledge of
Edmer's laboratory test result (CBC), medical history, and symptoms (i.e., fever, rashes, rapid breathing, chest
and stomach pain, throat irritation, difficulty in breathing, and traces of blood in the sputum). However, these
information did not lead Dr. Casumpang to the possibility that Edmer could be suffering from either dengue
fever, or dengue hemorrhagic fever, as he clung to his diagnosis of broncho pneumonia. This means that given
the symptoms exhibited, Dr. Casumpang already ruled out the possibility of other diseases like dengue.

In other words, it was lost on Dr. Casumpang that the characteristic symptoms of dengue (as Dr. Jaudian testified)
are: patient's rapid breathing; chest and stomach pain; fever; and the presence of blood in his saliva. All these
manifestations were present and known to Dr. Casumpang at the time of his first and second visits to Edmer.
While he noted some of these symptoms in confirming bronchopneumonia, he did not seem to have considered
the patient's other manifestations in ruling out dengue fever or dengue hemorrhagic fever.58 To our mind, Dr.
Casumpang selectively appreciated some, and not all of the symptoms; worse, he casually ignored the pieces of
information that could have been material in detecting dengue fever. This is evident from the testimony of Mrs.
Cortejo:
TSN, Mrs. Cortejo, November 27, 1990
Q:
A:
Q:
A:
Q:

Now, when Dr. Casumpang visited your son for the first time at 5:30 p.m., what did he do, if any?
He examined my son by using stethoscope and after that, he confirmed to me that my son was suffering
from broncho pneumonia.
After he confirmed that your son was suffering broncho pneumonia, what did you say if any?
Again, I told Dr. Casumpang, how come it was broncho pneumonia when my son has no cough or
colds.
What was the answer of Dr. Casumpang to your statement?
xxxx

A:
Q:
A:

And then, Dr. Casumpang answered "THAT'S THE USUAL BRONCHO PNEUMONIA, NO
COLDS, NO PHLEGM."
How long did Dr. Casumpang stay in your son's room?
He stayed for a minute or 2.
xxxx

Q:

Q: When Dr. Casumpang arrived at 9:00 o'clock a.m. on April 23, what did you tell him, if any?
xxxx

A:

I told Dr. Casumpang... After examining my son using stethoscope and nothing more, I told Dr.
Casumpang about the traces of blood in my son's sputum and I told him what is all about and he has
throat irritation.
Q: What did he tell you?
A: He just nodded his head but he did not take the initiative of looking at the throat of my son.
Q: So what happened after that?
A: I also told Dr. Casumpang about his chest pain and also stomach pain.
Q: So what did Dr. Casumpang do after you have narrated all these complaints of your son?
A: Nothing. He also noticed the rapid breathing of my son and my son was almost moving because of
rapid breathing and he is swaying in the bed.
Q: Do you know what action was taken by Dr. Casumpang when you told him that your son is
experiencing a rapid breathing?
A: No action. He just asked me if my son has an asthma but I said none.
Q: So how long did Dr. Casumpang stay and attended your son on April 23?
A: More or less two (2) minutes then I followed him up to the door and I repeated about the fever of my
son.
Q: What did he tell you, if any, regarding that information you gave him that your son had a fever?
A: He said, that is broncho pneumonia, It's only being active now. [Emphasis supplied]
We also find it strange why Dr. Casumpang did not even bother to check Edmer's throat despite knowing that as
early as 9:00 in the morning of April 23, 1988, Edmer had blood streaks in his sputum. Neither did Dr.
Casumpang order confirmatory tests to confirm the source of bleeding. The Physician's Progress Notes 59 stated:
"Blood streaks on phlegm can be due to bronchial irritation or congestion" which clearly showed that Dr.
Casumpang merely assumed, without confirmatory physical examination, that bronchopneumonia caused the

bleeding.
Dr. Jaudian likewise opined that Dr. Casumpang's medical examination was not comprehensive enough to
reasonably lead to a correct diagnosis.60 Dr. Casumpang only used a stethoscope in coming up with the diagnosis
that Edmer was suffering from bronchopneumonia; he never confirmed this finding with the use of a
bronchoscope. Furthermore, Dr. Casumpang based his diagnosis largely on the chest x-ray result that is generally
inconclusive.61
Significantly, it was only at around 5:00 in the afternoon of April 23, 1988 (after Edmer's third episode of
bleeding) that Dr. Casumpang ordered the conduct of hematocrit, hemoglobin, blood typing, blood transfusion
and tourniquet tests. These tests came too late, as proven by: (1) the blood test results that came at about 6:00 in
the evening, confirming that Edmer's illness had developed to "Dengue Hemorrhagic Fever" and (2) Dr. Jaudian's
testimony that "dengue fever could have been detected earlier than 7:30 in the evening of April 23, 1988 because
the
symptoms
were
already
evident."62
In Spouses Flores v. Spouses Pineda,63 a case involving a medical malpractice suit, the Court ruled that the
petitioner doctors were negligent because they failed to immediately order tests to confirm the patient's illness.
Despite the doctors' suspicion that the patient could be suffering from diabetes, the former still proceeded to the
D&C operation. In that case, expert testimony showed that tests should have been ordered immediately on
admission to the hospital in view of the symptoms presented. The Court held:
When a patient exhibits symptoms typical of a particular disease, these symptoms should, at the very
least, alert the physician of the possibility that the patient may be afflicted with the suspected disease.
The Court also ruled that reasonable prudence would have shown that diabetes and its complications were
foreseeable harm. However, the petitioner doctors failed to take this into consideration and proceeded with the
D&C operation. Thus, the Court ruled that they failed to comply with their duty to observe the standard of care to
be
given
to
hyperglycemic/diabetic
patients.
Similarly, in Jarcia,64 involving the negligence of the doctors in failing to exercise reasonable prudence in
ascertaining the extent of the patient's injuries, this Court declared that:
In failing to perform an extensive medical examination to determine the extent of Roy Jr.'s injuries,
Dr. Jarcia and Dr. Bastan were remiss of their duties as members of the medical profession. Assuming
for the sake of argument that they did not have the capacity to make such thorough evaluation at that
stage, they should have referred the patient to another doctor with sufficient training and experience
instead of assuring him and his mother that everything was all right. [Emphasis supplied]
Even assuming that Edmer's symptoms completely coincided with the diagnosis of bronchopneumonia (so that
this diagnosis could not be considered "wrong"), we still find Dr. Casumpang guilty of negligence.
First, we emphasize that we do not decide the correctness of a doctor's diagnosis, or the accuracy of the medical
findings and treatment. Our duty in medical malpractice cases is to decide - based on the evidence adduced and
expert
opinion
presented whether
a
breach
of
duty
took
place.
Second, we clarify that a wrong diagnosis is not by itself medical malpractice. 65 Physicians are generally not
liable for damages resulting from a bona fide error of judgment. Nonetheless, when the physician's erroneous
diagnosis was the result of negligent conduct (e.g., neglect of medical history, failure to order the appropriate
tests, failure to recognize symptoms), it becomes an evidence of medical malpractice.
Third, we also note that medicine is not an exact science; 66 and doctors, or even specialists, are not expected to

give a 100% accurate diagnosis in treating patients who come to their clinic for consultations. Error is possible as
the exercise of judgment is called for in considering and reading the exhibited symptoms, the results of tests, and
in arriving at definitive conclusions. But in doing all these, the doctor must have acted according to acceptable
medical
practice
standards.
In the present case, evidence on record established that in confirming the diagnosis of bronchopneumonia, Dr.
Casumpang selectively appreciated some and not all of the symptoms presented, and failed to promptly conduct
the appropriate tests to confirm his findings. In sum, Dr. Casumpang failed to timely detect dengue fever, which
failure, especially when reasonable prudence would have shown that indications of dengue were evident and/or
foreseeable,
constitutes
negligence.
a.

Negligence

in

the

Treatment

and

Management

of

Dengue

Apart from failing to promptly detect dengue fever, Dr. Casumpang also failed to promptly undertake the proper
medical
management needed
for
this
disease.
As Dr. Jaudian opined, the standard medical procedure once the patient had exhibited the classic symptoms of
dengue fever should have been: oxygen inhalation, use of analgesic, and infusion of fluids or dextrose;67 and
once the patient had twice vomited fresh blood, the doctor should have ordered: blood transfusion, monitoring of
the patient every 30 minutes, hemostatic to stop bleeding, and oxygen if there is difficulty in breathing.68
Dr. Casumpang failed to measure up to these standards. The evidence strongly suggests that he ordered a
transfusion of platelet concentrate instead of blood transfusion. The tourniquet test was only conducted after
Edmer's second episode of bleeding, and the medical management (as reflected in the records) did not include
antibiotic
therapy
and
complete
physical
examination.
Dr. Casumpang's testimony states:
Q:
A:
Q:
A:
Q:
A:
Q:
A:
Q:
A:
Q:
A:
Q:
Q:
Q:
A:
Q:
A:
Q:
A:

Now, after entertaining - After considering that the patient Edmer Cortero was already suffering from
dengue hemorrhagic fever, what did you do, if any?
We ordered close monitoring of the blood pressure, the cardiac rate and respiratory rate of the
patient.
Now, was your instructions carried on?
Yes, sir.
What was the blood pressure of the patient?
During those times, the blood pressure of the patient was even normal during those times.
How about the respiratory rate?
The respiratory rate was fast because the patient in the beginning since admission had difficulty in
breathing.
Then, after that, what did you do with the patient? Doctor?
We transfused platelet concentrate and at the same time, we monitor [sic] the patient.
Then, who monitor [sic] the patient?
The pediatric resident on duty at that time.
Now, what happened after that?
While monitoring the patient, all his vital signs were ________; his blood pressure was normal so we
continued with the supportive management at that time.
Now, after that?
In the evening of April 23, 1988,1 stayed in the hospital and I was informed by the pediatric resident on
duty at around 11:15 in the evening that the blood pressure of the patient went down to .60 palpatory.
What did you do upon receipt of that information?
I immediately went up to the room of the patient and we changed the IV fluid from the present fluid
which was D5 0.3 sodium chloride to lactated ringers solution.
You mean to say you increased the dengue [sic] of the intervenus [sic] fluid?
We changed the IV fluid because lactated ringers was necessary to resume the volume and to bring

back the blood pressure, to increase the blood pressure.[Emphasis supplied]


Although Dr. Casumpang presented the testimonies of Dr. Rodolfo Jagonap and Dr. Ellewelyn Pasion (Dr.
Pasion), Personnel Officer and Medical Director of SJDH, respectively as well as the testimonies of Dr. Livelo
and Dr. Reyes (the radiologist who read Edmer's chest x-ray result), these witnesses failed to dispute the standard
of action that Dr. Jaudian established in his expert opinion. We cannot consider them expert witnesses either for
the sole reason that they did not testify on the standard of care in dengue cases. 69
On the whole, after examining the totality of the adduced evidence, we find that the lower courts correctly did not
rely on Dr. Casumpang's claim that he exercised prudence and due diligence in handling Edmer's case. Aside
from being self-serving, his claim is not supported by competent evidence. As the lower courts did, we rely on
the uncontroverted fact that he failed, as a medical professional, to observe the most prudent medical procedure
under
the
circumstances
in
diagnosing
and
treating
Edmer.
Dr.

Miranda

is

Not

Liable

for

Negligence

In considering the case of Dr. Miranda, the junior resident physician who was on-duty at the time of Edmer's
confinement, we see the need to draw distinctions between the responsibilities and corresponding liability of Dr.
Casumpang,
as
the
attending
physician,
and
that
of
Dr.
Miranda.
In his testimony, Dr. Pasion declared that resident applicants are generally doctors of medicine licensed to
practice in the Philippines and who would like to pursue a particular specialty. 70 They are usually the front line
doctors responsible for the first contact with the patient. During the scope of the residency program, 71 resident
physicians (or "residents")72 function under the supervision of attending physicians 73 or of the hospital's
teaching staff. Under this arrangement, residents operate merely as subordinates who usually defer to the
attending physician on the decision to be made and on the action to be taken.
The attending physician, on the other hand, is primarily responsible for managing the resident's exercise of
duties. While attending and resident physicians share the collective responsibility to deliver safe and appropriate
care to the patients,74 it is the attending physician who assumes the principal responsibility of patient
care.75 Because he/she exercises a supervisory role over the resident, and is ultimately responsible for the
diagnosis and treatment of the patient, the standards applicable to and the liability of the resident for medical
malpractice is theoretically less than that of the attending physician. These relative burdens and distinctions,
however, do not translate to immunity from the legal duty of care for residents, 76 or from the responsibility
arising

from

their

own

negligent

act.

In Jenkins v. Clark,77 the Ohio Court of Appeals held that the applicable standard of care in medical malpractice
cases involving first-year residents was that of a reasonably prudent physician and not that of interns. According
to Jenkins:
It is clear that the standard of care required of physicians is not an individualized one but of
physicians in general in the community. In order to establish medical malpractice, it must be shown
by a preponderance of the evidence that a physician did some particular thing or things that a
physician or surgeon of ordinary skill, care and diligence would not have done under like or similar
conditions or circumstances, or that he failed or omitted to do some particular thing or things that a
physician or surgeon of ordinary skill, care and diligence would have done under like or similar
conditions or circumstances, and that the inquiry complained of was the direct result of such doing or
failing
to
do
such
thing
or
things.
We note that the standard of instruction given by the court was indeed a proper one. It clearly
informed the jury that the medical care required is that of reasonably careful physicians or hospital
emergency room operators, not of interns or residents. [Emphasis supplied]

A decade later, Centman v. Cobb,78 affirmed the Jenkins ruling and held that interns and first-year residents are
"practitioners of medicine required to exercise the same standard of care applicable to physicians with unlimited
licenses to practice." The Indiana Court held that although a first-year resident practices under a temporary
medical permit, he/she impliedly contracts that he/she has the reasonable and ordinary qualifications of her
profession and that he/she will exercise reasonable skill, diligence, and care in treating the patient.
We find that Dr. Miranda was not independently negligent. Although she had greater patient exposure, and was'
subject to the same standard of care applicable to attending physicians, we believe that a finding of negligence
should also depend on several competing factors, among them, her authority to make her own diagnosis, the
degree of supervision of the attending physician over her, and the shared responsibility between her and the
attending
physicians.
In this case, before Dr. Miranda attended to Edmer, both Dr. Livelo and Dr. Casumpang had diagnosed Edmer
with bronchopneumonia. In her testimony, Dr. Miranda admitted that she had been briefed about Edmer's
condition, his medical history, and initial diagnosis; 79 and based on these pieces of information,
she confirmed the,

finding

of

bronchopneumonia.

Dr. Miranda likewise duly reported to Dr. Casumpang, who admitted receiving updates regarding Edmer's
condition.80 There is also evidence supporting Dr. Miranda's claim that she extended diligent care to Edmer. In
fact, when she suspected - during Edmer's second episode of bleeding - that Edmer could be suffering from
dengue fever, she wasted no time in conducting the necessary tests, and promptly notified Dr. Casumpang about
the incident. Indubitably, her medical assistance led to the finding of dengue fever.
We note however, that during Edmer's second episode of bleeding,81 Dr. Miranda failed to immediately examine
and note the cause of the blood specimen. Like Dr. Casumpang, she merely assumed that the blood in Edmer's
phlegm was caused by bronchopneumonia. Her testimony states:
TSN, June 8, 1993:
Q:
A:
Q:
A:

Let us get this clear, you said that the father told you the patient cocked [sic] out phlegm.
With blood streak.
Now, you stated specimen, were you not able to examine the specimen?
No, sir, I did not because according to the father he wash [sic] his hands.
xxxx

Q:
A:

Now, from you knowledge, what does that indicate if the patient expels a phlegm and blood streak?
If a patient cocked [sic] out phlegm then the specimen could have come from the lung alone. 82 [Emphasis
supplied]
xxxx

TSN, June 17, 1993:


Q:
A:

Now, in the first meeting you had, when that was relayed to you by the father that Edmer Cortejo had
coughed out blood, what medical action did you take?
I examined the patient and I thought that, that coughed out phlegm was a product of broncho pneumonia.
xxxx

Q:
A:

So what examination did you specifically conduct to see that there was no internal bleeding?
At that time I did not do anything to determine the cause of coughing of the blood because I
presumed that it was a mucous (sic) produced by broncho pneumonia, And besides the patient did
not even show any signs of any other illness at that time.[83

Based on her statements we find that Dr. Miranda was not entirely faultless. Nevertheless, her failure to discern
the import of Edmer's second bleeding does not necessarily amount to negligence as the respondent himself
admitted that Dr. Miranda failed to examine the blood specimen because he washed it away. In addition,
considering the diagnosis previously made by two doctors, and the uncontroverted fact that the burden of final
diagnosis pertains to the attending physician (in this case, Dr. Casumpang), we believe that Dr. Miranda's error
was merely an honest mistake of judgment influenced in no small measure by her status in the hospital hierarchy;
hence,
she
should
not
be
held
liable
for
medical
negligence.
Dr.

Jaudian

's

Professional

Competence

and

Credibility

One of the critical issues the petitioners raised in the proceedings before the lower court and before this Court
was Dr. Jaudian's competence and credibility as an expert witness. The petitioners tried to discredit his expert
testimony on the ground that he lacked the proper training and fellowship status in pediatrics.
Criteria

in

Qualifying

as

an

Expert

Witness

The competence of an expert witness is a matter for the trial court to decide upon in the exercise of its discretion.
The test of qualification is necessarily a relative one, depending upon the subject matter of the investigation, and
the fitness of the expert witness. 84 In our jurisdiction, the criterion remains to be the expert witness' special
knowledge experience and practical training that qualify him/her to explain highly technical medical matters to
the
Court.
In Ramos v. Court of Appeals,85 the Court found the expert witness, who is a pulmonologist, not qualified to
testify on the field of anesthesiology. Similarly, in Cereno v. Court of Appeals,86 a 2012 case involving medical
negligence, the Court excluded the testimony of an expert witness whose specialty was anesthesiology, and
concluded that an anesthesiologist cannot be considered an expert in the field of surgery or even in surgical
practices
and
diagnosis.
Interestingly in this case, Dr. Jaudian, the expert witness was admittedly not a pediatrician but a practicing
physician who specializes in pathology.87 He likewise does not possess any formal residency training in
pediatrics. Nonetheless, both the lower courts found his knowledge acquired through study and practical
experience
sufficient
to
advance
an
expert
opinion
on
dengue-related
cases.
We

agree

with

the

lower

courts.

A close scrutiny of Ramos and Cereno reveals that the Court primarily based the witnesses' disqualification to
testify as an expert on their incapacity to shed light on the standard of care that must be observed by the
defendant-physicians. That the expert witnesses' specialties do not match the physicians' practice area only
constituted, at most, one of the considerations that should not be taken out of context. After all, the sole function
of a medical expert witness, regardless of his/her specialty, is to afford assistance to the courts on medical
matters,
and
to
explain
the
medical
facts
in
issue.
Furthermore, there was no reasonable indication in Ramos and Cereno that the expert witnesses possess a
sufficient familiarity with the standard of care applicable to the physicians' specialties.
US jurisprudence on medical malpractice demonstrated the trial courts' wide latitude of discretion in allowing a
specialist
from
another
field
to
testify
against
a
defendant
specialist.

