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SECOND DIVISION

JOHN KAM BIAK Y. CHAN, JR., G.R. No. 160283


P e t i t i o n e r,
Present:

PUNO,
Chairman,
AUSTRIA-MARTINEZ,
- versus - CALLEJO, SR.,
TINGA, and
CHICO-NAZARIO, JJ.

Promulgated:
IGLESIA NI CRISTO, INC.,
R e s p o n d e n t. October 14, 2005
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:

Before Us is a petition for review on certiorari[1] assailing the Decision[2] of the Court of Appeals in CA-G.R. CV No. 65976, dated 25 September 2003.

Said Decision denied the petitioners appeal from the decision of the Regional Trial Court (RTC), La Union, Branch 31, in Civil Case No. A-1646.

THE FACTS

The antecedents of the instant case are quite simple.

The Aringay Shell Gasoline Station is owned by the petitioner. It is located in Sta. Rita East, Aringay, La Union, and bounded on the south by a chapel

of the respondent.

The gasoline station supposedly needed additional sewerage and septic tanks for its washrooms. In view of this, the services of Dioscoro Ely Yoro

(Yoro), a retired general of the Armed Forces of the Philippines, was procured by petitioner, as the former was allegedly a construction contractor in

the locality.

Petitioner and Yoro executed a Memorandum of Agreement[3] (MOA) on 28 February 1995 which is reproduced hereunder:

MEMORANDUM OF AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:

This MEMORANDUM OF AGREEMENT, executed this 28th day of February, 1995, by and between:

JOHN Y. CHAN, of legal age, single, and a resident of Aringay, La Union, now and hereinafter called the FIRST PARTY;

GEN. ELY E. YORO, Jr., of legal age, married, and a resident of Damortis, Sto. Tomas, La Union, hereinafter referred to
as the SECOND PARTY:

WITNESSETH that:
WHEREAS, the FIRST PARTY is the owner of a parcel of land located at Sta. Rita, Aringay, La Union.

WHEREAS, the FIRST PARTY, desires to dig a septic tank for its perusal in the property bordering Iglesia ni Cristo.

WHEREAS, the SECOND PARTY is willing to contract the intended digging of septic tank for the first party.

WHEREAS, the FIRST PARTY and SECOND PARTY has (sic) agreed verbally as to the compensation of the said digging of septic tank.

WHEREFORE, for and in consideration of the terms and covenants hereinbelow set forth, the FIRST PARTY hereby AGREES and
ALLOWS the SECOND PARTY to undertake the digging of the parcel of land for the exclusive purpose of having a septic tank.

TERMS AND COVENANTS

1. The SECOND PARTY shall contract the said digging;

2. The FIRST PARTY shall have complete control over the number of personnel who will be entering the property for said contract;

3. The digging shall be allowed for a period of three (3) weeks only, commencing on March 28, 1995, unless extended by
agreement of the parties;

4. Any damage within or outside the property of the FIRST PARTY incurred during the digging shall be borne by the SECOND
PARTY;

5. In the event that valuable objects are found on the property, the same shall be divided among the parties as follows:

FIRST PARTY - 60%


SECOND PARTY - 40%

6. In the event that valuable objects are found outside the property line during the said digging, the same shall be divided among
the parties as follows:

FIRST PARTY - 35%


SECOND PARTY - 65%

7. In case government or military interference or outside intervention is imminent, the FIRST PARTY hereby reserves the option
to stop the digging at any stage thereof.

IN WITNESS WHEREOF, We have hereunto set our hands on the day and year first above-written at Aringay, La Union.[4]

Diggings thereafter commenced. After some time, petitioner was informed by the members of the respondent that the digging traversed

and penetrated a portion of the land belonging to the latter. The foundation of the chapel was affected as a tunnel was dug directly under it to the

damage and prejudice of the respondent.


On 18 April 1995, a Complaint[5] against petitioner and a certain Teofilo Oller, petitioners engineer, was filed by the respondent before the RTC, La

Union, Branch 31, docketed therein as Civil Case No. A-1646. Petitioner and Oller filed an Answer with Third-Party Complaint[6] impleading Yoro as

third-party defendant.

Yoro filed an Answer to the Third-Party Complaint[7] dated 13 July 1995. An Amended and Supplemental Complaint[8] dated 30 August 1995 was later

filed by the respondent already naming Yoro as a party-defendant, to which the petitioner and Oller filed an Answer.[9] Yoro filed his own Answer.[10]

After four years of hearing the case, the trial court promulgated its Decision[11] holding that the diggings were not intended for the construction of

sewerage and septic tanks but were made to construct tunnels to find hidden treasure. [12] The trial court adjudged the petitioner and Yoro solidarily

liable to the respondent on a 35%-65% basis (the petitioner liable for the 35%), and absolving Oller from any liability, viz:

WHEREFORE, this Court renders judgment in favor of plaintiff IGLESIA NI CRISTO and against defendants JOHN KAMBIAK
CHAN and DIOSCORO ELY YORO, JR. who are respectively solidarily liable to PLAINTIFF on a 35%-65% basis, with JOHN CHAN
taking the 35% tab, Ordering the two (2) aforesaid DEFENDANTS to pay PLAINTIFF the following amounts:

1. SIX HUNDRED THIRTY-THREE THOUSAND FIVE HUNDRED NINETY-FIVE PESOS AND FIFTY CENTAVOS (P633,595.50);
representing ACTUAL DAMAGES;

2. FIVE HUNDRED THOUSAND PESOS (P500,000.00) representing MORAL DAMAGES;

3. TEN MILLION PESOS (P10,000,000.00) as EXEMPLARY DAMAGES;

4. FIFTY THOUSAND PESOS (P50,000.00) as plaintiffs attorneys fees; and

5. TWENTY THOUSAND PESOS (P20,000.00) as litigation expenses.

Defendant TEOFILO OLLER is absolved of any civil liability.

Any counterclaim filed against PLAINTIFF IGLESIA NI CRISTO is dismissed.[13]

Petitioner filed a Notice of Appeal[14] dated 18 August 1999. Yoro filed his own Notice of Appeal[15] dated 20 August 1999.

In a Resolution[16] dated 19 November 1999, the trial court disallowed Yoros appeal for failure to pay the appellate court docket and other lawful

fees within the reglementary period for taking an appeal.[17] In view of Yoros failure to appropriately file an appeal, an order was issued for the

issuance of a Writ of Execution as against him only, the dispositive portion of which reads:

WHEREFORE, premises considered, this Court GRANTS the motion of plaintiff Iglesia ni Cristo for the issuance of a Writ
of Execution as against Dioscoro Ely Yoro, Jr. only.[18]
The petitioners appeal to the Court of Appeals, on the other hand, was given due course. [19] On 25 September 2003, the Court of Appeals rendered

its Decision denying the appeal. It affirmed the trial court but with modifications. The decretal portion of the decision states:

WHEREFORE, the appeal is hereby DENIED. The assailed decision in Civil Case No. A-1646 is hereby AFFIRMED with
MODIFICATIONS as follows:

(a) The award of moral damages in the amount of P500,000.00 is hereby deleted.

(b) The award of exemplary damages is hereby reduced to P50,000.00.

(c) The award of attorneys fees and litigation expenses is hereby reduced to P30,000.00.[20]

Undeterred, petitioner instituted the instant case before this Court. On 15 December 2004, the instant petition was given due course.[21]

ASSIGNMENT OF ERRORS

Petitioner assigns as errors the following:

THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE REGIONAL TRIAL COURT (BRANCH 31, AGOO, LA UNION)
PARTICULARLY IN SAYING THAT THE BASIS OF THE SOLIDARY OBLIGATION OF PETITIONER AND YORO VIS--VIS PLAINTIFF IS BASED
NOT ON THE MOA BUT ON TORT

II

THE COURT OF APPEALS ERRED IN NOT GIVING EFFECT TO THE MOA WHICH SHOULD EXONERATE THE PETITIONER FROM ALL
LIABILITIES TO THE PRIVATE RESPONDENT

III

THE COURT OF APPEALS ERRED IN NOT APPRECIATING THE THIRD-PARTY COMPLAINT AS CROSS-CLAIM OF THE PETITIONER
AGAINST YORO.[22]

ISSUE

Drawn from the above assignment of errors, the solitary issue that needs to be resolved is:

WHETHER OR NOT THE MEMORANDUM OF AGREEMENT ENTERED INTO BY THE PETITIONER AND YORO HAS THE EFFECT OF
MAKING THE LATTER SOLELY RESPONSIBLE FOR DAMAGES TO THE RESPONDENT.
THE RULINGS OF THE COURT

Petitioner avers that no liability should attach to him by laying the blame solely on Yoro. He argues that the MOA executed between him and Yoro is

the law between them and must be given weight by the courts. Since nothing in the MOA goes against the law, morals, good customs and public

policy, it must govern to absolve him from any liability.[23] Petitioner relies heavily in Paragraph 4 of the MOA, which is again reproduced hereunder:

4. Any damage within or outside the property of the FIRST PARTY incurred during the digging shall be borne by the SECOND
PARTY.

In answer to this, the respondent asserts that the MOA should not absolve petitioner from any liability. This written contract, according to the

respondent, clearly shows that the intention of the parties therein was to search for hidden treasure. The alleged digging for a septic tank was just a

cover-up of their real intention.[24] The aim of the petitioner and Yoro to intrude and surreptitiously hunt for hidden treasure in the respondents

premises should make both parties liable.[25]

At this juncture, it is vital to underscore the findings of the trial court and the Court of Appeals as to what was the real intention of the petitioner and

Yoro in undertaking the excavations. The findings of the trial court and the Court of Appeals on this point are in complete unison. Petitioner and Yoro

were in quest for hidden treasure[26] and, undoubtedly, they were partners in this endeavor.

The Court of Appeals, in its Decision, held in part:

The basis of their solidarity is not the Memorandum of Agreement but the fact that they have become joint tortfeasors.
There is solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires
solidarity.[27]

We find no compelling reason to disturb this particular conclusion reached by the Court of Appeals. The issue, therefore, must be ruled in the negative.

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.

Based on this provision of law, the requisites of quasi-delict are the following:
(a) there must be an act or omission;

(b) such act or omission causes damage to another;

(c) such act or commission is caused by fault or negligence; and

(d) there is no pre-existing contractual relation between the parties.

All the requisites are attendant in the instant case. The tortious act was the excavation which caused damage to the respondent because it was done

surreptitiously within its premises and it may have affected the foundation of the chapel. The excavation on respondents premises was caused by

fault. Finally, there was no pre-existing contractual relation between the petitioner and Yoro on the one hand, and the respondent on the other.

For the damage caused to respondent, petitioner and Yoro are jointly liable as they are joint tortfeasors. Verily, the responsibility of two or

more persons who are liable for a quasi-delict is solidary.[28]

The heavy reliance of petitioner in paragraph 4 of the MOA cited earlier cannot steer him clear of any liability.

As a general rule, joint tortfeasors are all the persons who command, instigate, promote, encourage, advise, countenance, cooperate in,

aid or abet the commission of a tort, or who approve of it after it is done, if done for their benefit.[29]

Indubitably, petitioner and Yoro cooperated in committing the tort. They even had provisions in their MOA as to how they would divide

the treasure if any is found within or outside petitioners property line. Thus, the MOA, instead of exculpating petitioner from liability, is the very

noose that insures that he be so declared as liable.

Besides, petitioner cannot claim that he did not know that the excavation traversed the respondents property. In fact, he had two (2) of

his employees actually observe the diggings, his security guard and his engineer Teofilo Oller.[30]

Coming now to the matter on damages, the respondent questions the drastic reduction of the exemplary damages awarded to it. It may be recalled

that the trial court awarded exemplary damages in the amount of P10,000,000.00 but same was reduced by the Court of Appeals to P50,000.00.

Exemplary or corrective damages are imposed by way of example or correction for the public good. [31] In quasi-delicts, exemplary damages may be

granted if the defendant acted with gross negligence.[32] By gross negligence is meant such entire want of care as to raise a presumption that the
person in fault is conscious of the probable consequences of carelessness, and is indifferent, or worse, to the danger of injury to person or property

of others.[33]

Surreptitiously digging under the respondents chapel which may weaken the foundation thereof, thereby endangering the lives and limbs of the

people in worship, unquestionably amounts to gross negligence. Not to mention the damage that may be caused to the structure itself. The

respondent may indeed be awarded exemplary damages.

For such tortious act done with gross negligence, the Court feels that the amount awarded by the Court of Appeals is inadequate. The exemplary

damages must correspondingly be increased to P100,000.00.

The modification made by this Court to the judgment of the Court of Appeals must operate as against Yoro, for as fittingly held by the court a quo:

While it is settled that a party who did not appeal from the decision cannot seek any relief other than what is provided
in the judgment appealed from, nevertheless, when the rights and liability of the defendants are so interwoven and dependent
as to be inseparable, in which case, the modification of the appealed judgment in favor of appellant operates as a modification
to Gen. Yoro who did not appeal. In this case, the liabilities of Gen. Yoro and appellant being solidary, the above exception
applies.[34]

WHEREFORE, the Decision of the Court of Appeals dated 25 September 2003 is AFFIRMED with MODIFICATION as to the award of exemplary damages,

which is hereby increased to P100,000.00. Costs against petitioner.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 96182 August 19, 1992

MARCELO FERNANDO, petitioner,


vs.
THE HONORABLE SANDIGANBAYAN, (First Division) and The Office of the Special Prosecutor, respondents.

G.R. No. 96183 August 19, 1992

SALVADOR M. MISON, petitioner,


vs.
SANDIGANBAYAN, OMBUDSMAN and OFFICE OF THE SPECIAL PPROSECUTOR, respondents.

Mario V. Andres for petitioner Fernando.

Bellaflor Angara-Castillo for petitioner Mison.

The Solicitor General for respondents.

GUTIERREZ, JR., J.:

These consolidated petitions question the two orders of the Sandiganbayan dated December 3, 1990 which denied the petitioners' motion to defer
arraignment and set the date for the petitioners' arraignment.

The petitioners are charged with violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019, as amended) for allegedly
having given, through manifest partiality, unwarranted benefits to J.F. Tabajonda Construction. The petitioners allegedly split a contract of over
P5,000,000.00 into eight (8) smaller contracts for the repair and renovation of the Bureau of Customs Building to avoid a public bidding and to favor
J.F. Tabajonda Construction which was awarded four (4) of the eight (8) contracts.

Sometime in September 1987, petitioner Mison, then Bureau of Customs Commissioner, asked President Aquino for authority to approve government
contracts below P2,000,000.00 entered into by the Bureau for urgent repairs and rehabilitation and to facilitate the implementation of projects
envisioned to improve the machinery of the Bureau. The request was referred to the Secretary of Finance for comment. Upon advice of petitioner
Fernando, then Undersecretary of Finance, who stated the requirements regarding authority to approve contracts, the Secretary by 1st Indorsement
dated November 12, 1987 interposed no objection to the grant of the authority.

On November 6, 1987, petitioner Mison created the Committee on Bidding of the Bureau which was tasked to "pass upon all requests for supplies
and materials, equipment, repairs, renovations and constructions; determine the reasonableness of the prices/costs thereof based on quotations
submitted by the bidders/contractors and recommended to the Commissioner the approval of awards to bidders."

On December 3, 1987, Hilario Amotan, Acting Chief, Procurement Office of the Bureau sent out Request for Quotations to eight (8) contractors, one
of which was J.F. Tabajonda Construction, to submit their respective quotations for labor and materials on eight (8) repair works to be done on the
main Customs Building. Of the eight (8) repair works that were to be done, four (4) were awarded to J.F. Tabajonda Construction, one to Lodestone
Construction, Inc., one to V.F. Labao Construction, one to F.S. Evangelista Construction and one to Pick and Shovel, Inc. as their bids were the lowest
from among six (6) submitted quotations. Thereupon, on January 21, 1988, petitioner Mison executed the contracts with the winning bidders. The
eight (8) contracts were forwarded to the Department of Finance for approval pursuant to Executive Order No. 301. The contracts were, however,
returned to the Bureau, Undersecretary Katigbak calling the attention of the Bureau to Section 2 of Executive Order No. 301 stating that "negotiated
contracts for public services and for furnishing supplies, materials or equipment may be entered into by the Department or agency head without
need of prior approval of higher authorities, subject to availability of funds, compliance with the standards or guidelines prescribed in Section 1
hereof, and to the audit jurisdiction of COA."

On February 4, 1988, petitioner Mison wrote petitioner Fernando, stating that the Bureau's contract with J.F. Tabajonda Construction, subject of
Mison's lst Indorsement of December 21, 1987 and approved by Fernando subject to existing rules and regulations, has the nature of a negotiated
contract. Petitioner Mison requested that it be exempt from the provisions of Executive Order No. 164 requiring that a negotiated contract shall be
resorted to only if public bidding would negate the objective for which the project is envisioned.

On February 5, 1988, in his lst Indorsement, petitioner Fernando approved the negotiated contract between the Bureau and J.F. Tabajonda
Construction pursuant to Executive Order No. 301 subject to usual accounting and auditing requirements.

On February 23, 1988, petitioner Mison forwarded to the Secretary of Finance the eight (8) contracts between the Bureau and the contractors
reiterating his request that the contracts, having the nature of a negotiated contract, be exempt from the provisions of Executive Order No. 164.
Furthermore, he requested for immediate approval of said contracts as the need for the repairs and renovation of the building was urgent as parts
of the building have become a hazard to life.

Petitioner Fernando, in his memorandum, recommended the approval of petitioner Mison's request before sending it to the acting Secretary and
the Undersecretary. On the face of the memorandum, Acting Secretary of Finance Victor Macalincag and Undersecretary E. del Fonso stamped their
approval on March 4, 1988. By 2nd Indorsement, petitioner Fernando then returned the eight (8) contracts to the Bureau stating that the Department
has approved them pursuant to Executive Order No. 301 with instructions that the same be subject to usual auditing and accounting requirements.

On April 29, 1988, Leonardo Jose, among others, a former Bureau of Customs employee who was separated by Mison from the service as a result of
the Bureau's reorganization pursuant to Executive Order No. 127, filed a complaint against the petitioners, among others, charging them with
violation of the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019, as amended) for their alleged acts of having split a multi-million peso
contract for the repair and reconstruction of the main customs building into eight (8) smaller contracts to avoid a public bidding and to favor J.F.
Tabajonda Construction.

Acting on said complaint, Teresita Diaz-Baldos, Special Investigation Officer (SIO) of the Office of the Special Prosecutor, conducted a preliminary
investigation and subsequently issued a resolution recommending the prosecution of the petitioners, among others, for violation of Section 3(e) of
Republic Act No. 3019, as amended which reads:

Sec. 3. Corrupt practices of public officers. In addition to acts or omissions of public officers already penalized by existing law,
the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:

xxx xxx xxx

(e) Causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits,
advantage or preference in the discharge of his official, administrative or judicial functions through manifest partiality, evident
bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of offices or government
corporations charged with the grant of licenses or permits or other concessions.

Special Prosecuting Officer (SPO) Carlos Montemayor affirmed the recommendation of SIO Diaz-Baldos after reviewing the resolution.

In the light of precedents that a head of office is not necessarily criminally liable if all he did was rely on the signature of subordinate officials, Deputy
Special Prosecutor Jose de G. Ferrer assigned the case to Prosecutor Wilfredo A. Orencia for a more extended review.
SPO Orencia recommended the dismissal of the complaint on grounds of insufficiency of evidence. His recommendation was approved by Acting
Special Prosecutor Jesus F. Guerrero. The recommendation of the Special Prosecutor was not approved by the Ombudsman who ordered the filing
of the information against the petitioners, among others, with the Sandiganbayan. The case was docketed as Criminal Case No. 14461, to wit:

That on or about the month of April, 1988 and immediately prior and subsequent thereto, in the City of Manila and within the
jurisdiction of this Honorable Court, the above-named accused, all public officers, COMMISSIONER SALVADOR MISON being the
Commissioner of the Bureau of Customs, UNDERSECRETARY MARCELO FERNANDO being the Undersecretary of the Department
of Finance, FRANCISCO WENCESLAO, being the Special Assistant to Commissioner Salvador Mison, and HILARIO AMOTAN, being
the Chief of the Supply Division and General Services of the Bureau of Customs, while in the performance of their official functions,
did then and there wilfully, unlawfully, criminally, and with manifest partiality conspire to grant, as they did in fact conspire in
granting unwarranted benefits, advantage or preference to J.F. Tabajonda Construction, a trading firm with a capitalization of
P50,000.00, by awarding to it contracts involving the renovations and repair of the Bureau of Customs Building at Port Area,
Manila costing P3,287,945.00 through four (4) negotiated contracts which were made possible by making four (4) separate job
orders and splitting the total construction costs in the following manner, to wit:

a) Renovation of the fourth floor level for P585,000.00;

b) Repair of the roofing of the fourth, third and second floors and the Medical and Central Division and toilet for P755,445.00;

c) Renovation of the second floor level for P1,250,000.00; and

d) Painting of all exterior face of the wall of the main Customs Building from the second to the fourth floor for P697,500.00, thus
avoiding the awarding of the contracts through public bidding as required by law; as consequence, the accused freely exercised
their discretion in awarding the aforesaid four (4) negotiated contracts to J.F. Tabajonda Construction, an unqualified, unlicensed
and unregistered construction firm, to the exclusion of other qualified, licensed and registered contractors who may have been
interested in offering their bids had the award been coursed through a public bidding. (G.R. No. 96182, Rollo, pp. 60-62)

Petitioner Mison filed his motion for reconsideration and/or reinvestigation and for deferment of arraignment while petitioner Fernando filed his
own motion for reconsideration.

The motions of the petitioners were heard jointly and the Sandiganbayan thereafter issued an order directing the following:

[T]he Ombudsman look into the sequence of events and the documents in support thereof presented by accused Fernando, to
determine the irregularity of approval by the Office of the Secretary of Finance of this transaction as a whole, as well as the
presentation of documents basis for the resolution of Prosecutor Teresita V. Diaz-Baldos without knowledge of, or notice to, the
accused. This is without prejudice to the determination by the Ombudsman of other items which, in his view, would also be
deserving of his attention to make a final determination as to whether or not the above and other facts in the record indicate the
existence or absence of probable cause against all or some of the accused. (G.R. No. 96182, Rollo, pp. 62-63)

As a result of the order of the Sandiganbayan, evidence was submitted by the petitioners and by the complainant.

After another investigation by SPO Tamayo, he ordered the dismissal of Criminal Case No. 14461 for lack of evidence. He, however, directed that a
preliminary investigation be conducted against petitioner Mison and eight (8) other persons for falsification of public documents involving another
matter.

Tamayo's order was subsequently disapproved by the Ombudsman in his order dated November 22, 1990.

Both petitioners moved for deferment of their arraignment. This was denied by the Sandiganbayan in their questioned December 3, 1990 order. The
Sandiganbayan, thereafter issued its second questioned order setting the arraignment of the petitioners with the pre-trial and trial to follow.

Hence, these, petitions.

From a careful reading of the records of this case, it is evident that there is substantial basis for this Court to rule that there is no prima facie case
against petitioners Fernando and Mison to sustain the prosecution of charges brought against them. It is worthy to note that the Solicitor General,
in his comment, agreed that there is no prima facie case in Criminal Case No. 14461.

We emphasize at this point that the Court has a policy of non-interference in the Ombudsman's exercise of his constitutionally mandated powers.
The overwhelming number of petitions brought to us questioning the filing by the Ombudsman of charges against them are invariably denied due
course. Occasionally, however, there are rare cases when, for various reasons there has been a misapprehension of facts, we step in with our review
power. This is one such case.
It may also be stressed at this point that the approach of the Courts to the quashing of criminal charges necessarily differs from the way a prosecutor
would handle exactly the same question. A court faced with a fifty-fifty proposition of guilt or innocence always decides in favor of innocence. A
prosecutor, conscious that he represents the offended party, may decide to leave the problem to the discretion of the court.

In the habeas corpus case of Juan Ponce Enrile v. Judge Salazar, et al., (186 SCRA 217 [1990]), the situation was more clear-cut, thus prompting the
undersigned ponente to state:

All courts should remember that they form part of an independent judicial system; they do not belong to the prosecution service.
A court should never play into the hands of the prosecution and blindly comply with its erroneous manifestations. Faced with an
information charging a manifestly non-existent crime, the duty of a trial court is to throw it out. Or, at the very least and where
possible, make it conform to the law. (at p. 244)

Under Executive Order No. 301, Commissioner Mison had authority to approve negotiated contracts up to P1,999,999.00. Between P2,000,000.00
and P9,999,999.00, approval may be given by the Secretary and two Undersecretaries. For negotiated contracts P10,000,000.00 and above,
Malacaang approval is required.

The November 22, 1990 order of the Ombudsman (G.R. No. 96182, Rollo, pp. 21-25) denying the petitioners' motion to withdraw the information
filed against them shows that the primary basis for prosecution is the alleged absence of the necessary authority, to wit:

xxx xxx xxx

While the eight (8) contracts have a combined price of over P5,000,000.00, the approval of which is required to be by the
Department Head and two Undersecretaries, it was only Fernando who expressed his approval thereof in his aforementioned
2nd indorsement. In an apparent attempt to cure this deficiency, evidence was presented to show that the said contracts were
approved by the then Acting Secretary of Finance and two Undersecretaries. This attempt is a recognition in itself by the accused
that the said contracts needed the approval not only of the Department head alone. The evidence presented to prove compliance
with the legal requirement is assailed by the complainant as being merely "curative", and this claim appears to be sustained by
the facts that such document only resurfaced during the reinvestigation, and that the supposed approval of the contracts by the
Department head and two undersecretaries is not even mentioned in the 2nd indorsement signed by accused Fernando alone. .
..

The records belie these findings. From the very inception of the plan to repair the decrepit and unsafe offices of the Bureau of Customs, petitioner
Mison sought appropriate authority from the Office of the President, no less, and later from the Department of Finance. The authority was given to
him. Only then did he order the contractors to proceed with the construction.

The findings of Special Prosecutor Tamayo in his Comment dated May 4, 1990 state that:

It is in the light of this procedural flow and documents relative to the administrative and supervision (sic) that the testimony of
Mr. Ramon Malarde bears great significance. On January 20, 1989, he presented certified xerox copies of all available documents
relative to the renovation and repair of the Bureau of Customs building and they exclusively included only the following which
were marked as OPS exhibits, and xerox copies of which are not presented as annexes to this comment, namely:

xxx xxx xxx

Annex H Memorandum of Undersecretary Fernando to Acting Secretary Victor Macalincag, dated March 4, 1988 (OPS #5);

xxx xxx xxx

(Emphasis supplied, Order, pp. 9 and 10)

The February 5, 1988 indorsement of Undersecretary Fernando approving Commissioner Mison's request to go ahead with the proposed contracts
pursuant to Executive Order No. 301 and subject to accounting and auditing rules is not the approval which is essential to its validity and, therefore,
forming part of the entire contract.

What is material to this case is that on March 4, 1988, Acting secretary Macalincag, Undersecretary del Fonso and Undersecretary Fernando approved
the negotiated contracts. Only then were the eight contracts returned to the Bureau. Only then could the execution of the contracts be deemed
complete.

The complainants assert that the March 4, 1988 approval was only curative. In other words, was it only an afterthought to provide evidence during
an investigation?
The complaints of disgruntled employees were filed on April 29, 1988. At that time, the authority had already been given.

The March 4, 1988 approval could not have been curative because the contracts were investigated only in 1989 and 1990. It is not correct that the
document surfaced only during re-investigation. As early as January 20, 1989, or more than one year before the re-investigation, it already formed
part of the records as Annex "H".

Furthermore, the history of the records show that the procedures and transactions involving the repair and renovations were regular and
aboveboard. This is shown by the normal, if not bureaucratic, exchange of communications and indorsements between the Commissioner of Customs
and the Department of Finance.

As earlier stated, Mison asked the President on September 24, 1987 for authority. The President referred the request to the Secretary of Finance. On
November 3, 1987 Undersecretary Fernando prepared a memorandum informing the Secretary of the requirements for approval of contracts entered
into by Mison. The Secretary approved the procedure in the memorandum and then replied to the President's referral.

Another Undersecretary, R.K. Katigbak, advised the Bureau of Customs that the eight (8) contracts are covered by Section 2 of Executive Order 301.
Petitioner Mison answered that what he needed was authority to enter into negotiated contracts.

Considering the urgency and need for repairs, Undersecretary Fernando approved the Bureau's entering into the contracts in his February 5, 1988
indorsement but "subject to the usual accounting and auditing requirement." On March 4, 1988, the needed signing authority was given by the
Secretary and another Undersecretary which, added to Fernando's own signature, constituted the authorization required by the Executive Order.
There is no basis to warrant prosecution under an Executive Order which was never violated.

The challenged November 22, 1990 order likewise states that there was evidence "to confirm the scheme to grant unwarranted benefits due to
partiality in favor of J.F. Tabajonda Construction."

Again, this is not supported by the records.

Quoting from the order of Special Prosecutor Tamayo dated October 19, 1990, "For a benefit to be unwarranted, it should be unjustified. It is devoid
of any consideration. In this regard, it suffices to state that the Commission on Audit certified that all the transactions were post-audited and it found
no ground for suspension/disallowance of the disbursements."

There was no manifest partiality granted to J.F. Tabajonda Construction. Mr. Mison could have validly awarded all eight (8) contracts to Tabajonda.
Instead, he awarded four (4) contracts to other contractors who gave lower bids for specific projects. This, in itself, negates partiality. Not one of the
other construction firms who submitted their respective quotations or bids protested or complained of any partiality in awarding the four (4)
contracts to J.F. Tabajonda Construction or that the contracts should not have been awarded to it but to anyone of the other participating bidders.
It is clear from the determination made by the Customs Committee on Bidding that J.F. Tabajonda Construction offered the lowest bid price. The
Committee based its decision on a finding that the procedures adopted were regular and fair. (Order of Special Prosecutor Tamayo dated October
19, 1990, pp. 23-24, G.R. No. 96183, Rollo, pp. 30-56)

As regards petitioner Fernando, there is no finding by the Ombudsman himself of any special relationship between Fernando and J.F. Tabajonda
Construction. He is completely clear on this count.

Moreover, the absence of any partiality on the part of Mison is further shown by the fact that the complainant was not a losing bidder, a disinterested
party, or a crusading citizen.. Rather, the complainant was a dismissed employee of the Bureau of Customs, bitterly angry because of his summary
dismissal.

The petitioners are charged with violation of Section 3(e) of Republic Act No. 3019, as amended. We held in Alejandro v. People (170 SCRA 400, 405,
407 [1989]);

In order that one may be held criminally liable under said section, the act of the accused which caused undue injury must have
been done with evident bad faith or with gross inexcusable negligence. Gross negligence has been defined as negligence
characterized by the want of even slight care, acting or omitting to act in a situation where there is a duty to act, not inadvertently
but wilfully and intentionally with a conscious indifference to consequences in so far as other persons may be affected.
(Ballentine's Law Dictionary, 3rd Edition, p. 537) It is the omission of that care which even inattentive and thoughtless men never
fail to take on their own property. (Bouvier's Law Dictionary, Vol. I, 3rd Revision, p. 1383)

xxx xxx xxx

Moreover, one of the elements of the crime described in Sec. 3(e) of the Anti-Graft and Corrupt Practices Act is that there should
be undue injury caused to any party. However, in the 30 July 1987 decision of the respondent Sandiganbayan, it is recognized
that there was no proof of damage caused to the employees of the hospital since they were in fact paid on 27 October 1982 their
salaries for the entire third quarter of 1982. (Emphasis supplied)

There is no evidence whatsoever to show that the acts of the petitioners were done with evident bad faith or gross negligence. Neither is there proof
that there was undue injury caused to any party. Who is the party injured? There is nothing in the records to show injury to any party, least of all the
government. The urgent repairs were completed. The Bureau of Customs personnel and the public dealing with them were benefited but nobody
was injured. But most of all, there was no evident partiality.

It appears, therefore, that the questioned orders overlook what this Court enunciated in Salonga v. Cruz Pao (134 SCRA 438, 461-462 [1985]):

xxx xxx xxx

The purpose of a preliminary investigation is to secure the innocent against hasty, malicious and oppressive prosecution, and to
protect him from an open and public accusation of crime, from the trouble, expense and anxiety of a public trial, and also to
protect the state from useless and expensive trials.

xxx xxx xxx

A preliminary investigation serves not only the purposes of the State. More important, it is a part of the guarantees of freedom
and fair play which are birthrights of all who live in our country. It is, therefore, imperative upon the fiscal or the judge as the
case may be, to relieve the accused from the pain of going through a trial once it is ascertained that the evidence is insufficient
to sustain a prima facie case or that no probable cause exists to form a sufficient belief as to the guilt of the accused. Although
there is no general formula or fixed rule for the determination of probable cause since the same must be decided in the light of
the conditions obtaining in given situations and its existence depends to a large degree upon the finding or opinion of the judge
conducting the examination, such a finding should not disregard the facts before the judge nor run counter to the clear dictates
of reason (See La Chemise Lacoste, S.A. v. Fernandez, 129 SCRA 391).

Whether the contract was awarded as a single P5,000,000.00 award or broken up into smaller awards for bidders who could give better services for
specific portions of the project is of no moment. Proper authority for up to P9,999,999.00 was given.

The records, therefore, do not bear out the Information's charge that the breaking up of the construction costs was a deliberate attempt to avoid
awards through public bidding. This is the main thrust of the prosecution. It is not partiality which resulted in unwarranted benefits to any private
party. This is only an incidental result from the main thrust. There is also no charge of over-pricing, poor construction, kickbacks, or any form of
anomaly of this nature. And there is no prima facie showing that one of the several contractors was given unwarranted benefits over the others.

WHEREFORE, the two petitions for certiorari are hereby GRANTED. The petitioners are dropped from the information in Criminal Case No. 14461 for
lack of probable cause.

SO ORDERED.
SECOND DIVISION
[G.R. No. L-8110. June 30, 1956.]
MARINDUQUE IRON MINES AGENTS, INC., Petitioner, vs. THE WORKMENS COMPENSATION COMMISSION, THE HEIRS OF PEDRO MAMADOR and
GERONIMO MA. COLL, Respondents.

DECISION
BENGZON, J.:
The Marinduque Iron Mines Agents Inc. questions by certiorari the order of the Workmens Compensation Commissioner confirming the referees
award of compensation to the heirs of Pedro Mamador for his accidental death.
Only the right to compensation is disputed; chan roblesvirtualawlibrarynot the amount.
It appears, says the award, that on August 23, 1951, at 6:chanroblesvirtuallawlibrary00 a.m. in Bo. Sumangga, Mogpog, Marinduque, the deceased
Mamador together with other laborers of the Respondent-corporation, (Marinduque Iron Mines Agents Inc.) boarded a truck belonging to the latter,
which was then driven by one Procopio Macunat, also employed by the corporation, and on its way to their place of work at the mine camp at
Talantunan, while trying to overtake another truck on the company road, it turned over and hit a coconut tree, resulting in the death of said Mamador
and injury to the others.
Procopio Macunat was prosecuted, convicted and sentenced to indemnify the heirs of the deceased. (Criminal Case No. 1491). He has paid nothing
however, to the latter.
In his first proposition Petitioner challenges the validity of the proceedings before the Commission, asserting it had not been given the opportunity
to cross-examine the opposing witnesses. According to Respondents.
The records show that pursuant to a request made by this Commission on March 28, 1953 to investigate the above-entitled case, the Public Defender
of Boac, Marinduque, notified Respondent Geronimo Ma. Coll and the general manager of the Respondent company, Mr. Eric Lenze, to appear before
him in an investigation, first on May 12, 1953, when neither of them appeared, and the second on May 29, 1953, when only Mr. Geronimo Ma. Coll.
appeared. The sworn testimony of Mr. Ma. Coll was then taken down in a question and answer method. On August 18, 1953, thru Referee Ramon
Villaflor, this Commission wrote the Respondent company to comment on the enclosed copy of the sworn declaration of Ma. Coll.
The Respondent company, thru its Vice President, denied its liability under the Workmens Compensation Act, as amended. In an investigation
conducted on February 8, 1954 by the undersigned referee, the Respondentcompany thru Mr. Lenze who was assisted by counsel, was allowed to
examine the records of the case including the sworn declaration of Ma. Coll and was given all the opportunity to rebut the same by additional
evidence.
In our opinion, Petitioners grievance does not rest on any sound basis, because it was given notice, and therefore had the chance, to examine (and
cross-examine) the witnesses against it. The statute even permits the Commissioner (or his referee) to take testimony without notice (section 48 Act
3428 as amended) provided of course such ex parte evidence is reduced to writing, and the adverse party is afforded opportunity to examine and
rebut the same which was done in this instance.
Anyway we are not shown how its failure to cross-examine the witnesses prejudiced the Petitioners position.
In its second proposition, Petitioner maintains that this claim is barred by section 6 of the Workmens Compensation Law, because (a) Macunat was
prosecuted and required to indemnify the heirs of the deceased and (b) an amicable settlement was concluded between said heirs and Macunat.
Section 6 provides as follows:chanroblesvirtuallawlibrary
Sec. 6. Liability of third parties. In case an employee suffers an injury for which compensation is due under this Act by any other person besides
his employer, it shall be optional with such injured employee either to claim compensation from his employer, under this Act, or sue such other
person for damages, in accordance with law; chan roblesvirtualawlibraryand in case compensation is claimed and allowed in accordance with this
Act, the employer who paid such compensation or was found liable to pay the same, shall succeed the injured employee to the right of recovering
from such person what he paid:chanroblesvirtuallawlibrary Provided, That in case the employer recovers from such third person damages in excess
of those paid or allowed under this Act, such excess shall be delivered to the injured employee or any other person entitled thereto, after deduction
of the expenses of the employer and the costs of the proceedings. The sum paid by the employer for compensation or the amount of compensation
to which the employee or his dependents are entitled, shall not be admissible as evidence in any damage suit or action.
It is the Petitioners contention that Criminal Case No. 1491 and its outcome constituted an election by the employee (or his heirs) to sue the third
person, such election having the effect of releasing the employer. However, Criminal Case No. 1491 was not a suit for damages against the third
person, it being alleged, without contradiction that the heirs did not intervene therein and have not so far received the indemnity ordered by the
court. At any rate, we have already decided in Nava vs. Inchausti Co. 1 that the indemnity granted the heirs in a criminal prosecution of the other
person does not affect the liability of the employer to pay compensation. 2
As to the alleged amicable settlement, it consists of an affidavit wherein, for the sum of 150 pesos, Mamadors widow promised to forgive Macunat
for the wrong committed and not to bring him before the authorities for prosecution. Upon making such promise Petitioner argues she elected
one of the remedies, (against the third person) and is barred from the other remedy (against the employer). The contention may not be sustained,
inasmuch as all the widow promised was to forego the offenders criminal prosecution. Note further that a question may be raised whether she could
bind the other heirs of the deceased.
The most important aspect of this appeal, is the effect of the deceaseds having violated the employers prohibition against laborers riding the haulage
trucks. Petitioner claims such violation was the laborers notorious negligence which, under the law, precludes recovery. The Commission has not
declared that the prohibition was known to Mamador. Yet the employer does not point out in the record evidence to that effect. Supposing Mamador
knew the prohibition, said the referee, can we truthfully say that he boarded the fatal truck with full apprehension of the existence of the danger,
if any at all, that an ordinary prudent man would try to avoid? I do not believe so, and even in the presence of doubt, the same must be resolved in
his favor. Unless of course, we can attribute to him a desire to end his life. Nowhere in the records of this case can we find the slightest insinuation
of that desire.
There is no doubt that mere riding on haulage truck or stealing a ride thereon is not negligence, ordinarily. It couldnt be, because transportation by
truck is not dangerous per se. It is argued that there was notorious negligence in this particular instance because there was the employers prohibition.
Does violation of this order constitute negligence? Many courts hold that violation of a statute or ordinance constitutes negligence per se. Others
consider the circumstances.
However there is practical unanimity in the proposition that violation of a rule promulgated by a Commission or board is not negligence per se; chan
roblesvirtualawlibrarybut it may be evidence of negligence. (C.J.S., Vol. 65, p. 427.)
This order of the employer (prohibition rather) couldnt be of a greater obligation than the rule of a Commission or board. And the referee correctly
considered this violation as possible evidence of negligence; chan roblesvirtualawlibrarybut it declared that under the circumstance, the laborer
could not be declared to have acted with negligence. Correctly, it is believed, since the prohibition had nothing to do with personal safety of the
riders.
Such finding is virtually a finding of fact which we may not overrule in this certiorari proceeding.
Nevertheless, even granting there was negligence, it surely was not notorious negligence, which we have interpreted to mean the same thing as
gross negligence 3 implying conscious indifference to consequences pursuing a course of conduct which would naturally and probably result
in injury utter disregard of consequences. (38 Am. Jur., 691) Getting or accepting a free ride on the companys haulage truck couldnt be gross
negligence, because as the referee found, no danger or risk was apparent.
There being no other material point raised in the petition for review, the award of compensation is hereby affirmed, with costs against Petitioner.
Padilla, Bautista Angelo, Concepcion, Reyes, J.B.L., and Endencia, JJ., concur.
Reyes, A., J., concurs in the result.
Republic of the Philippines
SUPREME COURT
Manila

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 LI, petitioner,


vs.
COURT OF APPEALS and LOURDES VALENZUELA, respondents.

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. 64-65, 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."23 It 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 non-official 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 non-
official 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.
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. L-44264 September 19, 1988

HEDY GAN y YU, petitioner,


vs.
THE HONORABLE COURT OF APPEALS and the PEOPLE OF THE PHILIPPINES, respondents.

Pacis, Baluyot, Reyes & De Leon for petitioner.

The Solicitor General for respondents.

FERNAN, C.J.:

Petitioner Hedy Gan was convicted of the crime of Homicide thru Reckless Imprudence in Criminal Case No. 10201 of the then Court of First Instance
of Manila, Branch XXII presided by Judge Federico C. Alikpala. She was sentenced to an indeterminate penalty of four (4) months and one (1) day
of arresto mayor as minimum and two (2) years, four (4) months and one (1) day of prision correccional as maximum and was made to indemnify the
heirs of the victim the sum of P12,000.00 without any subsidiary imprisonment in case of insolvency and to pay the costs. On appeal, the trial court's
decision was modified and petitioner was convicted only of Homicide thru Simple Imprudence. Still unsatisfied with the decision of the Court of
Appeals,1 petitioner has come to this Court for a complete reversal of the judgment below.