In Brown v. Sims,88 a neurosurgeon was found competent to give expert testimony regarding a gynecologist's
standard of pre-surgical care. In that case, the court held that since negligence was not predicated on the
gynecologist's negligent performance of the operation, but primarily on the claim that the pre-operative histories
and physicals were inadequate, the neurosurgeon was competent to testify as an expert.
Frost v. Mayo Clinic89 also allowed an orthopedic surgeon to testify against a neurologist in a medical
malpractice action. The court considered that the orthopedic surgeon's opinion on the "immediate need for
decompression" need not come from a specialist in neurosurgery. The court held that:
It is well established that "the testimony of a qualified medical doctor cannot be excluded simply
because he is not a specialist x x x." The matter of "x x x training and specialization of the witness
goes to the weight rather than admissibility x x x."
xxxx
It did not appear to the court that a medical doctor had to be a specialist in neurosurgery to express
the opinions permitted to be expressed by plaintiffs' doctors, e.g., the immediate need for a
decompression in the light of certain neurological deficits in a post-laminectomy patient. As stated
above, there was no issue as to the proper execution of the neurosurgery. The medical testimony
supported plaintiffs' theory of negligence and causation. (Citations omitted)
In another case,90 the court declared that it is the specialist's knowledge of the requisite subject matter, rather
than
his/her
specialty
that
determines
his/her
qualification
to
testify.
Also in Evans v. Ohanesian,91 the court set a guideline in qualifying an expert witness:
To qualify a witness as a medical expert, it must be shown that the witness (1) has the required
professional knowledge, learning and skill of the subject under inquiry sufficient to qualify him to
speak with authority on the subject; and (2) is familiar with the standard required of a physician under
similar circumstances; where a witness has disclosed sufficient knowledge of the subject to entitle his
opinion to go to the jury, the question of the degree of his knowledge goes more to the weight of the
evidence than to its admissibility.
xxxx
Nor is it critical whether a medical expert is a general practitioner or a specialist so long as he
exhibits knowledge of the subject. Where a duly licensed and practicing physician has gained
knowledge of the standard of care applicable to a specialty in which he is not directly engaged but as
to which he has an opinion based on education, experience, observation, or association wit that
specialty, his opinion is competent. (Emphasis supplied)
Finally, Brown v. Mladineo92 adhered to the principle that the witness' familiarity, and not the classification by
title or specialty, which should control issues regarding the expert witness' qualifications:
The general rule as to expert testimony in medical malpractice actions is that "a specialist in a
particular branch within a profession will not be required." Most courts allow a doctor to testify if
they are satisfied of his familiarity with the standards of a specialty, though he may not practice the
specialty himself. One court explained that "it is the scope of the witness' knowledge and not the
artificial classification by title that should govern the threshold question of admissibility. (Citations
omitted)
Application

to

the

Present

Case

In the case and the facts before us, we find that Dr. Jaudian is competent to testify on the standard of care in
dengue
fever
cases.

Although he specializes in pathology, it was established during trial that he had attended not less than 30
seminars held by the Pediatric Society, had exposure in pediatrics, had been practicing medicine for 16 years, and
had
handled
not
less
than
50
dengue
related
cases.
As a licensed medical practitioner specializing in pathology, who had practical and relevant exposure in
pediatrics and dengue related cases, we are convinced that Dr. Jaudian demonstrated sufficient familiarity with
the standard of care to be applied in dengue fever cases. Furthermore, we agree that he possesses knowledge and
experience
sufficient
to
qualify
him
to
speak
with
authority
on
the
subject.
The Causation Between Dr. Casumpang's Negligent Act/Omission, and the Patient's Resulting Death was
Adequately
Proven
Dr. Jaudian's testimony strongly suggests that due to Dr. Casumpang's failure to timely diagnose Edmer with
dengue, the latter was not immediately given the proper treatment. In fact, even after Dr. Casumpang had
discovered Edmer's real illness, he still failed to promptly perform the standard medical procedure. We agree with
these
findings.
As the respondent had pointed out, dengue fever, if left untreated, could be a life threatening disease. As in any
fatal diseases, it requires immediate medical attention. 93 With the correct and timely diagnosis, coupled with the
proper medical management, dengue fever is not a life-threatening disease and could easily be cured. 94
Furthermore, as Dr. Jaudian testified, with adequate intensive care, the mortality rate of dengue fever should fall
to less than 2%. Hence, the survival of the patient is directly related to early and proper management of the
illness.95
To reiterate, Dr. Casumpang failed to timely diagnose Edmer with dengue fever despite the presence of its
characteristic symptoms; and as a consequence of the delayed diagnosis, he also failed to promptly manage
Edmer's illness. Had he immediately conducted confirmatory tests, (i.e., tourniquet tests and series of blood tests)
and promptly administered the proper care and management needed for dengue fever, the risk of complications or
even
death,
could
have
been
substantially
reduced.
Furthermore, medical literature on dengue shows that early diagnosis and management of dengue is critical in
reducing the risk of complications and avoiding further spread of the virus. 96 That Edmer later died of
"Hypovolemic Shock/hemorrhagic shock," "Dengue Hemorrhagic Fever Stage IV," a severe and fatal form of
dengue fever, established the causal link between Dr. Casumpang's negligence and the injury.
Based on these considerations, we rule that the respondent successfully proved the element of causation.
Liability
We

of
now

discuss

the

SJDH
liability

of

the

hospital.

The respondent submits that SJDH should not only be held vicariously liable for the petitioning doctors'
negligence but also for its own negligence. He claims that SJDH fell short of its duty of providing its patients
with the necessary facilities and equipment as shown by the following circumstances:
(a)

SJDH was not equipped with proper paging system;

(b)

the number of its doctors is not proportionate to the number of patients;

(c)

SJDH was not equipped with a bronchoscope;

(d)

when Edmer's oxygen was removed, the medical staff did not immediately provide him with portable
oxygen;

(e)

when Edmer was about to be transferred to another hospital, SJDH's was not ready and had no driver; and

(f)

despite Edmer's critical condition, there was no doctor attending to him from 5:30 p.m. of April 22, to 9:00
a.m. of April 23, 1988.
SJDH on the other hand disclaims liability by claiming that the petitioning doctors are not its employees but are
mere
consultants
and
independent
contractors.
We affirm the hospital's liability not on the basis of Article 2180 of the Civil Code, but on the basis of the
doctrine
of
apparent
authority
or
agency
by
estoppel.
There

is

No

Employer-Employee

Relationship

Between

SJDH

and

the

Petitioning

Doctors

In determining whether an employer-employee relationship exists between the parties, the following elements
must be present: (1) selection and engagement of services; (2) payment of wages; (3) the power to hire and fire;
and (4) the power to control not only the end to be achieved, but the means to be used in reaching such an end. 97
Control,

which

is

the

most

crucial

among

the

elements,

is

not

present

in

this

case.

Based on the records, no evidence exists showing that SJDH exercised any degree of control over the means,
methods of procedure and manner by which the petitioning doctors conducted and performed their medical
profession. SJDH did not control their diagnosis and treatment. Likewise, no evidence was presented to show that
SJDH monitored, supervised, or directed the petitioning doctors in the treatment and management of Edmer's
case. In these lights, the petitioning doctors were not employees of SJDH, but were mere independent
contractors.
SJDH is Solidarity Liable Based on The Principle of Agency or Doctrine of Apparent Authority
Despite the absence of employer-employee relationship between SJDH and the petitioning doctors, SJDH is not
free
from
liability.98
As a rule, hospitals are not liable for the negligence of its independent contractors. However, it may be found
liable if the physician or independent contractor acts as an ostensible agent of the hospital. This exception is also
known
as
the
"doctrine
of
apparent
authority."99
The US case of Gilbert v. Sycamore Municipal Hospital100 abrogated the hospitals' immunity to vicarious
liability of independent contractor physicians. In that case, the Illinois Supreme Court held that under the doctrine
of apparent authority, hospitals could be found vicariously liable for the negligence of an independent contractor:
Therefore, we hold that, under the doctrine of apparent authority, a hospital can be held vicariously
liable for the negligent acts of a physician providing care at the hospital, regardless of whether the
physician is an independent contractor, unless the patient knows, or should have known, that the
physician is an independent contractor. The elements of the action have been set out as follows:
For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show
that: (1) the hospital, or its agent, acted in a manner that would lead a reasonable person
to conclude that the individual who was alleged to be negligent was an employee or agent
of the hospital; (2) where the acts of the agent create the appearance of authority, the

plaintiff must also prove that the hospital had knowledge of and acquiesced in them; and
(3) the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent
with ordinary care and prudence. (Emphasis supplied)
The doctrine was applied in Nogales v. Capitol Medical Center101 where this Court, through the ponenciaof
Associate Justice Antonio T. Carpio, discussed the two factors in determining hospital liability as follows:
The first factor focuses on the hospital's manifestations and is sometimes described as an inquiry
whether the hospital acted in a manner which would lead a reasonable person to conclude that the
individual who was alleged to be negligent was an employee or agent of the hospital. In this regard,
the hospital need not make express representations to the patient that the treating physician is an
employee of the hospital; rather a representation may be general and implied.
xxxx
The second factor focuses on the patient's reliance. It is sometimes characterized as an inquiry on
whether the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with
ordinary care and prudence. (Citation omitted)
In sum, a hospital can be held vicariously liable for the negligent acts of a physician (or an independent
contractor) providing care at the hospital if the plaintiff can prove these two factors: first, the hospital's
manifestations;
and second, the
patient's
reliance.
a.

Hospital's

manifestations

It involves an inquiry on whether the hospital acted in a manner that would lead a reasonable person to conclude
that the individual alleged to be negligent was an employee or agent of the hospital. As pointed out in Nogales,
the hospital need not make express representations to the patient that the physician or independent contractor is
an
employee
of
the
hospital;
representation
may
be
general
and
implied. 102
In Pamperin v. Trinity Memorial Hospital,103 questions were raised on "what acts by the hospital or its agent are
sufficient to lead a reasonable person to conclude that the individual was an agent of the hospital." In ruling that
the hospital's manifestations can be proven without the express representation by the hospital, the court relied on
several cases from other jurisdictions, and held that:
(1)

the hospital, by providing emergency room care and by failing to advise patients that they were being
treated by the hospital's agent and not its employee, has created the appearance of agency; and

(2)

patients entering the hospital through the emergency room, could properly assume that the treating doctors
and staff of the hospital were acting on its behalf.
In this case, the court considered the act of the hospital of holding itself out as provider of complete medical care,
and considered the hospital to have impliedly created the appearance of authority.
b.

Patient's

reliance

It involves an inquiry on whether the plaintiff acted in reliance on the conduct of the hospital or its agent,
consistent
with
ordinary
care
and
prudence.104
In Pamperin, the court held that the important consideration in determining the patient's reliance is: whether the
plaintiff is seeking care from the hospital itself or whether the plaintiff is looking to the hospital merely as a place
for
his/her
personal
physician
to
provide
medical
care.105
Thus, this requirement is deemed satisfied if the plaintiff can prove that he/she relied upon the hospital to provide

care and treatment, rather than upon a specific physician. In this case, we shall limit the determination of the
hospital's apparent authority to Dr. Casumpang, in view of our finding that Dr. Miranda is not liable for
negligence.
SJDH

Clothed

Dr.

Casumpang

With

Apparent

Authority

SJDH impliedly held out and clothed Dr. Casumpang with apparent authority leading the respondent to believe
that
he
is
an
employee
or
agent
of
the
hospital.
Based on the records, the respondent relied on SJDH rather than upon Dr. Casumpang, to care and treat his son
Edmer. His testimony during trial showed that he and his wife did not know any doctors at SJDH; they also did
not know that Dr. Casumpang was an independent contractor. They brought their son to SJDH for diagnosis
because of their family doctor's referral. The referral did not specifically point to Dr. Casumpang or even to Dr.
Miranda,
but
to
SJDH.
Significantly, the respondent had relied on SJDH's representation of Dr. Casumpang's authority. To recall, when
Mrs. Cortejo presented her Fortune Care card, she was initially referred to the Fortune Care coordinator, who was
then out of town. She was thereafter referred to Dr. Casumpang, who is also accredited with Fortune Care. In
both instances, SJDH through its agent failed to advise Mrs. Cortejo that Dr. Casumpang is an independent
contractor.
Mrs. Cortejo accepted Dr. Casumpang's services on the reasonable belief that such were being provided by SJDH
or its employees, agents, or servants. By referring Dr. Casumpang to care and treat for Edmer, SJDH impliedly
held out Dr. Casumpang, not only as an accredited member of Fortune Care, but also as a member of its medical
staff. SJDH cannot now disclaim liability since there is no showing that Mrs. Cortejo or the respondent knew, or
should have known, that Dr. Casumpang is only an independent contractor of the hospital. In this case, estoppel
has
already
set
in.
We also stress that Mrs. Cortejo's use of health care plan (Fortune Care) did not affect SJDH's liability. The only
effect of the availment of her Fortune Care card benefits is that her choice of physician is limited only to
physicians who are accredited with Fortune Care. Thus, her use of health care plan in this case only limited the
choice of doctors (or coverage of services, amount etc.) and not the liability of doctors or the hospital.
WHEREFORE, premises considered, this Court PARTLY GRANTS the consolidated petitions. The Court finds
Dr. Noel Casumpang and San Juan de Dios Hospital solidarity liable for negligent medical practice. We SET
ASIDE the finding of liability as to Dr. Ruby Sanga-Miranda. The amounts of P45,000.00 as actual damages and
P500,000.00 as moral damages should each earn legal interest at the rate of six percent (6%) per annum
computed from the date of the judgment of the trial court. The Court AFFIRMSthe rest of the Decision dated
October 29, 2004 and the Resolution dated January 12, 2006 in CA-G.R. CV No. 56400.
SO ORDERED.
Republic
SUPREME
Manila

of

the

SECOND DIVISION
G.R. No. 160110

June 18, 2014

Philippines
COURT

MARIANO C. MENDOZA and ELVIRA LIM, Petitioners,


vs.
SPOUSES LEONORA J. GOMEZ and GABRIEL V. GOMEZ, Respondents.
DECISION
PEREZ, J.:
Assailed in the present appeal by certiorari is the Decision1 dated 29 September 2003 of the Special Fourth
Division of the Court of Appeals (CA) in CA-G.R. CV No. 71877, which affirmed with modification the
Decision2dated 31 January 2001 of the Regional Trial Court (RTC), Branch 172, Valenzuela City in Civil Case
No. 5352-V-97, and which effectively allowed the award of actual, moral, and exemplary damages, as well as
attorney's fees and costs of the suit in favor of respondent Spouses Leonora and Gabriel Gomez (respondents).
Antecedent Facts
On 7 March 1997, an Isuzu Elf truck (Isuzu truck) with plate number UAW 582,3 owned by respondent Leonora
J. Gomez (Leonora)4 and driven by Antenojenes Perez (Perez),5 was hit by a Mayamy Transportation bus
(Mayamy bus) with temporary plate number 1376-1280,6 registered under the name of petitioner Elvira Lim
(Lim)7 and driven by petitioner Mariano C. Mendoza (Mendoza).8
Owing to the incident, an Information for reckless imprudence resulting in damage to property and multiple
physical injuries was filed against Mendoza.9 Mendoza, however, eluded arrest, thus, respondents filed a separate
complaint for damages against Mendoza and Lim, seeking actual damages, compensation for lost income, moral
damages, exemplary damages, attorneys fees and costs of the suit.10 This was docketed as Civil Case No. 5352V-97.
According to PO1 Melchor F. Rosales (PO1 Rosales), investigating officer of the case, at around 5:30 a.m., the
Isuzu truck, coming from Katipunan Road and heading towards E. Rodriguez, Sr. Avenue, was travelling along
the downward portion of Boni Serrano Avenue when, upon reaching the corner of Riviera Street, fronting St.
Ignatius Village, its left front portion was hit by the Mayamy bus.11 According to PO1 Rosales, the Mayamy bus,
while traversing the opposite lane, intruded on the lane occupied by the Isuzu truck.12
PO1 Rosales also reported that Mendoza tried to escape by speeding away, but he was apprehended in Katipunan
Road corner C. P. Garcia Avenue by one Traffic Enforcer Galante and a security guard of St. Ignatius Village.13
As a result of the incident, Perez,as well as the helpers on board the Isuzu truck, namely Melchor V. Anla (Anla),
Romeo J. Banca (Banca), and Jimmy Repisada (Repisada), sustained injuries necessitating medical treatment
amounting to P11,267.35,which amount was shouldered by respondents. Moreover, the Isuzu truck sustained
extensive damages on its cowl, chassis, lights and steering wheel, amounting to P142,757.40.14
Additionally, respondents averred that the mishap deprived them of a daily income of P1,000.00. Engaged in the
business of buying plastic scraps and delivering them to recycling plants, respondents claimed that the Isuzu
truck was vital in the furtherance of their business.
For their part, petitioners capitalized on the issue of ownership of the bus in question. Respondents argued that
although the registered owner was Lim, the actual owner of the bus was SPO1 Cirilo Enriquez (Enriquez), who
had the bus attached with Mayamy Transportation Company (Mayamy Transport) under the so-called "kabit
system." Respondents then impleaded both Lim and Enriquez.
Petitioners, on the other hand, presented Teresita Gutierrez (Gutierrez), whose testimony was offered to prove
that Mayamy Bus or Mayamy Transport is a business name registered under her name, and that such business is a
sole proprietorship. Such was presented by petitioners to rebut the allegation of respondents that Mayamy
Transport is a corporation;15 and to show, moreover, that although Gutierrez is the sole proprietor of Mayamy
Transport, she was not impleaded by respondents in the case at bar.16

After weighing the evidence, the RTC found Mendoza liable for direct personal negligence under Article 2176 of
the Civil Code, and it also found Lim vicariously liable under Article 2180 of the same Code.
As regards Lim, the RTC relied on the Certificate of Registration issued by the Land Transportation Office on 9
December 199617 in concluding that she is the registered owner of the bus in question. Although actually owned
by Enriquez, following the established principle in transportation law, Lim, as the registered owner, is the one
who can be held liable.
Thus, the RTC disposed of the case as follows:
WHEREFORE, judgment is hereby rendered in favor of the [respondents] and against the [petitioners]:
1. Ordering the [petitioners] except Enriquez to pay [respondents], jointly and severally, the costs of repair
of the damaged vehicle in the amount of P142,757.40;
2. Ordering the defendants except Enriquez to pay [respondents], jointly and severally, the amount
of P1,000.00 per day from March 7, 1997 up to November 1997 representing the unrealized income of the
[respondents] when the incident transpired up to the time the damaged Isuzu truck was repaired;
3. Ordering the [petitioners] except Enriquez to pay [respondents], jointly and severally, the amount
of P100,000.00 as moral damages, plus a separate amount of P50,000.00 as exemplary damages;
4. Ordering the [petitioners] except Enriquez to pay [respondents], jointly and severally, the amount
of P50,000.00 as attorneys fees; 5. Ordering the [petitioners] except Enriquez to pay [respondents] the
costs of suit.18
Displeased, petitioners appealed to the CA, which appeal was docketed as CA-G.R. CV No. 71877. After
evaluating the damages awarded by the RTC, such were affirmed by the CA with the exception of the award of
unrealized income which the CA ordered deleted, viz:
WHEREFORE, premises considered, the appeal is PARTLY GRANTED. The judgment of the Regional Trial
Court of Valenzuela City, Branch 172 dated January 31, 2001, is MODIFIED, in that the award of P1,000.00 per
day from March 1997 up to November 1997 representing unrealized income is DELETED. The award
of P142,757.40 for the cost of repair of the damaged vehicle, the award of P100,000.00 as moral damages, the
award of P50,000.00 as exemplary damages, the award of P50,000.00 as attorneys fees and the costs of the suit
are hereby MAINTAINED.19
The Present Petition
Unsatisfied with the CA ruling, petitioners filed an appeal by certiorari before the Court, raising the following
issues:20
1. The court a quo has decided questions of substance in a way not in accord with law or with the
applicable decisions of the Supreme Court when it awarded:
a. Moral damages in spite of the fact that the [respondents] cause of action is clearly based on
quasi-delict and [respondents] did not sustain physical injuries to be entitled thereto pursuant to
Article 2219 (2) of the New Civil Code and pertinent decisions of the Supreme Court to that effect.
The court a quo erroneously concluded that the driver acted in bad faith and erroneously applied
the provision of Article 21 of the same code to justify the award for bad faith is not consistent with
quasi-delict which is founded on fault or negligence.
b. Exemplary damages in spite of the fact that there is no finding that the vehicular accident was
due to petitioner-drivers gross negligence to be entitled thereto pursuant to Article 2231 of the
New Civil Code and pertinent decisions of the Supreme Court to that effect. The factual basis of
the court a quo that "the act of the driver of the bus in attempting to escape after causing the
accident in wanton disregard of the consequences of his negligent act is such gross negligence that

justifies an award of exemplary damages" is an act after the fact which is not within the
contemplation of Article 2231 of the New Civil Code.
c. Attorneys fees in spite of the fact that the assailed decisions of the trial court and the court a
quo are bereft with jurisdictions for the award of attorneys fees pursuant to the pertinent decisions
of the Supreme Court on the matter and provision Article 2208 of the New Civil Code. The court a
quo erroneously applied the decision of the Supreme Court in Baas, Jr. vs. Court of Appeals, 325
SCRA 259.
The Courts Ruling
The petition is partially meritorious.
Respondents anchor their claim for damages on Mendozas negligence, banking on Article 2176 of the Civil
Code, to wit:
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.
In impleading Lim, on the other hand, respondents invoke the latters vicarious liability as espoused in Article
2180 of the same Code:
The obligation imposed by Article 2176 is demandable not only for ones own acts or omissions, but also for
those of persons for whom one is responsible.
xxxx
Employers shall be liable for the damages caused by their employees and household helpers acting within the
scope of their assigned tasks, even though the former are not engaged in any business of industry.
The first question to address, then, is whether or not Mendozas negligence was duly proven. Negligence is
defined as the failure to observe for the protection of the interests of another person, that degree of care,
precaution and vigilance which the circumstances justly demand, whereby such other person suffers injury.21
As found by the RTC, and affirmed by the CA, Mendoza was negligent in driving the subject Mayamy bus, as
demonstrated by the fact that, at the time of the collision, the bus intruded on the lane intended for the Isuzu
truck. Having encroached on the opposite lane, Mendoza was clearly in violation of traffic laws. Article2185 of
the Civil Code provides that unless there is proof to the contrary, it is presumed that a person driving a motor
vehicle has been negligent if at the time of the mishap, he was violating any traffic regulation. In the case at bar,
Mendozas violation of traffic laws was the proximate cause of the harm.
Proximate cause is defined as that cause, which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury, and without which the result would not have occurred. And more
comprehensively, the proximate legal cause is that acting first and producing the injury, either immediately or by
setting other events in motion, all constituting a natural and continuous chain of events, each having a close
causal connection with its immediate predecessor, the final event in the chain immediately effecting the injury as
a natural and probable result of the cause which first acted, under such circumstances that the person responsible
for the first event should, as an ordinary prudent and intelligent person, have reasonable ground to expect at the
moment of his act or default that an injury to some person might probably result therefrom.22
The evidence on record shows that before the collision, the Isuzu truck was in its rightful lane, and was even at a
stop, having been flagged down by a security guard of St. Ignatius Village.23 The mishap occurred when the
Mayamy bus, travelling at a fast speed as shown by the impact of the collision, and going in the opposite
direction as that of the Isuzu truck, encroached on the lane rightfully occupied by said Isuzu truck, and caused the
latter to spin, injuring Perez, Anla, Banca, and Repisada, and considerably damaging the Isuzu truck.