The facts of the case as found by the appellate court are as follows:

In the morning of July 4, 1972 at about 8:00 o'clock, the accused Hedy Gan was driving a Toyota car along North Bay Boulevard,
Tondo, Manila. While in front of house no. 694 of North Bay Boulevard, there were two vehicles, a truck and a jeepney parked
on one side of the road, one following the other about two to three meters from each other. As the car driven by the accused
approached the place where the two vehicles were parked, there was a vehicle coming from the opposite direction, followed by
another which tried to overtake and bypass the one in front of it and thereby encroached the lane of the car driven by the
accused. To avoid a head-on collision with the oncoming vehicle, the defendant swerved to the right and as a consequence, the
front bumper of the Toyota Crown Sedan hit an old man who was about to cross the boulevard from south to north, pinning him
against the rear of the parked jeepney. The force of the impact caused the parked jeepney to move forward hitting the rear of
the parts truck ahead of it. The pedestrian was injured, the Toyota Sedan was damaged on its front, the jeep suffered damages
on its rear and front paints, and the truck sustained scratches at the wooden portion of its rear. The body of the old man who
was later Identified as Isidoro Casino was immediately brought to the Jose Reyes Memorial Hospital but was (pronounced) dead
on arrival.2

An information for Homicide thru Reckless Imprudence was filed against petitioner in view of the above incident. She entered a plea of not guilty
upon arraignment and the case was set for trial.
Meanwhile, petitioner sought and was granted a re-investigation by the City Fiscal, as a result of which the trial fiscal moved for the dismissal of the
case against petitioner during the resumption of hearing on September 7, 1972. The grounds cited therefor were lack of interest on the part of the
complaining witness to prosecute the case as evidenced by an affidavit of desistance submitted to the trial court and lack of eyewitness to sustain
the charge.

The motion to dismiss filed by the fiscal was never resolved. The Court instead ordered the prosecution to present its evidence. After the prosecution
rested its case, the petitioner filed a motion to dismiss the case on the ground of insufficiency of evidence.

On December 22, 1972, the trial court rendered judgment finding petitioner guilty beyond reasonable doubt of the of- offense charged.

Petitioner appealed to the Court of Appeals in CA-G.R. No. 14472-CR. On May 3, 1976, the Court of Appeals rendered a decision, the dispositive
portion of which reads as follows:

Wherefore, as modified, the accused Hedy Gan is guilty beyond reasonable doubt of the crime of homicide thru simple
imprudence and, pursuant to paragraph 2, Article 365 of the Revised Penal Code, she is hereby sentenced to the indeterminate
penalty of three (3) months and eleven (11) days of arresto mayor and to indemnify the heirs of Isidoro Casino in the sum of
Twelve Thousand Pesos (Pl2,000.00) without, however, any subsidiary imprisonment in case of insolvency, and to pay the costs. 3

Petitioner now appeals to this Court on the following assignments of errors:

The Court of Appeals erred in holding that when the petitioner saw a car travelling directly towards her, she should have stepped
on the brakes immediately or in swerving her vehicle to the right should have also stepped on the brakes or lessened her speed,
to avoid the death of a pedestrian.

II

The Court of Appeals erred in convicting the petitioner of the crime of Homicide thru Simple Imprudence.

III

The Court of Appeals erred in adjudging the petitioner liable to indemnify the deceased in the sum of P12,000.00. 4

We reverse.

The test for determining whether or not a person is negligent in doing an act whereby injury or damage results to the person or property of another
is this: Would a prudent man in the position of the person to whom negligence is attributed foresee harm to the person injured as a reasonable
consequence of the course about to be pursued? If so, the law imposes the duty oil the doer to take precaution against its mischievous results and
the failure to do so constitutes negligence. 5

A corollary rule is what is known in the law as the emergency rule. "Under that rule, one who suddenly finds himself in a place of danger, and is
required to act without time to consider the best means that may be adopted to avoid the impending danger, is not guilty of negligence, if he fails to
adopt what subsequently and upon reflection may appear to have been a better method, unless the emergency in which he finds himself is brought
about by his own negligence." 6

Applying the above test to the case at bar, we find the petitioner not guilty of the crime of Simple Imprudence resulting in Homicide.

The appellate court in finding the petitioner guilty said:

The accused should have stepped on the brakes when she saw the car going in the opposite direction followed by another which
overtook the first by passing towards its left. She should not only have swerved the car she was driving to the right but should
have also tried to stop or lessen her speed so that she would not bump into the pedestrian who was crossing at the time but also
the jeepney which was then parked along the street. 7

The course of action suggested by the appellate court would seem reasonable were it not for the fact that such suggestion did not take into account
the amount of time afforded petitioner to react to the situation she was in. For it is undeniable that the suggested course of action presupposes
sufficient time for appellant to analyze the situation confronting her and to ponder on which of the different courses of action would result in the
least possible harm to herself and to others.
Due to the lack of eyewitnesses, no evidence was presented by the prosecution with respect to the relative distances of petitioner to the parked
jeepney and the oncoming overtaking vehicle that would tend to prove that petitioner did have sufficient time to reflect on the consequences of her
instant decision to swerve her car to the light without stepping on her brakes. In fact, the evidence presented by the prosecution on this point is the
petitioner's statement to the police 8 stating::

And masasabi ko lang ho umiwas ho ako sa isang sasakyan na biglang nagovertake sa sasakyan na aking kasalubong kung kaya ay
aking kinabig sa kanan ang akin kotse subalit siya naman biglangpagtawid ng tao o victim at hindi ko na ho naiwasan at ako ay
wala ng magawa . Iyan ho ang buong pangyayari nang nasabing aksidente.9 (Emphasis supplied)

The prosecution having presented this exhibit as its own evidence, we cannot but deem its veracity to have been admitted by it. Thus, under the
circumstances narrated by petitioner, we find that the appellate court is asking too much from a mere mortal like the petitioner who in the blink of
an eye had to exercise her best judgment to extricate herself from a difficult and dangerous situation caused by the driver of the overtaking vehicle.
Petitioner certainly could not be expected to act with all the coolness of a person under normal conditions. 10 The danger confronting petitioner was
real and imminent, threatening her very existence. She had no opportunity for rational thinking but only enough time to heed the very powerfull
instinct of self-preservation.

Also, the respondent court itself pronounced that the petitioner was driving her car within the legal limits. We therefore rule that the "emergency
rule" enunciated above applies with full force to the case at bar and consequently absolve petitioner from any criminal negligence in connection with
the incident under consideration.

We further set aside the award of damages to the heirs of the victim, who by executing a release of the claim due them, had effectively and clearly
waived their right thereto.

WHEREFORE, judgment is hereby rendered acquitting petitioner HEDY GAN y YU of the crime of Homicide thru Simple Imprudence. She is no longer
liable for the P12,000.00 civil indemnity awarded by the appellate court to the heirs of the victim.

SO ORDERED.
FIRST DIVISION

G.R. No. 152040 March 31, 2006

MARIKINA AUTO LINE TRANSPORT CORPORATION and FREDDIE L. SUELTO, Petitioners,


vs.
PEOPLE OF THE PHILIPPINES and ERLINDA V. VALDELLON, Respondents.

DECISION

CALLEJO, SR., J.:

Before the Court is a Petition for Review on Certiorari of the Decision1 of the Court of Appeals (CA) in CA-G.R. CR No. 16739 affirming the Joint
Decision of the Regional Trial Court (RTC) in Criminal Case No. Q-93-42629 and Civil Case No. Q-93-16051, where Freddie Suelto was convicted of
reckless imprudence resulting in damages to property.

Erlinda V. Valdellon is the owner of a two-door commercial apartment located at No. 31 Kamias Road, Quezon City. The Marikina Auto Line Transport
Corporation (MALTC) is the owner-operator of a passenger bus with Plate Number NCV-849. Suelto, its employee, was assigned as the regular driver
of the bus.2

At around 2:00 p.m. on October 3, 1992, Suelto was driving the aforementioned passenger bus along Kamias Road, Kamuning, Quezon City, going
towards Epifanio de los Santos Avenue (EDSA). The bus suddenly swerved to the right and struck the terrace of the commercial apartment owned by
Valdellon located along Kamuning Road.3 Upon Valdellons request, the court ordered Sergio Pontiveros, the Senior Building Inspection Officer of the
City Engineers Office, to inspect the damaged terrace. Pontiveros submitted a report enumerating and describing the damages:

(1) The front exterior and the right side concrete columns of the covered terrace were vertically displaced from its original position causing
exposure of the vertical reinforcement.

(2) The beams supporting the roof and parapet walls are found with cracks on top of the displaced columns.

(3) The 6 CHB walls at [the] right side of the covered terrace were found with cracks caused by this accident.

(4) The front iron grills and concrete balusters were found totally damaged and the later [sic] beyond repair. 4

He recommended that since the structural members made of concrete had been displaced, the terrace would have to be demolished "to keep its
monolithicness, and to insure the safety and stability of the building."5

Photographs6 of the damaged terrace were taken. Valdellon commissioned Engr. Jesus R. Regal, Jr. to estimate the cost of repairs, inclusive of labor
and painting, and the latter pegged the cost at P171,088.46.7
In a letter dated October 19, 1992 addressed to the bus company and Suelto, Valdellon demanded payment of P148,440.00, within 10 days from
receipt thereof, to cover the cost of the damage to the terrace. 8 The bus company and Suelto offered a P30,000.00 settlement which Valdellon
refused.9

Valdellon filed a criminal complaint for reckless imprudence resulting in damage to property against Suelto. After the requisite preliminary
investigation, an Information was filed with the RTC of Quezon City. The accusatory portion of the Information reads:

That on or about the 3rd day of October 1992, in Quezon City, Philippines, the said accused, being then the driver and/or person in charge of a
Marikina Auto Line bus bearing Plate No. NVC-849, did then and there unlawfully, and feloniously drive, manage, and operate the same along Kamias
Road, in said City, in a careless, reckless, negligent, and imprudent manner, by then and there making the said vehicle run at a speed greater than
was reasonable and proper without taking the necessary precaution to avoid accident to person/s and damage to property, and considering the
condition of the traffic at said place at the time, causing as a consequence of his said carelessness, negligence, imprudence and lack of precaution,
the said vehicle so driven, managed and operated by him to hit and bump, as in fact it hit and bump a commercial apartment belonging to ERLINDA
V. VALDELLON located at No. 31 Kamias Road, this City, thereby causing damages to said apartment in the total amount of P171,088.46, Philippine
Currency, to her damage and prejudice in the total amount aforementioned.

CONTRARY TO LAW.10

Valdellon also filed a separate civil complaint against Suelto and the bus company for damages. She prayed that after due proceedings, judgment be
rendered in her favor, thus:

WHEREFORE, it is respectfully prayed of this Honorable Court to issue a writ of preliminary attachment against the defendants upon approval of
plaintiffs bond, and after trial on the merits, to render a decision in favor of the plaintiff, ordering the defendants, jointly and severally, to pay

a) the total sum of P171,088.46 constituting the expenses for the repair of the damaged apartment of plaintiff, with interests to be charged
thereon at the legal rate from the date of the formal demand until the whole obligation is fully paid;

b) the sum of not less than P20,000.00 each as compensatory and exemplary damages;

c) the sum of P20,000.00 as attorneys fees and the sum of P1,000.00 for each appearance of plaintiffs counsel; and costs of suit;

PLAINTIFF further prays for such other reliefs as may be just and equitable in the premises. 11

A joint trial of the two cases was ordered by the trial court.12

The trial court conducted an ocular inspection of the damaged terrace, where defendants offered to have it repaired and restored to its original
state. Valdellon, however, disagreed because she wanted the building demolished to give way for the construction of a new one. 13

During the trial, Valdellon testified on the damage caused to the terrace of her apartment, and, in support thereof, adduced in evidence a receipt
for P35,000.00, dated October 20, 1993, issued by the BB Construction and Steel Fabricator for "carpentry, masonry, welding job and electrical
[work]."14

Pontiveros of the Office of the City Engineer testified that there was a need to change the column of the terrace, but that the building should also be
demolished because "if concrete is destroyed, [one] cannot have it restored to its original position." 15

Engr. Jesus Regal, Jr., the proprietor of the SSP Construction, declared that he inspected the terrace and estimated the cost of repairs, including labor,
at P171,088.46.

Suelto testified that at 2:00 p.m. on October 3, 1992, he was driving the bus on its way to Ayala Avenue, Makati, Metro Manila. When he reached
the corner of K-H Street at Kamias Road, Quezon City, a passenger jeepney suddenly crossed from EDSA going to V. Luna and swerved to the lane
occupied by the bus. Suelto had to swerve the bus to the right upon which it hit the side front of the terrace of Valdellons two-door
apartment.16 Based on his estimate, the cost to the damage on the terrace of the apartment amounted to P40,000.00.17 On cross-examination, Suelto
declared that he saw the passenger jeepney when it was a meter away from the bus. Before then, he had seen some passenger jeepneys on the right
trying to overtake one another.18

Architect Arnulfo Galapate testified that the cost of the repair of the damaged terrace amounted to P55,000.00.19

On April 28, 1994, the trial court rendered judgment finding Suelto guilty beyond reasonable doubt of reckless imprudence resulting in damage to
property, and ordered MALTC and Suelto to pay, jointly and severally, P150,000.00 to Valdellon, by way of actual and compensatory damages, as
well as attorneys fees and costs of suit. The fallo of the decision reads:
WHEREFORE, finding the accused FREDDIE SUELTO Y LIWAG guilty beyond reasonable doubt of the crime of Reckless Imprudence Resulting in Damage
to Property, said accused is hereby sentenced to suffer imprisonment of ONE (1) YEAR.

With respect to the civil liability, judgment is hereby rendered in favor of plaintiff Erlinda Valdellon and against defendant Marikina Auto Line
Transport Corporation and accused Freddie Suelto, where both are ordered, jointly and severally, to pay plaintiff:

a. the sum of P150,000.00, as reasonable compensation sustained by plaintiff for her damaged apartment;

b. the sum of P20,000.00, as compensatory and exemplary damages;

c. the sum of P20,000.00, as attorneys fees; and,

d. the costs of suit.

SO ORDERED.20

MALTC and Suelto, now appellants, appealed the decision to the CA, alleging that the prosecution failed to prove Sueltos guilt beyond reasonable
doubt. They averred that the prosecution merely relied on Valdellon, who testified only on the damage caused to the terrace of her apartment which
appellants also alleged was excessive. Appellant Suelto further alleged that he should be acquitted in the criminal case for the prosecutions failure
to prove his guilt beyond reasonable doubt. He maintained that, in an emergency case, he was not, in law, negligent. Even if the appellate court
affirmed his conviction, the penalty of imprisonment imposed on him by the trial court is contrary to law.

In its Brief for the People of the Philippines, the Office of the Solicitor General (OSG) submitted that the appealed decision should be affirmed with
modification. On Sueltos claim that the prosecution failed to prove his guilt for the crime of reckless imprudence resulting in damage to property,
the OSG contended that, applying the principle of res ipsa loquitur, the prosecution was able to prove that he drove the bus with negligence and
recklessness. The OSG averred that the prosecution was able to prove that Sueltos act of swerving the bus to the right was the cause of damage to
the terrace of Valdellons apartment, and in the absence of an explanation to the contrary, the accident was evidently due to appellants want of
care. Consequently, the OSG posited, the burden was on the appellant to prove that, in swerving the bus to the right, he acted on an emergency, and
failed to discharge this burden. However, the OSG averred that the trial court erred in sentencing appellant to a straight penalty of one year, and
recommended a penalty of fine.

On June 20, 2000, the CA rendered judgment affirming the decision of the trial court, but the award for actual damages was reduced to P100,000.00.
The fallo of the decision reads:

WHEREFORE, premises considered, the decision dated April 28, 1994, rendered by the court a quo is AFFIRMED with the modification that the sum
of P150,000.00 as compensation sustained by the plaintiff-appellee for her damaged apartment be reduced to P100,000.00 without pronouncement
as to costs.

SO ORDERED.21

Appellants filed a Motion for Reconsideration, but the CA denied the same.22

MALTC and Suelto, now petitioners, filed the instant petition reiterating its submissions in the CA: (a) the prosecution failed to prove the crime
charged against petitioner Suelto; (b) the prosecution failed to adduce evidence to prove that respondent suffered actual damages in the amount
of P100,000.00; and (c) the trial court erred in sentencing petitioner Suelto to one (1) year prison term.

On the first issue, petitioners aver that the prosecution was mandated to prove that petitioner Suelto acted with recklessness in swerving the bus to
the right thereby hitting the terrace of private respondents apartment. However, the prosecution failed to discharge its burden. On the other hand,
petitioner Suelto was able to prove that he acted in an emergency when a passenger jeepney coming from EDSA towards the direction of the bus
overtook another vehicle and, in the process, intruded into the lane of the bus.

On the second issue, petitioners insist that private respondent was able to prove only the amount of P35,000.00 by way of actual damages; hence,
the award of P100,000.00 is barren of factual basis.

On the third issue, petitioner Suelto posits that the straight penalty of imprisonment recommended by the trial court, and affirmed by the CA, is
contrary to Article 365 of the Revised Penal Code.

The petition is partially granted.


On the first issue, we find and so resolve that respondent People of the Philippines was able to prove beyond reasonable doubt that petitioner Suelto
swerved the bus to the right with recklessness, thereby causing damage to the terrace of private respondents apartment. Although she did not
testify to seeing the incident as it happened, petitioner Suelto himself admitted this in his answer to the complaint in Civil Case No. Q-93-16051, and
when he testified in the trial court.

Suelto narrated that he suddenly swerved the bus to the right of the road causing it to hit the column of the terrace of private respondent. Petitioners
were burdened to prove that the damage to the terrace of private respondent was not the fault of petitioner Suelto.

We have reviewed the evidence on record and find that, as ruled by the trial court and the appellate court, petitioners failed to prove that petitioner
acted on an emergency caused by the sudden intrusion of a passenger jeepney into the lane of the bus he was driving.

It was the burden of petitioners herein to prove petitioner Sueltos defense that he acted on an emergency, that is, he had to swerve the bus to the
right to avoid colliding with a passenger jeep coming from EDSA that had overtaken another vehicle and intruded into the lane of the bus. The sudden
emergency rule was enunciated by this Court in Gan v. Court of Appeals,23 thus:

[O]ne who suddenly finds himself in a place of danger, and is required to act without time to consider the best means that may be adopted to avoid
the impending danger, is not guilty of negligence if he fails to adopt what subsequently and upon reflection may appear to have been a better method
unless the emergency in which he finds himself is brought about by his own negligence.

Under Section 37 of Republic Act No. 4136, as amended, otherwise known as the Land Transportation and Traffic Code, motorists are mandated to
drive and operate vehicles on the right side of the road or highway:

SEC. 37. Driving on right side of highway. Unless a different course of action is required in the interest of the safety and the security of life, person
or property, or because of unreasonable difficulty of operation in compliance herewith, every person operating a motor vehicle or an animal-drawn
vehicle on a highway shall pass to the right when meeting persons or vehicles coming toward him, and to the left when overtaking persons or vehicles
going the same direction, and when turning to the left in going from one highway to another, every vehicle shall be conducted to the right of the
center of the intersection of the highway.

Section 35 of the law provides, thus:

Sec. 35. Restriction as to speed.(a) Any person driving a motor vehicle on a highway shall drive the same at a careful and prudent speed, not greater
nor less than is reasonable and proper, having due regard for the traffic, the width of the highway, and of any other condition then and there existing;
and no person shall drive any motor vehicle upon a highway at such a speed as to endanger the life, limb and property of any person, nor at a speed
greater than will permit him to bring the vehicle to a stop within the assured clear distance ahead (emphasis supplied).

In relation thereto, Article 2185 of the New 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 mishap, he was violating any traffic regulation." By his own admission, petitioner Suelto violated
the Land Transportation and Traffic Code when he suddenly swerved the bus to the right, thereby causing damage to the property of private
respondent.

However, the trial court correctly rejected petitioner Sueltos defense, in light of his contradictory testimony vis--vis his Counter-Affidavit submitted
during the preliminary investigation:

It is clear from the photographs submitted by the prosecution (Exhs. C, D, G, H & I) that the commercial apartment of Dr. Valdellon sustained heavy
damage caused by the bus being driven by Suelto. "It seems highly improbable that the said damages were not caused by a strong impact. And, it is
quite reasonable to conclude that, at the time of the impact, the bus was traveling at a high speed when Suelto tried to avoid the passenger jeepney."
Such a conclusion finds support in the decision of the Supreme Court in People vs. Ison, 173 SCRA 118, where the Court stated that "physical evidence
is of the highest order. It speaks more eloquently than a hundred witnesses." The pictures submitted do not lie, having been taken immediately after
the incident. The damages could not have been caused except by a speeding bus. Had the accused not been speeding, he could have easily reduced
his speed and come to a full stop when he noticed the jeep. Were he more prudent in driving, he could have avoided the incident or even if he could
not avoid the incident, the damages would have been less severe.

In addition to this, the accused has made conflicting statements in his counter-affidavit and his testimony in court. In the former, he stated that the
reason why he swerved to the right was because he wanted to avoid the passenger jeepney in front of him that made a sudden stop. But, in his
testimony in court, he said that it was to avoid a passenger jeepney coming from EDSA that was overtaking by occupying his lane. Such glaring
inconsistencies on material points render the testimony of the witness doubtful and shatter his credibility. Furthermore, the variance between
testimony and prior statements renders the witness unreliable. Such inconsistency results in the loss in the credibility of the witness and his testimony
as to his prudence and diligence.
As already maintained and concluded, the severe damages sustained could not have resulted had the accused acted as a reasonable and prudent
man would. The accused was not diligent as he claims to be. What is more probable is that the accused had to swerve to the right and hit the
commercial apartment of the plaintiff because he could not make a full stop as he was driving too fast in a usually crowded street.24

Moreover, if the claim of petitioners were true, they should have filed a third-party complaint against the driver of the offending passenger jeepney
and the owner/operator thereof.

Petitioner Sueltos reliance on the sudden emergency rule to escape conviction for the crime charged and his civil liabilities based thereon is, thus,
futile.

On the second issue, we agree with the contention of petitioners that respondents failed to prove that the damages to the terrace caused by the
incident amounted to P100,000.00. The only evidence adduced by respondents to prove actual damages claimed by private respondent were the
summary computation of damage made by Engr. Jesus R. Regal, Jr. amounting to P171,088.46 and the receipt issued by the BB Construction and
Steel Fabricator to private respondent for P35,000.00 representing cost for carpentry works, masonry, welding, and electrical works. Respondents
failed to present Regal to testify on his estimation. In its five-page decision, the trial court awarded P150,000.00 as actual damages to private
respondent but failed to state the factual basis for such award. Indeed, the trial court merely declared in the decretal portion of its decision that the
"sum of P150,000.00 as reasonable compensation sustained by plaintiff for her damaged apartment." The appellate court, for its part, failed to
explain how it arrived at the amount of P100,000.00 in its three-page decision. Thus, the appellate court merely declared:

With respect to the civil liability of the appellants, they contend that there was no urgent necessity to completely demolish the apartment in question
considering the nature of the damages sustained as a result of the accident. Consequently, appellants continue, the award of P150,000.00 as
compensation sustained by the plaintiff-appellee for her damaged apartment is an unconscionable amount.

The damaged portions of the apartment in question are not disputed.

Considering the aforesaid damages which are the direct result of the accident, the reasonable, and adequate compensation due is hereby fixed
at P100,000.00.25

Under Article 2199 of the New Civil Code, actual damages include all the natural and probable consequences of the act or omission complained of,
classified as one for the loss of what a person already possesses (dao emergente) and the other, for the failure to receive, as a benefit, that which
would have pertained to him (lucro cesante). As expostulated by the Court in PNOC Shipping and Transport Corporation v. Court of Appeals:26

Under Article 2199 of the Civil Code, actual or compensatory damages are those awarded in satisfaction of, or in recompense for, loss or injury
sustained. They proceed from a sense of natural justice and are designed to repair the wrong that has been done, to compensate for the injury
inflicted and not to impose a penalty. In actions based on torts or quasi-delicts, actual damages include all the natural and probable consequences
of the act or omission complained of. There are two kinds of actual or compensatory damages: one is the loss of what a person already possesses
(dao emergente), and the other is the failure to receive as a benefit that which would have pertained to him (lucro cesante). 27

The burden of proof is on the party who would be defeated if no evidence would be presented on either side. The burden is to establish ones case
by a preponderance of evidence which means that the evidence, as a whole, adduced by one side, is superior to that of the other. Actual damages
are not presumed. The claimant must prove the actual amount of loss with a reasonable degree of certainty premised upon competent proof and on
the best evidence obtainable. Specific facts that could afford a basis for measuring whatever compensatory or actual damages are borne must be
pointed out. Actual damages cannot be anchored on mere surmises, speculations or conjectures. As the Court declared:

As stated at the outset, to enable an injured party to recover actual or compensatory damages, he is required to prove the actual amount of loss with
reasonable degree of certainty premised upon competent proof and on the best evidence available. The burden of proof is on the party who would
be defeated if no evidence would be presented on either side. He must establish his case by a preponderance of evidence which means that the
evidence, as a whole, adduced by one side is superior to that of the other. In other words, damages cannot be presumed and courts, in making an
award, must point out specific facts that could afford a basis for measuring whatever compensatory or actual damages are borne.28

The Court further declared that "where goods are destroyed by the wrongful act of defendant, the plaintiff is entitled to their value at the time of
the destruction, that is, normally, the sum of money which he would have to pay in the market for identical or essentially similar goods, plus in a
proper case, damages for the loss of the use during the period before replacement.29

While claimants bare testimonial assertions in support of their claims for damages should not be discarded altogether, however, the same should
be admitted with extreme caution. Their testimonies should be viewed in light of claimants self-interest, hence, should not be taken as gospel truth.
Such assertion should be buttressed by independent evidence. In the language of the Court:

For this reason, Del Rosarios claim that private respondent incurred losses in the total amount of P6,438,048.00 should be admitted with extreme
caution considering that, because it was a bare assertion, it should be supported by independent evidence. Moreover, because he was the owner of
private respondent corporation whatever testimony he would give with regard to the value of the lost vessel, its equipment and cargoes should be
viewed in the light of his self-interest therein. We agree with the Court of Appeals that his testimony as to the equipment installed and the cargoes
loaded on the vessel should be given credence considering his familiarity thereto. However, we do not subscribe to the conclusion that his valuation
of such equipment, cargo, and the vessel itself should be accepted as gospel truth. We must, therefore, examine the documentary evidence presented
to support Del Rosarios claim as regards the amount of losses.30

An estimate of the damage cost will not suffice:

Private respondents failed to adduce adequate and competent proof of the pecuniary loss they actually incurred. It is not enough that the damage
be capable of proof but must be actually proved with a reasonable degree of certainty, pointing out specific facts that afford a basis for measuring
whatever compensatory damages are borne. Private respondents merely sustained an estimated amount needed for the repair of the roof of their
subject building. What is more, whether the necessary repairs were caused only by petitioners alleged negligence in the maintenance of its school
building, or included the ordinary wear and tear of the house itself, is an essential question that remains indeterminable.31

We note, however, that petitioners adduced evidence that, in their view, the cost of the damage to the terrace of private respondent would amount
to P55,000.00.32 Accordingly, private respondent is entitled to P55,000.00 actual damages.

We also agree with petitioner Sueltos contention that the trial court erred in sentencing him to suffer a straight penalty of one (1) year. This is so
because under the third paragraph of Article 365 of the Revised Penal Code, the offender must be sentenced to pay a fine when the execution of the
act shall have only resulted in damage to property. The said provision reads in full:

ART. 365. Imprudence and negligence. Any person who, by reckless imprudence, shall commit any act which, had it been intentional, would
constitute a grave felony, shall suffer the penalty of arresto mayor in its maximum period, to prision correccional in its medium period; if it would
have constituted a less grave felony, the penalty of arresto mayor in its minimum and medium periods shall be imposed; if it would have constituted
a light felony, the penalty of arresto menor in its maximum period shall be imposed.

Any person who, by simple imprudence or negligence, shall commit an act which would, otherwise, constitute a grave felony, shall suffer the penalty
of arresto mayor in its medium and maximum periods; if it would have constituted a less serious felony, the penalty of arresto mayor in its minimum
period shall be imposed.

When the execution of the act covered by this article shall have only resulted in damage to the property of another, the offender shall be punished
by a fine ranging from an amount equal to the value of said damages to three times such value, but which shall in no case be less than 25 pesos.

A fine not exceeding two hundred pesos and censure shall be imposed upon any person who, by simple imprudence or negligence, shall cause some
wrong which, if done maliciously, would have constituted a light felony.

In the imposition of these penalties, the courts shall exercise their sound discretion, without regard to the rules prescribed in Article 64 (Emphasis
supplied).

In the present case, the only damage caused by petitioner Sueltos act was to the terrace of private respondents apartment, costing P55,000.00.
Consequently, petitioners contention that the CA erred in awarding P100,000.00 by way of actual damages to private respondent is correct. We
agree that private respondent is entitled to exemplary damages, and find that the award given by the trial court, as affirmed by the CA, is reasonable.
Considering the attendant circumstances, we rule that private respondent Valdellon is entitled to only P20,000.00 by way of exemplary damages.

IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The joint decision of the Regional Trial Court of Quezon City is AFFIRMED
WITH THE MODIFICATION that petitioner Suelto is sentenced to pay a fine of P55,000.00 with subsidiary imprisonment in case of insolvency.
Petitioners are ORDERED to pay to Erlinda V. Valdellon, jointly and severally, the total amount of P55,000.00 by way of actual damages,
and P20,000.00 by way of exemplary damages.

No pronouncement as to costs.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. L-68102 July 16, 1992

GEORGE MCKEE and ARACELI KOH MCKEE, petitioners,


vs.
INTERMEDIATE APPELLATE COURT, JAIME TAYAG and ROSALINDA MANALO, respondents.

G.R. No. L-68103 July 16, 1992

CARMEN DAYRIT KOH, LETICIA KOH, JULIETA KOH TUQUERO, ARACELI KOH MCKEE, ANTONIO KOH and ELIZABETH KOH TURLA, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, JAIME TAYAG and ROSALINDA MANALO, respondents.

DAVIDE, JR., J.:

Petitioners urge this Court to review and reverse the Resolution of the Court of Appeals in C.A.-G.R. CV Nos. 69040-41, promulgated on 3 April 1984,
which set aside its previous Decision dated 29 November 1983 reversing the Decision of the trial court which dismissed petitioners' complaints in
Civil Case No. 4477 and Civil Case No. 4478 of the then Court of First Instance (now Regional Trial Court) of Pampanga entitled "Carmen Dayrit Koh,
Leticia Koh, Julieta Koh Tuquero, Araceli Koh McKee and Elizabeth Koh Turla vs. Jaime Tayag and Rosalinda Manalo," and "George McKee and Araceli
Koh McKee vs. Jaime Tayag and Rosalinda Manalo," respectively, and granted the private respondents' counterclaim for moral damages, attorney's
fees and litigation expenses.

The said civil cases for damages based on quasi-delict were filed as a result of a vehicular accident which led to the deaths of Jose Koh, Kim Koh
McKee and Loida Bondoc and caused physical injuries to George Koh McKee, Christopher Koh McKee and petitioner Araceli Koh McKee.

Petitioners in G.R. No. 68102, parents of the minors George Koh McKee, Christopher Koh McKee and the deceased Kim Koh McKee, were the plaintiffs
in Civil Case No. 4478, while petitioner Carmen Dayrit Koh and her co-petitioners in G.R. No. 68103, who are the wife and children, respectively, of
the late Jose Koh, were the plaintiffs in Civil Case No. 4477. Upon the other hand, private respondents are the owners of the cargo truck which figured
in the mishap; a certain Ruben Galang was the driver of the truck at the time of the accident.
The antecedent facts are not disputed.

Between nine and ten o'clock in the morning of 8 January 1977, in Pulong Pulo Bridge along MacArthur Highway, between Angeles City and San
Fernando, Pampanga, a head-on-collision took place between an International cargo truck, Loadstar, with Plate No. RF912-T Philippines '76 owned
by private respondents, and driven by Ruben Galang, and a Ford Escort car bearing Plate No. S2-850 Pampanga '76 driven by Jose Koh. The collision
resulted in the deaths of Jose Koh, Kim Koh McKee and Loida Bondoc, and physical injuries to George Koh McKee, Christopher Koh McKee and Araceli
Koh McKee, all passengers of the Ford Escort.

Jose Koh was the father of petitioner Araceli Koh McKee, the mother of minors George, Christopher and Kim Koh McKee. Loida Bondoc, on the other
hand, was the baby sitter of one and a half year old Kim. At the time of the collision, Kim was seated on the lap of Loida Bondoc who was at the front
passenger's seat of the car while Araceli and her two (2) sons were seated at the car's back seat.

Immediately before the collision, the cargo truck, which was loaded with two hundred (200) cavans of rice weighing about 10,000 kilos, was traveling
southward from Angeles City to San Fernando Pampanga, and was bound for Manila. The Ford Escort, on the other hand, was on its way to Angeles
City from San Fernando. When the northbound car was about (10) meters away from the southern approach of the bridge, two (2) boys suddenly
darted from the right side of the road and into the lane of the car. The boys were moving back and forth, unsure of whether to cross all the way to
the other side or turn back. Jose Koh blew the horn of the car, swerved to the left and entered the lane of the truck; he then switched on the
headlights of the car, applied the brakes and thereafter attempted to return to his lane. Before he could do so, his car collided with the truck. The
collision occurred in the lane of the truck, which was the opposite lane, on the said bridge.

The incident was immediately reported to the police station in Angeles City; consequently, a team of police officers was forthwith dispatched to
conduct an on the spot investigation. In the sketch 1 prepared by the investigating officers, the bridge is described to be sixty (60) "footsteps" long
and fourteen (14) "footsteps" wide seven (7) "footsteps" from the center line to the inner edge of the side walk on both sides. 2 Pulong Pulo Bridge,
which spans a dry brook, is made of concrete with soft shoulders and concrete railings on both sides about three (3) feet high.

The sketch of the investigating officer discloses that the right rear portion of the cargo truck was two (2) "footsteps" from the edge of the right
sidewalk, while its left front portion was touching the center line of the bridge, with the smashed front side of the car resting on its front bumper.
The truck was about sixteen (16) "footsteps" away from the northern end of the bridge while the car was about thirty-six (36) "footsteps" from the
opposite end. Skid marks produced by the right front tire of the truck measured nine (9) "footsteps", while skid marks produced by the left front tire
measured five (5) "footsteps." The two (2) rear tires of the truck, however, produced no skid marks.

In his statement to the investigating police officers immediately after the accident, Galang admitted that he was traveling at thirty (30) miles (48
kilometers) per hour.

As a consequence of the collision, two (2) cases, Civil Case No. 4477 and No. 4478, were filed on 31 January 1977 before the then Court of First
Instance of Pampanga and were raffled to Branch III and Branch V of the said court, respectively. In the first, herein petitioners in G.R. No. 68103
prayed for the award of P12,000.00 as indemnity for the death of Jose Koh, P150,000.00 as moral damages, P60,000.00 as exemplary damages,
P10,000.00 for litigation expenses, P6,000.00 for burial expenses, P3,650.00 for the burial lot and P9,500.00 for the tomb, plus attorney's fees. 3 In
the second case, petitioners in G.R. No. 68102 prayed for the following: (a) in connection with the death of Kim McKee, the sum of P12,000.00 as
death benefit, P3,150.00 for funeral services, P3,650.00 for the cemetery lot, P3,000.00 for the tomb, P50,000.00 as moral damages, P10,000.00 as
exemplary damages and P2,000.00 as miscellaneous damages; (b) in the case of Araceli Koh McKee, in connection with the serious physical injuries
suffered, the sum of P100,000.00 as moral damages, P20,000.00 as exemplary damages, P12,000.00 for loss of earnings, P5,000.00 for the
hospitalization expenses up to the date of the filing of the complaint; and (c) with respect to George McKee, Jr., in connection with the serious
physical injuries suffered, the sum of P50,000.00 as moral damages, P20,000.00 as exemplary damages and the following medical expenses: P3,400
payable to the Medical Center, P3,500.00 payable to the St. Francis Medical Center, P5,175.00 payable to the Clark Air Base Hospital, and
miscellaneous expenses amounting to P5,000.00. They also sought an award of attorney's fees amounting to 25% of the total award plus traveling
and hotel expenses, with costs. 4

On 1 March 1977, an Information charging Ruben Galang with the crime of "Reckless Imprudence Resulting to (sic) Multiple Homicide and Physical
Injuries and Damage to Property" was filed with the trial court. It was docketed as Criminal Case No. 3751 and was raffled to Branch V of the court,
the same Branch where Civil Case No. 4478 was assigned. 5

In their Answer with Counterclaim in Civil Case No. 4477, private respondents asserted that it was the Ford Escort car which "invaded and bumped
(sic) the lane of the truck driven by Ruben Galang and, as counterclaim, prayed for the award of P15,000.00 as attorney's fees, P20,000.00 as actual
and liquidated damages, P100,000.00 as moral damages and P30,000.00 as business losses. 6 In Civil Case No. 4478, private respondents first filed a
motion to dismiss on grounds of pendency of another action (Civil Case No. 4477) and failure to implead an indispensable party, Ruben Galang, the
truck driver; they also filed a motion to consolidate the case with Civil Case No. 4477 pending before Branch III of the same court, which was opposed
by the plaintiffs. 7 Both motions were denied by Branch V, then presided over by Judge Ignacio Capulong. Thereupon, private respondents filed their
Answer with Counter-claim 8 wherein they alleged that Jose Koh was the person "at fault having approached the lane of the truck driven by Ruben
Galang, . . . which was on the right lane going towards Manila and at a moderate speed observing all traffic rules and regulations applicable under
the circumstances then prevailing;" in their counterclaim, they prayed for an award of damages as may be determined by the court after due hearing,
and the sums of P10,000.00 as attorney's fees and P5,000.00 as expenses of litigation.
Petitioners filed their Answers to the Counterclaims in both cases.

To expedite the proceedings, the plaintiffs in Civil Case No. 4478 filed on 27 March 1978 a motion to adopt the testimonies of witnesses taken during
the hearing of Criminal Case No. 3751, which private respondents opposed and which the court denied. 9 Petitioners subsequently moved to
reconsider the order denying the motion for consolidation, 10 which Judge Capulong granted in the Order of 5 September 1978; he then directed that
Civil Case No. 4478 be consolidated with Civil Case No. 4477 in Branch III of the court then presided over by Judge Mario Castaeda, Jr.

Left then with Branch V of the trial court was Criminal Case No. 3751.

In the civil cases, the plaintiffs presented as witnesses Araceli Koh McKee, Fernando Nuag, Col. Robert Fitzgerald, Primitivo Parel, Eugenio Tanhueco,
Carmen Koh and Antonio Koh, 11 and offered several documentary exhibits. Upon the other hand, private respondents presented as witnesses Ruben
Galang, Zenaida Soliman, Jaime Tayag and Roman Dayrit. 12

In the criminal case, the prosecution presented as witnesses Mrs. Araceli McKee, Salud Samia, Pfc. Fernando Nuag, Dr. Ramon Panlilio, Dr. Robert
Fitzgerald, Dr. Roberto Yuson, Dr. Hector, Ulanday, Pfc. Benigno de Leon, Marina Bolos, Primitivo Parel, Rogelio Pineda, Benito Caraan and Eugenio
Tanhueco, and offered several documentary exhibits. 13 Upon the other hand, the defense presented the accused Ruben Galang, Luciano Punzalan,
Zenaida Soliman and Roman Dayrit, and offered documentary exhibits. 14

On 1 October 1980, Judge Capulong rendered a decision against the accused Ruben Galang in the aforesaid criminal case. The dispositive portion of
the decision reads as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered finding the accused Ruben Galang guilty beyond reasonable
doubt of the crime charged in the information and after applying the provisions of Article 365 of the Revised Penal Code and
indeterminate sentence law, this Court, imposes upon said accused Ruben Galang the penalty of six (6) months of arresto
mayor as minimum to two (2) years, four (4) months and one (1) day of prision correccional as maximum; the accused is further
sentenced to pay and indemnify the heirs of Loida Bondoc the amount of P12,000.00 as indemnity for her death; to reimburse
the heirs of Loida Bondoc the amount of P2,000.00 representing the funeral expenses; to pay the heirs of Loida Bondoc the
amount of P20,000.00 representing her loss of income; to indemnify and pay the heirs of the deceased Jose Koh the value of the
car in the amount of P53,910.95, and to pay the costs. 15

The aforecited decision was promulgated only on 17 November 1980; on the same day, counsel for petitioners filed with Branch III of the court
where the two (2) civil cases were pending a manifestation to that effect and attached thereto a copy of the decision. 16

Upon the other hand, Judge Mario Castaeda, Jr. dismissed the two (2) civil cases on 12 November 1980 and awarded the private respondents moral
damages, exemplary damages and attorney's fees. 17 The dispositive portion of the said decision reads as follows:

WHEREFORE, finding the preponderance of evidence to be in favor of the defendants and against the plaintiffs, these cases are
hereby ordered DISMISSED with costs against the plaintiffs. The defendants had proven their counter-claim, thru evidences (sic)
presented and unrebutted. Hence, they are hereby awarded moral and exemplary damages in the amount of P100,000.00 plus
attorney's fee of P15,000.00 and litigation expenses for (sic) P2,000.00. The actual damages claimed for (sic) by the defendants
is (sic) hereby dismissing for lack of proof to that effect (sic). 18

A copy of the decision was sent by registered mail to the petitioners on 28 November 1980 and was received on 2 December 1980. 19

Accused Ruben Galang appealed the judgment of conviction to the Court of Appeals. The appeal was docketed as C.A.-G.R. Blg. 24764-CR and was
assigned to the court's Third Division. Plaintiffs in Civil Cases Nos. 4477 and 4478 likewise separately appealed the 12 November 1980 decision to the
appellate court. The appeals were docketed as C.A.-G.R. No. 69041-R and C.A.-G.R. No. 69040-R, respectively, and were assigned to the Fourth Civil
Cases Division.

On 4 October 1982, the respondent Court promulgated its decision 20 in C.A.-G.R. Blg. 24764-CR affirming the conviction of Galang. 21 The dispositive
portion of the decision reads:

DAHIL DITO, ang hatol na paksa ng naritong paghahabol ay Aming pinagtitibay sa kanyang kabuuan. Ang naghahabol pa rin ang
pinagbabayad ng gugol ng paghahabol.

A motion for reconsideration of the decision was denied by the respondent Court in its Kapasiyahan promulgated on 25 November 1982. 22 A petition
for its review 23 was filed with this Court; said petition was subsequently denied. A motion for its reconsideration was denied with finality in the
Resolution of 20 April 1983. 24

On 29 November 1983, respondent Court, by then known as the Intermediate Appellate Court, promulgated its consolidated decision in A.C.-G.R. CV
Nos. 69040 and 69041, 25 the dispositive portion of which reads:
WHEREFORE, the decision appealed from it hereby reversed and set aside and another one is rendered, ordering defendants-
appellees to pay plaintiffs-appellants as follows:

For the death of Jose Koh:

P 50,000.00 as moral damages


P 12,000.00 as death indemnity
P 16,000.00 for the lot and tomb (Exhs. U and U-1)
P 4,000.00 expenses for holding a wake (p. 9, tsn April 19, 1979)
P 950.00 for the casket (Exh. M)
P 375.00 for the vault services (Exhs. V and V-1)

For the death of Kim Koh McKee:

P 50,000.00 as moral damages


P 12,000.00 as death indemnity
P 1,000.00 for the purchase of the burial lot (Exh. M)
P 950.00 for funeral services (Exh. M-1)
P 375.00 for vault services (Exhs. V and V-1)

For the physical injuries suffered by George Koh McKee:

P 25,000.00 as moral damages


P 672.00 for Clark Field Hospital (Exh. E)
P 4,384.00 paid to Angeles Medical Clinic (Exhs. D, D-1 and
D-2)
P 1,555.00 paid to St. Francis Medical Center (Exhs. B and B-1)

For the physical injuries suffered by Araceli Koh McKee:

P 25,000.00 as moral damages


P 1,055.00 paid to St. Francis Medical Center (Exhs. G and
G-1)
P 75.00 paid to St. Francis Medical Center (Exhs. G-2 and G-3)
P 428.00 to Carmelite General Hospital (Exh. F)
P 114.20 to Muoz Clinic (Exh. MM)

For the physical injuries suffered by Christopher Koh McKee:

P 10,000.00 as moral damages


P 1,231.10 to St. Francis Medical Center (Exhs. L and L-1)
P 321.95 to F.C.E.A. Hospital (Exhs. G and D-1)

In addition, We award P10,000.00 as counsel (sic) fees in Civil Case No. 4477 and another P10,000.00; as counsel (sic) fees in Civil
Case No. 4478.

No pronouncement as to costs.

SO ORDERED. 26

The decision is anchored principally on the respondent Court's findings that it was Ruben Galang's inattentiveness or reckless imprudence which
caused the accident. The appellate court further said that the law presumes negligence on the part of the defendants (private respondents), as
employers of Galang, in the selection and supervision of the latter; it was further asserted that these defendants did not allege in their Answers the
defense of having exercised the diligence of a good father of a family in selecting and supervising the said employee.27 This conclusion of reckless
imprudence is based on the following findings of fact:

In the face of these diametrically opposed judicial positions, the determinative issue in this appeal is posited in the fourth assigned
error as follows:

IV
THE TRIAL COURT ERRED WHEN IT HELD THE (sic) DRIVER OF THE TRUCK STOPPED HIS TRUCK BLEW HIS HORN SWITCHED ON HIS
HEADLIGHTS AND COULD NOT SWERVE TO THE RIGHT.

Supportive of plaintiffs' version, principal witness Araceli Koh McKee testified thus:

Q What happened after that, as you approached the bridge?

A When we were approaching the bridge, two (2) boys tried to cross the right lane on the right side of the
highway going to San Fernando. My father, who is (sic) the driver of the car tried to avoid the two (2) boys
who were crossing, he blew his horn and swerved to the left to avoid hitting the two (2) boys. We noticed the
truck, he switched on the headlights to warn the truck driver, to slow down to give us the right of way to
come back to our right lane.

Q Did the truck slow down?

A No, sir, it did not, just (sic) continued on its way.

Q What happened after that?

A After avoiding the two (2) boys, the car tried to go back to the right lane since the truck is (sic) coming, my
father stepped on the brakes and all what (sic) I heard is the sound of impact (sic), sir. (tsn, pp. 5-6, July 22,
1977); or (Exhibit "O" in these Civil Cases).

xxx xxx xxx

Q Mrs. how did you know that the truck driven by the herein accused, Ruben Galang did not reduce its speed
before the actual impact of collision (sic) as you narrated in this Exhibit "1," how did you know (sic)?

A It just kept on coming, sir. If only he reduced his speed, we could have got (sic) back to our right lane on
side (sic) of the highway, sir. (tsn. pp. 33-34 July 22, 1977) or (Exhibit "O" in these Civil Cases) (pp. 30-31,
Appellants' Brief).

Plaintiffs' version was successfully corroborated to Our satisfaction by the following facts and circumstances:

1. An impartial eye-witness to the mishap, Eugenio Tanhueco, declared that the truck stopped only when it had already collided
with the car:

xxx xxx xxx

Tanhueco repeated the same testimony during the hearing in the criminal case:

xxx xxx xxx

Tanhueco could (sic) not be tagged as an accommodation witness because he was one of the first to arrive at the scene of the
accident. As a matter of fact, he brought one of the injured passengers to the hospital.

We are not prepared to accord faith and credit to defendants' witnesses, Zenaida Soliman, a passenger of the truck, and Roman
Dayrit, who supposedly lived across the street.

Regarding Soliman, experience has shown that in the ordinary course of events people usually take the side of the person with
whom they are associated at the time of the accident, because, as a general rule, they do not wish to be identified with the person
who was at fault. Thus an imaginary bond is unconsciously created among the several persons within the same group (People vs.
Vivencio, CA-G.R. No. 00310-CR, Jan. 31, 1962).

With respect to Dayrit, We can not help suspecting (sic) that he is an accommodation witness. He did not go to the succor of the
injured persons. He said he wanted to call the police authorities about the mishap, but his phone had no dial tone. Be this (sic) as
it may, the trial court in the criminal case acted correctly in refusing to believe Dayrit.

2. Exhibit 2, the statement of Galang, does not include the claim that Galang stopped his truck at a safe distance from the car,
according to plaintiffs (p. 25, Appellants' Brief). This contention of appellants was completely passed sub-silencio or was not
refuted by appellees in their brief. Exhibit 2 is one of the exhibits not included in the record. According to the Table of Contents
submitted by the court below, said Exhibit 2 was not submitted by defendants-appellees. In this light, it is not far-fetched to
surmise that Galang's claim that he stopped was an eleventh-hour desperate attempt to exculpate himself from imprisonment
and damages.

3. Galang divulged that he stopped after seeing the car about 10 meters away:

ATTY. SOTTO:

Q Do I understand from your testimony that inspite of the fact that you admitted that the road is straight and
you may be able to (sic) see 500-1000 meters away from you any vehicle, you first saw that car only about
ten (10) meters away from you for the first time?

xxx xxx xxx

A I noticed it, sir, that it was about ten (10) meters away.

ATTY. SOTTO:

Q So, for clarification, you clarify and state under your oath that you have (sic) not noticed it before that ten
(10) meters? (Tsn. 3 to 5, Sept. 18, 1979). (p. 16, Appellants' Brief)

Galang's testimony substantiate (sic) Tanhueco's statement that Galang stopped only because of the impact. At ten (10) meters
away, with the truck running at 30 miles per hour, as revealed in Galang's affidavit (Exh. 2; p. 25, Appellants' brief), it is well-nigh
impossible to avoid a collision on a bridge.

5. Galang's truck stopped because of the collision, and not because he waited for Jose Koh to return to his proper lane. The police
investigator, Pfc. Fernando L. Nuag, stated that he found skid marks under the truck but there were not (sic) skid marks behind
the truck (pp. 19-20, t.s.n., Nov. 3, 1978). The presence of skid marks show (sic) that the truck was speeding. Since the skid marks
were found under the truck and none were found at the rear of the truck, the reasonable conclusion is that the skid marks under
the truck were caused by the truck's front wheels when the trucks (sic) suddenly stopped seconds before the mishap in an
endeavor to avoid the same. But, as aforesaid, Galang saw the car at barely 10 meters away, a very short distance to avoid a
collision, and in his futile endeavor to avoid the collision he abruptly stepped on his brakes but the smashup happened just the
same.

For the inattentiveness or reckless imprudence of Galang, the law presumes negligence on the part of the defendants in the
selection of their driver or in the supervision over him. Appellees did not allege such defense of having exercised the duties of a
good father of a family in the selection and supervision of their employees in their answers. They did not even adduce evidence
that they did in fact have methods of selection and programs of supervision. The inattentiveness or negligence of Galang was the
proximate cause of the mishap. If Galang's attention was on the highway, he would have sighted the car earlier or at a very safe
distance than (sic) 10 meters. He proceeded to cross the bridge, and tried to stop when a collision was already inevitable, because
at the time that he entered the bridge his attention was not riveted to the road in front of him.

On the question of damages, the claims of appellants were amply proven, but the items must be reduced. 28

A motion for reconsideration alleging improper appreciation of the facts was subsequently filed by private respondents on the basis of which the
respondent Court, in its Resolution of 3 April 1984, 29 reconsidered and set aside its 29 November 1983 decision and affirmed in toto the trial court's
judgment of 12 November 1980. A motion to reconsider this Resolution was denied by the respondent Court on 4 July 1984. 30

Hence, this petition.

Petitioners allege that respondent Court:

. . . COMMITTED A VERY SERIOUS AND GRAVE ERROR WHEN IT TOTALLY REVERSED ITS DECISION BY MERELY BASING IT FROM
(sic) A MERE "PRESUMPTION," TOTALLY DISREGARDING THE PRIVATE RESPONDENTS' DRIVER'S ADMISSIONS AND CONFESSIONS,
WHO EXCLUSIVELY COMMITTED THE PROXIMATE CAUSE OF THE ACCIDENT (sic), FURTHER, IT ALSO DISREGARDED THE EVIDENCE
ADDUCED AND FOUND IN THE RECORDS; THEREFORE, RESPONDENT COURT'S RESOLUTIONS (ANNEXES A and B, PETITION) ARE
CLEARLY ERRONEOUS, PURELY BASED ON SPECULATIONS, CONJECTURES AND WITHOUT SURE FOUNDATION IN THE EVIDENCE.
II

. . . GRAVELY ABUSED ITS DISCRETION AND ERRED WHEN IN EFFECT IT DISREGARDED A DOCTRINE LAID DOWN BY THIS
HONORABLE COURT BY STATING AMONG OTHERS, "IT CANNOT CATEGORICALLY ADOPT THE FINDINGS OF GUILT IN THE
CRIMINAL CASE WHERE THE DRIVER OF THE TRUCK INVOLVED IN THE ACCIDENT WAS INDICTED.

III

. . . PATENTLY COMMITTED GRAVE ABUSE OF DISCRETION AND MADE A MISLEADING PRONOUNCEMENT, WHEN IT HELD: "IT IS
THUS INCUMBENT UPON THE PLAINTIFFS-APPELLANTS (APPELLEES WRONGLY MENTIONED IN THE RESOLUTION) TO PROVE
THEIR ALLEGATIONS THAT THE PROXIMATE CAUSE OF THE ACCIDENT WAS THE NEGLIGENCE OF PRIVATE RESPONDENTS' DRIVER.

IV

. . . COMMITTED ANOTHER GRIEVIOUS (sic) ERROR; COMMITTED GRAVE ABUSE OF DISCRETION AND CITED ANOTHER CASE
WHICH IS CLEARLY INAPPLICABLE TO THESE CASES.

. . . COMMITTED A PATENT ERROR AND GRAVELY ABUSED ITS DISCRETION IN ADOPTING THE FINDINGS OF THE TRIAL COURT
WHICH ARE CLEARLY ERRONEOUS AND CONTRARY TO THE EVIDENCE FOUND IN THE RECORDS, SPECIALLY THEY (sic) ARE
CONTRARY TO THE ADMITTED FACTS AND JUDICIAL ADMISSIONS MADE BY THE PRIVATE RESPONDENTS' DRIVER.

VI

. . . EXCEEDED ITS JURISDICTION, COMMITTED GRAVE ABUSE OF DISCRETION AND GRAVELY ERRED WHEN IT AWARDED DAMAGES
TO THE PRIVATE RESPONDENTS WHEN SAID AWARD IS NOT SUPPORTED BY EVIDENCE, IN THE RECORDS, AND SAID AWARD IS
NOT ALLOWED BY LAW AND THE CONSISTENT DECISIONS OF THIS HONORABLE COURT.

VII

. . . EXCEEDED ITS JURISDICTION, COMMITTED GRAVE ABUSE OF DISCRETION AND GRAVELY ERRED WHEN IT ERRONEOUSLY SET
ASIDE ITS DECISION AWARDING DAMAGES TO PETITIONERS WHICH IS CLEARLY IN ACCORDANCE WITH THE EVIDENCE, THE LAW
AND JURISPRUDENCE RELATIVE TO THE AWARD OF DAMAGES. 31

In the Resolution of 12 September 1984, We required private respondents to Comment on the petition. 32 After the said Comment 33 was filed,
petitioners submitted a Reply 34 thereto; this Court then gave due course to the instant petitions and required petitioners to file their Brief, 35 which
they accordingly complied with.

There is merit in the petition. Before We take on the main task of dissecting the arguments and counter-arguments, some observations on the
procedural vicissitudes of these cases are in order.

Civil Cases Nos. 4477 and 4478, which were for the recovery of civil liability arising from a quasi-delict under Article 2176 in relation to Article 2180
of the Civil Code, were filed ahead of Criminal Case No. 3751. Civil Case No. 4478 was eventually consolidated with Civil Case No. 4477 for joint trial
in Branch III of the trial court. The records do not indicate any attempt on the part of the parties, and it may therefore be reasonably concluded that
none was made, to consolidate Criminal Case No. 3751 with the civil cases, or vice-versa. The parties may have then believed, and understandably
so, since by then no specific provision of law or ruling of this Court expressly allowed such a consolidation, that an independent civil action, authorized
under Article 33 in relation to Article 2177 of the Civil Code, such as the civil cases in this case, cannot be consolidated with the criminal case. Indeed,
such consolidation could have been farthest from their minds as Article 33 itself expressly provides that the "civil action shall proceed independently
of the criminal prosecution, and shall require only a preponderance of evidence." Be that as it may, there was then no legal impediment against such
consolidation. Section 1, Rule 31 of the Rules of Court, which seeks to avoid a multiplicity of suits, guard against oppression and abuse, prevent
delays, clear congested dockets to simplify the work of the trial court, or in short, attain justice with the least expense to the parties litigants, 36 would
have easily sustained a consolidation, thereby preventing the unseeming, if no ludicrous, spectacle of two (2) judges appreciating, according to their
respective orientation, perception and perhaps even prejudice, the same facts differently, and thereafter rendering conflicting decisions. Such was
what happened in this case. It should not, hopefully, happen anymore. In the recent case of Cojuangco vs. Court or Appeals, 37 this Court held that
the present provisions of Rule 111 of the Revised Rules of Court allow a consolidation of an independent civil action for the recovery of civil liability
authorized under Articles 32, 33, 34 or 2176 of the Civil Code with the criminal action subject, however, to the condition that no final judgment has
been rendered in that criminal case.
Let it be stressed, however, that the judgment in Criminal Case No. 3751 finding Galang guilty of reckless imprudence, although already final by virtue
of the denial by no less than this Court of his last attempt to set aside the respondent Court's affirmance of the verdict of conviction, has no relevance
or importance to this case.

As We held in Dionisio vs. Alvendia, 38 the responsibility arising from fault or negligence in a quasi-delict is entirely separate and distinct from the civil
liability arising from negligence under the Penal Code. And, as more concretely stated in the concurring opinion of Justice J.B.L. Reyes, "in the case
of independent civil actions under the new Civil Code, the result of the criminal case, whether acquittal or conviction, would be entirely irrelevant to
the civil action." 39 In Salta vs. De Veyra and PNB vs. Purisima, 40 this Court stated:

. . . It seems perfectly reasonable to conclude that the civil actions mentioned in Article 33, permitted in the same manner to be
filed separately from the criminal case, may proceed similarly regardless of the result of the criminal case.

Indeed, when the law has allowed a civil case related to a criminal case, to be filed separately and to proceed independently even
during the pendency of the latter case, the intention is patent to make the court's disposition of the criminal case of no effect
whatsoever on the separate civil case. This must be so because the offenses specified in Article 33 are of such a nature, unlike
other offenses not mentioned, that they may be made the subject of a separate civil action because of the distinct separability
of their respective juridical cause or basis of action . . . .

What remains to be the most important consideration as to why the decision in the criminal case should not be considered in this appeal is the fact
that private respondents were not parties therein. It would have been entirely different if the petitioners' cause of action was for damages arising
from a delict, in which case private respondents' liability could only be subsidiary pursuant to Article 103 of the Revised Penal Code. In the absence
of any collusion, the judgment of conviction in the criminal case against Galang would have been conclusive in the civil cases for the subsidiary liability
of the private respondents. 41

And now to the merits of the petition.

It is readily apparent from the pleadings that the principal issue raised in this petition is whether or not respondent Court's findings in its challenged
resolution are supported by evidence or are based on mere speculations, conjectures and presumptions.

The principle is well-established that this Court is not a trier of facts. Therefore, in an appeal by certiorari under Rule 45 of the Revised Rules of Court,
only questions of law may be raised. The resolution of factual issues is the function of the lower courts whose findings on these matters are received
with respect and are, as a rule, binding on this Court. 42

The foregoing rule, however, is not without exceptions. Findings of facts of the trial courts and the Court of Appeals may be set aside when such
findings are not supported by the evidence or when the trial court failed to consider the material facts which would have led to a conclusion different
from what was stated in its judgment. 43 The same is true where the appellate court's conclusions are grounded entirely on conjectures, speculations
and surmises 44 or where the conclusions of the lower courts are based on a misapprehension of facts. 45

It is at once obvious to this Court that the instant case qualifies as one of the aforementioned exceptions as the findings and conclusions of the trial
court and the respondent Court in its challenged resolution are not supported by the evidence, are based on an misapprehension of facts and the
inferences made therefrom are manifestly mistaken. The respondent Court's decision of 29 November 1983 makes the correct findings of fact.

In the assailed resolution, the respondent Court held that the fact that the car improperly invaded the lane of the truck and that the collision occurred
in said lane gave rise to the presumption that the driver of the car, Jose Koh, was negligent. On the basis of this presumed negligence, the appellate
court immediately concluded that it was Jose Koh's negligence that was the immediate and proximate cause of the collision. This is an unwarranted
deduction as the evidence for the petitioners convincingly shows that the car swerved into the truck's lane because as it approached the southern
end of the bridge, two (2) boys darted across the road from the right sidewalk into the lane of the car. As testified to by petitioner Araceli Koh McKee:

Q What happened after that, as you approached the bridge?

A When we were approaching the bridge, two (2) boys tried to cross the right lane on the right side of the
highway going to San Fernando. My father, who is (sic) the driver of the car tried to avoid the two (2) boys
who were crossing, he blew his horn and swerved to the left to avoid hitting the two (2) boys. We noticed the
truck, he switched on the headlights to warn the truck driver, to slow down to give us the right of way to
come back to our right lane.

Q Did the truck slow down?

A No sir, it did not, just (sic) continued on its way.

Q What happened after that?


A After avoiding the two (2) boys, the car tried to go back to the right lane since the truck is (sic) coming, my
father stepped on the brakes and all what (sic) I heard is the sound of impact (sic), sir. 46

Her credibility and testimony remained intact even during cross examination. Jose Koh's entry into the lane of the truck was necessary in order to
avoid what was, in his mind at that time, a greater peril death or injury to the two (2) boys. Such act can hardly be classified as negligent.

Negligence was defined and described by this Court in Layugan vs. Intermediate Appellate Court, 47 thus:

. . . 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 not do (Black's
Law Dictionary, Fifth Edition, 930), or as Judge Cooley defines it, "(T)he 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." (Cooley on Torts, Fourth Edition, vol. 3, 265)

In Picart vs. Smith (37 Phil 809, 813), decided more than seventy years ago but still a sound rule, (W)e held:

The test by which to determine the existence of 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 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 paterfamiliasof the Roman
law. . . .

In Corliss vs. Manila Railroad Company, 48 We held:

. . . Negligence is want of the care required by the circumstances. It is a relative or comparative, not an absolute, term and its
application depends upon the situation of the parties and the degree of care and vigilance which the circumstances reasonably
require. Where the danger is great, a high degree of care is necessary, and the failure to observe it is a want of ordinary care
under the circumstances. (citing Ahern v. Oregon Telephone Co., 35 Pac. 549 (1894).

On the basis of the foregoing definition, the test of negligence and the facts obtaining in this case, it is manifest that no negligence could be imputed
to Jose Koh. Any reasonable and ordinary prudent man would have tried to avoid running over the two boys by swerving the car away from where
they were even if this would mean entering the opposite lane. Avoiding such immediate peril would be the natural course to take particularly where
the vehicle in the opposite lane would be several meters away and could very well slow down, move to the side of the road and give way to the
oncoming car. Moreover, under what is known as the emergency rule, "one who suddenly finds himself in a place of danger, and is required to act
without time to consider the best means that may be adopted to avoid the impending danger, is not guilty of negligence, if he fails to adopt what
subsequently and upon reflection may appear to have been a better method, unless the emergency in which he finds himself is brought about by his
own negligence." 49

Considering the sudden intrusion of the two (2) boys into the lane of the car, We find that Jose Koh adopted the best means possible in the given
situation to avoid hitting them. Applying the above test, therefore, it is clear that he was not guilty of negligence.

In any case, assuming, arguendo that Jose Koh is negligent, it cannot be said that his negligence was the proximate cause of the collision. Proximate
cause has been 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. 50

Applying the above definition, although it may be said that the act of Jose Koh, if at all negligent, was the initial act in the chain of events, it cannot
be said that the same caused the eventual injuries and deaths because of the occurrence of a sufficient intervening event, the negligent act of the
truck driver, which was the actual cause of the tragedy. The entry of the car into the lane of the truck would not have resulted in the collision had
the latter heeded the emergency signals given by the former to slow down and give the car an opportunity to go back into its proper lane. Instead of
slowing down and swerving to the far right of the road, which was the proper precautionary measure under the given circumstances, the truck driver
continued at full speed towards the car. The truck driver's negligence becomes more apparent in view of the fact that the road is 7.50 meters wide
while the car measures 1.598 meters and the truck, 2.286 meters, in width. This would mean that both car and truck could pass side by side with a
clearance of 3.661 meters to spare. 51 Furthermore, the bridge has a level sidewalk which could have partially accommodated the truck. Any
reasonable man finding himself in the given situation would have tried to avoid the car instead of meeting it head-on.
The truck driver's negligence is apparent in the records. He himself said that his truck was running at 30 miles (48 kilometers) per hour along the
bridge while the maximum speed allowed by law on a bridge 52 is only 30 kilometers per hour. Under Article 2185 of the Civil Code, a person driving
a vehicle is presumed negligent if at the time of the mishap, he was violating any traffic regulation. We cannot give credence to private respondents'
claim that there was an error in the translation by the investigating officer of the truck driver's response in Pampango as to whether the speed cited
was in kilometers per hour or miles per hour. The law presumes that official duty has been regularly performed; 53 unless there is proof to the
contrary, this presumption holds. In the instant case, private respondents' claim is based on mere conjecture.

The truck driver's negligence was likewise duly established through the earlier quoted testimony of petitioner Araceli Koh McKee which was duly
corroborated by the testimony of Eugenio Tanhueco, an impartial eyewitness to the mishap.

Araceli Koh McKee testified further, thus:

xxx xxx xxx

Q Mrs. how did you know that the truck driven by the herein accused, Ruben Galang did not reduce its speed
before the actual impact of collision as you narrated in this Exhibit "1," how did you know?

A It just kept on coming, sir. If only he reduced his speed, we could have got (sic) back to our right lane on
side (sic) of the highway, sir. (tsn, pp. 33-34, July 22, 1977) or (Exhibit; "O" in these Civil Cases) (pp. 30-31,
Appellants' Brief)54

while Eugenio Tanhueco testified thus:

Q When you saw the truck, how was it moving?

A It was moving 50 to 60 kilometers per hour, sir.

Q Immediately after you saw this truck, do you know what happened?

A I saw the truck and a car collided (sic), sir, and I went to the place to help the victims. (tsn. 28, April 19,
1979)

xxx xxx xxx

Q From the time you saw the truck to the time of the impact, will you tell us if the said truck ever stopped?

A I saw it stopped (sic) when it has (sic) already collided with the car and it was already motionless. (tsn. 31,
April 19, 1979; Emphasis Supplied). (p. 27, Appellants' Brief). 55

Clearly, therefore, it was the truck driver's subsequent negligence in failing to take the proper measures and degree of care necessary to avoid the
collision which was the proximate cause of the resulting accident.

Even if Jose Koh was indeed negligent, the doctrine of last clear chance finds application here. Last clear chance is a doctrine in the law of torts which
states that the contributory negligence of the party injured will not defeat the claim for damages if it is shown that the defendant might, by the
exercise of reasonable care and prudence, have avoided the consequences of the negligence of the injured party. In such cases, the person who had
the last clear chance to avoid the mishap is considered in law solely responsible for the consequences thereof. 56

In Bustamante vs. Court of Appeals, 57 We held:

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 (sic). 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 plaintiff's peril, or according to some authorities, should
have been aware of it in the reasonable exercise of due care, had in fact an opportunity later than that of the plaintiff to avoid
an accident (57 Am. Jur., 2d, pp. 798-799).

In Pantranco North Express, Inc., vs. Baesa, 58 We ruled:

The doctrine of last clear chance was defined by this Court in the case of Ong v. Metropolitan Water District, 104 Phil. 397 (1958),
in this wise:

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 People's Lumber and Hardware, et
al. vs. 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 (sic) for damages.

Applying the foregoing doctrine, it is not difficult to rule, as We now rule, that it was the truck driver's negligence in failing to exert ordinary care to
avoid the collision which was, in law, the proximate cause of the collision. As employers of the truck driver, the private respondents are, under Article
2180 of the Civil Code, directly and primarily liable for the resulting damages. The presumption that they are negligent flows from the negligence of
their employee. That presumption, however, is only juris tantum, not juris et de jure. 59 Their only possible defense is that they exercised all the
diligence of a good father of a family to prevent the damage. Article 2180 reads as follows:

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

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.

The diligence of a good father referred to means the diligence in the selection and supervision of employees. 60 The answers of the private
respondents in Civil Cases Nos. 4477 and 4478 did not interpose this defense. Neither did they attempt to prove it.

The respondent Court was then correct in its Decision of 29 November 1983 in reversing the decision of the trial court which dismissed Civil Cases
Nos. 4477 and 4478. Its assailed Resolution of 3 April 1984 finds no sufficient legal and factual moorings.

In the light of recent decisions of this Court, 61 the indemnity for death must, however, be increased from P12,000.00 to P50,000.00.

WHEREFORE, the instant petition is GRANTED. The assailed Resolution of the respondent Court of 3 April 1984 is SET ASIDE while its Decision of 29
November 1983 in C.A.-G.R. CV Nos. 69040-41 is REINSTATED, subject to the modification that the indemnity for death is increased from P12,000.00
to P50,000.00 each for the death of Jose Koh and Kim Koh McKee.

Costs against private respondents.

SO ORDERED.
THIRD DIVISION

SPOUSES DANTE CRUZ and G.R. No. 186312


LEONORA CRUZ,
Petitioners, Present:

CARPIO MORALES, J.,


Chairperson,
BRION,
- versus - BERSAMIN,
ABAD,* and
SUN HOLIDAYS, INC., VILLARAMA, JR., JJ.
Respondent.
Promulgated:
June 29, 2010

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

DECISION

CARPIO MORALES, J.:

Spouses Dante and Leonora Cruz (petitioners) lodged a Complaint on January 25, 2001 [1] against Sun Holidays, Inc. (respondent) with the Regional

Trial Court (RTC) of Pasig City for damages arising from the death of their son Ruelito C. Cruz (Ruelito) who perished with his wife on September 11,

2000 on board the boat M/B Coco Beach III that capsized en route to Batangas from Puerto Galera, Oriental Mindoro where the couple had stayed

at Coco Beach Island Resort (Resort) owned and operated by respondent.

The stay of the newly wed Ruelito and his wife at the Resort from September 9 to 11, 2000 was by virtue of a tour package-contract with respondent

that included transportation to and from the Resort and the point of departure in Batangas.

Miguel C. Matute (Matute),[2] a scuba diving instructor and one of the survivors, gave his account of the incident that led to the filing of the complaint

as follows:

Matute stayed at the Resort from September 8 to 11, 2000. He was originally scheduled to leave the Resort in the afternoon of September 10, 2000,

but was advised to stay for another night because of strong winds and heavy rains.

On September 11, 2000, as it was still windy, Matute and 25 other Resort guests including petitioners son and his wife trekked to the other side of

the Coco Beach mountain that was sheltered from the wind where they boarded M/B Coco Beach III, which was to ferry them to Batangas.

Shortly after the boat sailed, it started to rain. As it moved farther away from Puerto Galera and into the open seas, the rain and wind got stronger,
causing the boat to tilt from side to side and the captain to step forward to the front, leaving the wheel to one of the crew members.
The waves got more unwieldy. After getting hit by two big waves which came one after the other, M/B Coco Beach III capsized putting all

passengers underwater.

The passengers, who had put on their life jackets, struggled to get out of the boat. Upon seeing the captain, Matute and the other passengers who

reached the surface asked him what they could do to save the people who were still trapped under the boat. The captain replied Iligtas niyo na lang

ang sarili niyo (Just save yourselves).

Help came after about 45 minutes when two boats owned by Asia Divers in Sabang, Puerto Galera passed by the capsized M/B Coco Beach III. Boarded

on those two boats were 22 persons, consisting of 18 passengers and four crew members, who were brought to Pisa Island. Eight passengers,

including petitioners son and his wife, died during the incident.

At the time of Ruelitos death, he was 28 years old and employed as a contractual worker for Mitsui Engineering & Shipbuilding Arabia, Ltd. in Saudi

Arabia, with a basic monthly salary of $900.[3]

Petitioners, by letter of October 26, 2000,[4] demanded indemnification from respondent for the death of their son in the amount of at
least P4,000,000.

Replying, respondent, by letter dated November 7, 2000,[5] denied any responsibility for the incident which it considered to be a fortuitous event. It

nevertheless offered, as an act of commiseration, the amount of P10,000 to petitioners upon their signing of a waiver.

As petitioners declined respondents offer, they filed the Complaint, as earlier reflected, alleging that respondent, as a common carrier, was guilty of

negligence in allowing M/B Coco Beach III to sail notwithstanding storm warning bulletins issued by the Philippine Atmospheric, Geophysical and

Astronomical Services Administration (PAGASA) as early as 5:00 a.m. of September 11, 2000.[6]

In its Answer,[7] respondent denied being a common carrier, alleging that its boats are not available to the general public as they only ferry Resort

guests and crew members.Nonetheless, it claimed that it exercised the utmost diligence in ensuring the safety of its passengers; contrary to

petitioners allegation, there was no storm on September 11, 2000as the Coast Guard in fact cleared the voyage; and M/B Coco Beach III was not filled

to capacity and had sufficient life jackets for its passengers. By way of Counterclaim, respondent alleged that it is entitled to an award for attorneys

fees and litigation expenses amounting to not less than P300,000.

Carlos Bonquin, captain of M/B Coco Beach III, averred that the Resort customarily requires four conditions to be met before a boat is allowed to sail,
to wit: (1) the sea is calm, (2) there is clearance from the Coast Guard, (3) there is clearance from the captain and (4) there is clearance from the

Resorts assistant manager.[8] He added that M/B Coco Beach III met all four conditions on September 11, 2000,[9] but a subasco or squall,

characterized by strong winds and big waves, suddenly occurred, causing the boat to capsize. [10]

By Decision of February 16, 2005,[11] Branch 267 of the Pasig RTC dismissed petitioners Complaint and respondents Counterclaim.

Petitioners Motion for Reconsideration having been denied by Order dated September 2, 2005,[12] they appealed to the Court of Appeals.

By Decision of August 19, 2008,[13] the appellate court denied petitioners appeal, holding, among other things, that the trial court correctly

ruled that respondent is a private carrier which is only required to observe ordinary diligence; that respondent in fact observed extraordinary diligence
in transporting its guests on board M/B Coco Beach III; and that the proximate cause of the incident was a squall, a fortuitous event.

Petitioners Motion for Reconsideration having been denied by Resolution dated January 16, 2009,[14] they filed the present Petition for Review.[15]
Petitioners maintain the position they took before the trial court, adding that respondent is a common carrier since by its tour package,

the transporting of its guests is an integral part of its resort business. They inform that another division of the appellate court in fact held respondent

liable for damages to the other survivors of the incident.

Upon the other hand, respondent contends that petitioners failed to present evidence to prove that it is a common carrier; that the Resorts ferry

services for guests cannot be considered as ancillary to its business as no income is derived therefrom; that it exercised extraordinary diligence as

shown by the conditions it had imposed before allowing M/B Coco Beach III to sail; that the incident was caused by a fortuitous event without any

contributory negligence on its part; and that the other case wherein the appellate court held it liable for damages involved different plaintiffs, issues

and evidence.[16]

The petition is impressed with merit.

Petitioners correctly rely on De Guzman v. Court of Appeals[17] in characterizing respondent as a common carrier.

The Civil Code defines common carriers in the following terms:


Article 1732. Common carriers are persons, corporations, firms or associations engaged in the business of
carrying or transporting passengers or goods or both, by land, water, or air for compensation, offering their
services to the public.

The above article makes no distinction between one whose principal business activity is the carrying of persons or goods or both,
and one who does such carrying only as an ancillary activity (in local idiom, as a sideline). Article 1732 also carefully avoids making
any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering
such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its
services to the general public, i.e., the general community or population, and one who offers services or solicits business only
from a narrow segment of the general population. We think that Article 1733 deliberately refrained from making such
distinctions.

So understood, the concept of common carrier under Article 1732 may be seen to coincide neatly with the notion of public
service, under the Public Service Act (Commonwealth Act No. 1416, as amended) which at least partially supplements the law on
common carriers set forth in the Civil Code. Under Section 13, paragraph (b) of the Public Service Act, public service includes:

. . . every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or
compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for
general business purposes, any common carrier, railroad, street railway, traction railway, subway motor
vehicle, either for freight or passenger, or both, with or without fixed route and whatever may be its
classification, freight or carrier service of any class, express service, steamboat, or steamship line, pontines,
ferries and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine repair
shop, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and
power, water supply and power petroleum, sewerage system, wire or wireless communications systems, wire
or wireless broadcasting stations and other similar public services . . .[18] (emphasis and underscoring
supplied.)

Indeed, respondent is a common carrier. Its ferry services are so intertwined with its main business as to be properly considered ancillary

thereto. The constancy of respondents ferry services in its resort operations is underscored by its having its own Coco Beach boats. And the tour

packages it offers, which include the ferry services, may be availed of by anyone who can afford to pay the same. These services are thus available
to the public.
That respondent does not charge a separate fee or fare for its ferry services is of no moment. It would be imprudent to suppose that it

provides said services at a loss. The Court is aware of the practice of beach resort operators offering tour packages to factor the transportation fee

in arriving at the tour package price. That guests who opt not to avail of respondents ferry services pay the same amount is likewise

inconsequential. These guests may only be deemed to have overpaid.

As De Guzman instructs, Article 1732 of the Civil Code defining common carriers has deliberately refrained from making distinctions on whether the

carrying of persons or goods is the carriers principal business, whether it is offered on a regular basis, or whether it is offered to the general public. The

intent of the law is thus to not consider such distinctions. Otherwise, there is no telling how many other distinctions may be concocted by

unscrupulous businessmen engaged in the carrying of persons or goods in order to avoid the legal obligations and liabilities of common carriers.

Under the Civil Code, common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary

diligence for the safety of the passengers transported by them, according to all the circumstances of each case. [19] They are bound to carry the

passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the
circumstances.[20]

When a passenger dies or is injured in the discharge of a contract of carriage, it is presumed that the common carrier is at fault or

negligent. In fact, there is even no need for the court to make an express finding of fault or negligence on the part of the common carrier. This

statutory presumption may only be overcome by evidence that the carrier exercised extraordinary diligence. [21]

Respondent nevertheless harps on its strict compliance with the earlier mentioned conditions of voyage before it allowed M/B Coco Beach III to sail

on September 11, 2000.Respondents position does not impress.

The evidence shows that PAGASA issued 24-hour public weather forecasts and tropical cyclone warnings for shipping on September 10 and 11, 2000

advising of tropical depressions in Northern Luzon which would also affect the province of Mindoro.[22] By the testimony of Dr. Frisco Nilo, supervising

weather specialist of PAGASA, squalls are to be expected under such weather condition. [23]

A very cautious person exercising the utmost diligence would thus not brave such stormy weather and put other peoples lives at risk. The

extraordinary diligence required of common carriers demands that they take care of the goods or lives entrusted to their hands as if they were their

own. This respondent failed to do.

Respondents insistence that the incident was caused by a fortuitous event does not impress either.

The elements of a "fortuitous event" are: (a) the cause of the unforeseen and unexpected occurrence, or the failure of the debtors to comply with

their obligations, must have been independent of human will; (b) the event that constituted the caso fortuito must have been impossible to foresee
or, if foreseeable, impossible to avoid; (c) the occurrence must have been such as to render it impossible for the debtors to fulfill their obligation in

a normal manner; and (d) the obligor must have been free from any participation in the aggravation of the resulting injury to the creditor.[24]
To fully free a common carrier from any liability, the fortuitous event must have been the proximate and only cause of the loss. And it should have

exercised due diligence to prevent or minimize the loss before, during and after the occurrence of the fortuitous event. [25]

Respondent cites the squall that occurred during the voyage as the fortuitous event that overturned M/B Coco Beach III. As reflected above, however,

the occurrence of squalls was expected under the weather condition of September 11, 2000. Moreover, evidence shows that M/B Coco Beach

III suffered engine trouble before it capsized and sank.[26]The incident was, therefore, not completely free from human intervention.

The Court need not belabor how respondents evidence likewise fails to demonstrate that it exercised due diligence to prevent or minimize the loss

before, during and after the occurrence of the squall.

Article 1764[27] vis--vis Article 2206[28] of the Civil Code holds the common carrier in breach of its contract of carriage that results in the
death of a passenger liable to pay the following: (1) indemnity for death, (2) indemnity for loss of earning capacity and (3) moral damages.

Petitioners are entitled to indemnity for the death of Ruelito which is fixed at P50,000.[29]

As for damages representing unearned income, the formula for its computation is:

Net Earning Capacity = life expectancy x (gross annual income - reasonable and necessary living expenses).

Life expectancy is determined in accordance with the formula:

2 / 3 x [80 age of deceased at the time of death][30]

The first factor, i.e., life expectancy, is computed by applying the formula (2/3 x [80 age at death]) adopted in the American Expectancy

Table of Mortality or the Actuarial of Combined Experience Table of Mortality.[31]

The second factor is computed by multiplying the life expectancy by the net earnings of the deceased, i.e., the total earnings less expenses
necessary in the creation of such earnings or income and less living and other incidental expenses. [32] The loss is not equivalent to the entire earnings

of the deceased, but only such portion as he would have used to support his dependents or heirs. Hence, to be deducted from his gross earnings are

the necessary expenses supposed to be used by the deceased for his own needs. [33]

In computing the third factor necessary living expense, Smith Bell Dodwell Shipping Agency Corp. v. Borja[34] teaches that when, as in this

case, there is no showing that the living expenses constituted the smaller percentage of the gross income, the living expenses are fixed at half of the

gross income.

Applying the above guidelines, the Court determines Ruelito's life expectancy as follows:

Life expectancy = 2/3 x [80 - age of deceased at the time of death]

2/3 x [80 - 28]


2/3 x [52]

Life expectancy = 35

Documentary evidence shows that Ruelito was earning a basic monthly salary of $900[35] which, when converted to Philippine peso applying

the annual average exchange rate of $1 = P44 in 2000,[36] amounts to P39,600. Ruelitos net earning capacity is thus computed as follows:

Net Earning Capacity = life expectancy x (gross annual income -


reasonable and necessary living expenses).

= 35 x (P475,200 - P237,600)
= 35 x (P237,600)

Net Earning Capacity = P8,316,000

Respecting the award of moral damages, since respondent common carriers breach of contract of carriage resulted in the death of

petitioners son, following Article 1764 vis--vis Article 2206 of the Civil Code, petitioners are entitled to moral damages.

Since respondent failed to prove that it exercised the extraordinary diligence required of common carriers, it is presumed to have acted

recklessly, thus warranting the award too of exemplary damages, which are granted in contractual obligations if the defendant acted in a wanton,

fraudulent, reckless, oppressive or malevolent manner.[37]

Under the circumstances, it is reasonable to award petitioners the amount of P100,000 as moral damages and P100,000 as exemplary

damages.[38]

Pursuant to Article 2208[39] of the Civil Code, attorney's fees may also be awarded where exemplary damages are awarded. The Court finds

that 10% of the total amount adjudged against respondent is reasonable for the purpose.

Finally, Eastern Shipping Lines, Inc. v. Court of Appeals[40] teaches that when an obligation, regardless of its source, i.e., law, contracts, quasi-

contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for payment of interest in the concept of actual and compensatory

damages, subject to the following rules, to wit

1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of
money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn
legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum
to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the
Civil Code.

2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of
damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be
adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty.
Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim
is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time
the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the
quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal
interest shall, in any case, be on the amount finally adjudged.