Having settled the fact of Mendozas negligence, then, the next question that confronts us is who may beheld
liable. According to Manresa, liability for personal acts and omissions is founded on that indisputable principle of
justice recognized by all legislations that when a person by his act or omission causes damage or prejudice to
another, a juridical relation is created by virtue of which the injured person acquires a right to be indemnified and
the person causing the damage is charged with the corresponding duty of repairing the damage. The reason for
this is found in the obvious truth that man should subordinate his acts to the precepts of prudence and if he fails
to observe them and causes damage to another, he must repair the damage.24 His negligence having caused the
damage, Mendoza is certainly liable to repair said damage.
Additionally, Mendozas employer may also be held liable under the doctrine of vicarious liability or imputed
negligence. Under such doctrine, a person who has not committed the act or omission which caused damage or
injury to another may nevertheless be held civilly liable to the latter either directly or subsidiarily under certain
circumstances.25 In our jurisdiction, vicarious liability or imputed negligence is embodied in Article 2180 of the
Civil Code and the basis for damages in the action under said article is the direct and primary negligence of the
employer in the selection or supervision, or both, of his employee.26
In the case at bar, who is deemed as Mendozas employer? Is it Enriquez, the actual owner of the bus or Lim, the
registered owner of the bus?
In Filcar Transport Services v. Espinas,27 we held that the registered owner is deemed the employer of the
negligent driver, and is thus vicariously liable under Article 2176, in relation to Article 2180, of the Civil Code.
Citing Equitable Leasing Corporation v. Suyom,28 the Court ruled that in so far as third persons are concerned,
the registered owner of the motor vehicle is the employer of the negligent driver, and the actual employer is
considered merely as an agent of such owner. Thus, whether there is an employer-employee relationship between
the registered owner and the driver is irrelevant in determining the liability of the registered owner who the law
holds primarily and directly responsible for any accident, injury or death caused by the operation of the vehicle in
the streets and highways.29
As early as Erezo v. Jepte,30 the Court, speaking through Justice Alejo Labrador summarized the justification for
holding the registered owner directly liable, to wit:
x x x The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that
any damage or injury is caused by the vehicles on the public highways, responsibility therefore can be fixed on a
definite individual, the registered owner. Instances are numerous where vehicle running on public highways
caused accidents or injuries to pedestrians or other vehicles without positive identification of the owner or
drivers, or with very scant means of identification. It is to forestall these circumstances, so inconvenient or
prejudicial to the public, that the motor vehicle registration is primarily ordained, in the interest of the
determination of persons responsible for damages or injuries caused on public highways.
"One of the principal purposes of motor vehicles legislation is identification of the vehicle and of the operator, in
case of accident; and another is that the knowledge that means of detection are always available may act as a
deterrent from lax observance of the law and of the rules of conservative and safe operation. Whatever purpose
there may be in these statutes, it is subordinate at the last to the primary purpose of rendering it certain that the
violator of the law or of the rules of safety shall not escape because of lack of means to discover him." The
purpose of the statute is thwarted, and the displayed number becomes a "snare and delusion," if courts will
entertain such defenses as that put forward by appellee in this case. No responsible person or corporation could
be held liable for the most outrageous acts of negligence, if they should be allowed to place a "middleman"
between them and the public, and escape liability by the manner in which they recompense their servants.31
Generally, when an injury is caused by the negligence of a servant or employee, there instantly arises a
presumption of law that there was negligence on the part of the master or employer either in the selection of the
servant or employee (culpa in eligiendo) or in the supervision over him after the selection (culpa vigilando), or
both. The presumption is juris tantum and not juris et de jure; consequently, it may be rebutted. Accordingly, the

general rule is that if the employer shows to the satisfaction of the court that in the selection and supervision of
his employee he has exercised the care and diligence of a good father of a family, the presumption is overcome
and he is relieved of liability.32 However, with the enactment of the motor vehicle registration law, the defenses
available under Article 2180 of the Civil Code - that the employee acts beyond the scope of his assigned task or
that it exercised the due diligence of a good father of a family to prevent damage are no longer available to the
registered owner of the motor vehicle, because the motor vehicle registration law, to a certain extent, modified
Article 2180.33
As such, there can be no other conclusion but to hold Lim vicariously liable with Mendoza.
This does not mean, however, that Lim is left without any recourse against Enriquez and Mendoza. Under the
civil law principle of unjust enrichment, the registered owner of the motor vehicle has a right to be indemnified
by the actual employer of the driver; and under Article 2181 of the Civil Code, whoever pays for the damage
caused by his dependents or employees may recover from the latter what he has paid or delivered in satisfaction
of the claim.
Having identified the persons liable, our next question is what may be awarded.
Actual or Compensatory Damages. Actual or compensatory damages are those awarded in satisfaction of, or in
recompense for, loss or injury sustained. They simply make good or replace the loss caused by the wrong.34
Article 2202 of the Civil Code provides that in crimes and quasi delicts, the defendant shall be liable for all
damages which are the natural and probable consequences of the act or omission complained of. It is not
necessary that such damages have been foreseen or could have reasonably been foreseen by the defendant.
Article 2199 of the same Code, however, sets the limitation that, except as provided by law or by stipulation, one
is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. As
such, to warrant an award of actual or compensatory damages, the claimant must prove that the damage sustained
is the natural and probable consequences of the negligent act and, moreover, the claimant must adequately prove
the amount of such damage.
In the case at bar, the RTC, basing on the receipts submitted by respondents and which receipts petitioners had
the opportunity to examine, found that the total repairs on the Isuzu truck amounted to P142,757.40, and that the
full hospitalization and medical expenses of Perez, Anla, Banca, and Repisada amounted to P11,267.35. As such,
these are the amounts that respondents are entitled to as actual and compensatory damages.
Although respondents alleged in their complaint that the damage to their Isuzu truck caused them the loss of a
daily income of P1,000.00, such claim was not duly substantiated by any evidence on record, and thus cannot be
awarded in their favor.
Moral Damages. Moral damages are awarded to enable the injured party to obtain means, diversions or
amusements that will serve to alleviate the moral suffering he has undergone, by reason of the defendant's
culpable action.35
In prayers for moral damages, however, recovery is more an exception rather than the rule. Moral damages are
not meant to be punitive but are designed to compensate and alleviate the physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
harm unjustly caused to a person. To be entitled to such an award, the claimant must satisfactorily prove that he
has suffered damages and that the injury causing it has sprung from any of the cases listed in Articles 2219 and
2220 of the Civil Code. Moreover, the damages must be shown to be the proximate result of a wrongful act or
omission. The claimant must thus establish the factual basis of the damages and its causal tie with the acts of the
defendant.36
In fine, an award of moral damages calls for the presentation of 1) evidence of besmirched reputation or physical,
mental or psychological suffering sustained by the claimant; 2)a culpable act or omission factually established; 3)
proof that the wrongful act or omission of the defendant is the proximate cause of the damages sustained by the

claimant; and 4) the proof that the act is predicated on any of the instances expressed or envisioned by Article
2219 and Article 2220 of the Civil Code.37
A review of the complaint and the transcript of stenographic notes yields the pronouncement that respondents
neither alleged nor offered any evidence of besmirched reputation or physical, mental or psychological suffering
incurred by them. All that Leonora and her counsel had to say on the matter of damages other than actual or
compensatory damages is this:38
Q: Did you ever spend covering attorneys fees?
A: Yes, sir. P50,000.00.
Q: Aside from the actual damage that you have mentioned x x x, how much more would you like this Court to
award you by way of moral damages?
A: P100,000.00, sir.
Q: How about exemplary damages?
A: P50,000.00, sir.
Q: What happened to you, what did you feel when the defendants failed to immediately repair your vehicle that
was damaged Madam Witness?
A: I have incurred expenses and I was forced to apply for a loan, sir.
In Kierulf v. CA,39 we observed that this Court cannot remind the bench and the bar often enough that in order
that moral damages may be awarded, there must be pleading and proof of moral suffering, mental anguish, fright
and the like. Citing Francisco v. GSIS,40 the Court held that there must be clear testimony on the anguish and
other forms of mental suffering. Thus, if the plaintiff fails to take the witness stand and testify as to his social
humiliation, wounded feelings and anxiety, moral damages cannot be awarded.
Moreover, respondents were not able to show that their claim properly falls under Articles 2219 and 2220 of the
Civil Code. Respondents cannot rely on Article 2219 (2) of the Civil Code which allows moral damages in quasidelicts causing physical injuries because in physical injuries, moral damages are recoverable only by the injured
party,41 and in the case at bar, herein respondents were not the ones who were actually injured.
In B.F. Metal (Corp.) v. Sps. Lomotan, et al.,42 the Court, in a claim for damages based on quasi-delict causing
physical injuries, similarly disallowed an award of moral damages to the owners of the damaged vehicle, when
neither of them figured in the accident and sustained injuries.
Neither can respondents rely on Article 21 of the Civil Code as the RTC erroneously did. Article 21 deals with
acts contra bonus mores, and has the following elements: (1) There is an act which is legal; (2) but which is
contrary to morals, good custom, public order, or public policy; (3) and it is done with intent to injure. 43 In the
present case, it can hardly be said that Mendozas negligent driving and violation of traffic laws are legal acts.
Moreover, it was not proven that Mendoza intended to injure Perez, et al. Thus, Article 21 finds no application to
the case at bar. All in all, we find that the RTC and the CA erred in granting moral damages to respondents.
Exemplary Damages. Article 2229 of the Civil Code provides that exemplary or corrective damages are imposed,
by way of example or correction for the public good, in addition to moral, temperate, liquidated or compensatory
damages. Article 2231 of the same Code further states that in quasi-delicts, exemplary damages may be granted if
the defendant acted with gross negligence.
Our jurisprudence sets certain conditions when exemplary damages may be awarded: First, they may be imposed
by way of example or correction only in addition, among others, to compensatory damages, and cannot be
recovered as a matter of right, their determination depending upon the amount of compensatory damages that
may be awarded to the claimant. Second, the claimant must first establish his right to moral, temperate, liquidated

or compensatory damages. Third, the wrongful act must be accompanied by bad faith, and the award would be
allowed only if the guilty party acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.44
In motor vehicle accident cases, exemplary damages may be awarded where the defendants misconduct is so
flagrant as to transcend simple negligence and be tantamount to positive or affirmative misconduct rather than
passive or negative misconduct. In characterizing the requisite positive misconduct which will support a claim for
punitive damages, the courts have used such descriptive terms as willful, wanton, grossly negligent, reckless, or
malicious, either alone or in combination.45
Gross negligence is the absence of care or diligence as to amount to a reckless disregard of the safety of persons
or property. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them.46
In the case at bar, having established respondents right to compensatory damages, exemplary damages are also in
order, given the fact that Mendoza was grossly negligent in driving the Mayamy bus. His act of intruding or
encroaching on the lane rightfully occupied by the Isuzu truck shows his reckless disregard for safety.
In Bao v. Bachelor Express, Inc., et al.,47 where an erring bus, in the process of overtaking a jeepney, also
encroached on the opposite lane, and consequently collided with a dump truck, the Court held the driver of the
bus grossly negligent and affirmed the award of exemplary damages. Attorneys Fees. Article 2208 of the Civil
Code enumerates the instances when attorneys fees may be recovered:
Art. 2208. In the absence of stipulation, attorneys fees and expenses of litigation, other than judicial costs,
cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendants act or omission has compelled the plaintiff to litigate with third persons or to
incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs valid and
demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmens compensation and employers liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorneys fees and expenses of
litigation should be recovered;
In all cases, the attorneys fees and expenses of litigation must be reasonable.
From the very opening sentence of Article 2208 of the Civil Code, it is clearly intended to retain the award of
attorneys fees as the exception in our law, as the general rule remains that attorneys fees are not recoverable in
the absence of a stipulation thereto, the reason being that it is not sound policy to set a premium on the right to
litigate.48
As such, in Spouses Agustin v. CA,49 we held that, the award of attorneys fees being an exception rather than
the general rule, it is necessary for the court to make findings of facts and law that would bring the case within
the exception and justify the grant of such award. Thus, the reason for the award of attorneys fees must be stated

in the text of the courts decision; otherwise, if it is stated only in the dispositive portion of the decision, the same
must be disallowed on appeal.
In the case at bar, the RTC Decision had nil discussion on the propriety of attorneys fees, and it merely awarded
such in the dispositive. The CA Decision, on the other hand, merely stated that the award of attorneys fees is
merited as such is allowed when exemplary damages are awarded.50 Following established
jurisprudence,51however, the CA should have disallowed on appeal said award of attorneys fees as the RTC
failed to substantiate said award. Costs of suit. The Rules of Court provide that, generally, costs shall be allowed
to the prevailing party as a matter of course, thus:52
Section 1. Costs ordinarily follow results of suit.- Unless otherwise provided in these rules, costs shall be allowed
to the prevailing party as a matter of course, but the court shall have power, for special reasons, to adjudge that
either party shall pay the costs of an action, or that the same be divided, as may be equitable. No costs shall be
allowed against the Republic of the Philippines, unless otherwise provided by law.
In the present case, the award of costs of suit to respondents, as the prevailing party, is in order.
Interests.1wphi1Interest by way of damages has been defined as interest allowed in actions for breach of
contractor tort for the unlawful detention of money already due. This type of interest is frequently called
"moratory interest." Interest as a part of damage, is allowed, not by application of arbitrary rules, but as a result
of the justice of the individual case and as compensation to the injured party.53
The legal provision on interests in quasi-delicts is Article 2211 of the Civil Code which provides that in crimes
and quasi-delicts, interest as part of the damage, may, in a proper case, be adjudicated in the discretion of the
court.
Generally, interest is allowed as a matter of right for failure to pay liquidated claims when due.54 For
unliquidated claims, however, Article 2213 of the Civil Code provides that interest cannot be recovered upon
unliquidated claims or damages, except when the demand can be established with reasonable certainty.
In the case at bar, although the award of exemplary damages is unliquidated in the sense that petitioners cannot
know for sure, before judgment, the exact amount that they are required to pay to respondents, the award of
actual or compensatory damages, however, such as the truck repairs and medical expenses, is arguably liquidated
in that they can be measured against a reasonably certain standard.55 Moreover, justice would seem to require
that the delay in paying for past losses which can be made reasonably certain should be compensated through an
award of interest.56
WHEREFORE, premises considered, the Court Resolves to PARTIALLY GRANT the appeal by certiorari, as
follows:
1) DECLARE Mariano Mendoza and Elvira Lim solidarily liable to respondent Spouses Leonora and
Gabriel Gomez;
2) MAINTAIN the award of actual or compensatory damages in the amount of P142,757.40 for the repair
of the Isuzu Elf truck, with legal interest beginning 31 January 2001 until fully paid;
3) GRANT additional actual or compensatory damages in the amount of P11,267.35 for the medical
expenses shouldered by respondent Spouses Leonora and Gabriel Gomez, with legal interest beginning 31
January 2001 until fully paid;
4) DELETE the award of moral damages;
5) MAINTAIN the award of exemplary damages at P50,000.00;
6) DELETE the award of attorney's fees; and
7) MAINTAIN the award of costs of suit.
SO ORDERED.

THIRD DIVISION
G.R. No. 174161, February 18, 2015
R TRANSPORT CORPORATION, Petitioner, v. LUISITO G. YU, Respondent.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and
set aside the Decision1 and Resolution,2 dated September 9, 2005 and August 8, 2006, respectively, of the Court
of
The

Appeals

(CA)

antecedent

in
facts

CA-G.R.
are

CV

No.
as

84175.
follows:

At around 8:45 in the morning of December 12, 1993, Loreta J. Yu, after having alighted from a passenger bus in
front of Robinsons Galleria along the north-bound lane of Epifanio de los Santos Avenue (EDSA), was hit and
run over by a bus driven by Antonio P. Gimena, who was then employed by petitioner R Transport Corporation.
Loreta was immediately rushed to Medical City Hospital where she was pronounced dead on
arrival.3cralawlawlibrary
On February 3, 1994, the husband of the deceased, respondent Luisito G. Yu, filed a Complaint for damages
before the Regional Trial Court (RTC) of Makati City against petitioner R Transport, Antonio Gimena, and Metro
Manila Transport Corporation (MMTC) for the death of his wife. MMTC denied its liability reasoning that it is
merely the registered owner of the bus involved in the incident, the actual owner, being petitioner R
Transport.4 It explained that under the Bus Installment Purchase Program of the government, MMTC merely
purchased the subject bus, among several others, for resale to petitioner R Transport, which will in turn operate
the same within Metro Manila. Since it was not actually operating the bus which killed respondents wife, nor
was it the employer of the driver thereof, MMTC alleged that the complaint against it should be dismissed. 5 For
its part, petitioner R Transport alleged that respondent had no cause of action against it for it had exercised due
diligence in the selection and supervision of its employees and drivers and that its buses are in good condition.
Meanwhile, the driver Antonio Gimena was declared in default for his failure to file an answer to the complaint.
After trial on the merits, wherein the parties presented their respective witnesses and documentary evidence, the
trial court rendered judgment in favor of respondent Yu ruling that petitioner R Transport failed to prove that it
exercised the diligence required of a good father of a family in the selection and supervision of its driver, who, by
its negligence, ran over the deceased resulting in her death. It also held that MMTC should be held solidarily
liable with petitioner R Transport because it would unduly prejudice a third person who is a victim of a tort to
look beyond the certificate of registration and prove who the actual owner is in order to enforce a right of action.
Thus, the trial court ordered the payment of damages in its Decision 6 dated June 3, 2004, the dispositive portion
of which reads:chanRoblesvirtualLawlibrary
WHEREFORE, foregoing premises considered, judgment is hereby rendered ordering defendants
Rizal Transport and Metro Manila Transport Corporation to be primarily and solidarily liable and
defendant Antonio Parraba Gimena subsidiarily liable to plaintiff Luisito Yu as follows:
1. Actual damages in the amount of Php78,357.00 subject to interest at the legal rate from the
filing of the complaint until fully paid;
2. Loss of income in the amount of Php500,000.00;
3. Moral damages in the amount of P150,000.00;
4. Exemplary damages in the amount of P20,000.00;
5. Attorneys fees in the amount of P10,000.00; and
6. Costs of suit.7

On September 9, 2005, the CA affirmed the Decision of the RTC with modification that defendant Antonio
Gimena is made solidarily liable for the damages caused to respondent. According to the appellate court,
considering that the negligence of Antonio Gimena was sufficiently proven by the records of the case, and that no
evidence of whatever nature was presented by petitioner to support its defense of due diligence in the selection
and supervision of its employees, petitioner, as the employer of Gimena, may be held liable for the damage
caused. The CA noted that the fact that petitioner is not the registered owner of the bus which caused the death of
the victim does not exculpate it from liability.8 Thereafter, petitioners Motion for Reconsideration was further
denied
Hence,

by

the

CA

in

Resolution9 dated

its

the

August

8,

present

2006.
petition.

Petitioner essentially invokes the following ground to support its petition:chanRoblesvirtualLawlibrary


I.
THE COURT OF APPEALS ERRED IN AFFIRMING THE RULING OF THE REGIONAL TRIAL
COURT FINDING PETITIONER LIABLE FOR THE DAMAGES CAUSED BY THE
NEGLIGENCE OF ITS EMPLOYEE, WHICH WAS NOT SUPPORTED BY THE EVIDENCE ON
RECORD.

Petitioner insists that the CA and the RTC were incorrect in ruling that its driver was negligent for aside from the
mere speculations and uncorroborated testimonies of the police officers on duty at the time of the accident, no
other evidence had been adduced to prove that its driver was driving in a reckless and imprudent manner. It
asserts that contrary to the findings of the courts below, the bus from which the victim alighted is actually the
proximate cause of the victims death for having unloaded its passengers on the lane where the subject bus was
traversing. Moreover, petitioner reiterates its argument that since it is not the registered owner of the bus which
bumped the victim, it cannot be held liable for the damage caused by the same.
We

disagree.

Time and again, it has been ruled that whether a person is negligent or not is a question of fact which this Court
cannot pass upon in a petition for review on certiorari, as its jurisdiction is limited to reviewing errors of
law.10 This Court is not bound to weigh all over again the evidence adduced by the parties, particularly where the
findings of both the trial and the appellate courts on the matter of petitioners negligence coincide. As a general
rule, therefore, the resolution of factual issues is a function of the trial court, whose findings on these matters are
binding on this Court, more so where these have been affirmed by the Court of Appeals, 11save for the following
exceptional and meritorious circumstances: (1) when the factual findings of the appellate court and the trial court
are contradictory; (2) when the findings of the trial court are grounded entirely on speculation, surmises or
conjectures; (3) when the lower courts inference from its factual findings is manifestly mistaken, absurd or
impossible; (4) when there is grave abuse of discretion in the appreciation of facts; (5) when the findings of the
appellate court go beyond the issues of the case, or fail to notice certain relevant facts which, if properly
considered, will justify a different conclusion; (6) when there is a misappreciation of facts; (7) when the findings
of fact are themselves conflicting; and (8) when the findings of fact are conclusions without mention of the
specific evidence on which they are based, are premised on the absence of evidence, or are contradicted by
evidence
on
record.12cralawlawlibrary
After a review of the records of the case, we find no cogent reason to reverse the rulings of the courts below for
none of the aforementioned exceptions are present herein. Both the trial and appellate courts found driver
Gimena negligent in hitting and running over the victim and ruled that his negligence was the proximate cause of

her death. Negligence has been defined as "the failure to observe for the protection of the interests of another
person that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other
person suffers injury.13Verily, foreseeability is the fundamental test of negligence. 14 It is the omission to do
something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of
human affairs, would do, or the doing of something which a prudent and reasonable man would not
do.15cralawlawlibrary
In this case, the records show that driver Gimena was clearly running at a reckless speed. As testified by the
police officer on duty at the time of the incident16 and indicated in the Autopsy Report,17 not only were the
deceaseds clothes ripped off from her body, her brain even spewed out from her skull and spilled over the road.
Indeed, this Court is not prepared to believe petitioners contention that its bus was travelling at a normal speed
in preparation for a full stop in view of the fatal injuries sustained by the deceased. Moreover, the location
wherein the deceased was hit and run over further indicates Gimenas negligence. As borne by the records, the
bus driven by Gimena bumped the deceased in a loading and unloading area of a commercial center. The fact that
he was approaching such a busy part of EDSA should have already cautioned the driver of the bus. In fact, upon
seeing that a bus has stopped beside his lane should have signalled him to step on his brakes to slow down for the
possibility that said bus was unloading its passengers in the area. Unfortunately, he did not take the necessary
precaution and instead, drove on and bumped the deceased despite being aware that he was traversing a
commercial center where pedestrians were crossing the street. Ultimately, Gimena should have observed due
diligence of a reasonably prudent man by slackening his speed and proceeding cautiously while passing the area.
Under Article 218018 of the New Civil Code, employers are liable for the damages caused by their employees
acting within the scope of their assigned tasks. Once negligence on the part of the employee is established, a
presumption instantly arises that the employer was remiss in the selection and/or supervision of the negligent
employee. To avoid liability for the quasi-delict committed by its employee, it is incumbent upon the employer
to rebut this presumption by presenting adequate and convincing proof that it exercised the care and diligence of
a good father of a family in the selection and supervision of its employees. 19cralawlawlibrary
Unfortunately, however, the records of this case are bereft of any proof showing the exercise by petitioner of the
required diligence. As aptly observed by the CA, no evidence of whatever nature was ever presented depicting
petitioners due diligence in the selection and supervision of its driver, Gimena, despite several opportunities to
do so. In fact, in its petition, apart from denying the negligence of its employee and imputing the same to the bus
from which the victim alighted, petitioner merely reiterates its argument that since it is not the registered owner
of the bus which bumped the victim, it cannot be held liable for the damage caused by the same. Nowhere was it
even remotely alleged that petitioner had exercised the required diligence in the selection and supervision of its
employee. Because of this failure, petitioner cannot now avoid liability for the quasi-delict committed by its
negligent
employee.
At this point, it must be noted that petitioner, in its relentless attempt to evade liability, cites our rulings in Vargas
v. Langcay20 and Tamayo v. Aquino21 insisting that it should not be held solidarily liable with MMTC for it is
not the registered owner of the bus which killed the deceased. However, this Court, in Jereos v. Court of Appeals,
et al.,22 rejected such contention in the following wise:chanRoblesvirtualLawlibrary
Finally, the petitioner, citing the case of Vargas vs. Langcay, contends that it is the registered owner
of the vehicle, rather than the actual owner, who must be jointly and severally liable with the driver of
the passenger vehicle for damages incurred by third persons as a consequence of injuries or death
sustained
in
the
operation
of
said
vehicle.
The contention is devoid of merit. While the Court therein ruled that the registered owner or operator
of a passenger vehicle is jointly and severally liable with the driver of the said vehicle for damages

incurred by passengers or third persons as a consequence of injuries or death sustained in the


operation of the said vehicle, the Court did so to correct the erroneous findings of the Court of
Appeals that the liability of the registered owner or operator of a passenger vehicle is merely
subsidiary, as contemplated in Art. 103 of the Revised Penal Code. In no case did the Court exempt
the actual owner of the passenger vehicle from liability. On the contrary, it adhered to the rule
followed in the cases of Erezo vs. Jepte, Tamayo vs. Aquino, and De Peralta vs. Mangusang, among
others, that the registered owner or operator has the right to be indemnified by the real or actual
owner of the amount that he may be required to pay as damage for the injury caused.
The right to be indemnified being recognized, recovery by the registered owner or operator may be
made in any form-either by a cross-claim, third-party complaint, or an independent action. The result
is the same.23
ChanRoblesVirtualawlibrary
Moreover, while We held in Tamayo that the responsibility of the registered owner and actual operator of a truck
which caused the death of its passenger is not solidary, We noted therein that the same is due to the fact that the
action instituted was one for breach of contract, to wit:chanRoblesvirtualLawlibrary
The decision of the Court of Appeals is also attacked insofar as it holds that inasmuch as the thirdparty defendant had used the truck on a route not covered by the registered owner's franchise, both
the registered owner and the actual owner and operator should be considered as joint tortfeasors and
should be made liable in accordance with Article 2194 of the Civil Code. This Article is as follows:
cralawred
Art. 2194. The responsibility of two or more persons who are liable for a quasi-delict is
solidary.
But the action instituted in the case at bar is one for breach of contract, for failure of the defendant to
carry safely the deceased for her destination. The liability for which he is made responsible, i.e., for
the death of the passenger, may not be considered as arising from a quasi-delict. As the registered
owner Tamayo and his transferee Rayos may not be held guilty of tort or a quasi-delict; their
responsibility
is
not
solidary
as
held
by
the
Court
of
Appeals.
The question that poses, therefore, is how should the holder of the certificate of public convenience,
Tamayo, participate with his transferee, operator Rayos, in the damages recoverable by the heirs of
the deceased passenger, if their liability is not that of Joint tortfeasors in accordance with Article 2194
of the Civil Code. The following considerations must be borne in mind in determining this question.
As Tamayo is the registered owner of the truck, his responsibility to the public or to any passenger
riding in the vehicle or truck must be direct, for the reasons given in our decision in the case of Erezo
vs. Jepte, supra, as quoted above. But as the transferee, who operated the vehicle when the passenger
died, is the one directly responsible for the accident and death he should in turn be made responsible
to the registered owner for what the latter may have been adjudged to pay. In operating the truck
without transfer thereof having been approved by the Public Service Commission, the transferee
acted merely as agent of the registered owner and should be responsible to him (the registered
owner), for any damages that he may cause the latter by his negligence.24
ChanRoblesVirtualawlibrary
However, it must be noted that the case at hand does not involve a breach of contract of carriage, as in Tamayo,
but a tort or quasi-delict under Article 2176,25 in relation to Article 218026 of the New Civil Code. As such, the
liability for which petitioner is being made responsible actually arises not from a pre-existing contractual relation
between petitioner and the deceased, but from a damage caused by the negligence of its employee. Petitioner
cannot, therefore, rely on our ruling in Tamayo and escape its solidary liability for the liability of the employer
for the negligent conduct of its subordinate is direct and primary, subject only to the defense of due diligence in
the
selection
and
supervision
of
the
employee. 27cralawlawlibrary
Indeed, this Court has consistently been of the view that it is for the better protection of the public for both the

owner of record and the actual operator to be adjudged jointly and severally liable with the driver. 28 As aptly
stated by the appellate court, the principle of holding the registered owner liable for damages notwithstanding
that ownership of the offending vehicle has already been transferred to another is designed to protect the public
and not as a shield on the part of unscrupulous transferees of the vehicle to take refuge in, inorder to free itself
from
liability
arising
from
its
own
negligent
act. 29cralawlawlibrary
Hence, considering that the negligence of driver Gimena was sufficiently proven by the records of the case, and
that no evidence of whatever nature was presented by petitioner to support its defense of due diligence in the
selection and supervision of its employees, petitioner, as the employer of Gimena, may be held liable for damages
arising
from
the
death
of
respondent
Yus
wife.
WHEREFORE, premises considered, the instant petition is DENIED. The Decision and Resolution, dated
September 9, 2005 and August 8, 2006, respectively, of the Court of Appeals in CA-G.R. CV No. 84175 are
hereby AFFIRMED.
SO ORDERED.chanroblesvirtuallawlibrary
Republic
of
SUPREME
Manila

the

Philippines
COURT

THIRD DIVISION

G.R. No. 75112 August 17, 1992


FILAMER CHRISTIAN INSTITUTE, petitioner,
vs.
HON. INTERMEDIATE APPELLATE COURT, HON. ENRIQUE P. SUPLICO, in his capacity as Judge
of the Regional Trial Court, Branch XIV, Roxas City and POTENCIANO KAPUNAN, SR., respondents.
Bedona & Bedona Law Office for petitioner.
Rhodora G. Kapunan for private respondents.

GUTIERREZ, JR., J.:


The private respondents, heirs of the late Potenciano Kapunan, seek reconsideration of the decision rendered by
this Court on October 16, 1990 (Filamer Christian Institute v. Court of Appeals, 190 SCRA 477) reviewing the
appellate court's conclusion that there exists an employer-employee relationship between the petitioner and its codefendant Funtecha. The Court ruled that the petitioner is not liable for the injuries caused by Funtecha on the
grounds that the latter was not an authorized driver for whose acts the petitioner shall be directly and primarily
answerable, and that Funtecha was merely a working scholar who, under Section 14, Rule X, Book III of the
Rules and Regulations Implementing the Labor Code is not considered an employee of the petitioner.
The private respondents assert that the circumstances obtaining in the present case call for the application of
Article 2180 of the Civil Code since Funtecha is no doubt an employee of the petitioner. The private respondents
maintain that under Article 2180 an injured party shall have recourse against the servant as well as the petitioner
for whom, at the time of the incident, the servant was performing an act in furtherance of the interest and for the
benefit of the petitioner. Funtecha allegedly did not steal the school jeep nor use it for a joy ride without the
knowledge of the school authorities.
After a re-examination of the laws relevant to the facts found by the trial court and the appellate court, the Court
reconsiders its decision. We reinstate the Court of Appeals' decision penned by the late Justice Desiderio Jurado

and concurred in by Justices Jose C. Campos, Jr. and Serafin E. Camilon. Applying Civil Code provisions, the
appellate court affirmed the trial court decision which ordered the payment of the P20,000.00 liability in the
Zenith Insurance Corporation policy, P10,000.00 moral damages, P4,000.00 litigation and actual expenses, and
P3,000.00 attorney's fees.
It is undisputed that Funtecha was a working student, being a part-time janitor and a scholar of petitioner Filamer.
He was, in relation to the school, an employee even if he was assigned to clean the school premises for only two
(2) hours in the morning of each school day.
Having a student driver's license, Funtecha requested the driver, Allan Masa, and was allowed, to take over the
vehicle while the latter was on his way home one late afternoon. It is significant to note that the place where
Allan lives is also the house of his father, the school president, Agustin Masa. Moreover, it is also the house
where Funtecha was allowed free board while he was a student of Filamer Christian Institute.
Allan Masa turned over the vehicle to Funtecha only after driving down a road, negotiating a sharp dangerous
curb, and viewing that the road was clear. (TSN, April 4, 1983, pp. 78-79) According to Allan's testimony, a fast
moving truck with glaring lights nearly hit them so that they had to swerve to the right to avoid a collision. Upon
swerving, they heard a sound as if something had bumped against the vehicle, but they did not stop to check.
Actually, the Pinoy jeep swerved towards the pedestrian, Potenciano Kapunan who was walking in his lane in the
direction against vehicular traffic, and hit him. Allan affirmed that Funtecha followed his advise to swerve to the
right. (Ibid., p. 79) At the time of the incident (6:30 P.M.) in Roxas City, the jeep had only one functioning
headlight.
Allan testified that he was the driver and at the same time a security guard of the petitioner-school. He further
said that there was no specific time for him to be off-duty and that after driving the students home at 5:00 in the
afternoon, he still had to go back to school and then drive home using the same vehicle.
Driving the vehicle to and from the house of the school president where both Allan and Funtecha reside is an act
in furtherance of the interest of the petitioner-school. Allan's job demands that he drive home the school jeep so
he can use it to fetch students in the morning of the next school day.
It is indubitable under the circumstances that the school president had knowledge that the jeep was routinely
driven home for the said purpose. Moreover, it is not improbable that the school president also had knowledge of
Funtecha's possession of a student driver's license and his desire to undergo driving lessons during the time that
he was not in his classrooms.
In learning how to drive while taking the vehicle home in the direction of Allan's house, Funtecha definitely was
not having a joy ride. Funtecha was not driving for the purpose of his enjoyment or for a "frolic of his own" but
ultimately, for the service for which the jeep was intended by the petitioner school. (See L. Battistoni v. Thomas,
Can SC 144, 1 D.L.R. 577, 80 ALR 722 [1932]; See also Association of Baptists for World Evangelism, Inc. v.
Fieldmen's Insurance Co., Inc. 124 SCRA 618 [1983]). Therefore, the Court is constrained to conclude that the
act of Funtecha in taking over the steering wheel was one done for and in behalf of his employer for which act
the petitioner-school cannot deny any responsibility by arguing that it was done beyond the scope of his janitorial
duties. The clause "within the scope of their assigned tasks" for purposes of raising the presumption of liability of
an employer, includes any act done by an employee, in furtherance of the interests of the employer or for the
account of the employer at the time of the infliction of the injury or damage. (Manuel Casada, 190 Va 906, 59 SE
2d 47 [1950]) Even if somehow, the employee driving the vehicle derived some benefit from the act, the
existence of a presumptive liability of the employer is determined by answering the question of whether or not
the servant was at the time of the accident performing any act in furtherance of his master's business. (Kohlman
v. Hyland, 210 NW 643, 50 ALR 1437 [1926]; Jameson v. Gavett, 71 P 2d 937 [1937])
Section 14, Rule X, Book III of the Rules implementing the Labor Code, on which the petitioner anchors its
defense, was promulgated by the Secretary of Labor and Employment only for the purpose of administering and
enforcing the provisions of the Labor Code on conditions of employment. Particularly, Rule X of Book III

provides guidelines on the manner by which the powers of the Labor Secretary shall be exercised; on what
records should be kept; maintained and preserved; on payroll; and on the exclusion of working scholars from, and
inclusion of resident physicians in the employment coverage as far as compliance with the substantive labor
provisions on working conditions, rest periods, and wages, is concerned.
In other words, Rule X is merely a guide to the enforcement of the substantive law on labor. The Court, thus,
makes the distinction and so holds that Section 14, Rule X, Book III of the Rules is not the decisive law in a civil
suit for damages instituted by an injured person during a vehicular accident against a working student of a school
and against the school itself.
The present case does not deal with a labor dispute on conditions of employment between an alleged employee
and an alleged employer. It invokes a claim brought by one for damages for injury caused by the patently
negligent acts of a person, against both doer-employee and his employer. Hence, the reliance on the
implementing rule on labor to disregard the primary liability of an employer under Article 2180 of the Civil Code
is misplaced. An implementing rule on labor cannot be used by an employer as a shield to avoid liability under
the substantive provisions of the Civil Code.
There is evidence to show that there exists in the present case an extra-contractual obligation arising from the
negligence or reckless imprudence of a person "whose acts or omissions are imputable, by a legal fiction, to
other(s) who are in a position to exercise an absolute or limited control over (him)." (Bahia v. Litonjua and
Leynes, 30 Phil. 624 [1915])
Funtecha is an employee of petitioner Filamer. He need not have an official appointment for a driver's position in
order that the petitioner may be held responsible for his grossly negligent act, it being sufficient that the act of
driving at the time of the incident was for the benefit of the petitioner. Hence, the fact that Funtecha was not the
school driver or was not acting within the scope of his janitorial duties does not relieve the petitioner of the
burden of rebutting the presumption juris tantum that there was negligence on its part either in the selection of a
servant or employee, or in the supervision over him. The petitioner has failed to show proof of its having
exercised the required diligence of a good father of a family over its employees Funtecha and Allan.
The Court reiterates that supervision includes the formulation of suitable rules and regulations for the guidance of
its employees and the issuance of proper instructions intended for the protection of the public and persons with
whom the employer has relations through his employees. (Bahia v. Litonjua and Leynes, supra, at p. 628;
Phoenix Construction, v. Intermediate Appellate Court, 148 SCRA 353 [1987])
An employer is expected to impose upon its employees the necessary discipline called for in the performance of
any act indispensable to the business and beneficial to their employer.
In the present case, the petitioner has not shown that it has set forth such rules and guidelines as would prohibit
any one of its employees from taking control over its vehicles if one is not the official driver or prohibiting the
driver and son of the Filamer president from authorizing another employee to drive the school vehicle.
Furthermore, the petitioner has failed to prove that it had imposed sanctions or warned its employees against the
use of its vehicles by persons other than the driver.
The petitioner, thus, has an obligation to pay damages for injury arising from the unskilled manner by which
Funtecha drove the vehicle. (Cangco v. Manila Railroad Co., 38 Phil. 768, 772 [1918]). In the absence of
evidence that the petitioner had exercised the diligence of a good father of a family in the supervision of its
employees, the law imposes upon it the vicarious liability for acts or omissions of its employees. (Umali v.
Bacani, 69 SCRA 263 [1976]; Poblete v. Fabros, 93 SCRA 200 [1979]; Kapalaran Bus Liner v. Coronado, 176
SCRA 792 [1989]; Franco v. Intermediate Appellate Court, 178 SCRA 331 [1989]; Pantranco North Express, Inc.
v. Baesa, 179 SCRA 384 [1989]) The liability of the employer is, under Article 2180, primary and solidary.
However, the employer shall have recourse against the negligent employee for whatever damages are paid to the
heirs of the plaintiff.