3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest,
whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction,
this interim period being deemed to be by then an equivalent to a forbearance of credit. (emphasis supplied).

Since the amounts payable by respondent have been determined with certainty only in the present petition, the interest due shall be computed upon

the finality of this decision at the rate of 12% per annum until satisfaction, in accordance with paragraph number 3 of the immediately cited guideline

in Easter Shipping Lines, Inc.

WHEREFORE, the Court of Appeals Decision of August 19, 2008 is REVERSED and SET ASIDE. Judgment is rendered in favor of petitioners ordering

respondent to pay petitioners the following: (1) P50,000 as indemnity for the death of Ruelito Cruz; (2) P8,316,000 as indemnity for Ruelitos loss of

earning capacity; (3) P100,000 as moral damages; (4) P100,000 as exemplary damages; (5) 10% of the total amount adjudged against respondent as

attorneys fees; and (6) the costs of suit.

The total amount adjudged against respondent shall earn interest at the rate of 12% per annum computed from the finality of this decision until full

payment.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. Nos. 103442-45 May 21, 1993

NATIONAL POWER CORPORATION, ET AL., petitioners,


vs.
THE COURT OF APPEALS, GAUDENCIO C. RAYO, ET AL., respondents.

The Solicitor General for plaintiff-appellee.

Ponciano G. Hernandez for private respondents.

DAVIDE, JR., J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court urging this Court to set aside the 19 August 1991 consolidated
Decision of the Court of Appeals in CA.-G.R. CV Nos. 27290-931 which reversed the Decision of Branch 5 of the then Court of First Instance (now
Regional Trial Court) of Bulacan, and held petitioners National Power Corporation (NPC) and Benjamin Chavez jointly and severally liable to the
private respondents for actual and moral damages, litigation expenses and attorney's fees.

This present controversy traces its beginnings to four (4) separate complaints 2 for damages filed against the NPC and Benjamin Chavez before the
trial court. The plaintiffs therein, now private respondents, sought to recover actual and other damages for the loss of lives and the destruction to
property caused by the inundation of the town of Norzagaray, Bulacan on 26-27 October 1978. The flooding was purportedly caused by the negligent
release by the defendants of water through the spillways of the Angat Dam (Hydroelectric Plant). In said complaints, the plaintiffs alleged, inter alia,
that: 1) defendant NPC operated and maintained a multi-purpose hydroelectric plant in the Angat River at Hilltop, Norzagaray, Bulacan; 2) defendant
Benjamin Chavez was the plant supervisor at the time of the incident in question; 3) despite the defendants' knowledge, as early as 24 October 1978,
of the impending entry of typhoon "Kading," they failed to exercise due diligence in monitoring the water level at the dam; 4) when the said water
level went beyond the maximum allowable limit at the height of the typhoon, the defendants suddenly, negligently and recklessly opened three (3)
of the dam's spillways, thereby releasing a large amount of water which inundated the banks of the Angat River; and 5) as a consequence, members
of the household of the plaintiffs, together with their animals, drowned, and their properties were washed away in the evening of 26 October and
the early hours of 27 October 1978.3

In their Answers, the defendants, now petitioners, alleged that: 1) the NPC exercised due care, diligence and prudence in the operation and
maintenance of the hydroelectric plant; 2) the NPC exercised the diligence of a good father in the selection of its employees; 3) written notices were
sent to the different municipalities of Bulacan warning the residents therein about the impending release of a large volume of water with the onset
of typhoon "Kading" and advise them to take the necessary precautions; 4) the water released during the typhoon was needed to prevent the collapse
of the dam and avoid greater damage to people and property; 5) in spite of the precautions undertaken and the diligence exercised, they could still
not contain or control the flood that resulted and; 6) the damages incurred by the private respondents were caused by a fortuitous event or force
majeure and are in the nature and character of damnum absque injuria. By way of special affirmative defense, the defendants averred that the NPC
cannot be sued because it performs a purely governmental function.4

Upon motion of the defendants, a preliminary hearing on the special defense was conducted. As a result thereof, the trial court dismissed the
complaints as against the NPC on the ground that the provision of its charter allowing it to sue and be sued does not contemplate actions based on
tort. The parties do not, however, dispute the fact that this Court overruled the trial court and ordered the reinstatement of the complaints as against
the NPC.5
Being closely interrelated, the cases were consolidated and trial thereafter ensued.

The lower court rendered its decision on 30 April 1990 dismissing the complaints "for lack of sufficient and credible evidence."6 Consequently, the
private respondents seasonably appealed therefrom to the respondent Court which then docketed the cases as CA-G.R. CV Nos. 27290-93.

In its joint decision promulgated on 19 August 1991, the Court of Appeals reversed the appealed decision and awarded damages in favor of the
private respondents. The dispositive portion of the decision reads:

CONFORMABLY TO THE FOREGOING, the joint decision appealed from is hereby REVERSED and SET ASIDE, and a new one is
hereby rendered:

1. In Civil Case No. SM-950, ordering defendants-appellees to pay, jointly and severally, plaintiffs-appellants, with legal interest
from the date when this decision shall become final and executory, the following:

A. Actual damages, to wit:

1) Gaudencio C. Rayo, Two Hundred Thirty One Thousand Two Hundred Sixty Pesos (P231,260.00);

2) Bienvenido P. Pascual, Two Hundred Four Thousand Five Hundred Pesos (P204.500.00);

3) Tomas Manuel, One Hundred Fifty Five Thousand Pesos (P155,000.00);

4) Pedro C. Bartolome, One Hundred Forty Seven Thousand Pesos (P147,000.00);.

5) Bernardino Cruz, One Hundred Forty Three Thousand Five Hundred Fifty Two Pesos and Fifty Centavos
(P143,552.50);

6) Jose Palad, Fifty Seven Thousand Five Hundred Pesos (P57,500.00);

7) Mariano S. Cruz, Forty Thousand Pesos (P40,000.00);

8) Lucio Fajardo, Twenty nine Thousand Eighty Pesos (P29,080.00); and

B. Litigation expenses of Ten Thousand Pesos (P10,000.00);

2. In Civil case No. SM-951, ordering defendants-appellees to pay jointly and severally, plaintiff-appellant, with legal interest from
the date when this decision shall have become final and executory, the following :

A. Actual damages of Five Hundred Twenty Thousand Pesos (P520,000.00);.

B. Moral damages of five hundred Thousand Pesos (P500,000.00); and.

C. Litigation expenses of Ten Thousand Pesos (P10,000.00);.

3. In Civil Case No. SM-953, ordering defendants-appellees to pay, jointly and severally, with legal interest from the date when
this decision shall have become final and executory;

A. Plaintiff-appellant Angel C. Torres:

1) Actual damages of One Hundred Ninety Nine Thousand One Hundred Twenty Pesos (P199,120.00);

2) Moral Damages of One Hundred Fifty Thousand Pesos (P150,000.00);

B. Plaintiff-appellant Norberto Torres:

1) Actual damages of Fifty Thousand Pesos (P50,000.00);

2) Moral damages of Fifty Thousand Pesos (P50,000.00);


C. Plaintiff-appellant Rodelio Joaquin:

1) Actual damages of One Hundred Thousand Pesos (P100,000.00);

2) Moral damages of One Hundred Thousand Pesos (P100,000.00); and

D. Plaintifsf-appellants litigation expenses of Ten Thousand Pesos (P10,000.00);

4. In Civil case No. SM-1247, ordering defendants-appellees to pay, jointly and severally, with legal interest from the date when
this decision shall have become final and executory :

A. Plaintiffs-appellants Presentacion Lorenzo and Clodualdo Lorenzo:

1) Actual damages of Two Hundred Fifty Six Thousand Six Hundred Pesos (P256,600.00);

2) Moral damages of Fifty Thousand Pesos (P50,000.00);

B. Plaintiff-appellant Consolacion Guzman :

1) Actual damages of One Hundred forty Thousand Pesos (P140,000.00);

2) Moral damages of Fifty Thousand Pesos (P50,000.00);

C. Plaintiff-appellant Virginia Guzman :

1) Actual damages of Two Hundred Five Hundred Twenty Pesos (205,520.00); and

D. Plaintiffs-appellants litigation expenses of Ten Thousand Pesos (10,000.00).

In addition, in all the four (4) instant cases, ordering defendants-appellees to pay, jointly and severally, plaintiffs-appellants
attorney fees in an amount equivalent to 15% of the total amount awarded.

No pronouncement as to costs.7

The foregoing judgment is based on the public respondent's conclusion that the petitioners were guilty of:

. . . a patent gross and evident lack of foresight, imprudence and negligence . . . in the management and operation of Angat Dam.
The unholiness of the hour, the extent of the opening of the spillways, And the magnitude of the water released, are all but
products of defendants-appellees' headlessness, slovenliness, and carelessness. The resulting flash flood and inundation of even
areas (sic) one (1) kilometer away from the Angat River bank would have been avoided had defendants-appellees prepared the
Angat Dam by maintaining in the first place, a water elevation which would allow room for the expected torrential rains. 8

This conclusion, in turn, is anchored on its findings of fact, to wit:

As early as October 21, 1978, defendants-appellees knew of the impending onslaught of and imminent danger posed by typhoon
"Kading". For as alleged by defendants-appellees themselves, the coming of said super typhoon was bannered by Bulletin Today,
a newspaper of national circulation, on October 25, 1978, as "Super Howler to hit R.P." The next day, October 26, 1978, said
typhoon once again merited a headline in said newspaper as "Kading's Big Blow expected this afternoon" (Appellee's Brief, p. 6).
Apart from the newspapers, defendants-appellees learned of typhoon "Kading' through radio announcements (Civil Case No. SM-
950, TSN, Benjamin Chavez, December 4, 1984, pp. 7-9).

Defendants-appellees doubly knew that the Angat Dam can safely hold a normal maximum headwater elevation of 217 meters
(Appellee's brief, p. 12; Civil Case No. SM-951, Exhibit "I-6"; Civil Case No. SM-953, Exhibit "J-6"; Civil Case No. SM-1247, Exhibit
"G-6").

Yet, despite such knowledge, defendants-appellees maintained a reservoir water elevation even beyond its maximum and safe
level, thereby giving no sufficient allowance for the reservoir to contain the rain water that will inevitably be brought by the
coming typhoon.
On October 24, 1978, before typhoon "Kading" entered the Philippine area of responsibility, water elevation ranged from 217.61
to 217.53, with very little opening of the spillways, ranging from 1/2 to 1 meter. On October 25, 1978, when typhoon "Kading"
entered the Philippine area of responsibility, and public storm signal number one was hoisted over Bulacan at 10:45 a.m., later
raised to number two at 4:45 p.m., and then to number three at 10:45 p.m., water elevation ranged from 217.47 to 217.57, with
very little opening of the spillways, ranging from 1/2 to 1 meter. On October 26, 1978, when public storm signal number three
remained hoisted over Bulacan, the water elevation still remained at its maximum level of 217.00 to 218.00 with very little
opening of the spillways ranging from 1/2 to 2 meters, until at or about midnight, the spillways were suddenly opened at 5 meters,
then increasing swiftly to 8, 10, 12, 12.5, 13, 13.5, 14, 14.5 in the early morning hours of October 27, 1978, releasing water at the
rate of 4,500 cubic meters per second, more or less. On October 27, 1978, water elevation remained at a range of 218.30 to
217.05 (Civil Case No. SM-950, Exhibits "D" and series, "L", "M", "N", and "O" and Exhibits "3" and "4"; Civil Case No. SM-951,
Exhibits "H" and "H-1"; Civil Case No. SM-953, Exhibits "I" and "I-1"; Civil Case No. SM 1247, Exhibits "F" and "F-1").

xxx xxx xxx

From the mass of evidence extant in the record, We are convinced, and so hold that the flash flood on October 27, 1978, was
caused not by rain waters (sic), but by stored waters (sic) suddenly and simultaneously released from the Angat Dam by
defendants-appellees, particularly from midnight of October 26, 1978 up to the morning hours of October 27,
1978.9

The appellate court rejected the petitioners' defense that they had sent "early warning written notices" to the towns of Norzagaray, Angat, Bustos,
Plaridel, Baliwag and Calumpit dated 24 October 1978 which read:

TO ALL CONCERN (sic):

Please be informed that at present our reservoir (dam) is full and that we have been releasing water intermittently for the past
several days.

With the coming of typhoon "Rita" (Kading) we expect to release greater (sic) volume of water, if it pass (sic) over our place.

In view of this kindly advise people residing along Angat River to keep alert and stay in safe places.

BENJAMI
N L.
CHAVEZ
Power
Plant
Superinte
ndent10

because:

Said notice was delivered to the "towns of Bulacan" on October 26, 1978 by defendants-appellees driver, Leonardo Nepomuceno
(Civil Case No. SM-950, TSN, Benjamin Chavez, December 4, 1984, pp. 7-11 and TSN, Leonardo Nepomuceno, March 7, 1985, pp.
10-12).

Said notice is ineffectual, insufficient and inadequate for purposes of the opening of the spillway gates at midnight of October
26, 1978 and on October 27, 1978. It did not prepare or warn the persons so served, for the volume of water to be released,
which turned out to be of such magnitude, that residents near or along the Angat River, even those one (1) kilometer away,
should have been advised to evacuate. Said notice, addressed "TO ALL CONCERN (sic)," was delivered to a policeman (Civil Case
No. SM-950, pp. 10-12 and Exhibit "2-A") for the municipality of Norzagaray. Said notice was not thus addressed and delivered to
the proper and responsible officials who could have disseminated the warning to the residents directly affected. As for the
municipality of Sta. Maria, where plaintiffs-appellants in Civil Case No. SM-1246 reside, said notice does not appear to have been
served.11

Relying on Juan F. Nakpil & Sons vs. Court of Appeals,12 public respondent rejected the petitioners' plea that the incident in question was caused
by force majeure and that they are, therefore, not liable to the private respondents for any kind of damage such damage being in the nature
of damnum absque injuria.

The motion for reconsideration filed by the petitioners, as well as the motion to modify judgment filed by the public respondents,13 were denied by
the public respondent in its Resolution of 27 December 1991. 14
Petitioners thus filed the instant petition on 21 February 1992.

After the Comment to the petition was filed by the private respondents and the Reply thereto was filed by the petitioners, We gave due course to
the petition on 17 June 1992 and directed the parties to submit their respective Memoranda, 15 which they subsequently complied with.

The petitioners raised the following errors allegedly committed by the respondent Court :

I. THE COURT OF APPEALS ERRED IN APPLYING THE RULING OF NAKPIL & SONS V. COURT OF APPEALS AND HOLDING THAT
PETITIONERS WERE GUILTY OF NEGLIGENCE.

II. THE COURT OF APPEALS ERRED IN HOLDING THAT THE WRITTEN NOTICES OF WARNING ISSUED BY PETITIONERS WERE
INSUFFICIENT.

III. THE COURT OF APPEALS ERRED IN HOLDING THAT THE DAMAGE SUFFERED BY PRIVATE RESPONDENTS WAS NOT DAMNUM
ABSQUE INJURIA.

IV. THE COURT OF APPEALS ERRED IN NOT AWARDING THE COUNTERCLAIM OF PETITIONERS FOR ATTORNEY'S FEES AND
EXPENSES OF LITIGATION.16

These same errors were raised by herein petitioners in G.R. No. 96410, entitled National Power Corporation, et al., vs. Court of Appeals, et al.,17 which
this Court decided on 3 July 1992. The said case involved the very same incident subject of the instant petition. In no uncertain terms, We declared
therein that the proximate cause of the loss and damage sustained by the plaintiffs therein who were similarly situated as the private respondents
herein was the negligence of the petitioners, and that the 24 October 1978 "early warning notice" supposedly sent to the affected municipalities,
the same notice involved in the case at bar, was insufficient. We thus cannot now rule otherwise not only because such a decision binds this Court
with respect to the cause of the inundation of the town of Norzagaray, Bulacan on 26-27 October 1978 which resulted in the loss of lives and the
destruction to property in both cases, but also because of the fact that on the basis of its meticulous analysis and evaluation of the evidence adduced
by the parties in the cases subject of CA-G.R. CV Nos. 27290-93, public respondent found as conclusively established that indeed, the petitioners
were guilty of "patent gross and evident lack of foresight, imprudence and negligence in the management and operation of Angat Dam," and that
"the extent of the opening of the spillways, and the magnitude of the water released, are all but products of defendants-appellees' headlessness,
slovenliness, and carelessness."18 Its findings and conclusions are biding upon Us, there being no showing of the existence of any of the exceptions
to the general rule that findings of fact of the Court of Appeals are conclusive upon this Court. 19 Elsewise stated, the challenged decision can stand
on its own merits independently of Our decision in G.R. No. 96410. In any event, We reiterate here in Our pronouncement in the latter case that Juan
F. Nakpil & Sons vs. Court of Appeals20 is still good law as far as the concurrent liability of an obligor in the case of force majeure is concerned. In
the Nakpil case, We held:

To exempt the obligor from liability under Article 1174 of the Civil Code, for a breach of an obligation due to an "act of God," the
following must concur: (a) the cause of the breach of the obligation must be independent of the will of the debtor; (b) the event
must be either unforseeable or unavoidable; (c) the event must be such as to render it impossible for the debtor to fulfill his
obligation in a moral manner; and (d) the debtor must be free from any participation in, or aggravation of the injury to the
creditor. (Vasquez v. Court of Appeals, 138 SCRA 553; Estrada v. Consolacion, 71 SCRA 423; Austria v. Court of Appeals, 39 SCRA
527; Republic of the Phil. v. Luzon Stevedoring Corp., 21 SCRA 279; Lasam v. Smith, 45 Phil. 657).

Thus, if upon the happening of a fortuitous event or an act of God, there concurs a corresponding fraud, negligence, delay or
violation or contravention in any manner of the tenor of the obligation as provided for in Article 1170 of the Civil Code, which
results in loss or damage, the obligor cannot escape liability.

The principle embodied in the act of God doctrine strictly requires that the act must be one occasioned exclusively by the violence
of nature and all human agencies are to be excluded from creating or entering into the cause of the mischief. When the effect,
the cause of which is to be considered, is found to be in part the result of the participation of man, whether it be from active
intervention or neglect, or failure to act, the whole occurrence is thereby humanized, as it were, and removed from the rules
applicable to the acts of God. (1 Corpus Juris, pp. 1174-1175).

Thus it has been held that when the negligence of a person concurs with an act of God in producing a loss, such person is not
exempt from liability by showing that the immediate cause of the damage was the act of God. To be exempt from liability for loss
because of an act of God, he must be free from any previous negligence or misconduct by which that loss or damage may have
been occasioned. (Fish & Elective Co. v. Phil. Motors, 55 Phil. 129; Tucker v. Milan, 49 O.G. 4379; Limpangco & Sons v. Yangco
Steamship Co., 34 Phil. 594, 604; Lasam v. Smith, 45 Phil. 657). 21

Accordingly, petitioners cannot be heard to invoke the act of God or force majeure to escape liability for the loss or damage sustained by private
respondents since they, the petitioners, were guilty of negligence. The event then was not occasioned exclusively by an act of God or force majeure;
a human factor negligence or imprudence had intervened. The effect then of the force majeure in question may be deemed to have, even if
only partly, resulted from the participation of man. Thus, the whole occurrence was thereby humanized, as it were, and removed from the laws
applicable to acts of God.

WHEREFORE, for want of merit, the instant petition is hereby DISMISSED and the Consolidated Decision of the Court of Appeals in CA-G.R. CV Nos.
27290-93 is AFFIRMED, with costs against the petitioners.

SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 107968 October 30, 1996

ELIAS S. CIPRIANO and/or E.S. CIPRIANO ENTERPRISES, petitioner,


vs.
THE COURT OF APPEALS and MACLIN ELECTRONICS, INC., respondents.

MENDOZA, J.:p

This is a petition for review of the decision 1 of the Court of Appeals in CA-G.R. CV No. 36045 which affirmed in toto the decision of Branch 58 2 of the
Quezon City Regional Trial Court, ordering the petitioner to pay P252,155.00 to private respondent for the loss of the latter's vehicle while undergoing
rustproofing and P10,000.00 in attorney's fees.

The facts of the case are as follows:

Petitioner Elias S. Cipriano is the owner of E.S. Cipriano Enterprises, which is engaged in the rustproofing of vehicles, under the style Mobilkote. On
April 30, 1991, private respondent Maclin Electronics, Inc., through an employee, brought a 1990 model Kia Pride People's car to petitioner's shop
for rustproofing. The car had been purchased the year before the Integrated Auto Sales, Inc. for P252,155.00.

The vehicle was received in the shop under Job Order No. 123581, 3 which showed the date it was received for rustproofing as well its condition at
the time. Neither the time of acceptance nor the hour of release, however, was specified. According to the petitioner, the car was brought to his
shop at 10 o'clock in the morning of April 30, 1991 and was ready for release later that afternoon, as it took only six hours to complete the process
of rustproofing.

In the afternoon of May 1, 1991, fire broke out at the Lambat restaurant, which petitioner also owned, adjoining his Mobilkote rustproofing shop.
The fire destroyed both the shop and the restaurant, including private respondent's Kia Pride. The car had been kept inside the building, allegedly to
protect it from theft. Petitioner claimed that despite efforts to save the vehicle, there was simply not enough time to get it out of the building, unlike
three other cars which had been saved because they were parked near the entrance of the garage. 4

On May 8, 1991, private respondent sent a letter to petitioner, demanding reimbursement for the value of the Kia Pride. In reply, petitioner denied
liability on the ground that the fire was a fortuitous event. This prompted private respondent to bring this suit for the value of its vehicle and for
damages against petitioner. Private respondent alleged that its vehicle was lost due to the negligence and imprudence of the petitioner, citing
petitioner's failure to register his business with the Department of Trade and Industry under P.D. No. 1572 and to insure it as required in the rules
implementing the Decree. 5

In his Answer, petitioner invoked Art. 1174 of the Civil Code and denied liability for the loss which he alleged was due to fortuitous event. He later
testified that he employed an electrician who regularly inspected the lighting in his restaurant and rustproofing shop. In addition, he claimed he had
installed fire-fighting devices and that the fire was an accident entirely independent of his will and devoid of any negligence on his part. He further
averred that private respondent's car was ready for release as early as afternoon of April 30, 1991 and that it was private respondent's delay in
claiming it that was the cause of the loss.

Petitioner explained that rustproofing involved spraying asphalt-like materials underneath a motor vehicle so that rust will not corrode its body and
that the materials and chemicals used for this purpose are not inflammable. Therefore, he could not be made to assume the risk of loss due to fire.
He also claimed that he was not required to register his business with the Department of Trade and Industry, because he was not covered by P.D.
No. 1572.
On the other hand, private respondent argued that petitioner was liable for the loss of the car even if it was caused by a fortuitous event. It contended
that the nature of petitioner's business required him to assume the risk because under P.D. No. 1572, petitioner was required to insure his property
as well as those of his customers.

The trial court sustained the private respondent's contention that the "failure of defendant to comply with P.D. No. 1572 is in effect a manifest act
of negligence which renders defendants [petitioner herein] liable for the loss of the car even if the same was caused by fire," 6 even as it ruled that
the business of rustproofing is "definitely covered" P.D. No. 1572. Since petitioner did not register his business and insure it, he must bear the cost
of loss of his customers. As already noted, the court ordered petitioner to pay private respondent P252,155.00 with interest at 6%per annum from
the filing of the case and attorney's fees in the amount of P10,000.00.

On Appeal, the decision was affirmed. The Court of Appeals ruled that the provisions of the Civil Code relied upon by the petitioner are not applicable
to this case, and that the law applicable to the case is P.D. No. 1572, the purpose of which is to protect customers who entrust their properties to
service and repair enterprises. The Court of Appeals held that by virtue of the provisions of P.D. No. 1572 and its implementing rules and regulations
which require fire insurance coverage prior to accreditation, owners of service and repair enterprises assume the risk of loss of their customer's
property. The appellate court stated:

Defendant-appellant was operating the business of rustproofing of cars and other motor vehicles illegally at the time of the fire
in question; i.e., without the necessary accreditation and license from the Department of Trade and Industry, and it is for this
reason that it did not carry at least a fire insurance coverage to protect the vehicles entrusted to it by its customers. Therefore,
it must bear the consequences of such illegal operation, including the risk of losses or injuries to the vehicles of its customers
brought about by unforeseen or fortuitous events like the fire that gutted its shop
and completely burned appellee's car while said vehicle was in its possession. 7

The Court of Appeals also affirmed the award of attorney's fees, ruling that although the lower court did not expressly and specifically state the
reason for the award, the basis therefor could be inferred from the finding that petitioner unjustly refused to pay private respondent's valid and
demandable claim. Said the appellate court:

Such wanton, reckless, and illegal operation of appellant's business resulted in appellee's lack of protection from the fire that
gutted appellant's shop and which completely burned its car while in appellant's possession for rustproofing. Yet appellant
adamantly and stubbornly refused to pay appellee the value of its lost car. It was, therefore, correctly ordered by the court a
quo to pay appellee reasonable attorney's fees as it had unjustly and unreasonably refused to satisfy the latter's plainly valid,
just, and demandable claim, compelling said appellee to file this action to protect its interests (Art. 2208, pars. (2) and (5), New
Civil Code). 8

Hence, this appeal. Petitioner contends that the fire which destroyed private respondent's car was a fortuitous event for which he cannot be held
responsible. In support of his argument, he cites the following provisions of the Civil Code:

Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of
the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or
which, though foreseen, were inevitable.

Art. 1262. An obligation which consists in the delivery of a determinate thing shall be extinguished if it should be lost or destroyed
without the fault of the debtor, and before he has incurred in delay.

When by law or stipulation, the obligor is liable even for fortuitous events, the loss of the thing does not extinguish the obligation,
and he shall be responsible for damages. The same rule applies when the nature of the obligation requires the assumption of
risk.

The contention is without merit. The issue in this case is whether petitioner was required to insure his business and the vehicles received by him in
the course of his business and, if so, whether his failure to do so constituted negligence, rendering him liable for loss due to the risk required to be
insured against. We hold that both questions must be answered in the affirmative.

We have already held that violation of a statutory duty is negligence per se. In F.F. Cruz and Co., Inc. v. Court of Appeals, 9 we held the owner of a
furniture shop liable for the destruction of the plaintiff's house in a fire which started in his establishment in view of his failure to comply with an
ordinance which required the construction of a firewall. In Teague v. Fernandez, 10 we stated that where the very injury which was intended to be
prevented by the ordinance has happened, non-compliance with the ordinance was not only an act of negligence, but also the proximate cause of
the death.

Indeed, the existence of a contract between petitioner and private respondent does not bar a finding of negligence under the principles of quasi-
delict, as we recently held in Fabre v. Court of Appeals. 11 Petitioner's negligence is the source of his obligation. He is not being held liable for breach
of his contractual obligation due to negligence but for his negligence in not complying with a duty imposed on him by law. It is therefore immaterial
that the loss occasioned to private respondent was due to a fortuitous event, since it was petitioner's negligence in not insuring against the risk which
was the proximate cause of the loss.

Thus, P.D. No. 1572, 1 requires service and repair enterprises for motor vehicles, like that petitioner's, to register with Department of Trade and
Industry. As condition for such registration or accreditation, Ministry Order No. 32 requires covered enterprises to secure insurance coverage. Rule
III of this Order provides in pertinent parts: 12

1 REQUIREMENTS FOR ACCREDITATION

1) Enterprises applying for original accreditation shall submit the following:

1.1 List of machineries/equipment/tools in useful condition;

1.2 List of certified engineers/accredited technicians mechanics with their personal data;

1.3 Copy of Insurance Policy of the shop covering the property entrusted by its customer for repair, service or
maintenance together with a copy of the official receipt covering the full payment of premium:

1.4 Copy of Bond referred to under Section 7, Rule III of this Rules and Regulations;

1.5 Written service warranty in the form prescribed by the Bureau;

1.6 Certificate issued by the Securities and Exchange Commission and Articles of Incorporation or Partnership
in case of corporation or partnership;

1.7 Such other additional documents which the Director may require from time to time.

8 INSURANCE POLICY

The insurance policy of the following risks like theft, pilferage, fire, flood and loss should cover exclusively the machines, motor
vehicles, heavy equipment, engines, electronics, electrical airconditioners, refrigerators, office machines and data processing
equipment, medical and dental equipment, other consumer mechanical and industrial equipment stored for repair and/or service
in the premises of the applicant.

There is thus a statutory duty imposed on petitioner and it is for his failure to comply with this duty that he was guilty or negligence rendering him
liable for damages to private respondent. While the fire in this case may be considered a fortuitous event, 13 this circumstance cannot exempt
petitioner from liability for loss.

We think, however, that the Court of Appeals erred in sustaining the award of attorney's fees by the lower court. It is now settled that the reasons
or grounds for an award of attorney's fees must be set forth in the decision of the court. 14 They cannot be left to inference as the appellate court
held in this case. The reason for this is that it is not sound policy to penalize the right to litigate. An award of attorney's fees, being an exception to
this policy and limited to the grounds enumerated in the law, 15 must be fully justified in the decision. It can not simply be inserted as an item of
recoverable damages in the judgment of the court. Since in this case there is no justification for the award of attorney's fees in the decision of the
trial court, it was error for the Court of Appeals to sustain such award.

WHEREFORE, the decision, dated November 18, 1992, of the Court of Appeals is AFFIRMED, with the modification that the award of attorney's fees
is DELETED.

Republic of the Philippines


SUPREME COURT
Manila

THIRD DIVISION

G.R. No. L-52732 August 29, 1988

F.F. CRUZ and CO., INC., petitioner,


vs.
THE COURT OF APPEALS, GREGORIO MABLE as substituted by his wife LUZ ALMONTE MABLE and children DOMING, LEONIDAS, LIGAYA, ELENA,
GREGORIO, JR., SALOME, ANTONIO, and BERNARDO all surnamed MABLE, respondents.
Luis S. Topacio for petitioner.

Mauricio M. Monta for respondents.

CORTES, J.:

This petition to review the decision of the Court of Appeals puts in issue the application of the common law doctrine of res ipsa loquitur.

The essential facts of the case are not disputed.

The furniture manufacturing shop of petitioner in Caloocan City was situated adjacent to the residence of private respondents. Sometime in August
1971, private respondent Gregorio Mable first approached Eric Cruz, petitioner's plant manager, to request that a firewall be constructed between
the shop and private respondents' residence. The request was repeated several times but they fell on deaf ears. In the early morning of September
6, 1974, fire broke out in petitioner's shop. Petitioner's employees, who slept in the shop premises, tried to put out the fire, but their efforts proved
futile. The fire spread to private respondents' house. Both the shop and the house were razed to the ground. The cause of the conflagration was
never discovered. The National Bureau of Investigation found specimens from the burned structures negative for the presence of inflammable
substances.

Subsequently, private respondents collected P35,000.00 on the insurance on their house and the contents thereof.

On January 23, 1975, private respondents filed an action for damages against petitioner, praying for a judgment in their favor awarding P150,000.00
as actual damages, P50,000.00 as moral damages, P25,000.00 as exemplary damages, P20,000.00 as attorney's fees and costs. The Court of First
Instance held for private respondents:

WHEREFORE, the Court hereby renders judgment, in favor of plaintiffs, and against the defendant:

1. Ordering the defendant to pay to the plaintiffs the amount of P80,000.00 for damages suffered by said plaintiffs for the loss of
their house, with interest of 6% from the date of the filing of the Complaint on January 23, 1975, until fully paid;

2. Ordering the defendant to pay to the plaintiffs the sum of P50,000.00 for the loss of plaintiffs' furnitures, religious images,
silverwares, chinawares, jewelries, books, kitchen utensils, clothing and other valuables, with interest of 6% from date of the
filing of the Complaint on January 23, 1975, until fully paid;

3. Ordering the defendant to pay to the plaintiffs the sum of P5,000.00 as moral damages, P2,000.00 as exemplary damages, and
P5,000.00 as and by way of attorney's fees;

4. With costs against the defendant;

5. Counterclaim is ordered dismissed, for lack of merit. [CA Decision, pp. 1-2; Rollo, pp. 29-30.]

On appeal, the Court of Appeals, in a decision promulgated on November 19, 1979, affirmed the decision of the trial court but reduced the award of
damages:

WHEREFORE, the decision declaring the defendants liable is affirmed. The damages to be awarded to plaintiff should be reduced
to P70,000.00 for the house and P50,000.00 for the furniture and other fixtures with legal interest from the date of the filing of
the complaint until full payment thereof. [CA Decision, p. 7; Rollo, p. 35.]

A motion for reconsideration was filed on December 3, 1979 but was denied in a resolution dated February 18, 1980. Hence, petitioner filed the
instant petition for review on February 22, 1980. After the comment and reply were filed, the Court resolved to deny the petition for lack of merit
on June 11, 1980.

However, petitioner filed a motion for reconsideration, which was granted, and the petition was given due course on September 12, 1980. After the
parties filed their memoranda, the case was submitted for decision on January 21, 1981.

Petitioner contends that the Court of Appeals erred:

1. In not deducting the sum of P35,000.00, which private respondents recovered on the insurance on their house, from the award of damages.
2. In awarding excessive and/or unproved damages.

3. In applying the doctrine of res ipsa loquitur to the facts of the instant case.

The pivotal issue in this case is the applicability of the common law doctrine of res ipsa loquitur, the issue of damages being merely consequential. In
view thereof, the errors assigned by petitioner shall be discussed in the reverse order.

1. The doctrine of res ipsa loquitur, whose application to the instant case petitioner objects to, may be stated as follows:

Where the thing which caused the injury complained of is shown to be under the management of the defendant or his servants
and the accident is such as in the ordinary course of things does not happen if those who have its management or control use
proper care, it affords reasonable evidence, in the absence of explanation by the defendant, that the accident arose from want
of care. [Africa v. Caltex (Phil.), Inc., G.R. No. L-12986, March 31, 1966, 16 SCRA 448.]

Thus, in Africa, supra, where fire broke out in a Caltex service station while gasoline from a tank truck was being unloaded into an underground
storage tank through a hose and the fire spread to and burned neighboring houses, this Court, applying the doctrine of res ipsa loquitur, adjudged
Caltex liable for the loss.

The facts of the case likewise call for the application of the doctrine, considering that in the normal course of operations of a furniture manufacturing
shop, combustible material such as wood chips, sawdust, paint, varnish and fuel and lubricants for machinery may be found thereon.

It must also be noted that negligence or want of care on the part of petitioner or its employees was not merely presumed. The Court of Appeals
found that petitioner failed to construct a firewall between its shop and the residence of private respondents as required by a city ordinance; that
the fire could have been caused by a heated motor or a lit cigarette; that gasoline and alcohol were used and stored in the shop; and that workers
sometimes smoked inside the shop [CA Decision, p. 5; Rollo, p. 33.]

Even without applying the doctrine of res ipsa loquitur, petitioner's failure to construct a firewall in accordance with city ordinances would suffice to
support a finding of negligence.

Even then the fire possibly would not have spread to the neighboring houses were it not for another negligent omission on the
part of defendants, namely, their failure to provide a concrete wall high enough to prevent the flames from leaping over it. As it
was the concrete wall was only 2-1/2 meters high, and beyond that height it consisted merely of galvanized iron sheets, which
would predictably crumble and melt when subjected to intense heat. Defendant's negligence, therefore, was not only with respect
to the cause of the fire but also with respect to the spread thereof to the neighboring houses.[Africa v. Caltex (Phil.), Inc., supra;
Emphasis supplied.]

In the instant case, with more reason should petitioner be found guilty of negligence since it had failed to construct a firewall between its property
and private respondents' residence which sufficiently complies with the pertinent city ordinances. The failure to comply with an ordinance providing
for safety regulations had been ruled by the Court as an act of negligence [Teague v. Fernandez, G.R. No. L-29745, June 4, 1973, 51 SCRA 181.]

The Court of Appeals, therefore, had more than adequate basis to find petitioner liable for the loss sustained by private respondents.

2. Since the amount of the loss sustained by private respondents constitutes a finding of fact, such finding by the Court of Appeals should not be
disturbed by this Court [M.D. Transit & Taxi Co., Inc. v. Court of Appeals, G.R. No. L-23882, February 17, 1968, 22 SCRA 559], more so when there is
no showing of arbitrariness.

In the instant case, both the CFI and the Court of Appeals were in agreement as to the value of private respondents' furniture and fixtures and
personal effects lost in the fire (i.e. P50,000.00). With regard to the house, the Court of Appeals reduced the award to P70,000.00 from P80,000.00.
Such cannot be categorized as arbitrary considering that the evidence shows that the house was built in 1951 for P40,000.00 and, according to private
respondents, its reconstruction would cost P246,000.00. Considering the appreciation in value of real estate and the diminution of the real value of
the peso, the valuation of the house at P70,000.00 at the time it was razed cannot be said to be excessive.

3. While this Court finds that petitioner is liable for damages to private respondents as found by the Court of Appeals, the fact that private respondents
have been indemnified by their insurer in the amount of P35,000.00 for the damage caused to their house and its contents has not escaped the
attention of the Court. Hence, the Court holds that in accordance with Article 2207 of the Civil Code the amount of P35,000.00 should be deducted
from the amount awarded as damages. Said article provides:

Art. 2207. If the plaintiffs property has been insured, and he has received indemnity from the insurance company for the injury
or loss arising out of the wrong or breach of contract complained of, the insurance company is subrogated to the rights of the
insured against the wrongdoer or the person who violated the contract. If the amount paid by the insurance company does not
fully cover the injury or loss, the aggrieved party shall be entitled to recover the deficiency from the person causing the loss or
injury. (Emphasis supplied.]

The law is clear and needs no interpretation. Having been indemnified by their insurer, private respondents are only entitled to recover the deficiency
from petitioner.

On the other hand, the insurer, if it is so minded, may seek reimbursement of the amount it indemnified private respondents from petitioner. This is
the essence of its right to be subrogated to the rights of the insured, as expressly provided in Article 2207. Upon payment of the loss incurred by the
insured, the insurer is entitled to be subrogated pro tanto to any right of action which the insured may have against the third person whose negligence
or wrongful act caused the loss [Fireman's Fund Insurance Co. v. Jamila & Co., Inc., G.R. No. L-27427, April 7, 1976, 70 SCRA 323.]

Under Article 2207, the real party in interest with regard to the indemnity received by the insured is the insurer [Phil. Air Lines, Inc. v. Heald Lumber
Co., 101 Phil. 1031, (1957).] Whether or not the insurer should exercise the rights of the insured to which it had been subrogated lies solely within
the former's sound discretion. Since the insurer is not a party to the case, its identity is not of record and no claim is made on its behalf, the private
respondent's insurer has to claim his right to reimbursement of the P35,000.00 paid to the insured.

WHEREFORE, in view of the foregoing, the decision of the Court of Appeals is hereby AFFIRMED with the following modifications as to the damages
awarded for the loss of private respondents' house, considering their receipt of P35,000.00 from their insurer: (1) the damages awarded for the loss
of the house is reduced to P35,000.00; and (2) the right of the insurer to subrogation and thus seek reimbursement from petitioner for the P35,000.00
it had paid private respondents is recognized.

SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. L-29745 June 4, 1973

MERCEDES M. TEAGUE, petitioner,


vs.
ELENA FERNANDEZ, et al., respondent.

Jose W. Diokno for petitioner.

Jose G. Gatchalian for respondents.

MAKALINTAL, J.:

The facts are stated in the decision of the Court of Appeals as follows:

The Realistic Institute, admittedly owned and operated by defendant-appellee Mercedes M. Teague was a vocational school for
hair and beauty culture situated on the second floor of the Gil-Armi Building, a two-storey, semi-concrete edifice (Exhs. "C", "C-
1" to "C-5" and "4") located at the corner of Quezon Boulevard and Soler Street, Quiapo, Manila. The said second floor was
unpartitioned, had a total area of about 400 square meters, and although it had only one stairway, of about 1.50 meters in width,
it had eight windows, each of which was provided with two fire-escape ladders (Exh. "4"), and the presence of each of said fire-
exits was indicated on the wall (Exh. "5").
At about four o'clock in the afternoon of October 24, 1955, a fire broke out in a store for surplus materials located about ten
meters away from the institute. Soler Street lay between that store and the institute. Upon seeing the fire, some of the students
in the Realistic Institute shouted 'Fire! Fire!' and thereafter, a panic ensued. Four instructresses and six assistant instructress of
the Institute were present and they, together with the registrar, tried to calm down the students, who numbered about 180 at
the time, telling them not to be afraid because the Gil-Armi Building would not get burned as it is made of concrete, and that the
fire was anyway, across the street. They told the students not to rush out but just to go down the stairway two by two, or to use
the fire-escapes. Mrs. Justitia Prieto, one of the instructresses, took to the microphone so as to convey to the students the above
admonitions more effectively, and she even slapped three students in order to quiet them down. Miss Frino Meliton, the registrar,
whose desk was near the stairway, stood up and tried with outstretched arms to stop the students from rushing and pushing
their way to the stairs. The panic, however, could not be subdued and the students, with the exception of the few who made use
of fire-escapes kept on rushing and pushing their way through the stairs, thereby causing stampede therein.

Indeed, no part of the Gil-Armi Building caught fire. But, after the panic was over, four students, including Lourdes Fernandez, a
sister of plaintiffs-appellants, were found dead and several others injured on account of the stampede.

xxx xxx xxx

The injuries sustained by Lourdes Fernandez consisted of lacerations in both eyes and on the upper lip, contused abrasions in different parts of the
body, internal hemorrhage and fractures in the second and third right ribs. The cause of death, according to the autopsy report, was "Shock due to
traumatic fractures of the ribs with perinephric hematoma and lacerations of the conjunctiva of both eyes."

The deceased's five brothers and sisters filed an action for damages against Mercedes M. Teague as owner and operator of Realistic Institute. The
Court of First Instance of Manila found for the defendant and dismissed the case. The plaintiffs thereupon appealed to the Court of Appeals, which
by a divided vote of 3 to 2 (a special division of five members having been constituted) rendered a judgment of reversal and sentenced the defendant
to pay damages to the plaintiffs in the sum of P11,000.00, plus interest at the legal rate from the date the complaint was filed.

The case came up to this Court on a petition for review filed by the defendant below.