It is an admitted fact that the actual driver of the school jeep, Allan Masa, was not made a party defendant in the
civil case for damages. This is quite understandable considering that as far as the injured pedestrian, plaintiff
Potenciano Kapunan, was concerned, it was Funtecha who was the one driving the vehicle and presumably was
one authorized by the school to drive. The plaintiff and his heirs should not now be left to suffer without
simultaneous recourse against the petitioner for the consequent injury caused by a janitor doing a driving chore
for the petitioner even for a short while. For the purpose of recovering damages under the prevailing
circumstances, it is enough that the plaintiff and the private respondent heirs were able to establish the existence
of employer-employee relationship between Funtecha and petitioner Filamer and the fact that Funtecha was
engaged in an act not for an independent purpose of his own but in furtherance of the business of his employer. A
position of responsibility on the part of the petitioner has thus been satisfactorily demonstrated.
WHEREFORE, the motion for reconsideration of the decision dated October 16, 1990 is hereby GRANTED. The
decision of the respondent appellate court affirming the trial court decision is REINSTATED.
SO ORDERED.
THIRD DIVISION

[G.R. No. 119121. August 14, 1998]

NATIONAL POWER CORPORATION, petitioner, vs. COURT OF APPEALS, Fifteenth Division and
PHESCO INCORPORATED, respondents.
DECISION
ROMERO, J.:
On July 22, 1979, a convoy of four (4) dump trucks owned by the National Power Corporation (NPC) left
Marawi city bound for Iligan city. Unfortunately, enroute to its destination, one of the trucks with plate no. RFT9-6-673 driven by a certain Gavino Ilumba figured in a head-on-collision with a Toyota Tamaraw. The incident
resulted in the death of three (3) persons riding in the Toyota Tamaraw, as well as physical injuries to seventeen
other passengers.
On June 10, 1980, the heirs of the victims filed a complaint for damages against National Power Corporation
(NPC) and PHESCO Incorporated (PHESCO) before the then Court of First Instance of Lanao del Norte, Marawi
City. When defendant PHESCO filed its answer to the complaint it contended that it was not the owner of the
dump truck which collided with the Toyota Tamaraw but NPC. Moreover, it asserted that it was merely a
contractor of NPC with the main duty of supplying workers and technicians for the latters projects. On the other
hand, NPC denied any liability and countered that the driver of the dump truck was the employee of PHESCO.
After trial on the merits, the trial court rendered a decision dated July 25, 1988 absolving NPC of any
liability. The dispositive portion reads:
Consequently, in view of the foregoing consideration, judgment is hereby rendered ordering PHESCO, Inc. and
Gavino Ilumba upon receipt hereof:
1. To pay jointly and severally the plaintiffs thru the Dansalan College the sum of P954,154.55 representing the
actual or compensatory damages incurred by the plaintiffs; and

2. To pay the sum of P50,000.00 representing Attorneys fees.


SO ORDERED.
Dissatisfied, PHESCO appealed to the Court of Appeals, which on November 10, 1994 reversed the trial
courts judgment. We quote the pertinent portion of the decision:
A labor only contractor is considered merely as an agent of the employer (Deferia vs. National Labor Relations
Commission, 194 SCRA 525). A finding that a contractor is a labor only contractor is equivalent to a finding that
there is an employer-employee relationship between the owner of the project and the employees of the labor only
contractor (Industrial Timer Corporation vs. National Labor Relations Commission, 202 SCRA 465). So, even if
Phesco hired driver Gavino Ilumba, as Phesco is admittedly a labor only contractor of Napocor, the statute itself
establishes an employer-employee relationship between the employer (Napocor) and the employee (driver
Ilumba) of the labor only contractor (Phesco). (Ecal vs. National Labor Relations Commission, 195 SCRA 224).
Consequently, we hold Phesco not liable for the tort of driver Gavino Ilumba, as there was no employment
relationship between Phesco and driver Gavino Ilumba. Under Article 2180 of the Civil Code, to hold the
employer liable for torts committed by his employees within the scope of their assigned task, there must exist an
employer-employee relationship. (Martin vs. Court of Appeals, 205 SCRA 591).
WHEREFORE, we REVERSE the appealed decision. In lieu thereof, the Court renders judgment sentencing
defendant National Power Corporation to pay plaintiffs the sum of P174,889.20 plus P20,000.00 as attorneys fees
and costs.
SO ORDERED.
Chagrined by the sudden turnaround, NPC filed a motion for reconsideration of said decision which was,
however, denied on February 9, 1995.[1] Hence, this petition.
The principal query to be resolved is, as between NPC and PHESCO, who is the employer of Ilumba, driver
of the dumptruck which figured in the accident and which should, therefore, would be liable for damages to the
victims. Specifically, NPC assigns the sole error that:
THE COURT OF APPEALS DECISION FINDING THAT PETITIONER NPC AS THE EMPLOYER OF THE
DRIVER GAVINO ILUMBA, AND CONSEQUENTLY, SENTENCING IT TO PAY THE ACTUAL AND
COMPENSATORY DAMAGES SUSTAINED BY COMPLAINANTS, IS NOT IN ACCORD WITH THE LAW
OR WITH THE APPLICABLE RULINGS OF THIS HONORABLE COURT.[2]
As earlier stated, NPC denies that the driver of the dump truck was its employee. It alleges that it did not
have the power of selection and dismissal nor the power of control over Ilumba.[3] PHESCO, meanwhile, argues
that it merely acted as a recruiter of the necessary workers for and in behalf of NPC.[4]
Before we decide who is the employer of Ilumba, it is evidently necessary to ascertain the contractual
relationship between NPC and PHESCO. Was the relationship one of employer and job (independent) contractor
or one of employer and labor only contractor?
Job (independent) contracting is present if the following conditions are met: (a) the contractor carries on an
independent business and undertakes the contract work on his own account under his own responsibility
according to his own manner and method, free from the control and direction of his employer or principal in all
matters connected with the performance of the work except to the result thereof; and (b) the contractor has
substantial capital or investments in the form of tools, equipment, machineries, work premises and other
materials which are necessary in the conduct of his business.[5] Absent these requisites, what exists is a labor
only contract under which the person acting as contractor is considered merely as an agent or intermediary of the
principal who is responsible to the workers in the same manner and to the same extent as if they had been directly

employed by him.[6] Taking into consideration the above distinction and the provisions of the Memorandum of
Understanding entered into by PHESCO and NPC, we are convinced that PHESCO was engaged in labor only
contracting.
It must be noted that under the Memorandum, NPC had mandate to approve the critical path network and
rate of expenditure to be undertaken by PHESCO.[7] Likewise, the manning schedule and pay scale of the
workers hired by PHESCO were subject to confirmation by NPC.[8] Then too, it cannot be ignored that if
PHESCO enters into any sub-contract or lease, again NPCs concurrence is needed.[9] Another consideration is
that even in the procurement of tools and equipment that will be used by PHESCO, NPCs favorable
recommendation is still necessary before these tools and equipment can be purchased.[10] Notably, it is NPC that
will provide the money or funding that will be used by PHESCO to undertake the project.[11] Furthermore, it
must be emphasized that the project being undertaken by PHESCO, i.e., construction of power energy facilities,
is related to NPCs principal business of power generation. In sum, NPCs control over PHESCO in matters
concerning the performance of the latters work is evident. It is enough that NPC has the right to wield such
power to be considered as the employer.[12]
Under this factual milieu, there is no doubt that PHESCO was engaged in labor-only contracting vis--vis
NPC and as such, it is considered merely an agent of the latter. In labor-only contracting, an employer-employee
relationship between the principal employer and the employees of the labor-only contractor is
created. Accordingly, the principal employer is responsible to the employees of the labor-only contractor as if
such employees had been directly employed by the principal employer.[13] Since PHESCO is only a labor-only
contractor, the workers it supplied to NPC, including the driver of the ill-fated truck, should be considered as
employees of NPC.[14] After all, it is axiomatic that any person (the principal employer) who enters into an
agreement with a job contractor, either for the performance of a specified work or for the supply of manpower,
assumes responsibility over the employees of the latter.[15]
However, NPC maintains that even assuming that a labor only contract exists between it and PHESCO, its
liability will not extend to third persons who are injured due to the tortious acts of the employee of the labor-only
contractor.[16] Stated otherwise, its liability shall only be limited to violations of the Labor Code and not quasidelicts.
To bolster its position, NPC cites Section 9(b), Rule VII, Book III of the Omnibus Rules Implementing the
Labor Code which reads:
(b) Labor only contracting as defined herein is hereby prohibited and the person acting as contractor shall be
considered merely as an agent or intermediary of the employer who shall be responsible to the workers in the
same manner and extent as if the latter were directly employed by him.
In other words, NPC posits the theory that its liability is limited only to compliance with the substantive
labor provisions on working conditions, rest periods, and wages and shall not extend to liabilities suffered by
third parties, viz.:
Consequently, the responsibilities of the employer contemplated in a labor only contract, should, consistent with
the terms expressed in the rule, be restricted to the workers. The same can not be expanded to cover liabilities for
damages to third persons resulting from the employees tortious acts under Article 2180 of the Civil Code.[17]
The reliance is misplaced. It bears stressing that the action was premised on the recovery of damages as a
result of quasi-delict against both NPC and PHESCO, hence, it is the Civil Code and not the Labor Code which is
the applicable law in resolving this case.
To be sure, the pronouncement of this Court in Filamer Christian Institute v. IAC,[18] is most instructive:

The present case does not deal with a labor dispute on conditions of employment between an alleged employee
and an alleged employer. It invokes a claim brought by one for damages for injury caused by the patently
negligent acts of a person, against both doer-employee and his employer. Hence, the reliance on the
implementing rule on labor to disregard the primary liability of an employer under Article 2180 of the Civil Code
is misplaced. An implementing rule on labor cannot be used by an employer as a shield to avoid liability under
the substantive provisions of the Civil Code.
Corollarily from the above doctrine, the ruling in Cuison v. Norton & Harrison Co.,[19] finds applicability in
the instant case, viz.:
It is well to repeat that under the civil law an employer is only liable for the negligence of his employees in the
discharge of their respective duties. The defense of independent contractor would be a valid one in the
Philippines just as it would be in the United States. Here Ora was a contractor, but it does not necessarily follow
that he was an independent contractor. The reason for this distinction is that the employer retained the power of
directing and controlling the work. The chauffeur and the two persons on the truck were the employees of Ora,
the contractor, but Ora, the contractor, was an employee of Norton & Harrison Co., charged with the duty of
directing the loading and transportation of the lumber. And it was the negligence in loading the lumber and the
use of minors on the truck which caused the death of the unfortunate boy. On the facts and the law, Ora was not
an independent contractor, but was the servant of the defendant, and for his negligence defendant was
responsible.
Given the above considerations, it is apparent that Article 2180 of the Civil Code and not the Labor Code
will determine the liability of NPC in a civil suit for damages instituted by an injured person for any negligent act
of the employees of the labor only contractor. This is consistent with the ruling that a finding that a contractor
was a labor-only contractor is equivalent to a finding that an employer-employee relationship existed between the
owner (principal contractor) and the labor-only contractor, including the latters workers.[20]
With respect to the liability of NPC as the direct employer, Article 2180 of the Civil Code explicitly
provides:
Employers shall be liable for the damages caused by their employees and household helpers acting within the
scope of their assigned tasks, even though the former are not engaged in any business or industry.
In this regard, NPCs liability is direct, primary and solidary with PHESCO and the driver.[21] Of course,
NPC, if the judgment for damages is satisfied by it, shall have recourse against PHESCO and the driver who
committed the negligence which gave rise to the action.[22]
Finally, NPC, even if it truly believed that it was not the employer of the driver, could still have disclaimed
any liability had it raised the defense of due diligence in the selection or supervision of PHESCO and Ilumba.
[23] However, for some reason or another, NPC did not invoke said defense. Hence, by opting not to present any
evidence that it exercised due diligence in the supervision of the activities of PHESCO and Ilumba, NPC has
foreclosed its right to interpose the same on appeal in conformity with the rule that points of law, theories, issues
of facts and arguments not raised in the proceedings below cannot be ventilated for the first time on appeal.
[24] Consequently, its liability stands.
WHEREFORE, in view of the foregoing, the assailed decision of the Court of Appeals dated November 10,
1994 and its accompanying resolution dated February 9, 1995 are AFFIRMED without prejudice to the right of
NPC to demand from PHESCO and Ilumba reimbursement of the damages it would be adjudged to pay to
complainants. No costs.
SO ORDERED.

Republic
SUPREME
Manila

of

the

Philippines
COURT

FIRST DIVISON
G.R. No. 115024

February 7, 1996

MA.
LOURDES
VALENZUELA, petitioner,
vs.
COURT OF APPEALS, RICHARD LI and ALEXANDER COMMERCIAL, INC., respondents.
x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x
G.R. No. 117944

February 7, 1996

RICHARD
vs.
COURT OF APPEALS and LOURDES VALENZUELA, respondents.

LI, petitioner,

DECISION
KAPUNAN, J.:
These two petitions for review on certiorari under Rule 45 of the Revised Rules of Court stem from an action to
recover damages by petitioner Lourdes Valenzuela in the Regional Trial Court of Quezon City for injuries
sustained by her in a vehicular accident in the early morning of June 24, 1990. The facts found by the trial court
are succinctly summarized by the Court of Appeals below:
This is an action to recover damages based on quasi-delict, for serious physical injuries sustained in a
vehicular accident.
Plaintiff's version of the accident is as follows: At around 2:00 in the morning of June 24, 1990, plaintiff
Ma. Lourdes Valenzuela was driving a blue Mitsubishi lancer with Plate No. FFU 542 from her restaurant
at Marcos highway to her home at Palanza Street, Araneta Avenue. She was travelling along Aurora Blvd.
with a companion, Cecilia Ramon, heading towards the direction of Manila. Before reaching A. Lake
Street, she noticed something wrong with her tires; she stopped at a lighted place where there were
people, to verify whether she had a flat tire and to solicit help if needed. Having been told by the people
present that her rear right tire was flat and that she cannot reach her home in that car's condition, she
parked along the sidewalk, about 1-1/2 feet away, put on her emergency lights, alighted from the car, and
went to the rear to open the trunk. She was standing at the left side of the rear of her car pointing to the
tools to a man who will help her fix the tire when she was suddenly bumped by a 1987 Mitsubishi Lancer
driven by defendant Richard Li and registered in the name of defendant Alexander Commercial, Inc.
Because of the impact plaintiff was thrown against the windshield of the car of the defendant, which was
destroyed, and then fell to the ground. She was pulled out from under defendant's car. Plaintiff's left leg
was severed up to the middle of her thigh, with only some skin and sucle connected to the rest of the
body. She was brought to the UERM Medical Memorial Center where she was found to have a "traumatic
amputation, leg, left up to distal thigh (above knee)". She was confined in the hospital for twenty (20)
days and was eventually fitted with an artificial leg. The expenses for the hospital confinement
(P120,000.00) and the cost of the artificial leg (P27,000.00) were paid by defendants from the car
insurance.
In her complaint, plaintiff prayed for moral damages in the amount of P1 million, exemplary damages in
the amount of P100,000.00 and other medical and related expenses amounting to a total of P180,000.00,
including loss of expected earnings.

Defendant Richard Li denied that he was negligent. He was on his way home, travelling at 55 kph;
considering that it was raining, visibility was affected and the road was wet. Traffic was light. He testified
that he was driving along the inner portion of the right lane of Aurora Blvd. towards the direction of
Araneta Avenue, when he was suddenly confronted, in the vicinity of A. Lake Street, San Juan, with a car
coming from the opposite direction, travelling at 80 kph, with "full bright lights". Temporarily blinded, he
instinctively swerved to the right to avoid colliding with the oncoming vehicle, and bumped plaintiff's car,
which he did not see because it was midnight blue in color, with no parking lights or early warning
device, and the area was poorly lighted. He alleged in his defense that the left rear portion of plaintiff's car
was protruding as it was then "at a standstill diagonally" on the outer portion of the right lane towards
Araneta Avenue (par. 18, Answer). He confirmed the testimony of plaintiff's witness that after being
bumped the car of the plaintiff swerved to the right and hit another car parked on the sidewalk.
Defendants counterclaimed for damages, alleging that plaintiff was reckless or negligent, as she was not a
licensed driver.
The police investigator, Pfc. Felic Ramos, who prepared the vehicular accident report and the sketch of
the three cars involved in the accident, testified that the plaintiff's car was "near the sidewalk"; this
witness did not remember whether the hazard lights of plaintiff's car were on, and did not notice if there
was an early warning device; there was a street light at the corner of Aurora Blvd. and F. Roman, about
100 meters away. It was not mostly dark, i.e. "things can be seen" (p. 16, tsn, Oct. 28, 1991).
A witness for the plaintiff, Rogelio Rodriguez, testified that after plaintiff alighted from her car and
opened the trunk compartment, defendant's car came approaching very fast ten meters from the scene; the
car was "zigzagging". The rear left side of plaintiff's car was bumped by the front right portion of
defendant's car; as a consequence, the plaintiff's car swerved to the right and hit the parked car on the
sidewalk. Plaintiff was thrown to the windshield of defendant's car, which was destroyed, and landed
under the car. He stated that defendant was under the influence of liquor as he could "smell it very well"
(pp. 43, 79, tsn, June 17, 1991).
After trial, the lower court sustained the plaintiff's submissions and found defendant Richard Li guilty of gross
negligence and liable for damages under Article 2176 of the Civil Code. The trial court likewise held Alexander
Commercial, Inc., Li's employer, jointly and severally liable for damages pursuant to Article 2180. It ordered the
defendants to jointly and severally pay the following amounts:
1. P41,840.00, as actual damages, representing the miscellaneous expenses of the plaintiff as a result of
her severed left leg;
2. The sums of (a) P37,500.00, for the unrealized profits because of the stoppage of plaintiff's Bistro La
Conga restaurant three (3) weeks after the accident on June 24, 1990; (b) P20,000.00, a month, as
unrealized profits of the plaintiff in her Bistro La Conga restaurant, from August, 1990 until the date of
this judgment and (c) P30,000.00, a month for unrealized profits in plaintiff's two (2) beauty salons from
July, 1990 until the date of this decision;
3. P1,000,000.00, in moral damages;
4. P50,000.00, as exemplary damages;
5. P60,000.00, as reasonable attorney's fees; and
6. Costs.
As a result of the trial court's decision, defendants filed an Omnibus Motion for New Trial and for
Reconsideration, citing testimony in Criminal Case O.C. No. 804367 (People vs. Richard Li), tending to show
that the point of impact, as depicted by the pieces of glass/debris from the parties' cars, appeared to be at the
center of the right lane of Aurora Blvd. The trial court denied the motion. Defendants forthwith filed an appeal
with the respondent Court of Appeals. In a Decision rendered March 30, 1994, the Court of Appeals found that