The decision of the appellate court declared that the defendant, hereinafter to be referred to as the petitioner, was negligent and that such negligence
was the proximate cause of the death of Lourdes Fernandez. This finding of negligence is based primarily on the fact that the provision of Section
491 Of the Revised Ordinances of the City of Manila had not been complied with in connection with the construction and use of the Gil-Armi building
where the petitioner's vocational school was housed. This provision reads as follows:

Sec. 491. Firepro of partitions, exits and stairways. ... All buildings and separate sections of buildings or buildings otherwise
known as accessorias having less than three stories, having one or more persons domiciled therein either temporarily or
permanently, and all public or quasi-public buildings having less than three stories, such as hospitals, sanitarium, schools,
reformatories, places of human detention, assembly halls, clubs, restaurants or panciterias, and the like, shall be provided with
at least two unobstructed stairways of not less than one meter and twenty centimeters in width and an inclination of not less
than forty degrees from the perpendicular, in case of large buildings more than two stairways shall likewise be provided when
required by the chief of the fire department, said stairways shall be placed as far apart as possible.

The alleged violation of the ordinance above-quoted consisted in the fact that the second storey of the Gil-Armi building had only one stairway, 1.5
meters wide, instead of two of at least 1.2 meters each, although at the time of the fire the owner of the building had a second stairway under
construction.

In ruling that such non-compliance with the City Ordinances was an act of negligence and that such negligence was the proximate cause of the death
of Lourdes Fernandez, reliance is based on a number of authorities in the American jurisdiction, thus: .

The mere fact of violation of a statute is not sufficient basis for an inference that such violation was the proximate cause of the
injury complained. However, if the very injury has happened which was intended to be prevented by the statute, it has been held
that violation of the statute will be deemed to be proximate cause of the injury. (65 C.J.S. 1156).

The generally accepted view is that violation of a statutory duty constitutes negligence, negligence as a matter or law, or,
according to the decisions on the question, negligence per se for the reason that non-observance of what the legislature has
prescribed as a suitable precaution is failure to observe that care which an ordinarily prudent man would observe, and, when the
state regards certain acts as so liable to injure others as to justify their absolute prohibition, doing the forbidden act is a breach
of duty with respect to those who may be injured thereby; or, as it has been otherwise expressed, when the standard of care is
fixed by law, failure to conform to such standard is negligence, negligence per se or negligence in and of itself, in the absence of
a legal excuse. According to this view it is immaterial, where a statute has been violated, whether the act or omission constituting
such violation would have been regarded as negligence in the absence of any statute on the subject or whether there was, as a
matter of fact, any reason to anticipate that injury would result from such violation. .... (65 C.J.S. pp. 623-628).
But the existence of an ordinance changes the situation. If a driver causes an accident by exceeding the speed limit, for example,
do not inquire whether his prohibited conduct was unreasonably dangerous. It is enough that it was prohibited. Violation of an
ordinance intended to promote safety is negligence. If by creating the hazard which the ordinance was intended to avoid it brings
about the harm which the ordinance was intended to prevent, it is a legal cause of the harm. This comes only to saying that in
such circumstances the law has no reason to ignore the causal relation which obviously exists in fact. The law has excellent reason
to recognize it, since it is the very relation which the makers of the ordinance anticipated. This court has applied these principles
to speed limits and other regulations of the manner of driving. (Ross vs. Hartman, 139 Fed. 2d 14 at 15).

... However, the fact that other happenings causing or contributing toward an injury intervened between the violation of a statute
or ordinance and the injury does not necessarily make the result so remote that no action can be maintained. The test is to be
found not in the number of intervening events or agents, but in their character and in the natural and probable connection
between the wrong done and the injurious consequence. The general principle is that the violation of a statute or ordinance is
not rendered remote as the cause of an injury by the intervention of another agency if the occurrence of the accident, in the
manner in which it happened, was the very thing which the statute or ordinance was intended to Prevent. (38 Am Jur 841).

The petitioner has raised a number of issues. The first is that Section 491 of the Revised Ordinances of the City of Manila refers to public buildings
and hence did not apply to the Gil-Armi building which was of private ownership. It will be noted from the text of the ordinance, however, that it is
not ownership which determines the character of buildings subject to its requirements, but rather the use or the purpose for which a particular
building is utilized. Thus the same may be privately owned, but if it is devoted to any one of the purposes mentioned in the ordinance for instance
as a school, which the Realistic Institute precisely was then the building is within the coverage of the ordinance. Indeed the requirement that such
a building should have two (2) separate stairways instead of only one (1) has no relevance or reasonable relation to the fact of ownership, but does
have such relation to the use or purpose for which the building is devoted.

It is next contended that the obligation to comply with the ordinance devolved upon the owners of the building and therefore it is they and not the
petitioner herein, who is a mere lessee, who should be liable for the violation. The contention ignores the fact that it was the use of the building for
school purposes which brought the same within the coverage of the ordinance; and it was the petitioner and not the owners who was responsible
for such use.

The next issue, indeed the basic one, raised by the petitioner is whether or not the failure to comply with the requirement of the ordinance was the
proximate cause of the death of Lourdes Fernandez. The case of Villanueva Vda. de Bataclan, et al. vs. Medina, G. R. No. L-10126, October 22, 1957,
is cited in support of the contention that such failure was not the proximate cause. It is there stated by this Court:

The proximate legal cause is that acting first and producing the injury, either immediately or by settling 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 affecting 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 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.

Having in view the decision just quoted, the petitioner relates the chain of events that resulted in the death of Lourdes Fernandez as follows: (1)
violation of ordinance; (2) fire at a neighboring place; (3) shouts of "Fire!, Fire!"; (4) panic in the Institute; (5) stampede; and (6) injuries and death.

As thus projected the violation of the ordinance, it is argued, was only a remote cause, if at all, and cannot be the basis of liability since there
intervened a number of independent causes which produced the injury complained of. A statement of the doctrine relied upon is found in Manila
Electric Co. vs. Remoquillo, L-8328, May 18, 1956, wherein this Court, citing Corpus Juris said:

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.
p. 931.)

According to the petitioner "the events of fire, panic and stampede were independent causes with no causal connection at all with the violation of
the ordinance." The weakness in the argument springs from a faulty juxtaposition of the events which formed a chain and resulted in the injury. It is
true that the petitioner's non-compliance with the ordinance in question was ahead of and prior to the other events in point of time, in the sense
that it was coetaneous with its occupancy of the building. But the violation was a continuing one, since the ordinance was a measure of safety
designed to prevent a specific situation which would pose a danger to the occupants of the building. That situation was undue overcrowding in case
it should become necessary to evacuate the building, which, it could be reasonably foreseen, was bound to happen under emergency conditions if
there was only one stairway available. It is true that in this particular case there would have been no overcrowding in the single stairway if there had
not been a fire in the neighborhood which caused the students to panic and rush headlong for the stairs in order to go down. But it was precisely
such contingencies or event that the authors of the ordinance had in mind, for under normal conditions one stairway would be adequate for the
occupants of the building. Thus, as stated in 38 American Jurisprudence, page 841: "The general principle is that the violation of a statute or ordinance
is not rendered remote as the cause of an injury by the intervention of another agency if the occurrence of the accident, in the manner in which it
happened, was the very thing which the statute or ordinance was intended to prevent." To consider the violation of the ordinance as the proximate
cause of the injury does not portray the situation in its true perspective; it would be more accurate to say that the overcrowding at the stairway was
the proximate cause and that it was precisely what the ordinance intended to prevent by requiring that there be two stairways instead of only one.
Under the doctrine of the cases cited by the respondents, the principle of proximate cause applies to such violation.

A procedural point mentioned by the petitioner is that the complaint did not specifically allege that the ordinance in question had been violated. The
violation, however, as an act of negligence which gave rise to liability, was sufficiently comprehended within paragraph 7 of the complaint, which
reads: .

Par. 7. That the death of Lourdes Fernandez was due to the gross negligence of the defendant who failed to exercise due care
and diligence for the safety of its students in not providing the building with adequate fire exits and in not practicing fire drill
exercises to avoid the stampede, aside from the fact that the defendant did not have a permit to use the building as a school-
house.

The decision appealed from is affirmed, with costs.

SECOND DIVISION

[G.R. No. 130003. October 20, 2004]

JONAS AONUEVO, petitioner vs. HON. COURT OF APPEALS and JEROME VILLAGRACIA, respondent

DECISION

TINGA, J.:

The bicycle provides considerable speed and freedom of movement to the rider. It derives a certain charm from being unencumbered by any
enclosure, affording the cyclist the perception of relative liberty. It also carries some obvious risks on the part of the user and has become the subject
of regulation, if not by the government, then by parental proscription.
The present petition seeks to bar recovery by an injured cyclist of damages from the driver of the car which had struck him. The argument is
hinged on the cyclists failure to install safety devices on his bicycle. However, the lower courts agreed that the motorist himself caused the collision
with his own negligence. The facts are deceptively simple, but the resolution entails thorough consideration of fundamental precepts on negligence.

The present petition raises little issue with the factual findings of the Regional Trial Court (RTC), Branch 160, of Pasig City, as affirmed by the
Court of Appeals. Both courts adjudged petitioner, Jonas Aonuevo ( Aonuevo ), liable for the damages for the injuries sustained by the cyclist, Jerome
Villagracia (Villagracia). Instead, the petition hinges on a sole legal question, characterized as novel by the petitioner: whether Article 2185 of the
New Civil Code, which presumes the driver of a motor vehicle negligent if he was violating a traffic regulation at the time of the mishap, should apply
by analogy to non-motorized vehicles.[1]

As found by the RTC, and affirmed by the Court of Appeals, the accident in question occurred on 8 February 1989, at around nine in the evening,
at the intersection of Boni Avenue and Barangka Drive in Mandaluyong (now a city). Villagracia was traveling along Boni Avenue on his bicycle, while
Aonuevo, traversing the opposite lane was driving his Lancer car with plate number PJJ 359. The car was owned by Procter and Gamble Inc., the
employer of Aonuevos brother, Jonathan. Aonuevo was in the course of making a left turn towards Libertad Street when the collision occurred.
Villagracia sustained serious injuries as a result, which necessitated his hospitalization several times in 1989, and forced him to undergo four (4)
operations.

On 26 October 1989, Villagracia instituted an action for damages against Procter and Gamble Phils., Inc. and Aonuevo before the RTC.[2] He had
also filed a criminal complaint against Aonuevo before the Metropolitan Trial Court of Mandaluyong, but the latter was subsequently acquitted of
the criminal charge.[3] Trial on the civil action ensued, and in a Decision dated 9 March 1990, the RTC rendered judgment against Procter and Gamble
and Aonuevo, ordering them to pay Villagracia the amounts of One Hundred Fifty Thousand Pesos (P150, 000.00). for actual damages, Ten Thousand
Pesos (P10,000.00) for moral damages, and Twenty Thousand Pesos (P20,000.00) for attorneys fees, as well as legal costs.[4] Both defendants
appealed to the Court of Appeals.

In a Decision[5] dated 8 May 1997, the Court of Appeals Fourth Division affirmed the RTC Decision in toto[6]. After the Court of Appeals denied
the Motion for Reconsideration in a Resolution[7] dated 22 July 1997, Procter and Gamble and Aonuevo filed their respective petitions for review with
this Court. Procter and Gambles petition was denied by this Court in a Resolution dated 24 November 1997. Aonuevos petition,[8] on the other hand,
was given due course,[9] and is the subject of this Decision.

In arriving at the assailed Decision, the Court of Appeals affirmed the factual findings of the RTC. Among them: that it was Aonuevos vehicle
which had struck Villagracia;[10] that Aonuevos vehicle had actually hit Villagracias left mid-thigh, thus causing a comminuted fracture;[11] that as
testified by eyewitness Alfredo Sorsano, witness for Villagracia, Aonuevo was umaarangkada, or speeding as he made the left turn into
Libertad;[12] that considering Aonuevos claim that a passenger jeepney was obstructing his path as he made the turn. Aonuevo had enough warning
to control his speed;[13] and that Aonuevo failed to exercise the ordinary precaution, care and diligence required of him in order that the accident
could have been avoided.[14] Notably, Aonuevo, in his current petition, does not dispute the findings of tortious conduct on his part made by the
lower courts, hinging his appeal instead on the alleged negligence of Villagracia. Aonuevo proffers no exculpatory version of facts on his part, nor
does he dispute the conclusions made by the RTC and the Court of Appeals. Accordingly, the Court, which is not a trier of facts, [15] is not compelled
to review the factual findings of the lower courts, which following jurisprudence have to be received with respect and are in fact generally binding.[16]

Notwithstanding, the present petition presents interesting questions for resolution. Aonuevos arguments are especially fixated on a particular
question of law: whether Article 2185 of the New Civil Code should apply by analogy to non-motorized vehicles.[17] In the same vein, Aonuevo insists
that Villagracias own fault and negligence serves to absolve the former of any liability for damages.

Its is easy to discern why Aonuevo chooses to employ this line of argument. Aonuevo points out that Villagracias bicycle had no safety gadgets
such as a horn or bell, or headlights, as invoked by a 1948 municipal ordinance. [18] Nor was it duly registered with the Office of the Municipal
Treasurer, as required by the same ordinance. Finally, as admitted by Villagracia, his bicycle did not have foot brakes. [19] Before this Court, Villagracia
does not dispute these allegations, which he admitted during the trial, but directs our attention instead to the findings of Aonuevos own
negligence.[20] Villagracia also contends that, assuming there was contributory negligence on his part, such would not exonerate Aonuevo from
payment of damages. The Court of Appeals likewise acknowledged the lack of safety gadgets on Villagracias bicycle, but characterized the contention
as off-tangent and insufficient to obviate the fact that it was Aonuevos own negligence that caused the accident. [21]

Aonuevo claims that Villagracia violated traffic regulations when he failed to register his bicycle or install safety gadgets thereon. He posits that
Article 2185 of the New Civil Code applies by analogy. The provision reads:

Article 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.

The provision was introduced for the first time in this jurisdiction with the adoption in 1950 of the New Civil Code.[22] Its applicability is expressly
qualified to motor vehicles only, and there is no ground to presume that the law intended a broader coverage.

Still, Aonuevo hypothesizes that Article 2185 should apply by analogy to all types of vehicles [23]. He points out that modern-day travel is more
complex now than when the Code was enacted, the number and types of vehicles now in use far more numerous than as of then. He even suggests
that at the time of the enactment of the Code, the legislators must have seen that only motor vehicles were of such public concern that they had to
be specifically mentioned, yet today, the interaction of vehicles of all types and nature has inescapably become matter of public concern so as to
expand the application of the law to be more responsive to the times.[24]
What Aonuevo seeks is for the Court to amend the explicit command of the legislature, as embodied in Article 2185, a task beyond the pale of
judicial power. The Court interprets, and not creates, the law. However, since the Court is being asked to consider the matter, it might as well examine
whether Article 2185 could be interpreted to include non-motorized vehicles.

At the time Article 2185 was formulated, there existed a whole array of non-motorized vehicles ranging from human-powered contraptions on
wheels such as bicycles, scooters, and animal-drawn carts such as calesas and carromata. These modes of transport were even more prevalent on
the roads of the 1940s and 1950s than they are today, yet the framers of the New Civil Code chose then to exclude these alternative modes from the
scope of Article 2185 with the use of the term motorized vehicles. If Aonuevo seriously contends that the application of Article 2185 be expanded
due to the greater interaction today of all types of vehicles, such argument contradicts historical experience. The ratio of motorized vehicles as to
non-motorized vehicles, as it stood in 1950, was significantly lower than as it stands today. This will be certainly affirmed by statistical data, assuming
such has been compiled, much less confirmed by persons over sixty. Aonuevos characterization of a vibrant intra-road dynamic between motorized
and non-motorized vehicles is more apropos to the past than to the present.

There is a fundamental flaw in Aonuevos analysis of Art. 2185, as applicable today. He premises that the need for the distinction between
motorized and non-motorized vehicles arises from the relative mass of number of these vehicles. The more pertinent basis for the segregate
classification is the difference in type of these vehicles. A motorized vehicle operates by reason of a motor engine unlike a non-motorized vehicle,
which runs as a result of a direct exertion by man or beast of burden of direct physical force. A motorized vehicle, unimpeded by the limitations in
physical exertion. is capable of greater speeds and acceleration than non-motorized vehicles. At the same time, motorized vehicles are more capable
in inflicting greater injury or damage in the event of an accident or collision. This is due to a combination of factors peculiar to the motor vehicle,
such as the greater speed, its relative greater bulk of mass, and greater combustability due to the fuels that they use.

There long has been judicial recognition of the peculiar dangers posed by the motor vehicle. As far back as 1912, in the U.S. v. Juanillo[25], the
Court has recognized that an automobile is capable of great speed, greater than that of ordinary vehicles hauled by animals, and beyond doubt it is
highly dangerous when used on country roads, putting to great hazard the safety and lives of the mass of the people who travel on such roads.[26] In
the same case, the Court emphasized:

A driver of an automobile, under such circumstances, is required to use a greater degree of care than drivers of animals, for the reason that the
machine is capable of greater destruction, and furthermore, it is absolutely under the power and control of the driver; whereas, a horse or other
animal can and does to some extent aid in averting an accident. It is not pleasant to be obliged to slow down automobiles to accommodate persons
riding, driving, or walking. It is probably more agreeable to send the machine along and let the horse or person get out of the way in the best manner
possible; but it is well to understand, if this course is adopted and an accident occurs, that the automobile driver will be called upon to account for
his acts. An automobile driver must at all times use all the care and caution which a careful and prudent driver would have exercised under the
circumstances.[27]

American jurisprudence has had occasion to explicitly rule on the relationship between the motorist and the cyclist. Motorists are required to
exercise ordinary or reasonable care to avoid collision with bicyclists.[28] While the duty of using ordinary care falls alike on the motorist and the rider
or driver of a bicycle, it is obvious, for reasons growing out of the inherent differences in the two vehicles, that more is required from the former to
fully discharge the duty than from the latter.[29]

The Code Commission was cognizant of the difference in the natures and attached responsibilities of motorized and non-motorized vehicles.
Art. 2185 was not formulated to compel or ensure obeisance by all to traffic rules and regulations. If such were indeed the evil sought to be remedied
or guarded against, then the framers of the Code would have expanded the provision to include non-motorized vehicles or for that matter,
pedestrians. Yet, that was not the case; thus the need arises to ascertain the peculiarities attaching to a motorized vehicle within the dynamics of
road travel. The fact that there has long existed a higher degree of diligence and care imposed on motorized vehicles, arising from the special nature
of motor vehicle, leads to the inescapable conclusion that the qualification under Article 2185 exists precisely to recognize such higher standard.
Simply put, the standards applicable to motor vehicle are not on equal footing with other types of vehicles.

Thus, we cannot sustain the contention that Art. 2185 should apply to non-motorized vehicles, even if by analogy. There is factual and legal
basis that necessitates the distinction under Art. 2185, and to adopt Aonuevos thesis would unwisely obviate this distinction.

Even if the legal presumption under Article 2185 should not apply to Villagracia, this should not preclude any possible finding of negligence on
his part. While the legal argument as formulated by Aonuevo is erroneous, his core contention that Villagracia was negligent for failure to comply
with traffic regulations warrants serious consideration, especially since the imputed negligent acts were admitted by Villagracia himself.

The Civil Code characterizes negligence as 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. [30] However, the existence of negligence in a given case is not determined by the
personal judgment of the actor in a given situation, but rather, it is the law which determines what would be reckless or negligent.[31]

Aonuevo, asserts that Villagracia was negligent as the latter had transgressed a municipal ordinance requiring the registration of bicycles and
the installation of safety devices thereon. This view finds some support if anchored on the long standing principle of negligence per se.

The generally accepted view is that the violation of a statutory duty constitutes negligence, negligence as a matter of law, or negligence per
se.[32] In Teague vs. Fernandez,[33] the Court cited with approval American authorities elucidating on the rule:

The mere fact of violation of a statute is not sufficient basis for an inference that such violation was the proximate cause of the injury complained.
However, if the very injury has happened which was intended to be prevented by the statute, it has been held that violation of the statute will be
deemed to be the proximate cause of the injury. (65 C.J.S. 1156)
The generally accepted view is that violation of a statutory duty constitutes negligence, negligence as a matter of law, or, according to the decisions
on the question, negligence per se, for the reason that non-observance of what the legislature has prescribed as a suitable precaution is failure to
observe that care which an ordinarily prudent man would observe, and, when the state regards certain acts as so liable to injure others as to justify
their absolute prohibition, doing the forbidden act is a breach of duty with respect to those who may be injured thereby; or, as it has been otherwise
expressed, when the standard of care is fixed by law, failure to conform to such standard is negligence, negligence per se or negligence in and of
itself, in the absence of a legal excuse. According to this view it is immaterial, where a statute has been violated, whether the act or omission
constituting such violation would have been regarded as negligence in the absence of any statute on the subject or whether there was, as a matter
of fact, any reason to anticipate that injury would result from such violation. x x x. (65 C.J.S. pp.623-628)

But the existence of an ordinance changes the situation. If a driver causes an accident by exceeding the speed limit, for example, we do not inquire
whether his prohibited conduct was unreasonably dangerous. It is enough that it was prohibited. Violation of an ordinance intended to promote
safety is negligence. If by creating the hazard which the ordinance was intended to avoid it brings about the harm which the ordinance was intended
to prevent, it is a legal cause of the harm. This comes only to saying that in such circumstances the law has no reason to ignore the causal relation
which obviously exists in fact. The law has excellent reason to recognize it, since it is the very relation which the makers of the ordinance anticipated.
This court has applied these principles to speed limits and other regulations of the manner of driving. (Ross vs. Hartman, 139 Fed. 2d 14 at 15).

x x x However, the fact that other happenings causing or contributing toward an injury intervened between the violation of a statute or ordinance
and the injury does not necessarily make the result so remote that no action can be maintained. The test is to be found not in the number of
intervening events or agents, but in their character and in the natural and probable connection between the wrong done and the injurious
consequence. The general principle is that the violation of a statute or ordinance is not rendered remote as the cause of an injury by the intervention
of another agency if the occurrence of the accident, in the manner in which it happened, was the very thing which the statute or ordinance was
intended to prevent. (38 Am Jur 841)[34]

In Teague, the owner of a vocational school stricken by a fire resulting in fatalities was found negligent, base on her failure to provide adequate
fire exits in contravention of a Manila city ordinance. [35] In F.F. Cruz and Co., Inc. v. Court of Appeals[36], the failure of the petitioner to construct a
firewall in accordance with city ordinances sufficed to support a finding of negligence. [37] In Cipriano v. Court of Appeals, [38]the Court found that the
failure of the petitioner to register and insure his auto rustproofing shop in accordance with the statute constituted negligence per se, thus holding
him liable for the damages for the destruction by fire of a customers vehicle garaged therein.

Should the doctrine of negligence per se apply to Villagracia, resulting from his violation of an ordinance? It cannot be denied that the statutory
purpose for requiring bicycles to be equipped with headlights or horns is to promote road safety and to minimize the occurrence of road accidents
involving bicycles. At face value, Villagracias mishap was precisely the danger sought to be guarded against by the ordinance he violated. Aonuevo
argues that Villagracias violation should bar the latters recovery of damages, and a simplistic interpretation of negligence per se might vindicate such
an argument.

But this is by no means a simple case. There is the fact which we consider as proven, that Aonuevo was speeding as he made the left turn, and
such negligent act was the proximate cause of the accident. This reckless behavior would have imperiled anyone unlucky enough within the path of
Aonuevos car as it turned into the intersection, whether they are fellow motorists, pedestrians, or cyclists. We are hard put to conclude that
Villagracia would have avoided injury had his bicycle been up to par with safety regulations, especially considering that Aonuevo was already speeding
as he made the turn, or before he had seen Villagracia. Even assuming that Aonuevo had failed to see Villagracia because the bicycle was not equipped
with headlights, such lapse on the cyclists part would not have acquitted the driver of his duty to slow down as he proceeded to make the left turn.

This court has appreciated that negligence per se, arising from the mere violation of a traffic statute, need not be sufficient in itself in
establishing liability for damages. In Sanitary Steam Laundry, Inc. v. Court of Appeals,[39] a collision between a truck and a privately-owned Cimarron
van caused the death of three of the vans passengers. The petitioner therein, the owner of the truck, argued that the driver of the Cimarron was
committing multiple violations of the Land Transportation and Traffic Code[40] at the time of the accident. Among these violations: the Cimarron was
overloaded at the time of the accident; the front seat of the van was occupied by four adults, including the driver; and the van had only one
functioning headlight. Similar as in this case, petitioner therein invoked Article 2185 and argued that the driver of the Cimarron should be presumed
negligent. The Court, speaking through Justice Mendoza, dismissed these arguments:

[It] has not been shown how the alleged negligence of the Cimarron driver contributed to the collision between the vehicles. Indeed, petitioner has
the burden of showing a causal connection between the injury received and the violation of the Land Transportation and Traffic Code. He must show
that the violation of the statute was the proximate or legal cause of the injury or that it substantially contributed thereto. Negligence consisting in
whole or in part, of violation of law, like any other negligence, is without legal consequence unless it is a contributing cause of the injury. Petitioner
says that driving an overloaded vehicle with only one functioning headlight during nighttime certainly increases the risk of accident, that because the
Cimarron had only one headlight, there was decreased visibility, and that the fact that the vehicle was overloaded and its front seat overcrowded
decreased its maneuverability. However, mere allegations such as these are not sufficient to discharge its burden of proving clearly that such alleged
negligence was the contributing cause of the injury.[41]

Sanitary Steam[42] is controlling in this case. The bare fact that Villagracia was violating a municipal ordinance at the time of the accident may
have sufficiently established some degree of negligence on his part, but such negligence is without legal consequence unless it is shown that it was
a contributing cause of the injury. If anything at all, it is but indicative of Villagracias failure in fulfilling his obligation to the municipal government,
which would then be the proper party to initiate corrective action as a result. But such failure alone is not determinative of Villagracias negligence in
relation to the accident. Negligence is relative or comparative, dependent upon the situation of the parties and the degree of care and vigilance
which the particular circumstances reasonably require.[43] To determine if Villagracia was negligent, it is not sufficient to rely solely on the violations
of the municipal ordinance, but imperative to examine Villagracias behavior in relation to the contemporaneous circumstances of the accident.

The rule on negligence per se must admit qualifications that may arise from the logical consequences of the facts leading to the mishap. The
doctrine (and Article 2185, for that matter) is undeniably useful as a judicial guide in adjudging liability, for it seeks to impute culpability arising from
the failure of the actor to perform up to a standard established by a legal fiat. But the doctrine should not be rendered inflexible so as to deny relief
when in fact there is no causal relation between the statutory violation and the injury sustained. Presumptions in law, while convenient, are not
intractable so as to forbid rebuttal rooted in fact. After all, tort law is remunerative in spirit, aiming to provide compensation for the harm suffered
by those whose interests have been invaded owing to the conduct of others.[44]

Under American case law, the failures imputed on Villagracia are not grievous enough so as to negate monetary relief. In the absence of
statutory requirement, one is not negligent as a matter of law for failing to equip a horn, bell, or other warning devise onto a bicycle. [45] In most
cases, the absence of proper lights on a bicycle does not constitute negligence as a matter of law[46] but is a question for the jury whether the absence
of proper lights played a causal part in producing a collision with a motorist.[47] The absence of proper lights on a bicycle at night, as required by
statute or ordinance, may constitute negligence barring or diminishing recovery if the bicyclist is struck by a motorist as long as the absence of such
lights was a proximate cause of the collision;[48] however, the absence of such lights will not preclude or diminish recovery if the scene of the accident
was well illuminated by street lights,[49] if substitute lights were present which clearly rendered the bicyclist visible,[50] if the motorist saw the bicycle
in spite of the absence of lights thereon,[51] or if the motorist would have been unable to see the bicycle even if it had been equipped with lights. [52] A
bicycle equipped with defective or ineffective brakes may support a finding of negligence barring or diminishing recovery by an injured bicyclist where
such condition was a contributing cause of the accident.[53]

The above doctrines reveal a common thread. The failure of the bicycle owner to comply with accepted safety practices, whether or not
imposed by ordinance or statute, is not sufficient to negate or mitigate recovery unless a causal connection is established between such failure and
the injury sustained. The principle likewise finds affirmation in Sanitary Steam, wherein we declared that the violation of a traffic statute must be
shown as the proximate cause of the injury, or that it substantially contributed thereto.[54] Aonuevo had the burden of clearly proving that the alleged
negligence of Villagracia was the proximate or contributory cause of the latters injury.

On this point, the findings of the Court of Appeals are well-worth citing:

[As] admitted by appellant Aonuevo, he first saw appellee Villagracia at a distance of about ten (10) meters before the accident. Corrolarily, therefore,
he could have avoided the accident had he [stopped] alongside with an earlier (sic) jeep which was already at a full stop giving way to appellee. But
according to [eyewitness] Sorsano, he saw appellant Aonuevo umaarangkada and hit the leg of Villagracia (TSN March 14, 1990 p. 30). This earlier
(sic) jeep at a full stop gave way to Villagracia to proceed but Aonuevo at an unexpected motion (umarangkada) came out hitting Villagracia (TSN
March 9, 1990 p. 49). Appellant Aonuevo admitted that he did not blow his horn when he crossed Boni Avenue (TSN March 21, 1990 p. 47).[55]

By Aonuevos own admission, he had seen Villagracia at a good distance of ten (10) meters. Had he been decelerating, as he should, as he made
the turn, Aonuevo would have had ample opportunity to avoid hitting Villagracia. Moreover, the fact that Aonuevo had sighted Villagracia before the
accident would negate any possibility that the absence of lights on the bike contributed to the cause of the accident. [56] A motorist has been held
liable for injury to or death of a bicyclist where the motorist turned suddenly into the bicyclist so as to cause a collision.[57]

Neither does Aonuevo attempt before this Court to establish a causal connection between the safety violations imputed to Villagracia and the
accident itself. Instead, he relied on a putative presumption that these violations in themselves sufficiently established negligence appreciable against
Villagracia. Since the onus on Aonuevo is to conclusively prove the link between the violations and the accident, we can deem him as having failed
to discharge his necessary burden of proving Villagracias own liability.

Neither can we can adjudge Villagracia with contributory negligence. The leading case in contributory negligence, Rakes v. Atlantic
Gulf[58] clarifies that damages may be mitigated if the claimant in conjunction with the occurrence, [contributes] only to his injury.[59] To hold a person
as having contributed to his injuries, it must be shown that he performed an act that brought about his injuries in disregard of warnings or signs of
an impending danger to health and body.[60] To prove contributory negligence, it is still necessary to establish a causal link, although not proximate,
between the negligence of the party and the succeeding injury. In a legal sense, negligence is contributory only when it contributes proximately to
the injury, and not simply a condition for its occurrence.[61]

As between Aonuevo and Villagracia, the lower courts adjudged Aonuevo as solely responsible for the accident. The petition does not
demonstrate why this finding should be reversed. It is hard to imagine that the same result would not have occurred even if Villagracias bicycle had
been equipped with safety equipment. Aonuevo himself admitted having seen Villagracia from ten (10) meters away, thus he could no longer claim
not having been sufficiently warned either by headlights or safety horns. The fact that Aonuevo was recklessly speeding as he made the turn likewise
leads us to believe that even if Villagracias bicycle had been equipped with the proper brakes, the cyclist would not have had opportunity to brake in
time to avoid the speeding car. Moreover, it was incumbent on Aonuevo to have established that Villagracias failure to have installed the proper
brakes contributed to his own injury. The fact that Aonuevo failed to adduce proof to that effect leads us to consider such causal connection as not
proven.

All told, there is no reason to disturb the assailed judgment.

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals is AFFIRMED. Costs against petitioner.

SO ORDERED.
SECOND DIVISION
[G.R. No. L-8110. June 30, 1956.]
MARINDUQUE IRON MINES AGENTS, INC., Petitioner, vs. THE WORKMENS COMPENSATION COMMISSION, THE HEIRS OF PEDRO MAMADOR and
GERONIMO MA. COLL, Respondents.

DECISION
BENGZON, J.:
The Marinduque Iron Mines Agents Inc. questions by certiorari the order of the Workmens Compensation Commissioner confirming the referees
award of compensation to the heirs of Pedro Mamador for his accidental death.
Only the right to compensation is disputed; chan roblesvirtualawlibrarynot the amount.
It appears, says the award, that on August 23, 1951, at 6:chanroblesvirtuallawlibrary00 a.m. in Bo. Sumangga, Mogpog, Marinduque, the deceased
Mamador together with other laborers of the Respondent-corporation, (Marinduque Iron Mines Agents Inc.) boarded a truck belonging to the latter,
which was then driven by one Procopio Macunat, also employed by the corporation, and on its way to their place of work at the mine camp at
Talantunan, while trying to overtake another truck on the company road, it turned over and hit a coconut tree, resulting in the death of said Mamador
and injury to the others.
Procopio Macunat was prosecuted, convicted and sentenced to indemnify the heirs of the deceased. (Criminal Case No. 1491). He has paid nothing
however, to the latter.
In his first proposition Petitioner challenges the validity of the proceedings before the Commission, asserting it had not been given the opportunity
to cross-examine the opposing witnesses. According to Respondents.
The records show that pursuant to a request made by this Commission on March 28, 1953 to investigate the above-entitled case, the Public Defender
of Boac, Marinduque, notified Respondent Geronimo Ma. Coll and the general manager of the Respondent company, Mr. Eric Lenze, to appear before
him in an investigation, first on May 12, 1953, when neither of them appeared, and the second on May 29, 1953, when only Mr. Geronimo Ma. Coll.
appeared. The sworn testimony of Mr. Ma. Coll was then taken down in a question and answer method. On August 18, 1953, thru Referee Ramon
Villaflor, this Commission wrote the Respondent company to comment on the enclosed copy of the sworn declaration of Ma. Coll.
The Respondent company, thru its Vice President, denied its liability under the Workmens Compensation Act, as amended. In an investigation
conducted on February 8, 1954 by the undersigned referee, the Respondentcompany thru Mr. Lenze who was assisted by counsel, was allowed to
examine the records of the case including the sworn declaration of Ma. Coll and was given all the opportunity to rebut the same by additional
evidence.
In our opinion, Petitioners grievance does not rest on any sound basis, because it was given notice, and therefore had the chance, to examine (and
cross-examine) the witnesses against it. The statute even permits the Commissioner (or his referee) to take testimony without notice (section 48 Act
3428 as amended) provided of course such ex parte evidence is reduced to writing, and the adverse party is afforded opportunity to examine and
rebut the same which was done in this instance.
Anyway we are not shown how its failure to cross-examine the witnesses prejudiced the Petitioners position.
In its second proposition, Petitioner maintains that this claim is barred by section 6 of the Workmens Compensation Law, because (a) Macunat was
prosecuted and required to indemnify the heirs of the deceased and (b) an amicable settlement was concluded between said heirs and Macunat.
Section 6 provides as follows:chanroblesvirtuallawlibrary
Sec. 6. Liability of third parties. In case an employee suffers an injury for which compensation is due under this Act by any other person besides
his employer, it shall be optional with such injured employee either to claim compensation from his employer, under this Act, or sue such other
person for damages, in accordance with law; chan roblesvirtualawlibraryand in case compensation is claimed and allowed in accordance with this
Act, the employer who paid such compensation or was found liable to pay the same, shall succeed the injured employee to the right of recovering
from such person what he paid:chanroblesvirtuallawlibrary Provided, That in case the employer recovers from such third person damages in excess
of those paid or allowed under this Act, such excess shall be delivered to the injured employee or any other person entitled thereto, after deduction
of the expenses of the employer and the costs of the proceedings. The sum paid by the employer for compensation or the amount of compensation
to which the employee or his dependents are entitled, shall not be admissible as evidence in any damage suit or action.
It is the Petitioners contention that Criminal Case No. 1491 and its outcome constituted an election by the employee (or his heirs) to sue the third
person, such election having the effect of releasing the employer. However, Criminal Case No. 1491 was not a suit for damages against the third
person, it being alleged, without contradiction that the heirs did not intervene therein and have not so far received the indemnity ordered by the
court. At any rate, we have already decided in Nava vs. Inchausti Co. 1 that the indemnity granted the heirs in a criminal prosecution of the other
person does not affect the liability of the employer to pay compensation. 2
As to the alleged amicable settlement, it consists of an affidavit wherein, for the sum of 150 pesos, Mamadors widow promised to forgive Macunat
for the wrong committed and not to bring him before the authorities for prosecution. Upon making such promise Petitioner argues she elected
one of the remedies, (against the third person) and is barred from the other remedy (against the employer). The contention may not be sustained,
inasmuch as all the widow promised was to forego the offenders criminal prosecution. Note further that a question may be raised whether she could
bind the other heirs of the deceased.
The most important aspect of this appeal, is the effect of the deceaseds having violated the employers prohibition against laborers riding the haulage
trucks. Petitioner claims such violation was the laborers notorious negligence which, under the law, precludes recovery. The Commission has not
declared that the prohibition was known to Mamador. Yet the employer does not point out in the record evidence to that effect. Supposing Mamador
knew the prohibition, said the referee, can we truthfully say that he boarded the fatal truck with full apprehension of the existence of the danger,
if any at all, that an ordinary prudent man would try to avoid? I do not believe so, and even in the presence of doubt, the same must be resolved in
his favor. Unless of course, we can attribute to him a desire to end his life. Nowhere in the records of this case can we find the slightest insinuation
of that desire.
There is no doubt that mere riding on haulage truck or stealing a ride thereon is not negligence, ordinarily. It couldnt be, because transportation by
truck is not dangerous per se. It is argued that there was notorious negligence in this particular instance because there was the employers prohibition.
Does violation of this order constitute negligence? Many courts hold that violation of a statute or ordinance constitutes negligence per se. Others
consider the circumstances.
However there is practical unanimity in the proposition that violation of a rule promulgated by a Commission or board is not negligence per se; chan
roblesvirtualawlibrarybut it may be evidence of negligence. (C.J.S., Vol. 65, p. 427.)
This order of the employer (prohibition rather) couldnt be of a greater obligation than the rule of a Commission or board. And the referee correctly
considered this violation as possible evidence of negligence; chan roblesvirtualawlibrarybut it declared that under the circumstance, the laborer
could not be declared to have acted with negligence. Correctly, it is believed, since the prohibition had nothing to do with personal safety of the
riders.
Such finding is virtually a finding of fact which we may not overrule in this certiorari proceeding.
Nevertheless, even granting there was negligence, it surely was not notorious negligence, which we have interpreted to mean the same thing as
gross negligence 3 implying conscious indifference to consequences pursuing a course of conduct which would naturally and probably result
in injury utter disregard of consequences. (38 Am. Jur., 691) Getting or accepting a free ride on the companys haulage truck couldnt be gross
negligence, because as the referee found, no danger or risk was apparent.
There being no other material point raised in the petition for review, the award of compensation is hereby affirmed, with costs against Petitioner.
Padilla, Bautista Angelo, Concepcion, Reyes, J.B.L., and Endencia, JJ., concur.
Reyes, A., J., concurs in the result.
G.R. No. 119092 December 10, 1998

SANITARY STEAM LAUNDRY, INC., petitioner,


vs.
THE COURT OF APPEALS, NICANOR BERNABE III, JOSEFINA BERNABE, in their individual capacities and as HEIRS OF JASON BERNABE, JOHN JOSEPH
BERNABE, VICTOR IGNACIO, JULIETA ENRIQUEZ and RAMON ENRIQUEZ, RENE TABLANTE, LEOMAR MACASPAC, JR., CHARITO ESTOLANO, NENITA
SALUNOY, in their individual capacities and as HEIRS OF DALMACIO SALUNOY, respondents.

MENDOZA, J.:

This case involves a collision between a Mercedes Bent panel truck of petitioner Sanitary Steam Laundry and a Cimarron which caused the death of
three persons and the injuries of several others. The accident took place at the Aguinaldo Highway in Imus, Cavite on August 31, 1980. All the victims
were riding in the Cimarron. One of those who died was the driver. The Regional Trial Court of Makati found petitioner's driver to be responsible for
the vehicular accident and accordingly held petitioner liable to private respondents for P472,262.30 in damages and attorney's fees. Its decision was
affirmed in toto by the Court of Appeals. It is here for a review of the appellate court's decision.

The passengers of the Cimarron were mostly employees of the Project Management Consultants, Inc. (PMCI). They had just visited the construction
site of a company project at Lian, Batangas. The other passengers were family members and friends whom they invited to an excursion to the beach
after the visit to the construction site. The group stayed at Lian beach until 5:30 p.m., when they decided to go back to Manila.

The Cimarron, with Plate No. 840-45, was owned by Salvador Salenga, father of one of the employees of PMCI. Driving the vehicle was Rolando
Hernandez. It appears that at about 8:00 p.m., as it was traveling along Aguinaldo Highway in Imus, Cavite on its way back to Manila, the Cimarron
was hit on its front portion by petitioner's panel truck, bearing Plate No. 581 XM, which was traveling in the opposite direction. The panel truck was
on its way to petitioner's plant in Dasmarias, Cavite after delivering some linen to the Makati Medical Center. The driver, Herman Hernandez,
claimed that a jeepney in front of him suddenly stopped. He said he stepped on the brakes to avoid hitting the jeepney and that this caused his
vehicle to swerve to the left and encroach on a portion of the opposite lane. As a result, his panel truck collided with the Cimarron on the north-
bound lane.

The driver of the Cimarron, Rolando Hernandez, and two of his passengers, namely, Jason Bernabe and Dalmacio Salunoy, died. Several of the other
passengers of the Cimarron were injured and taken to various hospitals.

On December 4, 1980, private respondents filed this civil case for damages before the then Court of First Instance of Rizal, Pasig Branch, against
petitioner.