there was "ample basis from the evidence of record for the trial court's finding that the plaintiff's car was properly
parked at the right, beside the sidewalk when it was bumped by defendant's car."1 Dismissing the defendants'
argument that the plaintiff's car was improperly parked, almost at the center of the road, the respondent court
noted that evidence which was supposed to prove that the car was at or near center of the right lane was never
presented during the trial of the case.2 The respondent court furthermore observed that:
Defendant Li's testimony that he was driving at a safe speed of 55 km./hour is self serving; it was not
corroborated. It was in fact contradicted by eyewitness Rodriguez who stated that he was outside his
beerhouse located at Aurora Boulevard after A. Lake Street, at or about 2:00 a.m. of June 24, 1990 when
his attention was caught by a beautiful lady (referring to the plaintiff) alighting from her car and opening
the trunk compartment; he noticed the car of Richard Li "approaching very fast ten (10) meters away from
the scene"; defendant's car was zigzagging", although there were no holes and hazards on the street, and
"bumped the leg of the plaintiff" who was thrown against the windshield of defendant's care, causing its
destruction. He came to the rescue of the plaintiff, who was pulled out from under defendant's car and was
able to say "hurting words" to Richard Li because he noticed that the latter was under the influence of
liquor, because he "could smell it very well" (p. 36, et. seq., tsn, June 17, 1991). He knew that plaintiff
owned a beerhouse in Sta. Mesa in the 1970's, but did not know either plaintiff or defendant Li before the
accident.
In agreeing with the trial court that the defendant Li was liable for the injuries sustained by the plaintiff, the Court
of Appeals, in its decision, however, absolved the Li's employer, Alexander Commercial, Inc. from any liability
towards petitioner Lourdes Valenzuela and reduced the amount of moral damages to P500,000.00. Finding
justification for exemplary damages, the respondent court allowed an award of P50,000.00 for the same, in
addition to costs, attorney's fees and the other damages. The Court of Appeals, likewise, dismissed the
defendants' counterclaims.3
Consequently, both parties assail the respondent court's decision by filing two separate petitions before this
Court. Richard Li, in G.R. No. 117944, contends that he should not be held liable for damages because the
proximate cause of the accident was Ma. Lourdes Valenzuela's own negligence. Alternatively, he argues that in
the event that this Court finds him negligent, such negligence ought to be mitigated by the contributory
negligence of Valenzuela.
On the other hand, in G.R. No. 115024, Ma. Lourdes Valenzuela assails the respondent court's decision insofar as
it absolves Alexander Commercial, Inc. from liability as the owner of the car driven by Richard Li and insofar as
it reduces the amount of the actual and moral damages awarded by the trial court.4
As the issues are intimately related, both petitions are hereby consolidated.
It is plainly evident that the petition for review in G.R. No. 117944 raises no substantial questions of law. What it,
in effect, attempts to have this Court review are factual findings of the trial court, as sustained by the Court of
Appeals finding Richard Li grossly negligent in driving the Mitsubishi Lancer provided by his company in the
early morning hours of June 24, 1990. This we will not do. As a general rule, findings of fact of the Court of
Appeals are binding and conclusive upon us, and this Court will not normally disturb such factual findings unless
the findings of fact of the said court are palpably unsupported by the evidence on record or unless the judgment
itself is based on a misapprehension of facts.5
In the first place, Valenzuela's version of the incident was fully corroborated by an uninterested witness, Rogelio
Rodriguez, the owner-operator of an establishment located just across the scene of the accident. On trial, he
testified that he observed a car being driven at a "very fast" speed, racing towards the general direction of Araneta
Avenue.6 Rodriguez further added that he was standing in front of his establishment, just ten to twenty feet away
from the scene of the accident, when he saw the car hit Valenzuela, hurtling her against the windshield of the
defendant's Mitsubishi Lancer, from where she eventually fell under the defendant's car. Spontaneously reacting
to the incident, he crossed the street, noting that a man reeking with the smell of liquor had alighted from the

offending vehicle in order to survey the incident.7 Equally important, Rodriguez declared that he observed
Valenzuela's car parked parallel and very near the sidewalk,8 contrary to Li's allegation that Valenzuela's car was
close to the center of the right lane. We agree that as between Li's "self-serving" asseverations and the
observations of a witness who did not even know the accident victim personally and who immediately gave a
statement of the incident similar to his testimony to the investigator immediately after the incident, the latter's
testimony deserves greater weight. As the court emphasized:
The issue is one of credibility and from Our own examination of the transcript, We are not prepared to set
aside the trial court's reliance on the testimony of Rodriguez negating defendant's assertion that he was
driving at a safe speed. While Rodriguez drives only a motorcycle, his perception of speed is not
necessarily impaired. He was subjected to cross-examination and no attempt was made to question .his
competence or the accuracy of his statement that defendant was driving "very fast". This was the same
statement he gave to the police investigator after the incident, as told to a newspaper report (Exh. "P"). We
see no compelling basis for disregarding his testimony.
The alleged inconsistencies in Rodriguez' testimony are not borne out by an examination of the testimony.
Rodriguez testified that the scene of the accident was across the street where his beerhouse is located
about ten to twenty feet away (pp. 35-36, tsn, June 17, 1991). He did not state that the accident transpired
immediately in front of his establishment. The ownership of the Lambingan se Kambingan is not material;
the business is registered in the name of his mother, but he explained that he owns the establishment (p. 5,
tsn, June 20, 1991). Moreover, the testimony that the streetlights on his side of Aurora Boulevard were on
the night the accident transpired (p. 8) is not necessarily contradictory to the testimony of Pfc. Ramos that
there was a streetlight at the corner of Aurora Boulevard and F. Roman Street (p. 45, tsn, Oct. 20, 1991).
With respect to the weather condition, Rodriguez testified that there was only a drizzle, not a heavy rain
and the rain has stopped and he was outside his establishment at the time the accident transpired (pp. 6465, tsn, June 17, 1991). This was consistent with plaintiff's testimony that it was no longer raining when
she left Bistro La Conga (pp. 10-11, tsn, April 29, 1991). It was defendant Li who stated that it was
raining all the way in an attempt to explain why he was travelling at only 50-55 kph. (p. 11, tsn, Oct. 14,
1991). As to the testimony of Pfc. Ramos that it was raining, he arrived at the scene only in response to a
telephone call after the accident had transpired (pp. 9-10, tsn, Oct. 28, 1991). We find no substantial
inconsistencies in Rodriguez's testimony that would impair the essential integrity of his testimony or
reflect on his honesty. We are compelled to affirm the trial court's acceptance of the testimony of said
eyewitness.
Against the unassailable testimony of witness Rodriguez we note that Li's testimony was peppered with so many
inconsistencies leading us to conclude that his version of the accident was merely adroitly crafted to provide a
version, obviously self-serving, which would exculpate him from any and all liability in the incident. Against
Valenzuela's corroborated claims, his allegations were neither backed up by other witnesses nor by the
circumstances proven in the course of trial. He claimed that he was driving merely at a speed of 55 kph. when
"out of nowhere he saw a dark maroon lancer right in front of him, which was (the) plaintiff's car". He alleged
that upon seeing this sudden "apparition" he put on his brakes to no avail as the road was slippery.9
One will have to suspend disbelief in order to give credence to Li's disingenuous and patently self-serving
asseverations. The average motorist alert to road conditions will have no difficulty applying the brakes to a car
traveling at the speed claimed by Li. Given a light rainfall, the visibility of the street, and the road conditions on a
principal metropolitan thoroughfare like Aurora Boulevard, Li would have had ample time to react to the
changing conditions of the road if he were alert - as every driver should be - to those conditions. Driving exacts a
more than usual toll on the senses. Physiological "fight or flight" 10 mechanisms are at work, provided such
mechanisms were not dulled by drugs, alcohol, exhaustion, drowsiness, etc.11 Li's failure to react in a manner
which would have avoided the accident could therefore have been only due to either or both of the two factors: 1)
that he was driving at a "very fast" speed as testified by Rodriguez; and 2) that he was under the influence of

alcohol.12 Either factor working independently would have diminished his responsiveness to road conditions,
since normally he would have slowed down prior to reaching Valenzuela's car, rather than be in a situation
forcing him to suddenly apply his brakes. As the trial court noted (quoted with approval by respondent court):
Secondly, as narrated by defendant Richard Li to the San Juan Police immediately after the incident, he
said that while driving along Aurora Blvd., out of nowhere he saw a dark maroon lancer right in front of
him which was plaintiff's car, indicating, again, thereby that, indeed, he was driving very fast, oblivious of
his surroundings and the road ahead of him, because if he was not, then he could not have missed noticing
at a still far distance the parked car of the plaintiff at the right side near the sidewalk which had its
emergency lights on, thereby avoiding forcefully bumping at the plaintiff who was then standing at the
left rear edge of her car.
Since, according to him, in his narration to the San Juan Police, he put on his brakes when he saw the
plaintiff's car in front of him, but that it failed as the road was wet and slippery, this goes to show again,
that, contrary to his claim, he was, indeed, running very fast. For, were it otherwise, he could have easily
completely stopped his car, thereby avoiding the bumping of the plaintiff, notwithstanding that the road
was wet and slippery. Verily, since, if, indeed, he was running slow, as he claimed, at only about 55
kilometers per hour, then, inspite of the wet and slippery road, he could have avoided hitting the plaintiff
by the mere expedient or applying his brakes at the proper time and distance.
It could not be true, therefore, as he now claims during his testimony, which is contrary to what he told
the police immediately after the accident and is, therefore, more believable, that he did not actually step
on his brakes but simply swerved a little to the right when he saw the on-coming car with glaring
headlights, from the opposite direction, in order to avoid it.
For, had this been what he did, he would not have bumped the car of the plaintiff which was properly
parked at the right beside the sidewalk. And, it was not even necessary for him to swerve a little to the
right in order to safely avoid a collision with the on-coming car, considering that Aurora Blvd. is a double
lane avenue separated at the center by a dotted white paint, and there is plenty of space for both cars, since
her car was running at the right lane going towards Manila on the on-coming car was also on its right lane
going to Cubao.13
Having come to the conclusion that Li was negligent in driving his company-issued Mitsubishi Lancer, the next
question for us to determine is whether or not Valenzuela was likewise guilty of contributory negligence in
parking her car alongside Aurora Boulevard, which entire area Li points out, is a no parking zone.
We agree with the respondent court that Valenzuela was not guilty of contributory negligence.
Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he
has suffered, which falls below the standard to which he is required to conform for his own protection.14 Based
on the foregoing definition, the standard or act to which, according to petitioner Li, Valenzuela ought to have
conformed for her own protection was not to park at all at any point of Aurora Boulevard, a no parking zone. We
cannot agree.
Courts have traditionally been compelled to recognize that an actor who is confronted with an emergency is not
to be held up to the standard of conduct normally applied to an individual who is in no such situation. The law
takes stock of impulses of humanity when placed in threatening or dangerous situations and does not require the
same standard of thoughtful and reflective care from persons confronted by unusual and oftentimes threatening
conditions.15
Under the "emergency rule" adopted by this Court in Gan vs. Court of Appeals,16 an individual who suddenly
finds himself in a situation of danger and is required to act without much time to consider the best means that
may be adopted to avoid the impending danger, is not guilty of negligence if he fails to undertake what
subsequently and upon reflection may appear to be a better solution, unless the emergency was brought by his
own negligence.17

Applying this principle to a case in which the victims in a vehicular accident swerved to the wrong lane to avoid
hitting two children suddenly darting into the street, we held, in Mc Kee vs. Intermediate Appellate Court,18 that
the driver therein, Jose Koh, "adopted the best means possible in the given situation" to avoid hitting the children.
Using the "emergency rule" the Court concluded that Koh, in spite of the fact that he was in the wrong lane when
the collision with an oncoming truck occurred, was not guilty of negligence.19
While the emergency rule applies to those cases in which reflective thought, or the opportunity to adequately
weigh a threatening situation is absent, the conduct which is required of an individual in such cases is dictated not
exclusively by the suddenness of the event which absolutely negates thoroughful care, but by the over-all nature
of the circumstances. A woman driving a vehicle suddenly crippled by a flat tire on a rainy night will not be
faulted for stopping at a point which is both convenient for her to do so and which is not a hazard to other
motorists. She is not expected to run the entire boulevard in search for a parking zone or turn on a dark street or
alley where she would likely find no one to help her. It would be hazardous for her not to stop and assess the
emergency (simply because the entire length of Aurora Boulevard is a no-parking zone) because the hobbling
vehicle would be both a threat to her safety and to other motorists. In the instant case, Valenzuela, upon reaching
that portion of Aurora Boulevard close to A. Lake St., noticed that she had a flat tire. To avoid putting herself and
other motorists in danger, she did what was best under the situation. As narrated by respondent court: "She
stopped at a lighted place where there were people, to verify whether she had a flat tire and to solicit help if
needed. Having been told by the people present that her rear right tire was flat and that she cannot reach her home
she parked along the sidewalk, about 1 1/2 feet away, behind a Toyota Corona Car."20 In fact, respondent court
noted, Pfc. Felix Ramos, the investigator on the scene of the accident confirmed that Valenzuela's car was parked
very close to the sidewalk.21 The sketch which he prepared after the incident showed Valenzuela's car partly
straddling the sidewalk, clear and at a convenient distance from motorists passing the right lane of Aurora
Boulevard. This fact was itself corroborated by the testimony of witness Rodriguez.22
Under the circumstances described, Valenzuela did exercise the standard reasonably dictated by the emergency
and could not be considered to have contributed to the unfortunate circumstances which eventually led to the
amputation of one of her lower extremities. The emergency which led her to park her car on a sidewalk in Aurora
Boulevard was not of her own making, and it was evident that she had taken all reasonable precautions.
Obviously in the case at bench, the only negligence ascribable was the negligence of Li on the night of the
accident. "Negligence, as it is commonly understood is conduct which creates an undue risk of harm to
others."23It is the failure to observe that degree of care, precaution, and vigilance which the circumstances justly
demand, whereby such other person suffers injury.24 We stressed, in Corliss vs. Manila Railroad
Company,25 that negligence is the want of care required by the circumstances.
The circumstances established by the evidence adduced in the court below plainly demonstrate that Li was
grossly negligent in driving his Mitsubishi Lancer. It bears emphasis that he was driving at a fast speed at about
2:00 A.M. after a heavy downpour had settled into a drizzle rendering the street slippery. There is ample
testimonial evidence on record to show that he was under the influence of liquor. Under these conditions, his
chances of effectively dealing with changing conditions on the road were significantly lessened. As Presser and
Keaton emphasize:
[U]nder present day traffic conditions, any driver of an automobile must be prepared for the sudden
appearance of obstacles and persons on the highway, and of other vehicles at intersections, such as one
who sees a child on the curb may be required to anticipate its sudden dash into the street, and his failure to
act properly when they appear may be found to amount to negligence.26
Li's obvious unpreparedness to cope with the situation confronting him on the night of the accident was clearly of
his own making.
We now come to the question of the liability of Alexander Commercial, Inc. Li's employer. In denying liability on
the part of Alexander Commercial, the respondent court held that:

There is no evidence, not even defendant Li's testimony, that the visit was in connection with official
matters. His functions as assistant manager sometimes required him to perform work outside the office as
he has to visit buyers and company clients, but he admitted that on the night of the accident he came from
BF Homes Paranaque he did not have "business from the company" (pp. 25-26, ten, Sept. 23, 1991). The
use of the company car was partly required by the nature of his work, but the privilege of using it for nonofficial business is a "benefit", apparently referring to the fringe benefits attaching to his position.
Under the civil law, an employer is liable for the negligence of his employees in the discharge of their
respective duties, the basis of which liability is not respondeat superior, but the relationship of pater
familias, which theory bases the liability of the master ultimately on his own negligence and not on that of
his servant (Cuison v. Norton and Harrison Co., 55 Phil. 18). Before an employer may be held liable for
the negligence of his employee, the act or omission which caused damage must have occurred while an
employee was in the actual performance of his assigned tasks or duties (Francis High School vs. Court of
Appeals, 194 SCRA 341). In defining an employer's liability for the acts done within the scope of the
employee's assigned tasks, the Supreme Court has held that this includes any act done by an employee, in
furtherance of the interests of the employer or for the account of the employer at the time of the infliction
of the injury or damage (Filamer Christian Institute vs. Intermediate Appellate Court, 212 SCRA 637). An
employer is expected to impose upon its employees the necessary discipline called for in the performance
of any act "indispensable to the business and beneficial to their employer" (at p. 645).
In light of the foregoing, We are unable to sustain the trial court's finding that since defendant Li was
authorized by the company to use the company car "either officially or socially or even bring it home", he
can be considered as using the company car in the service of his employer or on the occasion of his
functions. Driving the company car was not among his functions as assistant manager; using it for nonofficial purposes would appear to be a fringe benefit, one of the perks attached to his position. But to
impose liability upon the employer under Article 2180 of the Civil Code, earlier quoted, there must be a
showing that the damage was caused by their employees in the service of the employer or on the occasion
of their functions. There is no evidence that Richard Li was at the time of the accident performing any act
in furtherance of the company's business or its interests, or at least for its benefit. The imposition of
solidary liability against defendant Alexander Commercial Corporation must therefore fail.27
We agree with the respondent court that the relationship in question is not based on the principle of respondeat
superior, which holds the master liable for acts of the servant, but that of pater familias, in which the liability
ultimately falls upon the employer, for his failure to exercise the diligence of a good father of the family in the
selection and supervision of his employees. It is up to this point, however, that our agreement with the respondent
court ends. Utilizing the bonus pater familias standard expressed in Article 2180 of the Civil Code, 28 we are of
the opinion that Li's employer, Alexander Commercial, Inc. is jointly and solidarily liable for the damage caused
by the accident of June 24, 1990.
First, the case of St. Francis High School vs. Court of Appeals29 upon which respondent court has placed undue
reliance, dealt with the subject of a school and its teacher's supervision of students during an extracurricular
activity. These cases now fall under the provision on special parental authority found in Art. 218 of the Family
Code which generally encompasses all authorized school activities, whether inside or outside school premises.
Second, the employer's primary liability under the concept of pater familias embodied by Art 2180 (in relation to
Art. 2176) of the Civil Code is quasi-delictual or tortious in character. His liability is relieved on a showing that
he exercised the diligence of a good father of the family in the selection and supervision of its employees. Once
evidence is introduced showing that the employer exercised the required amount of care in selecting its
employees, half of the employer's burden is overcome. The question of diligent supervision, however, depends on
the circumstances of employment.
Ordinarily, evidence demonstrating that the employer has exercised diligent supervision of its employee during
the performance of the latter's assigned tasks would be enough to relieve him of the liability imposed by Article

2180 in relation to Article 2176 of the Civil Code. The employer is not expected to exercise supervision over
either the employee's private activities or during the performance of tasks either unsanctioned by the former or
unrelated to the employee's tasks. The case at bench presents a situation of a different character, involving a
practice utilized by large companies with either their employees of managerial rank or their representatives.
It is customary for large companies to provide certain classes of their employees with courtesy vehicles. These
company cars are either wholly owned and maintained by the company itself or are subject to various plans
through which employees eventually acquire their vehicles after a given period of service, or after paying a token
amount. Many companies provide liberal "car plans" to enable their managerial or other employees of rank to
purchase cars, which, given the cost of vehicles these days, they would not otherwise be able to purchase on their
own.
Under the first example, the company actually owns and maintains the car up to the point of turnover of
ownership to the employee; in the second example, the car is really owned and maintained by the employee
himself. In furnishing vehicles to such employees, are companies totally absolved of responsibility when an
accident involving a company-issued car occurs during private use after normal office hours?
Most pharmaceutical companies, for instance, which provide cars under the first plan, require rigorous tests of
road worthiness from their agents prior to turning over the car (subject of company maintenance) to their
representatives. In other words, like a good father of a family, they entrust the company vehicle only after they
are satisfied that the employee to whom the car has been given full use of the said company car for company or
private purposes will not be a threat or menace to himself, the company or to others. When a company gives full
use and enjoyment of a company car to its employee, it in effect guarantees that it is, like every good father,
satisfied that its employee will use the privilege reasonably and responsively.
In the ordinary course of business, not all company employees are given the privilege of using a company-issued
car. For large companies other than those cited in the example of the preceding paragraph, the privilege serves
important business purposes either related to the image of success an entity intends to present to its clients and to
the public in general, or - for practical and utilitarian reasons - to enable its managerial and other employees of
rank or its sales agents to reach clients conveniently. In most cases, providing a company car serves both
purposes. Since important business transactions and decisions may occur at all hours in all sorts of situations and
under all kinds of guises, the provision for the unlimited use of a company car therefore principally serves the
business and goodwill of a company and only incidentally the private purposes of the individual who actually
uses the car, the managerial employee or company sales agent. As such, in providing for a company car for
business use and/or for the purpose of furthering the company's image, a company owes a responsibility to the
public to see to it that the managerial or other employees to whom it entrusts virtually unlimited use of a
company issued car are able to use the company issue capably and responsibly.
In the instant case, Li was an Assistant Manager of Alexander Commercial, Inc. In his testimony before the trial
court, he admitted that his functions as Assistant Manager did not require him to scrupulously keep normal office
hours as he was required quite often to perform work outside the office, visiting prospective buyers and
contacting and meeting with company clients. 30 These meetings, clearly, were not strictly confined to routine
hours because, as a managerial employee tasked with the job of representing his company with its clients,
meetings with clients were both social as well as work-related functions. The service car assigned to Li by
Alexander Commercial, Inc. therefore enabled both Li - as well as the corporation - to put up the front of a highly
successful entity, increasing the latter's goodwill before its clientele. It also facilitated meeting between Li and its
clients by providing the former with a convenient mode of travel.
Moreover, Li's claim that he happened to be on the road on the night of the accident because he was coming from
a social visit with an officemate in Paranaque was a bare allegation which was never corroborated in the court
below. It was obviously self-serving. Assuming he really came from his officemate's place, the same could give
rise to speculation that he and his officemate had just been from a work-related function, or they were together to
discuss sales and other work related strategies.