On November 23, 1990, the Regional Trial Court of Makati, to which the case was transferred following the reorganization of the judiciary, rendered
judgment for private respondents. The dispositive portion of its decision reads:

It is for the reasons stated above that the court is persuaded to award the damages incurred by the plaintiffs as proved in the
trial as follows:

Actual or compensatory expenses:

a. Charito Estolano P35,813.87 (Exh. J)

b. Nicanor Bernabe III 20,024.94

& Josefina C. Bernabe

c. Julieta, Ailyn & 45,830.45 (Exh. QQ)

Josefina Enriquez

and Josefina Valeiro

d. Leonor Macaspac 2,740.00


e. Victor Rey Ignacio 14,820.64 (Exh. EEE)

f. Rene Tablante 10,032.40 (Exh. QQQ)

g. Nenita Salonoy, widow; 20,000.00

and Jack & Manilyn,

children

Moral damages should also be awarded as follows:

For the injuries sustained by:

a. Charito Estolano P10,000.00 (Exh. F)

b. Julieta P. Enriquez 15,000.00 (Exh. MM)

c. Ailyn C. Enriquez 8,000.00 (Exh. NN)

d. Josefina R. Enriquez 10,000.00 (Exh. OO)

e. Josefina P. Valerio 2,000.00 (Exh. PP)

f. Nenita Salonoy 20,000.00 (Exh. DD)

g. Nicanor Bernabe III 8,000.00 (Exh. Q)

h. Josephine Bernabe 2,000.00 (Exh. R)

i. John Joseph Bernabe 10,000.00

j. Manilyn G. Salonoy 10,000.00 (Exh. EE)

k. Jack Salonoy 10,000.00 (Exh. JJ)

l. Leonor C. Macaspac 2,000.00 (Exh. AAA)

m. Victor Ignacio 8,000.00 (Exh. DDD)

n. Rene Tablanta 8,000.00 (Exh. FFF)

and finally the heirs of Jason Bernabe should be awarded the sum of P50,000.00 for the latter's death. The heirs of Dalmacio
Salunoy should be given the sum of P100,000.00 for moral damages and unearned income.

The foregoing considered, judgment is rendered in favor of plaintiffs ordering defendant to pay the amounts aforecited and to
pay the further sum of P50,000.00 for attorney's fees and the costs.

SO ORDERED.

As already stated, the Court of Appeals, to which the decision of the trial court was appealed, affirmed the decision on January 26, 1995. Hence, this
appeal.

First. Petitioner contends that the driver of the Cimarron was guilty of contributory negligence and, therefore, its liability should be mitigated, if not
totally extinguished. It claims that the driver of the Cimarron was guilty or violation of traffic rules and regulations at the time of the mishap. Hence,
in accordance with Art. 2185 of the Civil Code, he was presumed to be negligent.

According to petitioner, the negligence consisted of the following.


1. The Cimarron was overloaded because there were from 20 to 25 passengers inside when the passenger capacity of the vehicle was only 17.

2. The front seat of the Cimarron was occupied by four adults, including the driver.

3. The Cimarron had only one headlight on (its right headlight) as its left headlight was not functioning.

Petitioner cites Art. III, 2 of R.A. No. 4136, known as the Land Transportation and Traffic Code, which provides that "No person operating any vehicle
shall allow more passengers or more freight or cargo in his vehicle than its registered carry capacity" and Art. IV, 3(e) which states that "Every motor
vehicle of more than one meter of projected width, while in use on any public highway shall bear two headlights. . . which not later than one-half
hour after sunset and until at least one-half hour before sunrise and whenever weather conditions so require, shall both be lighted."

Petitioner asserts that the fact that its panel truck encroached on a portion of the lane of the Cimarron does not show that its driver was negligent.
Petitioner cites the case of Bayasen v. Court of Appeals,1 which allegedly held that the sudden swerving of a vehicle caused by its driver stepping on
the brakes is not negligence per se. Petitioner further claims that even if petitioner's swerving to the lane of respondents were considered proof of
negligence, this fact would not negate the presumption of negligence on the part of the other driver arising from his violations of traffic rules and
regulations.

Petitioner likewise invokes the ruling in Mckee v. Intermediate Appellate Court,2 in which a driver who invaded the opposite lane and caused a
collision between his car and a truck coming from the opposite lane, was exonerated based on the doctrine of last clear chance, which states that a
person who has the last clear chance or opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent, is solely responsible
for the consequences of the accident.

Petitioner contends that the ruling in that case should be applied to the present case. According to petitioner, although the driver of the panel truck
was initially negligent, the driver of the Cimarron had the last opportunity to avoid the accident. However, because of his negligence (i.e., the
aforementioned violations of traffic rules and regulations such as the use of only one headlight at night and the overcrowding at the front seat of the
vehicle), he was not able to avoid a collision with the panel truck.

We find the foregoing contention to be without merit.

First of all, it has not been shown how the alleged negligence of the Cimarron driver contributed to the collision between the vehicles. Indeed,
petitioner has the burden of showing a causal connection between the injury received and the violation of the Land Transportation and Traffic Code.
He must show that the violation of the statute was the proximate or legal cause of the injury or that it substantially contributed thereto. Negligence,
consisting in whole or in part, of violation of law, like any other negligence, is without legal consequence unless it is a contributing cause of the
injury.3 Petitioner says that "driving an overloaded vehicle with only one functioning headlight during nighttime certainly increases the risk of
accident,"4 that because the Cimarron had only one headlight, there was "decreased visibility," and that the tact that the vehicle was overloaded and
its front seat overcrowded "decreased [its] maneuverability,"5However, mere allegations such as these are not sufficient to discharge its burden of
proving clearly that such alleged negligence was the contributing cause of the injury.

Furthermore, based on the evidence in this case, there was no way either driver could have avoided the collision. The panel truck driver testified: 6

Q. You stated you were following a jeepney along the highway in Imus, Cavite, what happened afterwards, if
any?

A. The passenger jeepney I was following made a sudden stop so I stepped on the brakes.

Q. Upon stepping on your brakes, what happened if any?

A. The Mercedes Benz (panel) suddenly swerved to the left, sir.

Q. How big was the swerving to the left?

A. The distance which my vehicle swerved beyond the middle line or center line to the left was about this
distance, sir (witness demonstrating by using both hands the distance).

ATTY. ALILING:

Can we stipulate that it is 1 foot, Your Honor.

ATTY. GONZALES:
A little more, 1 1/2 feet.

ATTY. ALILING:

1 1/4 feet.

ATTY. GONZALES:

Between 1 1/4 and 1 1/2 feet.

The panel truck driver's testimony is consistent with the testimonies of private respondents that the panel truck went out of control and simply
smashed into the Cimarron in which they were riding. Thus, Nicanor Bernabe III
testified:7

Q: And did you see how the accident happened?

A: I just saw a glare of light. That is all and then the impact.

Q: Where did you see that glare of light?

A: Coming in front ahead of us.

Q: When you say ahead of you, was it . . . ?

A: Towards us.

xxx xxx xxx

Q: And from what did those glare of light come from.

A: Based on information I received, the light came from the headlights of a certain panel owned by Sanitary
Steam Laundry, Inc.

xxx xxx xxx

Q: You said that the lights were going towards you. Now, at what pace did these lights come toward you?

A: Fast pace.

Charito Estolano, another passenger who was seated in front of the Cimarron, similarly testified that they just saw the panel truck hurtling toward
them. She said: 8

Q Now, you said earlier that you were involved in an accident.


What was that accident?

A An approaching vehicle hit us.

Q Now, why do you know that there was the approaching vehicle?

A There was a light which glared us and I knew that it came from a vehicle. We were blinded.

Q Where was this vehicle headed for?

A Headed for Cavite.

Q Coming from?

A Coming from Manila, I think.


Q So that, actually, in relation to your vehicle, it was coming from the opposite direction?

A Yes, sir.

Q Now, you said that the light headed towards your vehicle. On which side of the highway was your Tamaraw
vehicle travelling at that time?

A We were on the right lane.

Q Did you actually see this light from the vehicle coming from the opposite direction heading towards your
vehicle?

A Yes, sir,

Q And what happened after that?

A After that, there was an impact.

Q All right. Will you tell the Court which bumped which?

A We were bumped by the vehicle which was coming from the opposite direction.

The foregoing testimonies show that the driver of the panel truck lost control of his vehicle and bumped the Cimarron. Hence, even if both headlights
of the Cimarron were lighted, it would have been bumped just the same because the driver of the panel truck could not stop despite the fact that he
applied the brakes. Petitioner's contention that because of "decreased visibility," caused by the fact that the Cimarron allegedly had only one
headlight on, its driver failed to see the Cimarron is without any basis in fact. Only its driver claimed that the Cimarron had only one headlight on.
The police investigator did not state in his report or in his testimony that the Cimarron had only one headlight on.

Nor is there any basis in fact for petitioner's contention that because of overcrowding in the front seat of the Cimarron there was "decreased
maneuverability" which prevented the Cimarron driver from avoiding the panel truck. There is absolutely no basis for this claim. There is nothing in
the testimonies of the passengers of the Cimarron, particularly Charito Estolano, who was seated in front, which suggest that the driver had no elbow
room for maneuvering the vehicle. To the contrary, from the testimony of some of the witnesses, 9 it appears that the driver of the Cimarron tried to
avoid the collision but because of the emergency created by the speeding panel truck coming from the opposite direction he was not able to fully
move his Cimarron away from the path of the oncoming vehicle. We are convinced that no "manuevering" which the Cimarron driver could have
done would have avoided a collision with the panel truck, given the suddenness of the events. Clearly, the overcrowding in the front seat was
immaterial.

All these point to the fact that the proximate cause of the accident was the negligence of petitioner's driver. As the trial court noted, the swerving of
petitioner's panel truck to the opposite lane could mean not only that petitioner's driver was running the vehicle at a very high speed but that he
was tailgating the passenger jeepney ahead of it as well.

Petitioner's driver claimed that the distance between the panel truck and the passenger jeepney in front was about 12 meters. 10 If this was so, he
would have had no difficulty bringing his panel truck to a stop. It is very probable that the driver did not really apply his brakes (which is why there
were no skid marks) but that finding the jeepney in front of him to be in close proximity, he tried to avoid hitting it by swerving his vehicle to the left.
In the process, however, he invaded a portion of the opposite lane and consequently hit the Cimarron. Indeed, the panel truck driver testified that
his vehicle was running at the speed of 60 miles per hour. 11 He tried to correct himself when asked by petitioner's counsel whether the panel truck
speedometer indicated miles or kilometers by saying that the speedometer measured kilometers and not miles, but on cross examination his
testimony got muddled. 12

Be that as it may, whether the driver meant 60 miles per hour (which could be 96.77 kilometers per hour) or 60 kilometers per hour, the fact remains
that the panel truck was overspeeding because the maximum allowable speed for truck and buses on open country roads, such as the Aguinaldo
Highway in Imus, Cavite, is only 50 kilometers per hour. 13

The case of Bayasen, which petitioner invokes, cannot apply to this case. There was no swerving of the vehicle in that case but skidding, and it was
caused by the fact that the road was wet and slippery. In this case, the road was dry and safe. There was no reason for the vehicle to swerve because
of road condition. The only explanation for this occurrence was human error.

Petitioner's reliance on the McKee case is also misplaced. In that case, the driver of the vehicle at fault, a truck, had an opportunity to avoid the
collision but he ignored the signals from the other vehicle, a car, to slow down and allow it to safely pass the bridge. In this case, there was no such
opportunity given the Cimarron on the night of the mishap. Everything happened so quickly that before the passengers of the Cimarron knew it, the
vehicle had been bumped by the truck.
Second. On its liability as employer of the negligent driver, petitioner contends that the non-submission of the NBI clearance and police clearance of
its driver does not mean that it failed to exercise the diligence of a good father of the family in the selection and supervision of its employees. It
argues that there is no law requiring employees to submit NBI and police clearance prior to their employment. Hence, petitioner's failure to require
submission of these documents does not mean that it did not exercise due diligence in the selection and supervision of its employees. On the other
hand, it asserts that its employment of Herman Hernandez as a driver means that he had passed the screening tests of the company, including
submission of the aforementioned documents. Petitioner maintains that the presumption is that the said driver submitted NBI and police clearance.

Petitioner likewise contends that the Court of Appeal's position that it failed to exercise due diligence in the selection and supervision of its employees
by not requiring its prospective employees to undergo psychological and physical tests before employment has no basis in law because there is no
law requiring such tests prior to hiring employees.

The petitioner's contention has no merit. The Court of Appeals did not say that petitioner's failure to submit NBI and police clearances of its driver
was proof that petitioner failed to exercise due diligence in the selection of its employees. What the Court of Appeals said was that petitioner's policy
of requiring prospective employees to submit NBI and police clearance and to have at least two (2) years experience as driver prior to employment
was not enough to prove the exercise of due diligence and that even this policy petitioner failed to prove by its failure to present the driver's NBI and
police records during the trial.

With respect to the requirement of passing psychological and physical tests prior to his employment, although no law requires it, such circumstance
would certainly be a reliable indicator of the exercise of due diligence. As the trial court said: 14

. . . No tests of skill, physical as well as mental and emotional, were conducted on their would-be employees. No on-the-job
training and seminars reminding employees, especially drivers, of road courtesies and road rules and regulations were done.
There were no instructions given to defendant's drivers as to how to react in cases of emergency nor what to do after an
emergency occurs. There was even failure on the part of defendant to present its concerned employee's 204 file. All these could
only mean failure on the part of defendant to exercise the diligence required of it of a good father of a family in the selection and
supervision of its employees.

Indeed, driving exacts a more than usual toll on the senses. 15 Accordingly, it behooves employers to exert extra care in the selection and
supervision of their employees. They must go beyond the minimum requirements fixed by law. In this case, David Bautista, the office
manager of petitioner in its Dasmarias plant, said that petitioner has a policy of requiring job applicants to submit clearances from the
police and the NBI. In the case of applicants for the position of driver they are required to have at least two (2) years driving experience
and to be holders of a professional driver's license for at least two years. But the supposed company policies on employment were not in
writing. Nor did Bautista show in what manner he supervised the drivers to ensure that they drove their vehicles in a safe way.

Third. With respect to the question of damages, we find no reversible error committed in the award of actual damages to private respondents. To
justify an award of actual damages, there must be competent proof of the actual amount of loss. Credence can be given only to claims which are duly
supported by receipts. 16Here, the actual damages claimed by private respondents were duly supported by receipts and appear to have been really
incurred.

As to the moral damages awarded, we find them to be reasonable and necessary in view of the circumstances of this case. Moral damages are
awarded to allow the victims to obtain means, diversion, or amusement to alleviate the moral suffering they had undergone due to the defendant's
culpable action. 17 In this case, private respondents doubtless suffered some ordeal because some of them lost their loved ones, while others lost
their future. Within the meaning of Art. 2217 of the Civil Code, they suffered sleepless night, mental anguish, serious anxiety, and wounded feelings.
An award of moral damages in their favor is thus justified.

The award of P50,000,00 to the heirs of Jason Bernabe as death indemnity is likewise in accordance with law. 18 However, the award of P100,000 to
the heirs of Dalmacio Salunoy, denominated in the decision of the trial court as "moral damages and unearned income" cannot be upheld. The heirs
were already included among those awarded moral damages. Marilyn Salunoy was ordered to be paid P10,000, Jack Salunoy, P10,000, and their
mother Nenita Salunoy, P20,000, as moral damages. The amount of P100,000 was presumably awarded primarily for loss of earning capacity but
even then the amount must be modified. In accordance with our cases 19 on this question, the formula for determining the life expectancy of Dalmacio
Salunoy must be determined by applying the formula 2/3 multiplied by (80 minus the age of the deceased). Since Salunoy was 46 years of age at the
time of his death, as stated in his death certificate, then his life expectancy was 22.6 years, or up to 68 years old.

Next, his net earnings must be computed. At the time of his death. Dalmacio Salunoy was earning more than P900.00 a month as bookkeeper at the
PMCI so that his annual gross earning was about P11,000.00. From this amount, about 50% should be deducted as reasonable and necessary living
expenses because it seems his wife occasionally finds work and thus helps in the household expenses.

Based on the foregoing, his net earning capacity was P124,300.00 computed as follows: 20

net earning life Gross reasonable &

capacity (x) = expectany x annual less necessary


income living

expenses

x = [2 (80-46)] x [P11,000 - P5,500]

= 22.6 x 5,500

= P124,300.00

In addition, the heirs of Dalmacio Salunoy should be paid P50,000.00 as death indemnity.

Finally, the award of attorney's fees should be disallowed as the trial court did not give any justification for granting it in its decision. It is now settled
that awards of attorney's fees must be based on findings of fact and law, stated in the decision of the trial court. 21

WHEREFORE, the decision of the Court of Appeals is MODIFIED in the sense that the award of P100,000.00 denominated "for moral damages and
unearned income" is deleted, and in lieu thereof the amount of P124,300.00 for loss of earning capacity and the further amount of P50,000.00 for
death indemnity are awarded to the heirs of Dalmacio Salunoy and the award of P50,000.00 for attorney's fees is disallowed. In all other respects
the appealed decision is AFFIRMED.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

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.
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 182356 December 4, 2013

DRA, LEILA A DELA LLANO, Petitioner,


vs.
REBECCA BIONG, doing business under the name and style of Pongkay Trading, Respondent.

DECISION

BRION, J.:

Very case essentially turns on two basic questions: questions of fact and questions of law. Questions of fact are the
parties and their counsel to respond to, based on what supporting facts the legal questions require; the court can
only draw conclusion from the facts or evidence adduced. When the facts are lacking because of the deficiency of
presented evidence, then the court can only draw one conclusion: that the cause must fail for lack of evidentiary
support.

The present case is one such case as Dra. Leila A dela Llanas(petitioner) petition for review on
certorari1challenging the February 11, 2008 Decision2 and the March 31, 2008 resolution3 of the Court of Appeals
(CA) in CA-G.R. CV No. 89163.

The Factual Antecedents

On March 30, 2000, at around 11:00 p.m., Juan dela Llana was driving a 1997 Toyota Corolla car along North
Avenue, Quezon City.4

His sister, Dra. dela Llana, was seated at the front passenger seat while a certain Calimlim was at the backseat.5

Juan stopped the car across the Veterans Memorial Hospital when the signal light turned red. A few seconds after
the car halted, a dump truck containing gravel and sand suddenly rammed the cars rear end, violently pushing the
car forward. Due to the impact, the cars rear end collapsed and its rear windshield was shattered. Glass splinters
flew, puncturing Dra. dela Llana. Apart from these minor wounds, Dra. dela Llana did not appear to have suffered
from any other visible physical injuries.6

The traffic investigation report dated March 30, 2000 identified the truck driver as Joel Primero. It stated that Joel
was recklessly imprudent in driving the truck.7

Joel later revealed that his employer was respondent Rebecca Biong, doing business under the name and style of
"Pongkay Trading" and was engaged in a gravel and sand business.8

In the first week of May 2000, Dra. dela Llana began to feel mild to moderate pain on the left side of her neck and
shoulder. The pain became more intense as days passed by. Her injury became more severe. Her health
deteriorated to the extent that she could no longer move her left arm. On June 9, 2000, she consulted with Dr.
Rosalinda Milla, a rehabilitation medicine specialist, to examine her condition. Dr. Milla told her that she suffered
from a whiplash injury, an injury caused by the compression of the nerve running to her left arm and hand. Dr. Milla
required her to undergo physical therapy to alleviate her condition. Dra. dela Llanas condition did not improve
despite three months of extensive physical therapy.9

She then consulted other doctors, namely, Drs. Willie Lopez, Leonor Cabral-Lim and Eric Flores, in search for a
cure. Dr. Flores, a neuro-surgeon, finally suggested that she undergo a cervical spine surgery to release the
compression of her nerve. On October 19, 2000, Dr. Flores operated on her spine and neck, between the C5 and
the C6 vertebrae.10

The operation released the impingement of the nerve, but incapacitated Dra. dela Llana from the practice of her
profession since June 2000 despite the surgery.11

Dra. dela Llana, on October 16, 2000, demanded from Rebecca compensation for her injuries, but Rebecca refused
to pay.12

Thus, on May 8, 2001, Dra. dela Llana sued Rebecca for damages before the Regional Trial Court of Quezon City
(RTC). She alleged that she lost the mobility of her arm as a result of the vehicular accident and claimed
150,000.00 for her medical expenses (as of the filing of the complaint) and an average monthly income of
30,000.00 since June 2000. She further prayed for actual, moral, and exemplary damages as well as attorneys
fees.13

In defense, Rebecca maintained that Dra. dela Llana had no cause of action against her as no reasonable relation
existed between the vehicular accident and Dra. dela Llanas injury. She pointed out that Dra. dela Llanas illness
became manifest one month and one week from the date of the vehicular accident. As a counterclaim, she
demanded the payment of attorneys fees and costs of the suit.14

At the trial, Dra. dela Llana presented herself as an ordinary witness15 and Joel as a hostile witness.16

Dra. dela Llana reiterated that she lost the mobility of her arm because of the vehicular accident. To prove her claim,
she identified and authenticated a medical certificate dated November 20, 2000 issued by Dr. Milla. The medical
certificate stated that Dra. dela Llana suffered from a whiplash injury. It also chronicled her clinical history and
physical examinations.17

Meanwhile, Joel testified that his truck hit the car because the trucks brakes got stuck.18

In defense, Rebecca testified that Dra. dela Llana was physically fit and strong when they met several days after the
vehicular accident. She also asserted that she observed the diligence of a good father of a family in the selection
and supervision of Joel. She pointed out that she required Joel to submit a certification of good moral character as
well as barangay, police, and NBI clearances prior to his employment. She also stressed that she only hired Primero
after he successfully passed the driving skills test conducted by Alberto Marcelo, a licensed driver-mechanic.19

Alberto also took the witness stand. He testified that he checked the truck in the morning of March 30, 2000. He
affirmed that the truck was in good condition prior to the vehicular accident. He opined that the cause of the
vehicular accident was a damaged compressor. According to him, the absence of air inside the tank damaged the
compressor.20

RTC Ruling

The RTC ruled in favor of Dra. dela Llana and held that the proximate cause of Dra. dela Llanas whiplash injury to
be Joels reckless driving.21

It found that a whiplash injury is an injury caused by the sudden jerking of the spine in the neck area. It pointed out
that the massive damage the car suffered only meant that the truck was over-speeding. It maintained that Joel
should have driven at a slower pace because road visibility diminishes at night. He should have blown his horn and
warned the car that his brake was stuck and could have prevented the collision by swerving the truck off the road. It
also concluded that Joel was probably sleeping when the collision occurred as Joel had been driving for fifteen
hours on that fateful day. The RTC further declared that Joels negligence gave rise to the presumption that
Rebecca did not exercise the diligence of a good father of a family in Joel's selection and supervision of Joel.
Rebecca was vicariously liable because she was the employer and she personally chose him to drive the truck. On
the day of the collision, she ordered him to deliver gravel and sand to Muoz Market, Quezon City. The Court
concluded that the three elements necessary to establish Rebeccas liability were present: (1) that the employee
was chosen by the employer, personally or through another; (2) that the services were to be rendered in accordance
with orders which the employer had 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. The RTC thus awarded Dra. dela Llana the amounts
of 570,000.00 as actual damages, 250,000.00 as moral damages, and the cost of the suit.22

CA Ruling

In a decision dated February 11, 2008, the CA reversed the RTC ruling. It held that Dra. dela Llana failed to
establish a reasonable connection between the vehicular accident and her whiplash injury by preponderance of
evidence. Citing Nutrimix Feeds Corp. v. Court of Appeals,23 it declared that courts will not hesitate to rule in favor of
the other party if there is no evidence or the evidence is too slight to warrant an inference establishing the fact in
issue. It noted that the interval between the date of the collision and the date when Dra. dela Llana began to suffer
the symptoms of her illness was lengthy. It concluded that this interval raised doubts on whether Joels reckless
driving and the resulting collision in fact caused Dra. dela Llanas injury. It also declared that courts cannot take
judicial notice that vehicular accidents cause whiplash injuries. It observed that Dra. dela Llana did not immediately
visit a hospital to check if she sustained internal injuries after the accident. Moreover, her failure to present expert
witnesses was fatal to her claim. It also gave no weight to the medical certificate. The medical certificate did not
explain how and why the vehicular accident caused the injury.24

The Petition

Dra. dela Llana points out in her petition before this Court that Nutrimix is inapplicable in the present case. She
stresses that Nutrimix involved the application of Article 1561 and 1566 of the Civil Code, provisions governing
hidden defects. Furthermore, there was absolutely no evidence in Nutrimix that showed that poisonous animal feeds
were sold to the respondents in that case. As opposed to the respondents in Nutrimix, Dra. dela Llana asserts that
she has established by preponderance of evidence that Joels egligent act was the proximate cause of her whiplash
injury. First, pictures of her damaged car show that the collision was strong. She posits that it can be reasonably
inferred from these pictures that the massive impact resulted in her whiplash injury. Second, Dr. Milla categorically
stated in the medical certificate that Dra. dela Llana suffered from whiplash injury. Third, her testimony that the
vehicular accident caused the injury is credible because she was a surgeon.

Dra. dela Llana further asserts that the medical certificate has probative value. Citing several cases, she posits that
an uncorroborated medical certificate is credible if uncontroverted.25

She points out that expert opinion is unnecessary if the opinion merely relates to matters of common knowledge.
She maintains that a judge is qualified as an expert to determine the causation between Joels reckless driving and
her whiplash injury. Trial judges are aware of the fact that whiplash injuries are common in vehicular collisions.

The Respondents Position

In her Comment,26 Rebecca points out that Dra. dela Llana raises a factual issue which is beyond the scope of a
petition for review on certiorari under Rule 45 of the Rules of Court. She maintains that the CAs findings of fact are
final and conclusive. Moreover, she stresses that Dra. dela Llanas arguments are not substantial to merit this
Courts consideration.

The Issue

The sole issue for our consideration in this case is whether Joels reckless driving is the proximate cause of Dra.
dela Llanas whiplash injury.

Our Ruling We find the petition unmeritorious.

The Supreme Court may review questions of fact in a petition for review on certiorari when the findings of fact by the
lower courts are conflicting

The issue before us involves a question of fact and this Court is not a trier of facts. As a general rule, the CAs
findings of fact are final and conclusive and this Court will not review them on appeal. It is not the function of this
Court to examine, review or evaluate the evidence in a petition for review on certiorari under Rule 45 of the Rules of
Court. We can only review the presented evidence, by way of exception, when the conflict exists in findings of the
RTC and the CA.27

We see this exceptional situation here and thus accordingly examine the relevant evidence presented before the
trial court.

Dra. dela Llana failed to establish her case by preponderance of evidence

Article 2176 of the Civil Code provides that "[w]hoever 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 a quasi-delict." Under this provision, the elements necessary to establish
a quasi-delict case are:

(1) damages to the plaintiff;

(2) negligence, by act or omission, of the defendant or by some person for whose acts the defendant must
respond, was guilty; and

(3) the connection of cause and effect between such negligence and the damages.28

These elements show that the source of obligation in a quasi-delict case is the breach or omission of mutual duties
that civilized society imposes upon its members, or which arise from non-contractual relations of certain members of
society to others.29

Based on these requisites, Dra. dela Llana must first establish by preponderance of evidence the three elements of
quasi-delict before we determine Rebeccas liability as Joels employer.

She should show the chain of causation between Joels reckless driving and her whiplash injury.

Only after she has laid this foundation can the presumption - that Rebecca did not exercise the diligence of a good
father of a family in the selection and supervision of Joel - arise.30

Once negligence, the damages and the proximate causation are established, this Court can then proceed with the
application and the interpretation of the fifth paragraph of Article 2180 of the Civil Code.31

Under Article 2176 of the Civil Code, in relation with the fifth paragraph of Article 2180, "an action predicated on an
employees act or omission may be instituted against the employer who is held liable for the negligent act or
omission committed by his employee."32

The rationale for these graduated levels of analyses is that it is essentially the wrongful or negligent act or omission
itself which creates the vinculum juris in extra-contractual obligations.33

In civil cases, a party who alleges a fact has the burden of proving it.

He who alleges has the burden of proving his allegation by preponderance of evidence or greater weight of credible
evidence.34

The reason for this rule is that bare allegations, unsubstantiated by evidence, are not equivalent to proof.

In short, mere allegations are not evidence.35

In the present case, the burden of proving the proximate causation between Joels negligence and Dra. dela Llanas
whiplash injury rests on Dra. dela Llana. She must establish by preponderance of evidence that Joels negligence, in
its natural and continuous sequence, unbroken by any efficient intervening cause, produced her whiplash injury, and
without which her whiplash injury would not have occurred.36
Notably, Dra. dela Llana anchors her claim mainly on three pieces of evidence:

(1) the pictures of her damaged car,

(2) the medical certificate dated November 20, 2000, and

(3) her testimonial evidence. However, none of these pieces of evidence show the causal relation between
the vehicular accident and the whiplash injury. In other words,

Dra. dela Llana, during trial, did not adduce the factum probans or the evidentiary facts by which the factum
probandum or the ultimate fact can be established, as fully discussed below.37

A.

The pictures of the damaged


car only demonstrate the
impact of the collision

Dra. dela Llana contends that the pictures of the damaged car show that the massive impact of the collision caused
her whiplash injury. We are not persuaded by this bare claim. Her insistence that these pictures show the causation
grossly belies common logic. These pictures indeed demonstrate the impact of the collision. However, it is a far-
fetched assumption that the whiplash injury can also be inferred from these pictures.

B.

The medical certificate cannot be


considered because it was
not admitted in evidence

Furthermore, the medical certificate, marked as Exhibit "H" during trial, should not be considered in resolving this
case for the reason that it was not admitted in evidence by the RTC in an order dated September 23, 2004.38

Thus, the CA erred in even considering this documentary evidence in its resolution of the case. It is a basic rule that
evidence which has not been admitted cannot be validly considered by the courts in arriving at their judgments.

However, even if we consider the medical certificate in the disposition of this case, the medical certificate has no
probative value for being hearsay. It is a basic rule that evidence, whether oral or documentary, is hearsay if its
probative value is not based on the personal knowledge of the witness but on the knowledge of another person who
is not on the witness stand.39

Hearsay evidence, whether objected to or not, cannot be given credence40 except in very unusual circumstance that
is not found in the present case. Furthermore, admissibility of evidence should not be equated with weight of
evidence. The admissibility of evidence depends on its relevance and competence, while the weight of evidence
pertains to evidence already admitted and its tendency to convince and persuade. Thus, a particular item of
evidence may be admissible, but its evidentiary weight depends on judicial evaluation within the guidelines provided
by the Rules of Court.41

During trial, Dra. dela Llana testified:

"Q: Did your physician tell you, more or less, what was the reason why you were feeling that pain in your left arm?

A: Well, I got a certificate from her and in that certificate, she stated that my condition was due to a compression of
the nerve, which supplied my left arm and my left hand.

Court: By the way, what is the name of this physician, Dra.?


Witness: Her name is Dra. Rosalinda Milla. She is a Rehabilitation Medicine Specialist. Atty. Yusingco: You
mentioned that this Dra. Rosalinda Milla made or issued a medical certificate. What relation does this medical
certificate, marked as Exhibit H have to do with that certificate, you said was made by Dra. Milla?

Witness: This is the medical certificate that Dra. Milla made out for me.

Atty. Yusingco: Your Honor, this has been marked as Exhibit H.

Atty. Yusingco: What other medical services were done on you, Dra. dela Llana, as a result of that feeling, that pain
that you felt in your left arm?

Witness: Well, aside from the medications and physical therapy, a re-evaluation of my condition after three months
indicated that I needed surgery.

Atty. Yusingco: Did you undergo this surgery?

Witness: So, on October 19, I underwent surgery on my neck, on my spine.

Atty. Yusingco: And, what was the result of that surgical operation?

Witness: Well, the operation was to relieve the compression on my nerve, which did not resolve by the extensive
and prolonged physical therapy that I underwent for more than three months."42(emphasis ours)

Evidently, it was Dr. Milla who had personal knowledge of the contents of the medical certificate. However, she was
1w phi 1

not presented to testify in court and was not even able to identify and affirm the contents of the medical certificate.
Furthermore, Rebecca was deprived of the opportunity to cross-examine Dr. Milla on the accuracy and veracity of
her findings. We also point out in this respect that the medical certificate nonetheless did not explain the chain of
causation in fact between Joels reckless driving and Dra. dela Llanas whiplash injury. It did not categorically state
that the whiplash injury was a result of the vehicular accident. A perusal of the medical certificate shows that it only
attested to her medical condition, i.e., that she was suffering from whiplash injury. However, the medical certificate
failed to substantially relate the vehicular accident to Dra. dela Llanas whiplash injury. Rather, the medical
certificate only chronicled her medical history and physical examinations.

C.

Dra. dela Llanas opinion that


Joels negligence caused her
whiplash injury has no probative value

Interestingly, the present case is peculiar in the sense that Dra. dela Llana, as the plaintiff in this quasi-delict case,
was the lone physician-witness during trial. Significantly, she merely testified as an ordinary witness before the trial
court. Dra. dela Llana essentially claimed in her testimony that Joels reckless driving caused her whiplash injury.
Despite the fact that Dra. dela Llana is a physician and even assuming that she is an expert in neurology, we cannot
give weight to her opinion that Joels reckless driving caused her whiplash injury without violating the rules on
evidence. Under the Rules of Court, there is a substantial difference between an ordinary witness and an expert
witness. The opinion of an ordinary witness may be received in evidence regarding:

(a) the identity of a person about whom he has adequate knowledge;

(b) a handwriting with which he has sufficient familiarity; and

(c) the mental sanity of a person with whom he is sufficiently acquainted. Furthermore, the witness may
1wphi 1

also testify on his impressions of the emotion, behavior, condition or appearance of a person.43

On the other hand, the opinion of an expert witness may be received in evidence on a matter requiring special
knowledge, skill, experience or training which he shown to possess.44
However, courts do not immediately accord probative value to an admitted expert testimony, much less to an
unobjected ordinary testimony respecting special knowledge. The reason is that the probative value of an expert
testimony does not lie in a simple exposition of the expert's opinion. Rather, its weight lies in the assistance that the
expert witness may afford the courts by demonstrating the facts which serve as a basis for his opinion and the
reasons on which the logic of his conclusions is founded.45

In the present case, Dra. dela Llanas medical opinion cannot be given probative value for the reason that she was
not presented as an expert witness. As an ordinary witness, she was not competent to testify on the nature, and the
cause and effects of whiplash injury. Furthermore, we emphasize that Dra. dela Llana, during trial, nonetheless did
not provide a medical explanation on the nature as well as the cause and effects of whiplash injury in her testimony.

The Supreme Court cannot take


judicial notice that vehicular
accidents cause whiplash injuries.

Indeed, a perusal of the pieces of evidence presented by the parties before the trial court shows that Dra. Dela
Llana did not present any testimonial or documentary evidence that directly shows the causal relation
between the vehicular accident and Dra. Dela Llanas injury. Her claim that Joels negligence causes her
whiplash injury was not established because of the deficiency of the presented evidence during trial. We point out in
this respect that courts cannot take judicial notice that vehicular ccidents cause whiplash injuries. This proportion is
not public knowledge, or is capable of unquestionable demonstration, or ought to be known to judges because of
their judicial functions.46 We have no expertise in the field of medicine. Justices and judges are only tasked to apply
and interpret the law on the basis of the parties pieces of evidence and their corresponding legal arguments.

In sum, Dra. dela Llana miserably failed to establish her cause by preponderance of evidence. While we
commiserate with her, our solemn duty to independently and impartially assess the merits of the case binds us to
rule against Dra. dela Llanas favor. Her claim, unsupported by prepondernace of evidence, is merely a bare
assertion and has no leg to stand on.

WHEREFORE, presmises considered, the assailed Decision dated February 11, 2008 and Resolution dated March
31, 2008 of the Court of Appeals are hereby AFFIRMED and the petition is hereby DENIED for lack of merit.
SO ORDERED.

ARTURO D. BRION
Associate Justice
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 ButuanCity. 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
plaintiffs-appellants/appellees. Whatever damage plaintiffs-appellants/appellees
[14]
suffered, they alone must bear them.

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 RTC ruled 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. PNT-247, 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 precedent-setting 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

SECOND DIVISION

CONSTANCIA G. TAMAYO, JOCELYN G. G.R. No. 176946


TAMAYO, and ARAMIS G. TAMAYO,
collectively known as HEIRS OF CIRILO
Present:
TAMAYO,
Petitioners,
CARPIO, J.,
Chairperson,
NACHURA,
- versus -
PERALTA,
ABAD, and
MENDOZA, JJ.
ROSALIA ABAD SEORA, ROAN ABAD SEORA,
and JANETE ABAD SEORA,
Respondents. Promulgated:

November 15, 2010

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

DECISION

NACHURA, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court.
Petitioners Constancia G. Tamayo (Constancia), Jocelyn G. Tamayo, and Aramis G. Tamayo are
assailing the Decision[1] dated March 22, 2006 and the Resolution[2] dated February 6, 2007 of
the Court of Appeals (CA) in CA-G.R. CV No. 63171. The CA affirmed, with modification, the
decision[3] of the Regional Trial Court (RTC) of Paraaque City in Civil Case No. 96-0339.

The factual antecedents, as found by the RTC and affirmed by the CA, are as follows:

On September 28, 1995, at about 11:00 a.m., Antonieto M. Seora (Seora), then 43 years
old and a police chief inspector of the Philippine National Police (PNP),[4] was riding a motorcycle
and crossing the intersection of Sucat Road towards Filipinas Avenue, when a tricycle allegedly
bumped his motorcycle from behind. As a result, the motorcycle was pushed into the path of an
Isuzu Elf Van (delivery van), which was cruising along Sucat Road and heading towards South
Superhighway. The delivery van ran over Seora, while his motorcycle was thrown a few meters
away. He was recovered underneath the delivery van and rushed to the Medical Center of
Paraaque, where he was pronounced dead on arrival.[5]

The tricycle was driven by Leovino F. Amparo (Amparo), who testified that it was the delivery
van that bumped Seoras motorcycle. He said that he did not see how the motorcycle could have
been hit by his tricycle since he was looking at his right side, but when he heard a sound, he
looked to his left and saw Seora already underneath the delivery van. He also said that when he
was brought to the police station for investigation, he brought his tricycle to disprove the claim
of the delivery van driver by showing that his tricycle sustained no damage.[6]

The delivery van, on the other hand, was driven by Elmer O. Polloso (Polloso) and
registered in the name of Cirilo Tamayo (Cirilo). While trial was ongoing, Cirilo was suffering
from lung cancer and was bedridden. His wife, petitioner Constancia, testified on his behalf.
Constancia narrated that she and her husband were managing a single proprietorship known as
Tamayo and Sons Ice Dealer. She testified that it was Cirilo who hired their drivers. She claimed
that, as employer, her husband exercised the due diligence of a good father of a family in the
selection, hiring, and supervision of his employees, including driver Polloso. Cirilo would tell
their drivers not to drive fast and not to be too strict with customers.[7]

One of Cirilos employees, Nora Pascual (Pascual), also testified. She alleged that she was
working as auditor and checker for Tamayo and Sons Ice Dealer. She testified that she and
another employee were with Polloso in the delivery van at the time of the incident. She narrated
that, while they were traversing Sucat Road, she saw a motorcycle going towards Filipinas
Avenue. Pascual said that, when they reached the intersection of Sucat Road and Filipinas
Avenue, Polloso blew the horn. She then saw a tricycle bump the rear of the motorcycle. She
said that Polloso stopped the delivery van. When they alighted, they saw the motorcycle already
under the delivery van. Pascual further testified that Polloso was a careful driver who drove the
truck slowly and followed traffic rules. She also said that Cirilo called for a meeting before the
delivery trucks left and told his drivers to be careful in their driving and to be courteous to their
customers.[8]

On March 2, 1999, the court rendered a decision, the dispositive portion of which reads:

WHEREFORE, defendants Leovino F. Amparo, Elmer O. Polloso and Cirilo


Tamayo are found liable jointly and severally to plaintiffs and ordered to pay the latter
the amounts of P105,100.00 for actual damages, P50,000.00 for loss of
life, P1,152,360.00 for loss of earnings and P30,000.00 for attorneys fees.

SO ORDERED.[9]

The RTC found Polloso guilty of negligence. It held that Polloso failed to slow down or
come to a full stop at the intersection, causing the delivery van to run over Seora. The RTC also
found that the truck was traveling fast on the outer lane, the lane customarily considered to be
for slow-moving vehicles.[10]
The RTC held Amparo similarly guilty of negligence. It found that the tricycle had bumped
into Seoras motorcycle and pushed it towards the trucks path. It said that the statement to that
effect made by witness Pascual was made immediately after the accident and could be
considered a spontaneous reaction to a startling occurrence.[11]

However, the RTC said that, even if the tricycle bumped into Seoras motorcycle from
behind, the collision could have been avoided had Polloso observed the elementary rule of
driving that one must slow down, or come to a full stop, when crossing an intersection.[12]

In addition, the RTC found Cirilo to be solidarily liable for Seoras death. It held that
Constancias testimony was hearsay and unsupported by any documentary evidence. The RTC
also brushed aside Pascuals testimony because, as checker and auditor, she had no participation
in hiring the companys drivers. Thus, Cirilo was held vicariously liable for the acts and omissions
of Polloso.[13]

Finally, in determining the liability for loss of income, the RTC modified the formula in
determining life expectancy, 2/3 x (80 age of victim at the time of death). The RTC considered
the retirement age of the members of the PNP, which was 55 years old. Thus, the formula that
the RTC used was 2/3 x (55 age of the victim at the time of death).

On appeal, the CA affirmed the RTCs decision, but modified the finding on the deceaseds
net earning capacity. The CA used the formula:

Net earning capacity = life expectancy x gross annual income less


living expenses[14]

with life expectancy computed as

2/3 x (80 age of deceased)[15]


and living expenses fixed at half of the victims gross income.

Thus, Seoras net earning capacity was computed to be P1,887,847.00.[16]

The CA disposed of the case in this wise:

WHEREFORE, the Decision dated March 2, 1999 rendered by


the Regional Trial Court of Paraaque City, Branch 257 is AFFIRMED with
the MODIFICATION as to the amount representing loss of earnings to P1,887,847.00

SO ORDERED.[17]

Petitioners Motion for Reconsideration was denied in a Resolution dated February 6,


[18]
2007.

Petitioners are now before this Court, assailing the CAs Decision and Resolution. They
raise the issues of who was negligent in the incident and what was the proximate cause of Seoras
death.[19] In particular, they submit the following Assignment of Errors:

THE HONORABLE COURT OF APPEALS GR[IE]VOUSLY ERRED IN HOLDING DEFENDANT


ELMER POLLOSO NEGLIGENT UNDER THE OBTAINING CIRCUMSTANCES.

II
THE HONORABLE COURT OF APPEALS MANIFESTLY ERRED IN DECLARING THE JOINT
NEGLIGENCE OF DEFENDANTS LEOVINO AMPARO AND ELMER POLLOSO TO BE THE
PROXIMATE CAUSE OF THE DEATH OF ANTONIETO SEORA.

III

THE HONORABLE COURT OF APPEALS ERRED IN ADJUDGING DEFENDANT CIRILO


TAMAYO SOLIDARILY LIABLE FOR THE DEATH OF ANTONIETO SEORA.[20]

The petition has no merit and is hereby denied.

As a rule, the jurisdiction of this Court in cases brought to it from the CA is limited to the review
and revision of errors of law allegedly committed by the appellate court.[21]

The issues raised by petitioners are questions of fact necessarily calling for a
reexamination and reevaluation of the evidence presented at the trial.

A question of fact arises when the doubt or difference pertains to the truth or falsehood
of alleged facts, or when the query necessarily solicits calibration of the whole evidence,
considering the credibility of witnesses, the existence and relevance of specific circumstances,
and their relation to one another and to the whole situation.[22]

The Court has consistently ruled that findings of fact of trial courts are entitled to great weight
and should not be disturbed, except for strong and valid reasons, because the trial court is in a
better position to examine the demeanor of witnesses while testifying. It is not a function of
this Court to analyze and weigh evidence all over again.[23] The factual findings of the CA
affirming those of the trial court are final and conclusive;[24] hence, they are binding on this
Court.
The Court will not disturb such factual findings unless there are compelling or exceptional
reasons.[25] No such reasons exist in this case.

The Court holds that the RTC and the CA correctly found Polloso negligent.

To be credible, testimonial evidence should not only come from the mouth of a credible
witness but it should also be credible, reasonable, and in accord with human experience.[26] It
should be positive and probable such that it is difficult for a rational mind not to find it
credible.[27]

If, as Pascual testified, the truck stopped when the tricycle bumped the motorcycle from
behind,[28] then there would have been no accident. Even if the motorcycle was nudged into the
path of the truck, as she claimed, there would have been no impact if the truck itself was not
moving, and certainly not an impact that would pin the motorcycles driver under the truck and
throw the motorcycle a few meters away.

The Court likewise finds that the CA did not err in upholding Cirilos solidary liability for Seoras
death. The RTC correctly disregarded the testimonies of Cirilos wife and his employee, leaving
no other evidence to support the claim that he had exercised the degree of diligence required
in hiring and supervising his employees.

Finally, the Court sustains the award for loss of earning capacity by the CA.

The award of damages for loss of earning capacity is concerned with the determination
of losses or damages sustained by respondents, as dependents and intestate heirs of the
deceased. This consists not of the full amount of his earnings, but of the support which they
received or would have received from him had he not died as a consequence of the negligent
act. Thus, the amount recoverable is not the loss of the victims entire earnings, but rather the
loss of that portion of the earnings which the beneficiary would have received.[29]

Indemnity for loss of earning capacity is determined by computing the net earning
capacity of the victim.[30]
The CA correctly modified the RTCs computation. The RTC had misapplied the
formula[31] generally used by the courts to determine net earning capacity, which is, to wit:

Net Earning Capacity = life expectancy x (gross annual income - reasonable and
necessary living expenses).

Life expectancy shall be computed by applying the formula (2/3 x [80 - age at death])
adopted from the American Expectancy Table of Mortality or the Actuarial of Combined
Experience Table of Mortality.[32] Hence, the RTC erred in modifying the formula and using the
retirement age of the members of the PNP instead of 80.

On the other hand, gross annual income requires the presentation of documentary
evidence for the purpose of proving the victims annual income.[33] The victims heirs presented
in evidence Seoras pay slip from the PNP, showing him to have had a gross monthly salary
of P12,754.00.[34] Meanwhile, the victims net income was correctly pegged at 50% of his gross
income in the absence of proof as regards the victims living expenses.[35]

Consequently, the Court sustains the award of P1,887,847.00 as damages for loss of
earning capacity. All other aspects of the assailed Decision are affirmed.

WHEREFORE, the foregoing premises considered, the Decision dated March 22, 2006 and
the Resolution dated February 6, 2007 of the Court of Appeals in CA-G.R. CV No. 63171 are
hereby AFFIRMED.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

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 decision1 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
"full-astern" 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
oncertiorari.

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." 25Scouring 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. 27Candidness, 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 the petitioner, 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. 35 This, 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. 43 These 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. 51 Logic 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. 62Those 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 full-astern. 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. 90Except 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, 96 and 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.
Co-defendants 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. 15-65, 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.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-21512 August 31, 1966

PROSPERO SABIDO and ASER LAGUNDA, petitioners,


vs.
CARLOS CUSTODIO, BELEN MAKABUHAY CUSTODIO and THE HONORABLE COURT OF
APPEALS,respondents.

Sabido, Sabido and Associates for petitioners.


Ernesto S. Tengco for respondents.

CONCEPCION, C.J.:

Prospero Sabido and Aser Lagunda seek the review by certiorari of a decision of the Court of Appeals, affirming that
of the Court of First Instance of Laguna, sentencing the Laguna-Tayabas Bus Co., Nicasio Mudales, and herein
petitioners. Prospero Sabido and Aser Lagunda, to jointly and severally indemnify Belen Makabuhay Custodio and
her son, Agripino Custodio Jr., in the sum of P6,000 and to pay the costs of the suit.

The facts are set forth in the decision of the Court of Appeals from which we quote:

Upon a careful study and judicious examining of the evidence on record, we are inclined to concur in the
findings made by the trial court. Here is how the Court a quo analyzed the facts of this case:

"In Barrio Halang, Municipality of Lumban, Province of Laguna, two trucks, one driven by Nicasio
Mudales and belonging to Laguna-Tayabas Bus Company, and the other driven by Aser Lagunda
and owned by Prospero Sabido, going in opposite directions met each other in a road curve.
Agripino Custodia a passenger of LTB bus, who was hanging on the left side as truck was full of
passengers was sideswiped by the track driven by Aser Lagunda. As a result, Agripino Custodio was
injured and died (Exhibit A).

"It appears clear from the evidence that Agripino Custodio was hanging on the left side of the LTB
bus. Otherwise, were he sitting inside the truck, he could not have been struck by the six by six truck
driven by Aser Lagunda. This fact alone, of allowing Agripino Custodio to hang on the side of the
truck, makes the defendant Laguna Tayabas Bus Company liable for damages. For certainly its
employees, who are the driver and conductor were negligent. They should not have allowed Agripino
Custodio to ride their truck in that manner.

"To avoid any liability, Aser Lagunda and Prospero Sabido throw all the blame on Nicasio Mudales.
From the testimony, however, of Belen Makabuhay, Agripino Custodio's widow, we can deduce that
Aser Lagunda was equally negligent as Nicasio Mudales. Belen testified that the 6 x 6 truck was
running fast when it met the LTB Bus. And Aser Lagunda had time and opportunity to avoid the
mishap if he had been sufficiently careful and cautious because the two trucks never collided with
each other. By simply swerving to the right side of the road, the 6 x 6 truck could have avoided
hitting Agripino Custodio. It is incredible that the LTB was running on the middle of the road when
passing a curve. He knows it is dangerous to do so. We are rather of the belief that both trucks did
not keep close to the right side of the road so they sideswiped each other and thus Agripino
Custodio was injured and died. In other words, both drivers must have drive in their trucks not in the
proper lane and are, therefore, both reckless and negligent.

"We might state by way of additional observations that the sideswiping of the deceased and his two fellow
passengers took place on broad daylight at about 9:30 in the morning of June 9, 1955 when the LTB bus
with full load to passengers was negotiating a sharp curve of a bumpy and sliding downward a slope,
whereas the six by six truck was climbing up with no cargoes or passengers on board but for three helpers,
owner Sabido and driver Lagunda (tsn. 308-309, Mendoza). Under the above-stated condition, there exists
strong persuasion to accept what Belen Makabuhay and Sofia Mesina, LTB passengers, had testified to the
effect that the 6 x 6 cargo truck was running at a fast rate of speed (tsn. 15, 74, 175 Mendoza). From the lips
of no less than driver Lagunda himself come the testimonial admission that the presence of three hanging
passengers located at the left side of the bus was noted when his vehicle was still at a distance of 5 or 7
meters from the bus, and yet despite the existence of a shallow canal on the right side of the road which he
could pass over with ease, Lagunda did not care to exercise prudence to avert the accident simply because
to use his own language the canal "is not a passage of trucks."

Based upon these facts, the Court of First Instance of Laguna and the Court of Appeals concluded that the Laguna-
Tayabas Bus Co. hereinafter referred to as the carrier and its driver Nicasio Mudales (none of whom has
appealed), had violated the contract of carriage with Agripino Custodio, whereas petitioners Sabido and Lagunda
were guilty of a quasi delict, by reason of which all of them were held solidarity liable in the manner above indicated.

Petitioners now maintain: (1) that the death of Agripino Custodio was due exclusively to the negligence of the carrier
and its driver; (2) that petitioners were not guilty of negligence in connection with the matter under consideration; (3)
that petitioners cannot be held solidarily liable with the carrier and its driver; and (4) that the complaint against
petitioners herein should be dismissed.

With respect to the first two (2) points, which are interrelated, it is urged that the carrier and its driver were clearly
guilty of negligence for having allowed Agripino Custodio to ride on the running board of the bus, in violation of
Section 42 of Act No. 3992, and that this negligence was the proximate cause of Agripino's death. It should be
noted, however, that the lower court had, likewise, found the petitioners guilty of contributory negligence, which was
as much a proximate cause of the accident as the carrier's negligence, for petitioners' truck was running at a
considerable speed, despite the fact that it was negotiating a sharp curve, and, instead of being close to its right
side of the road, said truck was driven on its middle portion and so near the passenger bus coming from the
opposite direction as to sideswipe a passenger riding on its running board. 1w ph1.t

The views of the Court of Appeals on the speed of the truck and its location at the time of the accident are in the
nature of findings of fact, which we cannot disturb in a petition for review by certiorari, such as the one at bar. At any
rate, the correctness of said findings is borne out by the very testimony of petitioner Lagunda to the effect that he
saw the passengers riding on the running board of the bus while the same was still five (5) or seven (7) meters away
from the truck driven by him. Indeed, the distance between the two (2) vehicles was such that he could have
avoided sideswiping said passengers if his truck were not running at a great speed.

Although the negligence of the carrier and its driver is independent, in its execution, of the negligence of the truck
driver and its owner, both acts of negligence are the proximate cause of the death of Agripino Custodio. In fact, the
negligence of the first two (2) would not have produced this result without the negligence of petitioners' herein. What
is more, petitioners' negligence was the last, in point of time, for Custodio was on the running board of the carrier's
bus sometime before petitioners' truck came from the opposite direction, so that, in this sense, petitioners' truck had
the last clear chance.

Petitioners contend that they should not be held solidarily liable with the carrier and its driver, because the latter's
liability arises from a breach of contract, whereas that of the former springs from a quasi delict. The rule is, however,
that

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 ... .
(38 Am. Jur. 946, 947.)

Wherefore, the decision appealed from is hereby affirmed, with costs against the petitioners herein. It is so ordered.
THIRD DIVISION

[G.R. No. 126389. July 10, 1998]

SOUTHEASTERN COLLEGE, INC., petitioner, vs. COURT OF APPEALS, JUANITA


DE JESUS VDA. DE DIMAANO, EMERITA DIMAANO, REMEDIOS DIMAANO,
CONSOLACION DIMAANO and MILAGROS DIMAANO, respondents.

DECISION
PURISIMA, J.:

Petition for review under Rule 45 of the Rules of Court seeking to set aside the
Decision promulgated on July 31, 1996, and Resolution dated September 12, 1996 of the
[1] [2]

Court of Appeals in CA-G.R. No. 41422, entitled Juanita de Jesus vda. de Dimaano, et
[3]

al. vs. Southeastern College, Inc., which reduced the moral damages awarded below
from P1,000,000.00 to P200,000.00. The Resolution under attack denied petitioners
[4]

motion for reconsideration.


Private respondents are owners of a house at 326 College Road, Pasay City, while
petitioner owns a four-storey school building along the same College Road. On October 11,
1989, at about 6:30 in the morning, a powerful typhoon Saling hit Metro Manila. Buffeted
by very strong winds, the roof of petitioners building was partly ripped off and blown away,
landing on and destroying portions of the roofing of private respondents house. After the
typhoon had passed, an ocular inspection of the destroyed buildings was conducted by a
team of engineers headed by the city building official, Engr. Jesus L. Reyna. Pertinent
aspects of the latters Report dated October 18, 1989 stated, as follows:
[5]

5. One of the factors that may have led to this calamitous event is the formation of the buildings in
the area and the general direction of the wind. Situated in the peripheral lot is an almost U-shaped
formation of 4-storey building. Thus, with the strong winds having a westerly direction, the general
formation of the buildings becomes a big funnel-like structure, the one situated along College
Road, receiving the heaviest impact of the strong winds. Hence, there are portions of the roofing,
those located on both ends of the building, which remained intact after the storm.

6. Another factor and perhaps the most likely reason for the dislodging of the roofings structural
trusses is the improper anchorage of the said trusses to the roof beams. The 1/2 diameter steel bars
embedded on the concrete roof beams which serve as truss anchorage are not bolted nor nailed to
the trusses. Still, there are other steel bars which were not even bent to the trusses, thus, those
trusses are not anchored at all to the roof beams.

It then recommended that to avoid any further loss and damage to lives, limbs and property
of persons living in the vicinity, the fourth floor of subject school building be declared as
astructural hazard.
In their Complaint before the Regional Trial Court of Pasay City, Branch 117, for
[6]

damages based on culpa aquiliana, private respondents alleged that the damage to their
house rendered the same uninhabitable, forcing them to stay temporarily in others
houses. And so they sought to recover from petitioner P117,116.00, as actual
damages, P1,000,000.00, as moral damages, P300,000.00, as exemplary damages
and P100,000.00, for and as attorneys fees; plus costs.
In its Answer, petitioner averred that subject school building had withstood several
devastating typhoons and other calamities in the past, without its roofing or any portion
thereof giving way; that it has not been remiss in its responsibility to see to it that said school
building, which houses school children, faculty members, and employees, is in tip-top
condition; and furthermore, typhoon Saling was an act of God and therefore beyond human
control such that petitioner cannot be answerable for the damages wrought thereby, absent
any negligence on its part.
The trial court, giving credence to the ocular inspection report to the effect that subject
school building had a defective roofing structure, found that, while typhoon Saling was
accompanied by strong winds, the damage to private respondents house could have been
avoided if the construction of the roof of [petitioners] building was not faulty. The dispositive
portion of the lower courts decision reads thus:
[7]

WHEREFORE, in view of the foregoing, the Court renders judgment (sic) in favor of the plaintiff
(sic) and against the defendants, (sic) ordering the latter to pay jointly and severally the former as
follows:

a) P117,116.00, as actual damages, plus litigation expenses;

b) P1,000,000.00 as moral damages;

c) P100,000.00 as attorneys fees;

d) Costs of the instant suit.

The claim for exemplary damages is denied for the reason that the defendants (sic) did not act in a
wanton fraudulent, reckless, oppressive or malevolent manner.

In its appeal to the Court of Appeals, petitioner assigned as errors, that: [8]

I
THE TRIAL COURT ERRED IN HOLDING THAT TYPHOON SALING, AS AN ACT OF GOD, IS
NOT THE SOLE AND ABSOLUTE REASON FOR THE RIPPING-OFF OF THE SMALL PORTION OF
THE ROOF OF SOUTHEASTERNS FOUR (4) STOREY SCHOOL BUILDING.
II
THE TRIAL COURT ERRED IN HOLDING THAT THE CONSTRUCTION OF THE ROOF OF
DEFENDANTS SCHOOL BUILDING WAS FAULTY NOTWITHSTANDING THE ADMISSION THAT
THERE WERE TYPHOONS BEFORE BUT NOT AS GRAVE AS TYPHOON SALING WHICH IS THE
DIRECT AND PROXIMATE CAUSE OF THE INCIDENT.
III
THE TRIAL COURT ERRED IN AWARDING ACTUAL AND MORAL DAMAGES AS WELL AS
ATTORNEYS FEES AND LITIGATION EXPENSES AND COSTS OF SUIT TO DIMAANOS WHEN
THEY HAVE NOT INCURRED ACTUAL DAMAGES AT ALL AS DIMAANOS HAVE ALREADY SOLD
THEIR PROPERTY, AN INTERVENING EVENT THAT RENDERS THIS CASE MOOT AND
ACADEMIC.
IV
THE TRIAL COURT ERRED IN ORDERING THE ISSUANCE OF THE WRIT OF EXECUTION
INSPITE OF THE PERFECTION OF SOUTHEASTERNS APPEAL WHEN THERE IS NO
COMPELLING REASON FOR THE ISSUANCE THERETO.

As mentioned earlier, respondent Court of Appeals affirmed with modification the trial
courts disposition by reducing the award of moral damages from P1,000,000.00
to P200,000.00.Hence, petitioners resort to this Court, raising for resolution the issues of:

1. Whether or not the award of actual damage [sic] to respondent Dimaanos on the basis of
speculation or conjecture, without proof or receipts of actual damage, [sic] legally feasible or
justified.

2. Whether or not the award of moral damages to respondent Dimaanos, without the latter having
suffered, actual damage has legal basis.

3. Whether or not respondent Dimaanos who are no longer the owner of the property, subject
matter of the case, during its pendency, has the right to pursue their complaint against petitioner
when the case was already rendered moot and academic by the sale of the property to third party.

4. Whether or not the award of attorneys fees when the case was already moot and
academic [sic] legally justified.

5. Whether or not petitioner is liable for damage caused to others by typhoon Saling being an act of
God.

6. Whether or not the issuance of a writ of execution pending appeal, ex-parte or without hearing,
has support in law.

The pivot of inquiry here, determinative of the other issues, is whether the damage on
the roof of the building of private respondents resulting from the impact of the falling portions
of the school buildings roof ripped off by the strong winds of typhoon Saling, was, within
legal contemplation, due to fortuitous event? If so, petitioner cannot be held liable for the
damages suffered by the private respondents. This conclusion finds support in Article 1174
of the Civil Code, which provides:

Art 1174. Except in cases expressly specified by the law, or when it is otherwise declared by
stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be
responsible for those events which could not be foreseen, or which, though foreseen, were
inevitable.

The antecedent of fortuitous event or caso fortuito is found in the Partidas which defines
it as an event which takes place by accident and could not have been foreseen. Escriche [9]
elaborates it as an unexpected event or act of God which could neither be foreseen nor
resisted. Civilist Arturo M. Tolentino adds that [f]ortuitous events may be produced by two
[10]

general causes: (1) by nature, such as earthquakes, storms, floods, epidemics, fires, etc.
and (2) by the act of man, such as an armed invasion, attack by bandits, governmental
prohibitions, robbery, etc. [11]

In order that a fortuitous event may exempt a person from liability, it is necessary that
he be free from any previous negligence or misconduct by reason of which the loss may
have been occasioned. An act of God cannot be invoked for the protection of a person
[12]

who has been guilty of gross negligence in not trying to forestall its possible adverse
consequences.When a persons negligence concurs with an act of God in producing
damage or injury to another, such person is not exempt from liability by showing that the
immediate or proximate cause of the damage or injury was a fortuitous event. When the
effect is found to be partly the result of the participation of man whether it be from active
intervention, or neglect, or failure to act the whole occurrence is hereby humanized, and
removed from the rules applicable to acts of God. [13]

In the case under consideration, the lower court accorded full credence to the finding of
the investigating team that subject school buildings roofing had no sufficient anchorage to
hold it in position especially when battered by strong winds. Based on such finding, the trial
court imputed negligence to petitioner and adjudged it liable for damages to private
respondents.
After a thorough study and evaluation of the evidence on record, this Court believes
otherwise, notwithstanding the general rule that factual findings by the trial court, especially
when affirmed by the appellate court, are binding and conclusive upon this Court. After a
[14]

careful scrutiny of the records and the pleadings submitted by the parties, we find exception
to this rule and hold that the lower courts misappreciated the evidence proffered.
There is no question that a typhoon or storm is a fortuitous event, a natural occurrence
which may be foreseen but is unavoidable despite any amount of foresight, diligence or
care. In order to be exempt from liability arising from any adverse consequence
[15]

engendered thereby, there should have been no human participation amounting to a


negligent act. In other words, the person seeking exoneration from liability must not be
[16]

guilty of negligence. Negligence, as commonly understood, is conduct which naturally or


reasonably creates undue risk or harm to others. It may be the failure to observe that degree
of care, precaution, and vigilance which the circumstances justly demand, or the omission
[17]

to do something which a prudent and reasonable man, guided by considerations which


ordinarily regulate the conduct of human affairs, would do. From these premises, we
[18]

proceed to determine whether petitioner was negligent, such that if it were not, the damage
caused to private respondents house could have been avoided?
At the outset, it bears emphasizing that a person claiming damages for the negligence
of another has the burden of proving the existence of fault or negligence causative of his
injury or loss. The facts constitutive of negligence must be affirmatively established
by competent evidence, not merely by presumptions and conclusions without basis in
[19]

fact. Private respondents, in establishing the culpability of petitioner, merely relied on the
aforementioned report submitted by a team which made an ocular inspection of petitioners
school building after the typhoon. As the term imparts, an ocular inspection is one by means
of actual sight or viewing. What is visual to the eye though, is not always reflective of the
[20]

real cause behind. For instance, one who hears a gunshot and then sees a wounded
person, cannot always definitely conclude that a third person shot the victim. It could have
been self-inflicted or caused accidentally by a stray bullet. The relationship of cause and
effect must be clearly shown.
In the present case, other than the said ocular inspection, no investigation was
conducted to determine the real cause of the partial unroofing of petitioners school
building. Private respondents did not even show that the plans, specifications and design of
said school building were deficient and defective. Neither did they prove any substantial
deviation from the approved plans and specifications. Nor did they conclusively establish
that the construction of such building was basically flawed. [21]

On the other hand, petitioner elicited from one of the witnesses of private respondents,
city building official Jesus Reyna, that the original plans and design of petitioners school
building were approved prior to its construction. Engr. Reyna admitted that it was a legal
requirement before the construction of any building to obtain a permit from the city building
official (city engineer, prior to the passage of the Building Act of 1977). In like manner, after
construction of the building, a certification must be secured from the same official attesting
to the readiness for occupancy of the edifice. Having obtained both building permit and
certificate of occupancy, these are, at the very least, prima facie evidence of the regular and
proper construction of subject school building. [22]

Furthermore, when part of its roof needed repairs of the damage inflicted by typhoon
Saling, the same city official gave the go-signal for such repairs without any deviation from
the original design and subsequently, authorized the use of the entire fourth floor of the
same building. These only prove that subject building suffers from no structural defect,
contrary to the report that its U-shaped form was structurally defective. Having given his
unqualified imprimatur, the city building official is presumed to have properly performed his
duties in connection therewith.
[23]

In addition, petitioner presented its vice president for finance and administration who
testified that an annual maintenance inspection and repair of subject school building were
regularly undertaken. Petitioner was even willing to present its maintenance supervisor to
attest to the extent of such regular inspection but private respondents agreed to dispense
with his testimony and simply stipulated that it would be corroborative of the vice presidents
narration.
Moreover, the city building official, who has been in the city government service since
1974, admitted in open court that no complaint regarding any defect on the same structure
has ever been lodged before his office prior to the institution of the case at bench. It is a
matter of judicial notice that typhoons are common occurrences in this country. If subject
school buildings roofing was not firmly anchored to its trusses, obviously, it could not have
withstood long years and several typhoons even stronger than Saling.
In light of the foregoing, we find no clear and convincing evidence to sustain the
judgment of the appellate court. We thus hold that petitioner has not been shown negligent
or at fault regarding the construction and maintenance of its school building in question and
that typhoon Saling was the proximate cause of the damage suffered by private
respondents house.
With this disposition on the pivotal issue, private respondents claim for actual and moral
damages as well as attorneys fees must fail. Petitioner cannot be made to answer for a
[24]

purely fortuitous event. More so because no bad faith or willful act to cause damage was
[25]

alleged and proven to warrant moral damages.


Private respondents failed to adduce adequate and competent proof of the pecuniary
loss they actually incurred. It is not enough that the damage be capable of proof but must
[26]

be actually proved with a reasonable degree of certainty, pointing out specific facts that
afford a basis for measuring whatever compensatory damages are borne. Private [27]

respondents merely submitted an estimated amount needed for the repair of the roof of their
subject building. What is more, whether the necessary repairs were caused ONLY by
petitioners alleged negligence in the maintenance of its school building, or included the
ordinary wear and tear of the house itself, is an essential question that remains
indeterminable.
The Court deems unnecessary to resolve the other issues posed by petitioner.
As regards the sixth issue, however, the writ of execution issued on April 1, 1993 by the
trial court is hereby nullified and set aside. Private respondents are ordered to reimburse
any amount or return to petitioner any property which they may have received by virtue of
the enforcement of said writ.
WHEREFORE, the petition is GRANTED and the challenged Decision is
REVERSED. The complaint of private respondents in Civil Case No. 7314 before the trial
court a quo is ordered DISMISSED and the writ of execution issued on April 1, 1993 in said
case is SET ASIDE. Accordingly, private respondents are ORDERED to return to petitioner
any amount or property received by them by virtue of said writ. Costs against the private
respondents.
SO ORDERED.
FIRST DIVISION

[G.R. No. 120027. April 21, 1999]

EDNA A. RAYNERA, for herself and on behalf of the minors RIANNA and REIANNE
RAYNERA, petitioners, vs. FREDDIE HICETA and JIMMY
ORPILLA, respondents.

DECISION
PARDO, J.:

The case is a petition for review on certiorari of the decision of the Court of Appeals,[1] reversing
that of the Regional Trial Court, Branch 45, Manila.[2]
The rule is well-settled that factual findings of the Court of Appeals are generally considered final
and may not be reviewed on appeal. However, this principle admits of certain exceptions, among which
is when the findings of the appellate court are contrary to those of the trial court, a re-examination of
the facts and evidence may be undertaken.[3] This case falls under the cited exception.
The antecedent facts are as follows:
Petitioner Edna A. Raynera was the widow of Reynaldo Raynera and the mother and legal guardian
of the minors Rianna and Reianne, both surnamed Raynera. Respondents Freddie Hiceta and Jimmy
Orpilla were the owner and driver, respectively, of an Isuzu truck-trailer, with plate No. NXC 848,
involved in the accident.
On March 23, 1989, at about 2:00 in the morning, Reynaldo Raynera was on his way home. He
was riding a motorcycle traveling on the southbound lane of East Service Road, Cupang,
Muntinlupa. The Isuzu truck was travelling ahead of him at 20 to 30 kilometers per hour.[4] The truck
was loaded with two (2) metal sheets extended on both sides, two (2) feet on the left and three (3) feet
on the right. There were two (2) pairs of red lights, about 35 watts each, on both sides of the metal
plates.[5] The asphalt road was not well lighted.
At some point on the road, Reynaldo Raynera crashed his motorcycle into the left rear portion of
the truck trailer, which was without tail lights. Due to the collision, Reynaldo sustained head injuries and
truck helper Geraldino D. Lucelo[6] rushed him to the Paraaque Medical Center. Upon arrival at the
hospital, the attending physician, Dr. Marivic Aguirre,[7] pronounced Reynaldo Raynera dead on arrival.
At the time of his death, Reynaldo was manager of the Engineering Department, Kawasaki Motors
(Phils.) Corporation. He was 32 years old, had a life expectancy of sixty five (65) years, and an annual
net earnings of not less than seventy three thousand five hundred (P73,500.00) pesos,[8] with a potential
increase in annual net earnings of not less than ten percent (10%) of his salary. [9]
On May 12, 1989, the heirs of the deceased demanded [10] from
respondents payment of damages arising from the death of Reynaldo Raynera as a result of the
vehicular accident.The respondents refused to pay the claims.
On September 13, 1989, petitioners filed with the Regional Trial Court, Manila [11] a complaint[12] for
damages against respondents owner and driver of the Isuzu truck.
In their complaint against respondents, petitioners sought recovery of damages for the death of
Reynaldo Raynera caused by the negligent operation of the truck-trailer at nighttime on the highway,
without tail lights.
In their answer filed on April 4, 1990, respondents alleged that the truck was travelling slowly on
the service road, not parked improperly at a dark portion of the road, with no tail lights, license plate
and early warning device.
At the trial, petitioners presented Virgilio Santos. He testified that at about 1:00 and 2:00 in the
morning of March 23, 1989, he and his wife went to Alabang market, on board a tricycle.They passed
by the service road going south, and saw a parked truck trailer, with its hood open and without tail
lights. They would have bumped the truck but the tricycle driver was quick in avoiding a collision. The
place was dark, and the truck had no early warning device to alert passing motorists. [13]
On the other hand, respondents presented truck helper Geraldino Lucelo. [14] He testified that at the
time the incident happened, the truck was slowly traveling at approximately 20 to 30 kilometers per
hour. Another employee of respondents, auto-mechanic Rogoberto Reyes,[15] testified that at about
3:00 in the afternoon of March 22, 1989, with the help of Lucelo, he installed two (2) pairs of red lights,
about 30 to 40 watts each, on both sides of the steel plates. [16] On his part, traffic investigation officer
Cpl. Virgilio del Monte[17] admitted that these lights were visible at a distance of 100 meters.
On December 19, 1991, the trial court rendered decision in favor of
petitioners. It found respondents Freddie Hiceta and Jimmy Orpilla negligent in view of these
circumstances: (1) the truck trailer had no license plate and tail lights; (2) there were only two pairs of
red lights, 50 watts[18] each, on both sides of the steel plates; and (3) the truck trailer was improperly
parked in a dark area.
The trial court held that respondents negligence was the immediate and proximate cause of
Reynaldo Rayneras death, for which they are jointly and severally liable to pay damages to
petitioners. The trial court also held that the victim was himself negligent, although this was insufficient
to overcome respondents negligence. The trial court applied the doctrine of contributory
negligence[19] and reduced the responsibility of respondents by 20% on account of the victims own
negligence.
The dispositive portion of the lower courts decision reads as follows:

All things considered, the Court is of the opinion that it is fair and reasonable to fix the
living and other expenses of the deceased the sum of P54,000.00 a year or
about P4,500.00 a month (P150.00 p/d) and that, consequently, the loss or damage
sustained by the plaintiffs may be estimated at P1,674,000.00 for the 31 years of
Reynaldo Rayneras life expectancy.

Taking into account the cooperative negligence of the deceased Reynaldo Raynera, the
Court believes that the demand of substantial justice are satisfied by allocating the
damages on 80-20 ratio. Thus, P1,337,200.00 shall be paid by the defendants with
interest thereon, at the legal rate, from date of decision, as damages for the loss of
earnings. To this sum, the following shall be added:

(a) P33,412.00, actually spent for funeral services, interment and memorial lot;

(b) P20,000.00 as attorneys fees;

(c) cost of suit.


SO ORDERED.[20]

On January 10, 1992, respondents Hiceta and Orpilla appealed to the Court of Appeals. [21]
After due proceedings, on April 28, 1995, the Court of Appeals rendered decision setting aside the
appealed decision. The appellate court held that Reynaldo Rayneras bumping into the left rear portion
of the truck was the proximate cause of his death, [22] and consequently, absolved respondents from
liability.
Hence, this petition for review on certiorari.
In this petition, the heirs of Reynaldo Raynera contend that the appellate court erred in: (1)
overturning the trial courts finding that respondents negligent operation of the Isuzu truck was the
proximate cause of the victims death; (2) applying the doctrine of last clear chance; (3) setting aside
the trial courts award of actual and compensatory damages.
The issues presented are (a) whether respondents were negligent, and if so, (b) whether such
negligence was the proximate cause of the death of Reynaldo Raynera.
Petitioners maintain that the proximate cause of Reynaldo Rayneras death was respondents
negligence in operating the truck trailer on the highway without tail lights and license plate.
The Court finds no reason to disturb the factual findings of the Court of Appeals.
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 not do.[23]
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.[24]
During the trial, it was established that the truck had no tail lights. The photographs taken of the
scene of the accident showed that there were no tail lights or license plates installed on the Isuzu
truck. Instead, what were installed were two (2) pairs of lights on top of the steel plates, and one (1)
pair of lights in front of the truck. With regard to the rear of the truck, the photos taken and the sketch
in the spot report proved that there were no tail lights.
Despite the absence of tail lights and license plate, respondents truck was visible in the highway. It
was traveling at a moderate speed, approximately 20 to 30 kilometers per hour. It used the service
road, instead of the highway, because the cargo they were hauling posed a danger to passing
motorists. In compliance with the Land Transportation Traffic Code (Republic Act No.
4136)[25] respondents installed 2 pairs of lights on top of the steel plates, as the vehicles cargo load
extended beyond the bed or body thereof.
We find that the direct cause of the accident was the negligence of the victim. Traveling behind the
truck, he had the responsibility of avoiding bumping the vehicle in front of him. He was in control of the
situation. His motorcycle was equipped with headlights to enable him to see what was in front of him. He
was traversing the service road where the prescribed speed limit was less than that in the highway.
Traffic investigator Cpl. Virgilio del Monte testified that two pairs of 50-watts bulbs were on top of
the steel plates,[26] which were visible from a distance of 100 meters.[27] Virgilio Santos admitted that
from the tricycle where he was on board, he saw the truck and its cargo of iron plates from a distance
of ten (10) meters.[28] In light of these circumstances, an accident could have been easily avoided,
unless the victim had been driving too fast and did not exercise due care and prudence demanded of
him under the circumstances.
Virgilio Santos testimony strengthened respondents defense that it was the victim who was reckless
and negligent in driving his motorcycle at high speed. The tricycle where Santos was on board was not
much different from the victims motorcycle that figured in the accident. Although Santos claimed the
tricycle almost bumped into the improperly parked truck, the tricycle driver was able to avoid hitting the
truck.
It has been said that drivers of vehicles who bump the rear of another vehicle are presumed to be
the cause of the accident, unless contradicted by other evidence. [29] The rationale behind the
presumption is that the driver of the rear vehicle has full control of the situation as he is in a position to
observe the vehicle in front of him.
We agree with the Court of Appeals that the responsibility to avoid the collision with the front vehicle
lies with the driver of the rear vehicle.
Consequently, no other person was to blame but the victim himself since he was the one who
bumped his motorcycle into the rear of the Isuzu truck. He had the last clear chance of avoiding the
accident.
WHEREFORE, we DENY the petition for review on certiorari and AFFIRM the decision of the Court
of Appeals in CA-G. R. CV No. 35895, dismissing the amended complaint in Civil Case No. 89-50355,
Regional Trial Court, Branch 45, Manila.
No costs.
SO ORDERED.
THIRD DIVISION

STEPHEN CANG and GEORGE NARDO y G.R. No. 163078


JOSOL,
Petitioners, Present:

CORONA, J.,
Chairperson,
CHICO-NAZARIO,

- versus - VELASCO, JR.,


NACHURA, and
PERALTA, JJ.

Promulgated:

HERMINIA CULLEN,
Respondent. November 25, 2009

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

DECISION

NACHURA, J.:

Before this Court is a Petition for Review under Rule 45 of the Rules of Court assailing the
Decision[1] dated December 2, 2002 and the Resolution[2] dated February 23, 2004 of the Court
of Appeals (CA) in CA-G.R. CV No. 69841. In the assailed Decision, the CA reversed and set aside
the Decision[3] of the Regional Trial Court (RTC) of Cebu, Branch 22, in Civil Case No. CEB-20504,
an action for damages.
The claim for damages was precipitated by a vehicular accident involving a taxicab bearing Plate
No. GVG-672, owned by petitioner Stephen Cang and driven by petitioner George Nardo, and a
motorcycle owned by respondent Herminia Cullen and driven by Guillermo Saycon.

On October 29, 1996, at about 3:10 p.m., Saycon was driving the Honda motorcycle, with
Plate No. LLC-A-4589, along P. del Rosario Street, Cebu City, occupying the middle portion of the
outer lane. The taxi, on the other hand, was traveling on the inner lane and slightly behind, but
to the left of, the motorcycle. Respondent alleged that between Sikatuna and D. Jakosalem
Streets, the taxi veered to the right and sideswiped the motorcycle, then attempted to speed
away. Peace officers near the scene flagged down the taxi. As a result of the collision, Saycon
was seriously injured.[4]

Petitioners, meanwhile, claimed that it was the motorcycle that bumped into the
taxi. Nardo narrated that he was driving the taxi on the inner lane (near the center island)
along P. del Rosario St., moving towards the intersection of D. Jakosalem St. When the caution
signal of the traffic light flashed, he immediately slowed down. It was at that point that the
motorcycle bumped into the taxis rear.[5]

Respondent, as employer, out of compassion, paid all of Saycons hospital and medical
expenses amounting to P185,091.00.[6] She also alleged that due to the injuries Saycon
sustained, he was unable to work. For humanitarian reasons, respondent had given Saycon an
amount equivalent to his wages from October 31, 1996 to May 30, 1997. She also gave
Saycon P2,000.00 per month from June 1997 until he was able to return to work.[7]

On July 3, 1997, respondent filed a Complaint for damages against petitioners praying
that judgment be rendered ordering the latter to pay, jointly and severally, P205,091.00 in
actual damages; P2,000.00 per month from June 1997 up to the time Saycon would be able to
return to work, with 6% per annum interest from the date of extrajudicial demand; P50,000.00
as exemplary damages; 20% of the total amount by way of attorneys fees; P10,000.00 as
acceptance fee; P500.00 per court appearance, as appearance fee; P20,000.00 as litigation
expenses; and the cost of the suit.[8]
Petitioner Cang filed a Motion to Dismiss contending that the complaint violated
Presidential Decree No. 1508, or the Katarungang Pambarangay Law. The motion was
dismissed on September 24, 1997.[9]

Subsequently, petitioners filed their Answer with Counterclaims. Cang averred that Nardo
was not driving the taxi as the formers employee, but that Nardo was leasing the taxi from
him.[10] Petitioners also claimed that Nardo did not sideswipe the motorcycle driven by Saycon,
nor did the latter speed away after the incident. They maintained that, at the time of the impact,
Nardos taxi was on its proper lane and that it was the motorcycle that veered into Nardos lane
and bumped the taxi.[11] Further, they alleged that after the impact, Nardo drove the taxi
backward to where Saycon and the motorcycle were slumped on the road. He then alighted
from the taxi. Meanwhile, two traffic enforcers had crossed the street. After examining Saycons
injuries, one of the enforcers ordered Nardo to bring the former to a hospital. Nardo hesitated
for a moment because he wanted the enforcers to make a sketch of the accident first, to show
the exact positions of the vehicles at the time of the accident. However, he was prevailed upon
by the traffic enforcers to bring Saycon to the hospital. Hence, it was not true that Nardo
attempted to speed away from the scene of the accident. Petitioner Cang also claimed that
Saycon was driving the motorcycle without any protective headgear and that the latter was not
authorized to drive the motorcycle since he only had a students permit.[12] Petitioner Cang
prayed that the complaint be dismissed for lack of merit, for lack of cause of action and for lack
of legal capacity. He also prayed for the award of P50,000.00 as moral damages, P20,000.00 as
exemplary damages, P10,000.00 as acceptance fee, P30,000.00 as attorneys fees, P20,000.00 as
litigation expenses, and P1,000.00 per court appearance.[13]

After trial, the RTC ruled in petitioners favor. In its Decision[14] dated January 31, 2000, the
trial court disposed:

WHEREFORE, based upon the foregoing, judgment is hereby rendered in favor


of the defendants. Plaintiffs (sic) complaint is hereby dismissed.

Defendants counterclaims are likewise denied.

No pronouncement as to costs.
SO ORDERED.[15]

Respondent appealed the RTC Decision to the CA. On December 2, 2002, the CA
promulgated the assailed Decision,[16] reversing the RTC Decision, to wit:

WHEREFORE, premises considered, the appealed decision dated January 31,


2000 of the Regional Trial Court of Cebu, Branch 22 is hereby REVERSED and SET
ASIDE. Defendants-appellees are hereby ordered to pay plaintiff-appellant, jointly and
severally[,] the following:

1.) The sum of P166,197.08 as actual damages which were incurred for the
hospitalization and other medical expenses of plaintiff-appellants driver
Guillermo Saycon; and

`2.) The sum of P20,000.00 as exemplary damages.

SO ORDERED.[17]

Petitioners are now before this Court on Petition for Review seeking the reversal of the
CA Decision and its Resolution denying their Motion for Reconsideration. They argue that the
CA erred in reversing the judgment rendered by the trial court; in giving credence to the
eyewitness testimony of Ike Aldemita, that petitioner Nardo had overtaken the motorcycle
driven by Saycon and, therefore, was the negligent party; and in awarding damages to
respondent.[18]

The petition is meritorious.

We note that the present Petition raises questions of fact. Whether a person is negligent
or not is a question of fact which we cannot ordinarily pass upon in a petition for review
on certiorari, as our jurisdiction is limited to reviewing errors of law.[19]
However, although findings of fact of the CA are generally conclusive on this Court, this
rule admits of the following exceptions:[20]

(1) the factual findings of the Court of Appeals and the trial court are
contradictory;

(2) the findings are grounded entirely on speculation, surmises or conjectures;

(3) the inference made by the Court of Appeals from its findings of fact is mainly
mistaken, absurd or impossible;

(4) there is grave abuse of discretion in the appreciation of facts;

(5) the appellate court, in making its findings, goes beyond the issues of the case
and such findings are contrary to the admissions of both appellant and appellee;

(6) the judgment of the Court of Appeals is premised on a misapprehension of


facts;

(7) the Court of Appeals fails to notice certain relevant facts which, if properly
considered, will justify a different conclusion; and

(8) the findings of fact of the Court of Appeals are contrary to those of the trial
court or are mere conclusions without citation of specific evidence, or where the facts
set forth by the petitioner are not disputed by respondent, or where the findings of
fact of the Court of Appeals are premised on the absence of evidence but are
contradicted by the evidence on record.
Thus, when there are conflicting findings of fact by the CA on one hand and by the trial
court on the other, as in this case,[21] the Court may give due course to petitions raising factual
issues by way of exception and only in the presence of extremely meritorious circumstances.[22]

Contrary to the CAs ruling, we find that the RTC correctly disregarded Aldemitas
testimony. Between the RTC and the CA, it is the formers assessment of the witnesses credibility
that should control.[23]

The trial court gave little credence to Aldemitas testimony, upon its finding that:

On the other hand, multicab driver Aldemita contended that he saw everything.
He said that the motorcycle and the taxi overtook him. He told the court during his
testimony that the motorcycle was ahead of the taxi. He further said that the
motorcycle was nearer him (TSN, February 13, 1998, Savellon, p. 4). The court finds
him inconsistent. If both were ahead of him and the motorcycle was ahead of the taxi,
then, the motorcycle could not be nearer him. Because if the motorcycle was indeed
nearer him, then, it could not have been ahead of the taxi. But rather, the taxi was
ahead of the motorcycle. But in a later testimony, he said that they were beside each
other (TSN, Feb. 12, 1998, Savellon, p. 17).