In fine, Alexander Commercial, inc. has not demonstrated, to our satisfaction, that it exercised the care and
diligence of a good father of the family in entrusting its company car to Li. No allegations were made as to
whether or not the company took the steps necessary to determine or ascertain the driving proficiency and history
of Li, to whom it gave full and unlimited use of a company car.31 Not having been able to overcome the burden
of demonstrating that it should be absolved of liability for entrusting its company car to Li, said company, based
on the principle of bonus pater familias, ought to be jointly and severally liable with the former for the injuries
sustained by Ma. Lourdes Valenzuela during the accident.
Finally, we find no reason to overturn the amount of damages awarded by the respondent court, except as to the
amount of moral damages. In the case of moral damages, while the said damages are not intended to enrich the
plaintiff at the expense of a defendant, the award should nonetheless be commensurate to the suffering inflicted.
In the instant case we are of the opinion that the reduction in moral damages from an amount of P1,000,000.00 to
P800,000,00 by the Court of Appeals was not justified considering the nature of the resulting damage and the
predictable sequelae of the injury.
As a result of the accident, Ma. Lourdes Valenzuela underwent a traumatic amputation of her left lower extremity
at the distal left thigh just above the knee. Because of this, Valenzuela will forever be deprived of the full
ambulatory functions of her left extremity, even with the use of state of the art prosthetic technology. Well
beyond the period of hospitalization (which was paid for by Li), she will be required to undergo adjustments in
her prosthetic devise due to the shrinkage of the stump from the process of healing.
These adjustments entail costs, prosthetic replacements and months of physical and occupational rehabilitation
and therapy. During her lifetime, the prosthetic devise will have to be replaced and re-adjusted to changes in the
size of her lower limb effected by the biological changes of middle-age, menopause and aging. Assuming she
reaches menopause, for example, the prosthetic will have to be adjusted to respond to the changes in bone
resulting from a precipitate decrease in calcium levels observed in the bones of all post-menopausal women. In
other words, the damage done to her would not only be permanent and lasting, it would also be permanently
changing and adjusting to the physiologic changes which her body would normally undergo through the years.
The replacements, changes, and adjustments will require corresponding adjustive physical and occupational
therapy. All of these adjustments, it has been documented, are painful.
The foregoing discussion does not even scratch the surface of the nature of the resulting damage because it would
be highly speculative to estimate the amount of psychological pain, damage and injury which goes with the
sudden severing of a vital portion of the human body. A prosthetic device, however technologically advanced,
will only allow a reasonable amount of functional restoration of the motor functions of the lower limb. The
sensory functions are forever lost. The resultant anxiety, sleeplessness, psychological injury, mental and physical
pain are inestimable.
As the amount of moral damages are subject to this Court's discretion, we are of the opinion that the amount of
P1,000,000.00 granted by the trial court is in greater accord with the extent and nature of the injury - physical and
psychological - suffered by Valenzuela as a result of Li's grossly negligent driving of his Mitsubishi Lancer in the
early morning hours of the accident.
WHEREFORE, PREMISES CONSIDERED, the decision of the Court of Appeals is modified with the effect of
REINSTATING the judgment of the Regional Trial Court.
SO ORDERED.

SECOND DIVISION
CORNELIO LAMPESA and DARIO
COPSIYAT,

G.R. No. 155111

Petitioners,

Present:

- versus -

QUISUMBING, J., Chairperson,


CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.

DR. JUAN DE VERA, JR., FELIX


Promulgated:
RAMOS and MODESTO TOLLAS,
Respondents.
February 14, 2008
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION

QUISUMBING, J.:
This petition for review seeks the reversal of the Decision[1] dated August 21, 2002 of the Court of Appeals in
CA-G.R. CV No. 49778 which had affirmed the Decision[2] dated March 22, 1995 of the Regional Trial Court of
San Carlos City, Pangasinan, Branch 57, finding petitioners Cornelio Lampesa and Dario Copsiyat liable for
damages on account of the injury sustained by respondent, Dr. Juan De Vera, Jr.
The antecedent facts, as found by the appellate court, are as follows:
On December 28, 1988, De Vera, Jr. boarded a passenger jeepney[3] bound for Baguio City driven by respondent
Modesto Tollas. Upon reaching the Km. 4 marker of the national highway, the jeepney came to a complete stop to
allow a truck,[4] then being driven by Dario Copsiyat, to cross the path of the jeepney in order to park at a private
parking lot on the right side of the road.As Tollas began to maneuver the jeepney slowly along its path, the truck,
which had just left the pavement, suddenly started to slide back towards the jeepney until its rear left portion hit
the right side of the jeepney. De Vera, Jr., who was seated in the front passenger seat, noticed his left middle
finger was cut off as he was holding on to the handle of the right side of the jeepney. He asked Tollas to bring
him immediately to the hospital. The Medical Certificate[5] dated June 19, 1989, described De
Vera, Jr.samputated left middle finger as follows:
Neuroma, proximal phalange left middle finger OPERATION PERFORMED: Ray amputation
middle finger left[6]

P/Cpl. Arthur A. Bomogao of the Benguet Integrated National Police investigated and recorded the incident in his
Police Investigation Report[7] dated January 17, 1989.
The defense, for its part, presented the following version of the incident: After delivering a load of vegetables,
truck owner Lampesa instructed his driver, Copsiyat, to park the truck in the parking lot across the
highway. While the rear of the truck was still on the pavement of the highway, an approaching passenger jeepney

sideswiped the rear portion of the truck. This resulted in the dismemberment of De Vera, Jr.s left middle finger,
according to the defense.
Lampesa offered P5,000 to De Vera, Jr. as a gesture of humanitarian support, but the latter demanded P1 million
although this amount was later lowered to P75,000. The parties failed to settle amicably; thus, De Vera, Jr. filed
an action for damages[8] against Lampesa, Copsiyat, Ramos and Tollas, as the truck owner, truck driver, jeepney
owner/operator and jeepney driver, respectively.
The trial court found driver Copsiyat negligent in the operation of his truck and ruled that his negligence was the
proximate cause of the injuries suffered by De Vera, Jr. It also ruled that Lampesa did not exercise due diligence
in the selection and supervision of his driver as required under Articles 2176[9] and 2180[10] of the Civil
Code. The fallo of the decision reads:
WHEREFORE, judgment is hereby rendered:
1. Ordering Dario Copsiyat and Cornelio F. Lampesa, jointly and solidarily to pay the plaintiff the
sum of P75,000.00 as moral damages; P22,000.00 as actual damages; and P15,000.00 as attorneys
fees plus the costs of suit.
2. The counterclaim and cross-claim of defendant Lampesa and Copsiyat and the counterclaim and
counter-cross-claim of defendants Ramos and Tollas are hereby dismissed.
SO ORDERED.[11]

Upon review, the Court of Appeals upheld the trial courts findings of negligence on the part of Copsiyat and
Lampesa. The dispositive portion of the decision reads:
WHEREFORE, the questioned Decision, dated March 22, 1995, of the Regional Trial Court of
Pangasinan, Branch 57, in Civil Case No. SCC-1506, is hereby AFFIRMED.
SO ORDERED.[12]

Hence, the instant petition, raising the following as issues:


I.
WHO BETWEEN THE TWO (2) DRIVERS (COPSIYAT WHO WAS THE ELF TRUCK
DRIVER AND TOLLAS FOR THE PASSENGER JEEP) WAS NEGLIGENT?
II.
GRANTING THAT COPSIYAT WAS ALSO NEGLIGENT, WHETHER OR NOT THE AWARD
OF MORAL DAMAGES AND ATTORNEYS FEES ARE JUSTIFIED; AND
III.
WHETHER OR NOT THE TRIAL COURT AND THE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR IN THE APPRECIATION OF THE EVIDENCE.[13]

Simply put, the issues for our resolution are: (1) Did the Court of Appeals err in affirming the trial courts ruling
that petitioners are liable for the injury sustained by De Vera, Jr.? and (2) Did it err in awarding moral damages
and attorneys fees?
Petitioners insist that it was Tollas, the jeepney driver, who was negligent. They maintain that Tollas should have
first allowed the truck to park as he had a clear view of the scenario, compared to Copsiyat, the truck driver, who
had a very limited view of the back of the truck. Lampesa also avers he did his legal duty in the selection and
supervision of Copsiyat as his driver. He alleges that before hiring Copsiyat, he asked the latter if he had a
professional drivers license.
For their part, respondents adopt the findings of the trial and appellate courts. They contend that it was Copsiyat who
was negligent in driving the truck and the testimony of De Vera, Jr. on this matter was more than sufficient to prove the
fact. De Vera, Jr. also contends that petitioners are liable for moral damages and attorneys fees under Articles
2217[14] and 2208[15] of the Civil Code.
Considering the contentions of the parties, in the light of the circumstances in this case, we are in agreement that
the petition lacks merit.
Article 2176 of the Civil Code provides that 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 quasi-delict. Whether a person is negligent or not is a question
of fact, which we cannot pass upon in a petition for review on certiorari, as our jurisdiction is limited to
reviewing errors of law.[16]
In this case, both the trial and the appellate courts found Copsiyat negligent in maneuvering the truck and ruled
that his negligence was the proximate cause of the injury sustained by De Vera, Jr. Lampesa was also held
accountable by both courts because he failed to exercise due diligence in the supervision of his driver. This Court
is not bound to weigh all over again the evidence adduced by the parties, particularly where the findings of both
the trial court and the appellate court on the matter of petitioners negligence coincide. The resolution of factual
issues is a function of the trial court, whose findings on these matters are, as a general rule, binding on this Court
more so where these have been affirmed by the Court of Appeals.[17]
Once negligence on the part of the employee is established, a presumption instantly arises that the employer was
negligent in the selection and/or supervision of said employee.[18] To rebut this presumption, the employer must
present adequate and convincing proof that he exercised care and diligence in the selection and supervision of his
employees.
Lampesa claims he did his legal duty as an employer in the selection and supervision of Copsiyat. But the record
is bare on this point. It lacks any showing that Lampesa did so. Admitting arguendo that Copsiyat did show his
professional license when he applied for the job of truck driver, Lampesa should not have been satisfied by the
mere possession of a professional drivers license by Copsiyat. As an employer, Lampesa was duty bound to do

more. He should have carefully examined Copsiyats qualifications, experiences and record of service, if any.
[19] Lampesa must also show that he exercised due supervision over Copsiyat after his selection. But all he had
shown on record were bare allegations unsubstantiated by evidence. Having failed to exercise the due diligence
required of him as employer, Lampesa cannot avoid solidary liability for the tortuous act committed by his driver,
Copsiyat.
On a final note, petitioners liability for moral damages and attorneys fees cannot now be questioned for failure of
petitioners to raise it before the Court of Appeals. It is a well-entrenched rule that issues not raised below cannot
be raised for the first time on appeal as to do so would be offensive to the basic rules of fair play and justice.
[20] Moreover, the award of moral damages in this case is justifiable under Article 2219 (2)[21] of the Civil
Code, which provides for said damages in cases of quasi-delicts causing physical injuries.[22] The award for
attorneys fees is also proper under Article 2208 (2)[23] of the Civil Code, considering that De Vera, Jr. was
compelled to litigate when petitioners ignored his demand for an amicable settlement of his claim.[24]
WHEREFORE, the petition is DENIED for lack of merit. The Decision dated August 21, 2002 of the Court of
Appeals in CA-G.R. CV No. 49778 is AFFIRMED. Costs against the petitioners.
SO ORDERED.

FIRST DIVISION
MERCURY DRUG CORPORATION and
ROLANDO J. DEL ROSARIO,
Petitioners,

- versus -

G.R. No. 172122


Present:
PUNO, C.J., Chairperson,
SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
GARCIA, JJ.

SPOUSES RICHARD HUANG and


CARMEN HUANG, and STEPHEN HUANG, Promulgated:
Respondents.
June 22, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION
PUNO, C.J.:

On appeal are the Decision[1] and Resolution[2] of the Court of Appeals in CA-G.R. CV No. 83981, dated
February 16, 2006 and March 30, 2006, respectively which affirmed with modification the Decision[3] of the
Regional Trial Court (RTC) of Makati City, dated September 29, 2004. The trial court found petitioners jointly
and severally liable to pay respondents damages for the injuries sustained by respondent Stephen Huang, son of
respondent spouses Richard and Carmen Huang.

First, the facts:


Petitioner Mercury Drug Corporation (Mercury Drug) is the registered owner of a six-wheeler 1990 Mitsubishi
Truck with plate number PRE 641 (truck). It has in its employ petitioner Rolando J. del Rosario as
driver. Respondent spouses Richard and Carmen Huang are the parents of respondent Stephen Huang and own
the red 1991 Toyota Corolla GLI Sedan with plate number PTT 775 (car).
These two vehicles figured in a road accident on December 20, 1996 at around 10:30 p.m. within the
municipality of Taguig, Metro Manila. Respondent Stephen Huang was driving the car, weighing 1,450 kg., while
petitioner Del Rosario was driving the truck, weighing 14,058 kg. Both were traversing the C-5 Highway, north
bound, coming from the general direction of Alabang going to Pasig City. The car was on the left innermost lane
while the truck was on the next lane to its right, when the truck suddenly swerved to its left and slammed into the
front right side of the car. The collision hurled the car over the island where it hit a lamppost, spun around and
landed on the opposite lane. The truck also hit a lamppost, ran over the car and zigzagged towards, and finally
stopped in front of Buellah Land Church.
At the time of the accident, petitioner Del Rosario only had a Traffic Violation Receipt (TVR). His drivers license
had been confiscated because he had been previously apprehended for reckless driving.
The car, valued at P300,000.00, was a total wreck. Respondent Stephen Huang sustained massive injuries to his
spinal cord, head, face, and lung. Despite a series of operations, respondent Stephen Huang is paralyzed for life
from his chest down and requires continuous medical and rehabilitation treatment.
Respondents fault petitioner Del Rosario for committing gross negligence and reckless imprudence while driving,
and petitioner Mercury Drug for failing to exercise the diligence of a good father of a family in the selection and
supervision of its driver.
In contrast, petitioners allege that the immediate and proximate cause of the accident was respondent Stephen
Huangs recklessness. According to petitioner Del Rosario, he was driving on the left innermost lane when the car
bumped the trucks front right tire. The truck then swerved to the left, smashed into an electric post, crossed the

center island, and stopped on the other side of the highway. The car likewise crossed over the center island and
landed on the same portion of C-5. Further, petitioner Mercury Drug claims that it exercised due diligence of a
good father of a family in the selection and supervision of all its employees.
The trial court, in its Decision dated September 29, 2004, found petitioners Mercury Drug and Del Rosario
jointly and severally liable to pay respondents actual, compensatory, moral and exemplary damages, attorneys
fees, and litigation expenses. The dispositive portion reads:
WHEREFORE, judgment is rendered finding defendants Mercury Drug Corporation, Inc. and
Rolando del Rosario, jointly and severally liable to pay plaintiffs Spouses Richard Y. Huang and
Carmen G. Huang, and Stephen Huang the following amounts:
1.
Two Million Nine Hundred Seventy Three Thousand Pesos
(P2,973,000.00) actual damages;
2.

As compensatory damages:
a.
Twenty Three Million Four Hundred Sixty One Thousand, and Sixty-Two
Pesos (P23,461,062.00) for life care cost of Stephen;
b.
Ten Million Pesos (P10,000,000.00) as and for lost or impaired earning
capacity of Stephen;

3.

Four Million Pesos (P4,000,000.00) as moral damages;

4.

Two Million Pesos (P2,000,000.00) as exemplary damages; and

5.

One Million Pesos (P1,000,000.00) as attorneys fees and litigation expense.[4]

On February 16, 2006, the Court of Appeals affirmed the decision of the trial court but reduced the award of
moral damages to P1,000,000.00. The appellate court also denied the motion for reconsideration filed by
petitioners.
Hence, this appeal.
Petitioners cite the following grounds for their appeal:
1. That the subject Decision which dismissed the appeal of petitioners herein but AFFIRMED
WITH MODIFICATION the decision of the Regional Trial Court, Branch 64, Makati City, in that
the award of moral damages was reduced to P1,000,000.00 and its Resolution dated March 30,
2006, which dismissed outright the Motion for Reconsideration must be set aside because the
Honorable Court of Appeals committed reversible error:
A.
IN DENYING OUTRIGHTLY THE MOTION FOR RECONSIDERATION ON
ALLEGEDLY BEING FILED OUT OF TIME FOR ONE DAY;
B.
IN ACCORDING GREATER WEIGHT TO THE EVIDENCE ADDUCED BY THE
RESPONDENTS HEREIN AND COMPLETELY DISREGARDING THE DEFENSE
INTERPOSED BY THE PETITIONERS HEREIN;
C.
IN DISREGARDING COMPLETELY ALL EVIDENCES PRESENTED BY THE
PETITIONERS HEREIN AND PROCEEDED TO RENDER ITS DECISION BASED ON
PRESUMPTIONS AND PERSONAL OPINIONS OF PEOPLE WHO ARE NOT
WITNESSES TO THE ACCIDENT;

D.

IN AWARDING DAMAGES IN FAVOR OF RESPONDENTS HEREIN;

E.
IN FINDING THAT MERCURY DRUG CORPORATION FAILED TO EXERCISE
THE DILIGENCE REQUIRED IN SUPERVISING ITS EMPLOYEES DESPITE
OVERWHELMING EVIDENCE PRESENTED BY PETITIONER COMPANY;
F.
IN FINDING THAT PETITIONER ROLANDO DEL ROSARIO WAS
NEGLIGENT IN DRIVING THE TRUCK AT THE TIME OF ACCIDENT AND TOTALLY
DISREGARDING THE EVIDENCES PRESENTED DURING THE TRIAL OF THE
CASE.
G.
IN PRESENTING ONLY IN THE DECISION TESTIMONIES FAVORABLE TO
THE RESPONDENTS HEREIN AND COMPLETELY DISREGARDING THE
EVIDENCES PRESENTED BY THE PETITIONERS HEREIN WHICH
CONTRADICTED SUCH TESTIMONIES NOT ONLY THROUGH ORAL
TESTIMONIES BUT AS WELL AS DOCUMENTARY EVIDENCES.[5]
We affirm the findings of the trial court and the appellate court that petitioner Del Rosario was negligent. The
evidence does not support petitioners claim that at the time of the accident, the truck was at the left inner lane and
that it was respondent Stephen Huangs car, at its right, which bumped the right front side of the truck. Firstly,
petitioner Del Rosario could not precisely tell which part of the truck was hit by the car,[6] despite the fact that
the truck was snub-nosed and a lot higher than the car. Petitioner Del Rosario could not also explain why the car
landed on the opposite lane of C-5 which was on its left side. He said that the car did not pass in front of him
after it hit him or under him or over him or behind him.[7] If the truck were really at the left lane and the car were
at its right, and the car hit the truck at its front right side, the car would not have landed on the opposite side, but
would have been thrown to the right side of the C-5 Highway. Noteworthy on this issue is the testimony of Dr.
Marlon Rosendo H. Daza, an expert in the field of physics. He conducted a study based on the following
assumptions provided by respondents:
1.

Two vehicles collided;

2.

One vehicle is ten times heavier, more massive than the other;

3.
Both vehicles were moving in the same direction and at the same speed of about 85 to 90
kilometers per hour;
4.
The heavier vehicle was driving at the innermost left lane, while the lighter vehicle was
at its right.
Dr. Daza testified that given the foregoing assumptions, if the lighter vehicle hits the right front portion of the
heavier vehicle, the general direction of the light vehicle after the impact would be to the right side of the heavy
vehicle, not the other way around. The truck, he opined, is more difficult to move as it is heavier. It is the car, the
lighter vehicle, which would move to the right of, and away from the truck. Thus, there is very little chance that
the car will move towards the opposite side, i.e., to the left of the truck.
Dr. Daza also gave a further study on the basis of the same assumptions except that the car is on the left side of
the truck, in accordance with the testimony of respondent Stephen Huang. Dr. Daza concluded that the general
direction of the car after impact would be to the left of the truck. In this situation, the middle island against which

the car was pinned would slow down the car, and enable the truck to catch up and hit the car again, before
running over it.[8]
To support their thesis, petitioners tried to show the damages that the truck sustained at its front right side. The
attempt does not impress. The photographs presented were taken a month after the accident, and Rogelio Pantua,
the automechanic who repaired the truck and authenticated the photographs, admitted that there were damages
also on the left side of the truck.[9]
Worse still, petitioner Del Rosario further admitted that after the impact, he lost control of the truck and failed to
apply his brakes. Considering that the car was smaller and lighter than the six-wheeler truck, the impact allegedly
caused by the car when it hit the truck could not possibly be so great to cause petitioner to lose all control that he
failed to even step on the brakes. He testified, as follows:
ATTY. DIAZ:
May I proceed, Your Honor. You were able to apply the brakes, were you sir?
WITNESS:
No more, sir, because I went over the island.
ATTY. DIAZ:
Because as you said you lost control, correct sir?
WITNESS:
Yes, sir.
ATTY. DIAZ:
In other words, sir from the time your truck was hit according to you up to the time you rested
on the shoulder, you traveled fifty meters?
WITNESS:
Yes, sir, about that distance.
ATTY. DIAZ:
And this was despite the fact that you were only traveling at the speed of seventy five
kilometers per hour, jumped over the island, hit the lamppost, and traveled the three lanes of
the opposite lane of C-5 highway, is that what you want to impress upon this court?
WITNESS:
Yes, sir.[10]
We therefore find no cogent reason to disturb the findings of the RTC and the Court of Appeals. The evidence
proves petitioner Del Rosarios negligence as the direct and proximate cause of the injuries suffered by respondent
Stephen Huang.Petitioner Del Rosario failed to do what a reasonable and prudent man would have done under
the circumstances.

We now come to the liability of petitioner Mercury Drug as employer of Del Rosario. Articles 2176 and 2180 of
the Civil Code provide:
Art. 2176. 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.
Art. 2180. The obligation imposed by article 2176 is demandable not only for ones own acts or
omissions, but also for those of persons for whom one is responsible.
xxx
The owners and managers of an establishment or enterprise are likewise responsible for damages
caused by their employees in the service of the branches in which the latter are employed or on the
occasion of their functions.
xxx
The liability of the employer under Art. 2180 of the Civil Code is direct or immediate. It is not conditioned on a
prior recourse against the negligent employee, or a prior showing of insolvency of such employee. It is also joint
and solidary with the employee.[11]
To be relieved of liability, petitioner Mercury Drug should show that it exercised the diligence of a good father of
a family, both in the selection of the employee and in the supervision of the performance of his duties. Thus, in
the selection of its prospective employees, the employer is required to examine them as to their qualifications,
experience, and service records.[12] With respect to the supervision of its employees, the employer should
formulate standard operating procedures, monitor their implementation, and impose disciplinary measures for
their breach. To establish compliance with these requirements, employers must submit concrete proof, including
documentary evidence.[13]
In the instant case, petitioner Mercury Drug presented testimonial evidence on its hiring
procedure. According to Mrs. MerlieCaamic, the Recruitment and Training Manager of petitioner Mercury Drug,
applicants are required to take theoretical and actual driving tests, and psychological examination. In the case of
petitioner Del Rosario, however, Mrs. Caamic admitted that he took the driving tests and psychological
examination when he applied for the position of Delivery Man, but not when he applied for the position
of Truck Man. Mrs. Caamic also admitted that petitioner Del Rosario used a Galant which is a light vehicle,
instead of a truck during the driving tests. Further, no tests were conducted on the motor skills development,
perceptual speed, visual attention, depth visualization, eye and hand coordination and steadiness of petitioner Del
Rosario. No NBI and police clearances were also presented. Lastly, petitioner Del Rosario attended only three
driving seminars on June 30, 2001, February 5, 2000 and July 7, 1984.In effect, the only seminar he attended
before the accident which occurred in 1996 was held twelve years ago in 1984.
It also appears that petitioner Mercury Drug does not provide for a back-up driver for long trips. At the time of
the accident, petitioner Del Rosario has been out on the road for more than thirteen hours, without any

alternate. Mrs. Caamic testified that she does not know of any company policy requiring back-up drivers for long
trips.[14]
Petitioner Mercury Drug likewise failed to show that it exercised due diligence on the supervision and discipline
over its employees. In fact, on the day of the accident, petitioner Del Rosario was driving without a license. He
was holding a TVR for reckless driving. He testified that he reported the incident to his superior, but nothing was
done about it. He was not suspended or reprimanded.[15] No disciplinary action whatsoever was taken against
petitioner Del Rosario. We therefore affirm the finding that petitioner Mercury Drug has failed to discharge its
burden of proving that it exercised due diligence in the selection and supervision of its employee, petitioner Del
Rosario.
We now consider the damages which respondents should recover from the petitioners.
The trial court awarded the following amounts:
1.
Two Million Nine Hundred Seventy-Three Thousand Pesos (P2,973,000.00) actual
damages;

2.

As compensatory damages:
a.
Twenty-Three Million Four Hundred Sixty One Thousand, and Sixty-Two Pesos
(P23,461,062.00) for life care cost of Stephen;
b.
Ten Million Pesos (P10,000,000.00) as and for lost or impaired earning capacity of
Stephen;

3.

Four Million Pesos (P4,000,000.00) as moral damages;

4.

Two Million Pesos (P2,000,000.00) as exemplary damages; and

5.

One Million Pesos (P1,000,000.00) as attorneys fees and litigation expense.

The Court of Appeals affirmed the decision of the trial court but reduced the award of moral damages
to P1,000,000.00.
With regard to actual damages, Art. 2199 of the Civil Code provides that [E]xcept as provided by law or by
stipulation one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has
duly proved x x x. In the instant case, we uphold the finding that the actual damages claimed by respondents were
supported by receipts. The amount of P2,973,000.00 represented cost of hospital expenses, medicines, medical
services and supplies, and nursing care services provided respondent Stephen from December 20, 1996, the day
of the accident, until December 1998.
Petitioners are also liable for all damages which are the natural and probable consequences of the act or omission
complained of.[16] The doctors who attended to respondent Stephen are one in their prognosis that his chances of
walking again and performing basic body functions are nil. For the rest of his life, he will need continuous
rehabilitation and therapy to prevent further complications such as pneumonia, bladder and rectum
infection, renal failure, sepsis and severe bed sores, osteoporosis and fractures, and other spinal cord injuryrelated conditions. He will be completely dependent on the care and support of his family. We thus affirm the

award of P23,461,062.00 for the life care cost of respondent Stephen Huang, based on his average monthly
expense and the actuarial computation of the remaining years that he is expected to live; and the conservative
amount of P10,000,000.00, as reduced by the trial court, for the loss or impairment of his earning capacity,
[17] considering his age, probable life expectancy, the state of his health, and his mental and physical condition
before the accident. He was only seventeen years old, nearly six feet tall and weighed 175 pounds. He was in
fourth year high school, and a member of the school varsity basketball team. He was also class president and
editor-in-chief of the school annual. He had shown very good leadership qualities. He was looking forward to his
college life, having just passed the entrance examinations of the University of the Philippines, De La Salle
University, and the University of Asia and the Pacific. The University of Sto. Tomas even offered him a chance to
obtain an athletic scholarship, but the accident prevented him from attending the basketball try-outs. Without
doubt, he was an exceptional student. He excelled both in his academics and extracurricular undertakings. He is
intelligent and motivated, a go-getter, as testified by Francisco Lopez, respondent Stephen Huangs godfather and
a bank executive.[18] Had the accident not happened, he had a rosy future ahead of him. He wanted to embark on
a banking career, get married and raise children. Taking into account his outstanding abilities, he would have
enjoyed a successful professional career in banking. But, as Mr. Lopez stated, it is highly unlikely for someone
like respondent to ever secure a job in a bank. To his knowledge, no bank has ever hired a person suffering with
the kind of disability as Stephen Huangs.[19]
We likewise uphold the award of moral and exemplary damages and attorneys fees.
The award of moral damages is aimed at a restoration, within the limits of the possible, of the spiritual status quo
ante.[20]Moral damages are designed to compensate and alleviate in some way the physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and
similar injury unjustly caused a person. Although incapable of pecuniary computation, they must be
proportionate to the suffering inflicted.[21] The amount of the award bears no relation whatsoever with the
wealth or means of the offender.
In the instant case, respondent Stephen Huang and respondent spouses Richard and Carmen Huang testified to
the intense suffering they continue to experience as a result of the accident. Stephen recounted the nightmares
and traumas he suffers almost every night when he relives the accident. He also gets depression when he thinks
of his bleak future. He feels frustration and embarrassment in needing to be helped with almost everything and in
his inability to do simple things he used to do. Similarly, respondent spouses and the rest of the family undergo
their own private suffering. They live with the day-to-day uncertainty of respondent Stephen Huangs
condition. They know that the chance of full recovery is nil. Moreover, respondent Stephen Huangs paralysis has
made him prone to many other illnesses. His family, especially respondent spouses, have to make themselves
available for Stephen twenty-four hours a day. They have patterned their daily life around taking care of him,
ministering to his daily needs, altering the lifestyle to which they had been accustomed.
Respondent Carmen Huangs brother testified on the insensitivity of petitioner Mercury Drug towards the plight
of respondent.Stephen, viz.:
Maybe words cannot describe the anger that we feel towards the defendants. All the time that we
were going through the crisis, there was none (sic) a single sign of nor offer of help, any
consolation or anything whatsoever. It is funny because, you know, I have many colleagues,

business associates, people even as far as United States, Japan, that I probably met only once,
when they found out, they make a call, they sent card, they write small notes, but from the
defendant, absolute silence. They didnt care, and worst, you know, this is a company that
have (sic) all the resources to help us. They were (sic) on our part, it was doubly painful because
we have no choice but to go back to them and buy the medicines that we need for Stephen. So, I
dont know how someone will really have no sense of decency at all to at least find out what
happened to my son, what is his condition, or if there is anything that they can do to help us.[22]
On the matter of exemplary damages, Art. 2231 of the Civil Code provides that in cases of quasi-delicts,
exemplary damages may be granted if the defendant acted with gross negligence. The records show that at the
time of the accident, petitioner Del Rosario was driving without a license because he was previously ticketed for
reckless driving. The evidence also shows that he failed to step on his brakes immediately after the impact. Had
petitioner Del Rosario done so, the injuries which respondent Stephen sustained could have been greatly reduced.
Wanton acts such as that committed by petitioner Del Rosario need be suppressed; and employers like petitioner
Mercury Drug should be more circumspect in the observance of due diligence in the selection and supervision of
their employees. The award of exemplary damages in favor of the respondents is therefore justified.
With the award of exemplary damages, we also affirm the grant of attorneys fees to respondents.[23] In addition,
attorneys fees may be granted when a party is compelled to litigate or incur expenses to protect his interest by
reason of an unjustified act of the other party.[24]
Cost against petitioners.
IN VIEW THEREOF, the petition is DENIED. The Decision and Resolution of the Court of Appeals dated
February 16, 2006 and March 30, 2006, respectively, in CA-G.R. CV No. 83981, are AFFIRMED.

SO ORDERED.

FIRST DIVISION
CHILD LEARNING CENTER, INC. G.R. No. 150920
and SPOUSES EDGARDO L. LIMON
and SYLVIA S. LIMON, Present:
Petitioners,
DAVIDE, JR., C.J. (Chairman),
- versus - QUISUMBING,
YNARES-SANTIAGO,
CARPIO, and
AZCUNA, JJ.
TIMOTHY TAGARIO, assisted by
his parents BASILIO TAGORIO and Promulgated:
HERMINIA TAGORIO,

Respondents. November 25, 2005


x-------------------------------------------------------------------------------------------x
DECISION
AZCUNA, J.:

This petition started with a tort case filed with the Regional Trial Court of Makati by Timothy Tagorio and his
parents, Basilio R. Tagorio and Herminia Tagorio, docketed as Civil Case No. 91-1389. The complaint[1] alleged
that during the school year 1990-1991, Timothy was a Grade IV student at Marymount School, an academic
institution operated and maintained by Child Learning Center, Inc. (CLC). In the afternoon of March 5, 1991,
between 1 and 2 p.m., Timothy entered the boys comfort room at the third floor of the Marymount building to
answer the call of nature. He, however, found himself locked inside and unable to get out. Timothy started to
panic and so he banged and kicked the door and yelled several times for help. When no help arrived he decided to
open the window to call for help. In the process of opening the window, Timothy went right through and fell
down three stories. Timothy was hospitalized and given medical treatment for serious multiple physical injuries.
An action under Article 2176 of the Civil Code was filed by respondents against the CLC, the members of its
Board of Directors, namely Spouses Edgardo and Sylvia Limon, Alfonso Cruz, Carmelo Narciso and Luningning
Salvador, and the Administrative Officer of Marymount School, Ricardo Pilao. In its defense,[2] CLC maintained
that there was nothing defective about the locking mechanism of the door and that the fall of Timothy was not
due to its fault or negligence. CLC further maintained that it had exercised the due care and diligence of a good
father of a family to ensure the safety, well-being and convenience of its students.
After trial, the court a quo found in favor of respondents and ordered petitioners CLC and Spouses Limon to pay
respondents, jointly and severally, P200,253.12 as actual and compensatory damages, P200,000 as moral
damages, P50,000 as exemplary damages, P100,000 as attorneys fees and the costs of the suit. The trial court
disregarded the corporate fiction of CLC and held the Spouses Limon personally liable because they were the
ones who actually managed the affairs of the CLC.
Petitioners CLC and the Spouses Limon appealed the decision to the Court of Appeals.
On September 28, 2001, the Court of Appeals[3] affirmed the decision in toto. Petitioners elevated the case to this
Court under Rule 45 of the Rules of Court, after their motion for reconsideration was denied by Resolution of
November 23, 2001.[4]
Petitioners question several factual findings of the trial court, which were affirmed by the Court of Appeals,
namely:[5]
1.
That respondent was allegedly trapped inside the boys comfort room located at the
third floor of the school building on March 5, 1991;

2.
That respondent allegedly banged and kicked the door of said comfort room several
times to attract attention and that he allegedly yelled thereat for help which never came;
3.
seek help;

That respondent was allegedly forced to open the window of said comfort room to

4.
That the lock set installed at the boys comfort room located in the third floor of the
school building on March 5, 1991 was allegedly defective and that the same lock set was involved
in previous incidents of alleged malfunctioning;
5.
That petitioner Child Learning Center, Inc. allegedly failed to install iron grills in the
window of the boys comfort room at the third floor of the school building;
6.
That petitioner Child Learning Center, Inc. allegedly failed to exercise the due care of
a good father of a family in the selection and supervision of its employees;
7.
That the proximate cause of respondents accident was allegedly not due to his own
contributory negligence;
8.
That there was an alleged basis to apply the legal principle of piercing the veil of
corporate entity in resolving the issue of alleged liability of petitioners Edgardo L. Limon and
Sylvia S. Limon;
9.
That there was alleged basis for petitioners to pay respondent actual, moral and
exemplary damages, plus attorneys fees;
10.
That there was an alleged basis in not awarding petitioners prayer for moral and
exemplary damages, including attorneys fees.

Generally, factual findings of the trial court, affirmed by the Court of Appeals, are final and conclusive and may
not be reviewed on appeal. The established exceptions are: (1) when the inference made is manifestly mistaken,
absurd or impossible; (2) when there is grave abuse of discretion; (3) when the findings are grounded entirely on
speculations, surmises or conjectures; (4) when the judgment of the Court of Appeals is based on
misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making
its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and
appellee; (7) when the findings of fact are conclusions without citation of specific evidence on which they are
based; (8) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and
which, if properly considered, would justify a different conclusion; and (9) when the findings of fact of the Court
of Appeals are premised on the absence of evidence and are contradicted by the evidence on record.[6]
On the basis of the records of this case, this Court finds no justification to reverse the factual findings and
consider this case as an exception to the general rule.

In every tort case filed under Article 2176 of the Civil Code, plaintiff has to prove by a preponderance of
evidence: (1) the damages suffered by the plaintiff; (2) the fault or negligence of the defendant or some other
person for whose act he must respond; and (3) the connection of cause and effect between the fault or negligence
and the damages incurred.[7]
Fault, in general, signifies a voluntary act or omission which causes damage to the right of another giving rise to
an obligation on the part of the actor to repair such damage. Negligence is the failure to observe for the protection
of the interest of another person that degree of care, precaution and vigilance which the circumstances justly
demand. Fault requires the execution of a positive act which causes damage to another while negligence consists
of the omission to do acts which result in damage to another.[8]
In this tort case, respondents contend that CLC failed to provide precautionary measures to avoid harm and injury
to its students in two instances: (1) failure to fix a defective door knob despite having been notified of the
problem; and (2) failure to install safety grills on the window where Timothy fell from.
The trial court found that the lock was defective on March 5, 1991:[9]
The door knob was defective. After the incident of March 5, 1991, said door knob was taken off
the door of the toilet where Timothy was in. The architect who testified during the trial declared
that although there were standard specifications for door knobs for comfort room[s], and he
designed them according to that requirement, he did not investigate whether the door knob
specified in his plans during the construction [was] actually put in place. This is so because he did
not verify whether the door knob he specified w[as] actually put in place at the particular comfort
room where Timothy was barred from getting outside. (TSN, pp. 19-20, December 8, 1994).

The Court of Appeals held that there was no reason to disturb the factual assessment:[10]
After having perused the records, We fail to see any indication of whim or arbitrariness on the part
of the trial magistrate in his assessment of the facts of the case. That said, We deem it not to be
within Our business to recast the factual conclusions reached by the court below.

Petitioners would make much of the point that no direct evidence was presented to prove that the door knob was
indeed defective on the date in question.
The fact, however, that Timothy fell out through the window shows that the door could not be opened from the
inside. That sufficiently points to the fact that something was wrong with the door, if not the door knob, under the
principle of res ipsa loquitor. The doctrine of res ipsa loquitor applies where (1) the accident was of such
character as to warrant an inference that it would not have happened except for the defendants negligence; (2) the
accident must have been caused by an agency or instrumentality within the exclusive management or control of
the person charged with the negligence complained of; and (3) the accident must not have been due to any
voluntary action or contribution on the part of the person injured.[11] Petitioners are clearly answerable for

failure to see to it that the doors of their school toilets are at all times in working condition. The fact that a student
had to go through the window, instead of the door, shows that something was wrong with the door.
As to the absence of grills on the window, petitioners contend that there was no such requirement under the
Building Code. Nevertheless, the fact is that such window, as petitioners themselves point out, was
approximately 1.5 meters from the floor, so that it was within reach of a student who finds the regular exit, the
door, not functioning. Petitioners, with the due diligence of a good father of the family, should have anticipated
that a student, locked in the toilet by a non-working door, would attempt to use the window to call for help or
even to get out. Considering all the circumstances, therefore, there is sufficient basis to sustain a finding of
liability on petitioners part.
Petitioners argument that CLC exercised the due diligence of a good father of a family in the selection and