He also said that both tried to pass the lane which would fit only two vehicles.
He told the court that both vehicles were running fast at a speed of more than 30 kph
when the motorcycle was hit by the taxi. It would seem to the court that both vehicles
were racing each other. Aldemita further said that in trying to pass the motorcycle,
the taxi hit the left handle bar of the motorcycle. The handle bar was twisted and the
motorcycle fell down to the left side. But if the taxi was indeed to the left of the
motorcycle and if it really swerved to the right and hit the motorcycle the law of force
would tell us that the motorcycle would fall to the right after impact. It is the most
logical direction for the motorcycle to fall. If the taxi was indeed traveling at a fast
speed when it hit the motorcycle, the impact would not have only caused a mere
twisted handle and the motorcycle would not have only fallen on its side as claimed
by Aldemita. High speed impact would have caused the motorcycle and its driver
greater damage and would have dislocated them much farther away than where it fell
in this case.
He claimed that he was more or less ten (10) meters from the site of the
accident when it happened (TSN, Feb. 12, 1998, p. 12). The court can, therefore, say
that he was also quite far from the scene of the accident and could not be that certain
as to what really happened.

Aldemita also said that he signaled the taxi driver to stop (TSN, Feb. 12, 1998,
Savellon, p. 6). However, later when asked, he said he signaled the policeman to stop
the taxi driver or not (sic). He also claimed that he was near (sic) the motorcyclist than
the policemen. He further claimed that he was there at the scene of the accident to
help but later said he never saw the driver of the taxi (TSN, Feb. 12, 1998, Savellon, p.
17). The court finds this highly unusual for somebody who claimed to be at the scene
of the accident not to see the driver who came out of his vehicle to reason out with
the responding enforcers. He said he was the one who removed the motorcycle which
pinned its driver and then helped carried (sic) the driver to the taxi as told by the
policeman (TSN, Feb. 12, 1998, Savellon p. 7). But later, he said that somebody took
his place in carrying the victim because there were already many people (TSN, Feb. 12,
1998, Savellon, p. 17). x x x.

xxxx

The court also cannot fail to notice the uncontroverted allegation of Nardo
during his testimony that Aldemita was not the person (the multicab driver) he saw
during the time of the accident. He claimed that the person who testified in court last
February 12, 1998, was not the driver of the multicab who was at the scene of the
accident that fateful night (sic) of October 29, 1996 (TSN, Aug. 24, 1998, Pieras, p. 12).
Allegations and claims like this when not countered and disproved would certainly cast
doubt on the credibility of the subject person and consequently, on his testimonies,
too.

Based on the points, the court cannot help but find Aldemitas testimony as
uncertain and filled with so many inconsistencies. They contradicted with each other
at many instances. The court believes in either of the two possibilities -- Aldemita did
not really actually and exactly see the whole incident or he was lying through his teeth.
Thus, the court cannot give so much weight to his testimony.[24]
The CA failed to refute the trial courts detailed analysis of the events leading to the
accident and what transpired thereafter. It merely said that the lower court should have
considered Aldemitas eyewitness testimony.[25] The CA based its findings of the accident only
on Aldemitas account. It failed to consider all the other testimonial and documentary evidence
analyzed by the trial court, which substantially controverted Aldemitas testimony.

In contrast, the trial court found Nardo more credible on the witness stand. Thus:
During his testimonies, Nardo appeared to be consistent, sincere and certain in
his statements. He appeared to be acknowledgeable (sic) in his work as a driver. He
conveyed a definite degree of credibility when he testified. The Court has decided to
give more appreciation to his testimonies.[26]

We are inclined to give greater weight to the trial courts assessment of the two witnesses.

The findings of the trial court on the credibility of witnesses are accorded great weight
and respect even considered as conclusive and binding on this Court[27] since the trial judge had
the unique opportunity to observe the witness firsthand and note his demeanor, conduct and
attitude under grueling examination.[28] Only the trial judge can observe the furtive glance, blush
of conscious shame, hesitation, flippant or sneering tone, calmness, sigh of a witness, or his
scant or full realization of an oath all of which are useful aids for an accurate determination of
a witness honesty and sincerity.[29] He can thus be expected to determine with reasonable
discretion which testimony is acceptable and which witness is worthy of belief.[30]

Absent any showing that the trial courts calibration of the credibility of the witnesses was
flawed, we are bound by its assessment.[31] This Court will sustain such findings unless it can be
shown that the trial court ignored,[32] overlooked, misunderstood,[33] misappreciated,[34] or
misapplied[35] substantial facts and circumstances, which, if considered, would materially affect
the result of the case.[36]

We find no such circumstances in this case. The trial courts meticulous and dispassionate
analysis of the facts of the case is noteworthy. It succeeded in presenting a clear and logical
picture of the events even as it admitted that the resolution of the case was made more difficult
by the inefficiencies, indifference, ineptitude, and dishonesty of the local law enforcers, and the
litigants,[37] which left the court without an official sketch of the accident,[38] with no
photographs or any other proof of the damage to the respondents motorcycle,[39] with an
altered police report,[40] and with the baffling matter of the victims drivers license being issued
two days after the accident took place when the victim was supposed to be in the hospital.[41]

These handicaps notwithstanding, the trial court methodically related in detail all the
testimonial and documentary evidence presented, and made the most rational analysis of what
truly happened on the day of the incident.

The trial court categorically found that it was not the taxi that bumped the motorcycle. It
concluded that based on the evidence presented before the court, it was the motorcycle that
bumped the taxi.[42] It also found that at the time of the accident, Saycon, the driver of the
motorcycle, did not have a license but only had a student drivers permit. Further, Saycon was
not wearing the proper protective headgear and was speeding.[43] Hence, the trial court
concluded:

It was really pitiful that Saycon suffered for what he did. But then, he has only
himself to blame for his sad plight. He had been careless in driving the motorcycle
without a helmet. For speeding. (sic) For driving alone with only a student permit. (sic)
For causing the accident. (sic) If the driver was found violating traffic rules, a legal
presumption that he was negligent arises.[44]

Section 30 of Republic Act No. 4136, or the Land Transportation and Traffic Code,
provides:

Sec. 30. Student-drivers permit Upon proper application and the payment of
the fee prescribed in accordance with law, the Director or his deputies may issue
student-drivers permits, valid for one year to persons not under sixteen years of age,
who desire to learn to operate motor vehicles.
A student-driver who fails in the examination on a professional or non-
professional license shall continue as a student-driver and shall not be allowed to take
another examination at least one month thereafter. No student-driver shall operate
a motor vehicle, unless possessed of a valid student-drivers permit and accompanied
by a duly licensed driver.

The licensed driver duly accredited by the Bureau, acting as instructor to the
student driver, shall be equally responsible and liable as the latter for any violation of
the provisions of this Act and for any injury or damage done by the motor vehicle on
account or as a result of its operation by a student-driver under his direction.[45]

Saycon was in clear violation of this provision at the time of the accident. Corollarily, Article
2185 of the Civil Code states:

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.

The Civil Code characterizes negligence as the omission of that diligence required by the
nature of the obligation and corresponds with the circumstances of the persons, of the time and
of the place.[46] Negligence, as it is commonly understood, is conduct that creates an undue risk
of harm to others. It is the failure to observe that degree of care, precaution and vigilance that
the circumstances justly demand.[47] It is the omission to do something which a reasonable man,
guided by considerations that ordinarily regulate the conduct of human affairs, would do, or
doing something that a prudent and reasonable man would not do.[48]
To determine whether there is negligence in a given situation, this Court laid down this
test: Did 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, the person is
guilty of negligence.[49]

Based on the foregoing test, we can conclude that Saycon was negligent. In the first place, he
should not have been driving alone. The law clearly requires that the holder of a student-drivers
permit should be accompanied by a duly licensed driver when operating a motor vehicle.
Further, there is the matter of not wearing a helmet and the fact that he was speeding. All these
prove that he was negligent.

Under Article 2179 of the Civil Code,


[w]hen the plaintiffs 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 defendants lack of due
care, the plaintiff may recover damages, but the courts shall mitigate the damages to
be awarded.

The trial court gave more credence to Nardos version of the accident that he was on his
proper lane, that he was not speeding, and that it was the motorcycle that bumped into his taxi.
The trial court established that the accident was caused wholly by Saycons negligence. It held
that the injuries and damages suffered by plaintiff (respondent) and Saycon were not due to the
acts of defendants (petitioners) but due to their own negligence and recklessness.[50]

Considering that Saycon was the negligent party, he would not have been entitled to recover
damages from petitioners had he instituted his own action. Consequently, respondent, as his
employer, would likewise not be entitled to claim for damages.

Further militating against respondents claim is the fact that she herself was negligent in
the selection and supervision of her employee. Article 2180 of the Civil Code 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.

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 observed all the diligence of a good father of a family to
prevent damage.[51]
When an employee causes damage due to his own negligence while performing his own
duties, there arises the juris tantum presumption that his employer is negligent, rebuttable only
by proof of observance of the diligence of a good father of a family.[52] Thus, in the selection of
prospective employees, employers are required to examine them as to their qualifications,
experience and service records. With respect to the supervision of employees, employers must
formulate standard operating procedures, monitor their implementation and impose
disciplinary measures for breaches thereof. These facts must be shown by concrete proof,
including documentary evidence.[53]

The fact that Saycon was driving alone with only a students permit is, to our minds, proof
enough that Cullen was negligent either she did not know that he only had a students permit or
she allowed him to drive alone knowing this deficiency. Whichever way we look at it, we arrive
at the same conclusion: that she failed to exercise the due diligence required of her as an
employer in supervising her employee. Thus, the trial court properly denied her claim for
damages. One who seeks equity and justice must come to this Court with clean hands.[54]

In sum, we hold that the trial court correctly found that it was Saycon who caused the
accident and, as such, he cannot recover indemnity for his injury. On the other hand,
respondent, as Saycons employer, was also negligent and failed to exercise the degree of
diligence required in supervising her employee. Consequently, she cannot recover from
petitioners what she had paid for the treatment of her employees injuries.

WHEREFORE, the foregoing premises considered, the Petition is GRANTED. The Decision
dated December 2, 2002 and the Resolution dated February 23, 2004 of the Court of Appeals in
CA-G.R. CV No. 69841 are REVERSED and SET ASIDE. The Decision of the Regional Trial Court of
Cebu, Branch 22, in Civil Case No. CEB-20504 is hereby REINSTATED. No pronouncement as to
costs.

SO ORDERED.
SECOND DIVISION

GOVERNMENT SERVICE G.R. No. 170414


INSURANCE SYSTEM,
Petitioner,

- versus -

PACIFIC AIRWAYS CORPORATION,


ELY BUNGABONG, and
MICHAEL GALVEZ,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - x

PHILIPPINE AIRLINES, INC., G.R. No. 170418


ROGELIO CASIO, and
RUEL ISAAC,
Petitioners,

- versus -

PACIFIC AIRWAYS CORPORATION,


ELY BUNGABONG and
MICHAEL GALVEZ,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
AIR TRANSPORTATION OFFICE, G.R. No. 170460
DANILO ALZOLA, and
ERNESTO* LIM, Present:
Petitioners,
CARPIO, J., Chairperson,
PERALTA,
- versus - ABAD,
PEREZ,** and
MENDOZA, JJ.

PACIFIC AIRWAYS CORPORATION,


ELY BUNGABONG, and
MICHAEL GALVEZ,
Respondents,
GOVERNMENT SERVICE Promulgated:
INSURANCE SYSTEM,
Intervenor. August 25, 2010
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

CARPIO, J.:

The Case

Before the Court are three consolidated petitions for review[1] of the 28 October 2004
Decision[2] and the 15 November 2005 Resolution[3] of the Court of Appeals in CA-G.R. CV No.
73214. The 28 October 2004 Decision affirmed the 27 July 2001 Decision[4] of the Regional Trial
Court (Branch 112) of Pasay City. The 15 November 2005 Resolution modified the 28 October
2004 Decision of the Court of Appeals.

The Antecedent Facts


On 2 April 1996, at around 6:45 p.m., the Twin Otter aircraft of Philippine Airways Corporation
(PAC) arrived at the Manila International Airport[5] from El Nido, Palawan.[6]In command of the
aircraft was Ely B. Bungabong.[7] With Bungabong in the cockpit was Michael F. Galvez as co-
pilot.[8]

Upon touchdown, the Twin Otter taxied along the runway and proceeded to the Soriano Hangar
to disembark its passengers.[9] After the last passenger disembarked, PACs pilots started the
engine of the Twin Otter in order to proceed to the PAC Hangar located at the other end of the
airport.[10] At around 7:18 p.m., Galvez contacted ground control to ask for clearance to taxi to
taxiway delta.[11] Rogelio Lim, ground traffic controller on duty at the Air Transportation Office
(ATO), issued the clearance on condition that he be contacted again upon reaching taxiway delta
intersection.[12]

PACs pilots then proceeded to taxi to taxiway delta at about 7:19 and 19 seconds. [13] Upon
reaching the intersection of taxiway delta, Galvez repeated the request to taxi to taxiway delta,
which request was granted.[14] Upon reaching fox 1, Galvez requested clearance to make a right
turn to fox 1 and to cross runway 13 in order to proceed to fox 1 bravo. [15] ATO granted the
request.[16] At this point, the Twin Otter was still 350 meters away from runway 13.[17] Upon
reaching runway 13, PACs pilots did not make a full stop at the holding point to request clearance
right before crossing runway 13.[18] Without such clearance, PACs pilots proceeded to cross
runway 13.

Meanwhile, the Philippine Airlines (PAL) Boeing 737, manned by pilots Rogelio Casio and Ruel
Isaac, was preparing for take-off along runway 13. The PAL pilots requested clearance to push
and start[19] on runway 13. Ernesto Linog, Jr., air traffic controller on duty at the ATO issued the
clearance.[20] Subsequently, at 7:20 and 18 seconds, Linog, Jr. gave PALs Boeing 737 clearance
to take off.[21] Pilots Casio and Isaac then proceeded with the take-off procedure.[22] While already
on take-off roll, Casio caught a glimpse of the Twin Otter on the left side of the Boeing 737 about
to cross runway 13.[23]

While the Twin Otter was halfway through runway 13, Galvez noticed the Boeing 737 and told
Bungabong that an airplane was approaching them from the right side. [24]Bungabong then
said, Diyos ko po and gave full power to the Twin Otter.[25] The PAL pilots attempted to abort the
take-off by reversing the thrust of the aircraft.[26] However, the Boeing 737 still collided with the
Twin Otter.[27]

The Boeing 737 dragged the Twin Otter about 100 meters away.[28] When the Twin Otter stopped,
PACs pilots ran away from the aircraft for fear it might explode.[29] While observing the Twin
Otter from a safe distance, they saw passengers running down from the Boeing 737. [30] When
PACs pilots returned to the aircraft to get their personal belongings, they saw that the Twin Otter
was a total wreck.[31]

At 7:21 and 2 seconds on that fateful evening, the PAL pilots informed ATOs control tower that
they had hit another aircraft, referring to the Twin Otter.[32] Bungabong suffered sprain on his
shoulder while Galvez had laceration on his left thumb. [33] An ambulance brought the two pilots
to Makati Medical Center where they were treated for serious and slight physical injuries.[34]

On 7 May 1996, PAC, Bungabong, and Galvez filed in the Regional Trial Court (Branch 112) of
Pasay City a complaint[35] for sum of money and damages against PAL, Casio, Isaac, ATO, Lim,
Linog, Jr., and ATOs traffic control supervisor, Danilo Alzola. The Government Service
Insurance System (GSIS), as insurer of the Boeing 737 that figured in the collision, intervened.

The Ruling of the Trial Court

The trial court ruled that the proximate cause of the collision was the negligence of Alzola, Lim,
and Linog, Jr., as ATOs traffic control supervisor, ground traffic controller, and air traffic
controller, respectively, at the time of the collision. The trial court further held that the direct
cause of the collision was the negligence of Casio and Isaac, as the pilots of the Boeing 737 that
collided with the Twin Otter. The decretal portion of the trial courts decision reads:

PREMISES CONSIDERED, judgment is hereby rendered ordering defendants


Philippine Air Lines and its pilots, Rogelio Casio and Ruel Isaac, and Air
Transportation Office and its comptrollers, Danilo Alzola, Rogelio Lim and Ernesto
Linog, Jr., jointly and severally, to pay:

a) Plaintiff Pacific Airways Corporation the amount of Php15,000,000.00 and the


further amount of Php100,000.00 a day from April 2, 1996 until it is fully reimbursed
for the value of its RP-C1154 plane, as actual damages, and the amount of
Php3,000,000.00, as exemplary damages, and the amount of Php1,000,000.00, as and
for attorneys fees and expenses of litigation;

b) Plaintiffs Ely B. Bongabong[36] and Michael F. Galvez, the amount of Php5,000.00


each, as actual damages; the amount of Php500,000.00, as and for moral damages;
Php500,000.00 as and for exemplary damages, and the amount of Php50,000.00, as
and for attorneys fees;

c) Defendants are, likewise, ordered to pay, jointly and severally, to plaintiffs the
costs of this suit.

SO ORDERED.[37]

PAL, Casio, Isaac, GSIS, ATO, Alzola, Lim, and Linog, Jr., all appealed the trial courts Decision
to the Court of Appeals.

The Ruling of the Court of Appeals

The Court of Appeals found that the trial court did not commit any reversible error. In its 28
October 2004 decision, the Court of Appeals affirmed in toto the decision of the trial court, thus:

WHEREFORE, the instant appeal is hereby DISMISSED. The decision of the


Regional Trial Court, Branch 112, Pasay City dated July 27, 2001 is hereby
AFFIRMED in toto.

SO ORDERED.[38]
PAL, Casio, Isaac, GSIS, ATO, Alzola, Lim, and Linog, Jr., filed their respective motions for
reconsideration. The appellate court denied for lack of merit all the motions for reconsideration
except the one filed by Linog, Jr.

The Court of Appeals gave weight to the 20 March 2003 Decision[39] on appeal of the RTC
(Branch 108) of Pasay City in Criminal Case No. 02-1979 acquitting Linog, Jr., who was
convicted in the original Decision together with Alzola and Lim, of reckless imprudence resulting
in damage to property with serious and slight physical injuries in connection with the collision.
Since Alzola and Lim did not appeal, the judgment of conviction against them became final.
Alzola and Lim were sentenced to arresto mayor or imprisonment for two (2) months.[40]

The Court of Appeals reasoned that since the trial court in the criminal case has ruled that Linog,
Jr. was not negligent, then the act from which the civil liability might arise did not exist. In its 15
November 2005 Resolution, the Court of Appeals decreed:

WHEREFORE, the decision subject of the motions for reconsideration is


MODIFIED in that the case against defendant-appellant ERNESTO LINOG, JR. is
dismissed. The decision is AFFIRMED in all other respects.

SO ORDERED.[41]

Hence, the instant consolidated petitions for review.

In G.R. No. 170418, petitioners PAL, Casio, and Isaac argue that the Court of Appeals should
have applied the emergency rule instead of the last clear chance doctrine. Petitioners claim that
even if the PAL pilots were negligent, PAL had exercised due diligence in the selection and
supervision of its pilots. Petitioners contend that the Court of Appeals awarded damages without
any specific supporting proof as required by law. Petitioners also claim that the Court of Appeals
should have awarded their counterclaim for damages.

In G.R. No. 170414, petitioner GSIS points out that PACs pilots were the ones guilty of
negligence as they violated the Rules of the Air, which provide that right of way belongs to the
aircraft on take-off roll and the aircraft on the right side of another. GSIS stresses that such
negligence was the proximate cause of the collision. GSIS posits that PAC, Bungabong, and
Galvez should be held solidarily liable to pay GSIS the cost of repairing the insured aircraft.

In G.R. No. 170460, petitioners ATO, Alzola, and Lim call our attention to the fact that PAC was
a mere lessee, not the owner of the Twin Otter. They argue that PAC, as mere lessee, was not the
real party-in-interest in the complaint seeking recovery for damages sustained by the Twin Otter.
Petitioners maintain that ground and air traffic clearances were the joint responsibility of ATO
and the pilots-in-command. Petitioners aver that Bungabong and Galvez were negligent in asking
for clearance to cross an active runway while still 350 meters away from the runway. Petitioners
claim that PAL had the right of way and that PACs pilots had the last clear chance to prevent the
collision.

The Issue

The sole issue for resolution is who among the parties is liable for negligence under the
circumstances.

The Courts Ruling


The petitions are meritorious.

In a petition for review under Rule 45, only questions of law may be raised. This rule, however,
admits of certain exceptions as when the judgment of the Court of Appeals is premised on a
misapprehension of facts or the Court of Appeals fails to notice certain relevant facts which, if
properly considered, will justify a different conclusion.[42]

After thoroughly going over the evidence on record in this case, we are unable to sustain the
finding of fact and legal conclusion of the Court of Appeals.

To ascertain who among the parties is liable for negligence, we must refer to the applicable rules
governing the specific traffic management of aircrafts at an airport. The Rules of the Air[43] of the
Air Transportation Office apply to all aircrafts registered in the Philippines.[44] The Boeing 737
and the Twin Otter in this case were both registered in the Philippines. Both are thus subject to
the Rules of the Air. In case of danger of collision between two aircrafts, the Rules of the Air
state:

2.2.4.7 Surface Movement of Aircraft. In case of danger of collision between two


aircrafts taxiing on the maneuvering area of an aerodrome, the following shall
apply:

a) When two aircrafts are approaching head on, or approximately so, each shall stop
or where practicable, alter its course to the right so as to keep well clear.

b) When two aircrafts are on a converging course, the one which has the other
on its right shall give way.[45] (Emphasis supplied)
In this case, however, the Boeing 737 and the Twin Otter were not both taxiing at the time of the
collision. Only the Twin Otter was taxiing. The Boeing 737 was already on take-off roll. The
Rules of the Air provide:
2.2.4.6 Taking Off. An aircraft taxiing on the maneuvering area of an aerodrome
shall give way to aircraft taking off or about to take off.[46] (Emphasis supplied)

Therefore, PALs aircraft had the right of way at the time of collision, not simply because it was
on the right side of PACs aircraft, but more significantly, because it was taking off or about to
take off.

PACs Pilots

For disregarding PALs right of way, PACs pilots were grossly negligent. Gross negligence is one
that is characterized by the want of even slight care, acting or omitting to act in a situation where
there is a duty to act, not inadvertently but willfully and intentionally with a conscious
indifference to consequences insofar as other persons may be affected.[47]

We find it hard to believe that PACs pilots did not see the Boeing 737 when they looked to the
left and to the right before approaching the runway. It was a clear summer evening in April and
the Boeing 737, only 200 meters away, had its inboard lights, outboard lights, taxi lights, and
logo lights on before and during the actual take-off roll.[48] The only plausible explanation why
PACs pilots did not see the Boeing 737 was that they did not really look to the left and to the right
before crossing the active runway.
Records show that PACs pilots, while still 350 meters away, prematurely requested clearance to
cross the active runway.[49] ATO points out that PACs pilots should have made a full stop at the
holding point to ask for updated clearance right before crossing the active runway. [50] Had PACs
pilots done so, ATO would by then be in a position to determine if there was an aircraft on a take-
off roll at the runway. The collision would not have happened.

ATO, Alzola, Lim, and Linog, Jr.

The Rules of Air Control govern airplane traffic management and clearance at the then Manila
International Airport. It contains several provisions indicating that airplane traffic management
and clearance are not the sole responsibility of ATO and its traffic controllers, but of the pilots-
in-command of aircrafts as well. The Rules of Air Control state:
1.3 The pilot-in-command of an aircraft shall, whether manipulating the controls
or not, be responsible for the operation of the aircraft in accordance with the rules of
the air, except that he may depart from these rules in circumstances that render
such departure absolutely necessary in the interest of safety. (Emphasis supplied)

1.5 The pilot-in-command of an aircraft shall have final authority as to the


disposition of the aircraft while he is in command.[51] (Emphasis supplied)
3.1 Clearances are based solely on expediting and separating aircraft and do not
constitute authority to violate any applicable regulations for promoting safety of
flight operations or for any other purpose. (Emphasis supplied)
xxxx
If an air traffic control clearance is not suitable to the pilot-in-command of an
aircraft, he may request, and, if practicable, obtain an amended
clearance. [52] (Emphasis supplied)

10.1.5 Clearances issued by controllers relate to traffic and aerodrome


conditions only and do not relieve a pilot of any responsibility whatsoever in
connection with a possible violation of applicable rules and
regulations.[53] (Emphasis supplied)

Therefore, even if ATO gave both PALs pilots and PACs pilots clearance to take off and clearance
to cross runway 13, respectively, it remained the primary responsibility of the pilots-in-command
to see to it that the respective clearances given were suitable. Since the pilots-in-command have
the final authority as to the disposition of the aircraft, they cannot, in case a collision occurs,
pass the blame to ATO for issuing clearances that turn out to be unsuitable.

The clearance to cross runway 13, premature as it was, was not an absolute license for PACs
pilots to recklessly maneuver the Twin Otter across an active runway. PACs pilots should have
stopped first at the holding point to ask for clearance to cross the active runway. It was wrong for
them to have relied on a prematurely requested clearance which was issued while they were still
350 meters away. Their defense, that it did not matter whether the clearance was premature or not
as long as the clearance was actually granted,[54] only reveals their poor judgment and gross
negligence in the performance of their duties.

On the other hand, evidence on record shows that the air traffic controller properly issued the
clearance to take off to the Boeing 737. Nothing on record indicates any irregularity in the
issuance of the clearance. In fact, the trial court, in the criminal case for reckless imprudence
resulting in damage to property with serious and slight physical injuries in connection with the
collision, ruled that air traffic controller Linog, Jr. was not negligent. The Court of Appeals, in its
15 November 2005 Resolution, absolved Linog, Jr. of civil liability for damages based on his
acquittal in the criminal case.

While Alzola and Lim, as found by the trial court in the criminal case for reckless imprudence,
may have been negligent in the performance of their functions, such negligence is only
contributory.[55] Their contributory negligence arises from their granting the premature request of
PACs pilots for clearance to cross runway 13 while the Twin Otter was still 350 meters away
from runway 13. However, as explained earlier, the granting of their premature request for
clearance did not relieve PACs pilots from complying with the Rules of the Air.

PALs Pilots

Records show that PALs pilots timely requested clearance to take off. Linog, Jr., ATOs air traffic
controller, duly issued the clearance to take off.[56] Under the Rules of the Air, PALs aircraft being
on take-off roll undisputedly had the right of way.[57] Further, the Rules of Air Control provide:

2.2.4.1 The aircraft that has the right of way shall maintain its heading and speed,
x x x. [58] (Emphasis supplied)

Thus, even if Casio noticed from the corner of his eye a small airplane taxiing on the left side and
approaching halfway of fox 1,[59] it was fairly reasonable for PALs pilots to assume that they may
proceed with the take-off because the taxiing aircraft would naturally respect their right of way
and not venture to cross the active runway while the Boeing 737 was on take-off roll.

Applicable by analogy is the case of Santos v. BLTB,[60] where the Court applied the principle that
a motorist who is properly proceeding on his own side of the highway, even after he sees an
approaching motorist coming toward him on the wrong side, is generally entitled to assume that
the other motorist will return to his proper lane of traffic.

Proximate Cause

After assiduously studying the records of this case and carefully weighing the arguments of the
parties, we are convinced that the immediate and proximate case of the collision is the gross
negligence of PACs pilots. 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.[61] In this case, the fact that PACs pilots
disregarded PALs right of way and did not ask for updated clearance right before crossing an
active runway was the proximate cause of the collision. Were it not for such gross negligence on
the part of PACs pilots, the collision would not have happened.

The Civil Code provides that when a plaintiffs own negligence is the immediate and proximate
cause of his injury, he cannot recover damages.
Art. 2179. When the plaintiffs 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 defendants
lack of due care, the plaintiff may recover damages, but the courts shall mitigate the
damages to be awarded. (Emphasis supplied)
Under the law and prevailing jurisprudence,[62] PAC and its pilots, whose own gross negligence
was the immediate and proximate cause of their own injuries, must bear the cost of such injuries.
They cannot recover damages. Civil Case No. 96-0565 for sum of money and damages, which
PAC, Bungabong, and Galvez filed against PAL, Casio, Isaac, ATO, Alzola, Lim, and Linog, Jr.
should have been dismissed for lack of legal basis.

PALs Counterclaims

We find supported by law and evidence on record PALs counterclaim for actual or compensatory
damages but only in the amount of US$548,819.93[63] representing lease charges during the
period the Boeing 737 was not flying. The said amount cannot be claimed against the insurance
policy covering the Boeing 737. In this connection, the Civil Code provides:
Art. 2207. If the plaintiffs property has been insured, and he has received indemnity
from the insurance company for the injury or loss arising out of the wrong or breach
of contract complained of, the insurance company shall be subrogated to the rights
of the insured against the wrongdoer or the person who has violated the contract. If
the amount paid by the insurance company does not fully cover the injury or
loss, the aggrieved party shall be entitled to recover the deficiency from the
person causing the loss or injury. (Emphasis supplied)

Under the law, GSIS, as insurer subrogee of PALs right to claim actual or compensatory damages
in connection with the repair of the damaged Boeing 737, is entitled to reimbursement for the
amount it advanced. GSIS claims reimbursement for the amount of US$2,775,366.84. [64] In
support of its claim, GSIS presented statements of account, check vouchers, and
invoices[65] proving payment for the repair of the Boeing 737 in the total amount of
US$2,775,366.84. We find the claim fully supported by evidence on record and thus we resolve
to grant the same.

With regard to PALs other counterclaims, settled is the rule that the award of moral and exemplary
damages as well as attorneys fees is discretionary based on the facts and circumstances of each
case. The actual losses sustained by the aggrieved parties and the gravity of the injuries must be
considered in arriving at reasonable levels.[66]Understandably, Casio and Isaac suffered sleepless
nights and were temporarily unable to work after the collision. They are thus entitled to moral
damages as well as exemplary damages considering that PACs pilots acted with gross
negligence.[67] Attorneys fees are generally not recoverable except when exemplary damages are
awarded[68] as in this case. We thus deem the amounts of P100,000 in moral damages, P100,000
in exemplary damages, and P50,000 in attorneys fees to be in accordance with prevailing
jurisprudence and appropriate given the circumstances.
WHEREFORE, we GRANT the petitions. We SET ASIDE the 28 October 2004 Decision and
the 15 November 2005 Resolution of the Court of Appeals in CA-G.R. CV No. 73214
affirming in toto the 27 July 2001 Decision of the Regional Trial Court (Branch 112) of Pasay
City. However, we SUSTAIN the dismissal of the case against Ernesto Linog, Jr.

Civil Case No. 96-0565 for sum of money and damages, filed by Pacific Airways Corporation
(PAC), Ely B. Bungabong, and Michael F. Galvez, is DISMISSED for lack of legal basis.

Pacific Airways Corporation, Ely B. Bungabong, and Michael F. Galvez are ORDERED to
solidarily pay:

(1) Philippine Airlines, Inc. actual or compensatory damages in the amount of


US$548,819.93;
(2) Rogelio Casio and Ruel Isaac individually moral damages in the amount of P100,000,
exemplary damages in the amount of P100,000, and attorneys fees in the amount
of P50,000; and
(3) the Government Service Insurance System, as insurer subrogee of Philippine
Airlines, actual or compensatory damages in the amount of US$2,775,366.84.

No pronouncement as to costs.
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-57079 September 29, 1989

PHILIPPINE LONG DISTANCE TELEPHONE CO., INC., petitioner,


vs.
COURT OF APPEALS and SPOUSES ANTONIO ESTEBAN and GLORIA ESTEBAN, respondents.

REGALADO, J.:

This case had its inception in an action for damages instituted in the former Court of First Instance of Negros
Occidental 1 by private respondent spouses against petitioner Philippine Long Distance Telephone Company (PLDT,
for brevity) for the injuries they sustained in the evening of July 30, 1968 when their jeep ran over a mound of earth
and fell into an open trench, an excavation allegedly undertaken by PLDT for the installation of its underground
conduit system. The complaint alleged that respondent Antonio Esteban failed to notice the open trench which was
left uncovered because of the creeping darkness and the lack of any warning light or signs. As a result of the
accident, respondent Gloria Esteban allegedly sustained injuries on her arms, legs and face, leaving a permanent
scar on her cheek, while the respondent husband suffered cut lips. In addition, the windshield of the jeep was
shattered.2

PLDT, in its answer, denies liability on the contention that the injuries sustained by respondent spouses were the
result of their own negligence and that the entity which should be held responsible, if at all, is L.R. Barte and
Company (Barte, for short), an independent contractor which undertook the construction of the manhole and the
conduit system.3 Accordingly, PLDT filed a third-party complaint against Barte alleging that, under the terms of their
agreement, PLDT should in no manner be answerable for any accident or injuries arising from the negligence or
carelessness of Barte or any of its employees.4 In answer thereto, Barte claimed that it was not aware nor was it
notified of the accident involving respondent spouses and that it had complied with the terms of its contract with
PLDT by installing the necessary and appropriate standard signs in the vicinity of the work site, with barricades at
both ends of the excavation and with red lights at night along the excavated area to warn the traveling public of the
presence of excavations.5

On October 1, 1974, the trial court rendered a decision in favor of private respondents, the decretal part of which
reads:

IN VIEW OF THE FOREGOING considerations the defendant Philippine Long Distance Telephone
Company is hereby ordered (A) to pay the plaintiff Gloria Esteban the sum of P20,000.00 as moral
damages and P5,000.00 exemplary damages; to plaintiff Antonio Esteban the sum of P2,000.00 as
moral damages and P500.00 as exemplary damages, with legal rate of interest from the date of the
filing of the complaint until fully paid. The defendant is hereby ordered to pay the plaintiff the sum of
P3,000.00 as attorney's fees.

(B) The third-party defendant is hereby ordered to reimburse whatever amount the defendant-third
party plaintiff has paid to the plaintiff. With costs against the defendant. 6

From this decision both PLDT and private respondents appealed, the latter appealing only as to the amount of
damages. Third-party defendant Barte did not appeal.

On September 25, 1979, the Special Second Division of the Court of Appeals rendered a decision in said appealed
case, with Justice Corazon Juliano Agrava as ponente, reversing the decision of the lower court and dismissing the
complaint of respondent spouses. It held that respondent Esteban spouses were negligent and consequently
absolved petitioner PLDT from the claim for damages.7 A copy of this decision was received by private respondents
on October 10, 1979. 8 On October 25, 1979, said respondents filed a motion for reconsideration dated October 24,
1979. 9 On January 24, 1980, the Special Ninth Division of the Court of Appeals denied said motion for
reconsideration.10 This resolution was received by respondent spouses on February 22, 1980.11

On February 29, 1980, respondent Court of Appeals received private respondents' motion for leave of court to file a
second motion for reconsideration, dated February 27, 1980. 12 On March 11, 1980, respondent court, in a resolution
likewise penned by Justice Agrava, allowed respondents to file a second motion for reconsideration, within ten (10)
days from notice thereof. 13 Said resolution was received by private respondents on April 1, 1980 but prior thereto,
private respondents had already filed their second motion for reconsideration on March 7, 1980. 14

On April 30,1980 petitioner PLDT filed an opposition to and/or motion to dismiss said second motion for
reconsideration. 15 The Court of Appeals, in view of the divergent opinions on the resolution of the second motion for
reconsideration, designated two additional justices to form a division of five.16 On September 3, 1980, said division of
five promulgated its resolution, penned by Justice Mariano A. Zosa, setting aside the decision dated September 25,
1979, as well as the resolution dated, January 24,1980, and affirming in toto the decision of the lower court.17

On September 19, 1980, petitioner PLDT filed a motion to set aside and/or for reconsideration of the resolution of
September 3, 1980, contending that the second motion for reconsideration of private respondent spouses was filed
out of time and that the decision of September 25, 1979 penned by Justice Agrava was already final. It further
submitted therein that the relationship of Barte and petitioner PLDT should be viewed in the light of the contract
between them and, under the independent contractor rule, PLDT is not liable for the acts of an independent
contractor.18 On May 11, 1981, respondent Court of Appeals promulgated its resolution denying said motion to set
aside and/or for reconsideration and affirming in toto the decision of the lower court dated October 1, 1974. 19

Coming to this Court on a petition for review on certiorari, petitioner assigns the following errors:

1. Respondent Court of Appeals erred in not denying private respondents' second motion for reconsideration on the
ground that the decision of the Special Second Division, dated September 25, 1979, and the resolution of the
Special Ninth Division, dated January 24, 1980, are already final, and on the additional ground that said second
motion for reconsideration is pro forma.

2. Respondent court erred in reversing the aforesaid decision and resolution and in misapplying the independent
contractor rule in holding PLDT liable to respondent Esteban spouses.

A convenient resume of the relevant proceedings in the respondent court, as shown by the records and admitted by
both parties, may be graphically presented as follows:

(a) September 25, 1979, a decision was rendered by the Court of Appeals with Justice Agrava
asponente;

(b) October 10, 1979, a copy of said decision was received by private respondents;

(c) October 25, 1979, a motion for reconsideration was filed by private respondents;

(d) January 24, 1980, a resolution was issued denying said motion for reconsideration;

(e) February 22, 1980, a copy of said denial resolution was received by private respondents;

(f) February 29, 1980, a motion for leave to file a second motion for reconsideration was filed by
private respondents

(g) March 7, 1980, a second motion for reconsideration was filed by private respondents;

(h) March 11, 1980, a resolution was issued allowing respondents to file a second motion for
reconsideration within ten (10) days from receipt; and
(i) September 3, 1980, a resolution was issued, penned by Justice Zosa, reversing the original
decision dated September 25, 1979 and setting aside the resolution dated January 24, 1980.

From the foregoing chronology, we are convinced that both the motion for leave to file a second motion for
reconsideration and, consequently, said second motion for reconsideration itself were filed out of time.

Section 1, Rule 52 of the Rules of Court, which had procedural governance at the time, provided that a second
motion for reconsideration may be presented within fifteen (15) days from notice of the order or judgment deducting
the time in which the first motion has been pending. 20 Private respondents having filed their first motion for
reconsideration on the last day of the reglementary period of fifteen (15) days within which to do so, they had only
one (1) day from receipt of the order denying said motion to file, with leave of court, a second motion for
reconsideration. 21 In the present case, after their receipt on February 22, 1980 of the resolution denying their first
motion for reconsideration, private respondents had two remedial options. On February 23, 1980, the remaining one
(1) day of the aforesaid reglementary period, they could have filed a motion for leave of court to file a second motion
for reconsideration, conceivably with a prayer for the extension of the period within which to do so. On the other
hand, they could have appealed through a petition for review on certiorari to this Court within fifteen (15) days from
February 23, 1980. 22 Instead, they filed a motion for leave to file a second motion 'for reconsideration on February
29, 1980, and said second motion for reconsideration on March 7, 1980, both of which motions were by then time-
barred.

Consequently, after the expiration on February 24, 1980 of the original fifteen (15) day period, the running of which
was suspended during the pendency of the first motion for reconsideration, the Court of Appeals could no longer
validly take further proceedings on the merits of the case, much less to alter, modify or reconsider its aforesaid
decision and/or resolution. The filing of the motion for leave to file a second motion for reconsideration by herein
respondents on February 29, 1980 and the subsequent filing of the motion itself on March 7, 1980, after the
expiration of the reglementary period to file the same, produced no legal effects. Only a motion for re-hearing or
reconsideration filed in time shall stay the final order or judgment sought to be re-examined. 23

The consequential result is that the resolution of respondent court of March 11, 1980 granting private respondents'
aforesaid motion for leave and, giving them an extension of ten (10) days to file a second motion for reconsideration,
is null and void. The period for filing a second motion for reconsideration had already expired when private
respondents sought leave to file the same, and respondent court no longer had the power to entertain or grant the
said motion. The aforesaid extension of ten (10) days for private respondents to file their second motion for
reconsideration was of no legal consequence since it was given when there was no more period to extend. It is an
elementary rule that an application for extension of time must be filed prior to the expiration of the period sought to
be extended. 24 Necessarily, the discretion of respondent court to grant said extension for filing a second motion for
reconsideration is conditioned upon the timeliness of the motion seeking the same.

No appeal having been taken seasonably, the respondent court's decision, dated September 25, 1979, became final
and executory on March 9, 1980. The subsequent resolutions of respondent court, dated March 11, 1980 and
September 3, 1980, allowing private respondents to file a second motion for reconsideration and reversing the
original decision are null and void and cannot disturb the finality of the judgment nor restore jurisdiction to
respondent court. This is but in line with the accepted rule that once a decision has become final and executory it is
removed from the power and jurisdiction of the court which rendered it to further alter or amend, much less revoke
it.25 The decision rendered anew is null and void.26 The court's inherent power to correct its own errors should be
exercised before the finality of the decision or order sought to be corrected, otherwise litigation will be endless and
no question could be considered finally settled. Although the granting or denial of a motion for reconsideration
involves the exercise of discretion,27 the same should not be exercised whimsically, capriciously or arbitrarily, but
prudently in conformity with law, justice, reason and equity.28

Prescinding from the aforesaid procedural lapses into the substantive merits of the case, we find no error in the
findings of the respondent court in its original decision that the accident which befell private respondents was due to
the lack of diligence of respondent Antonio Esteban and was not imputable to negligent omission on the part of
petitioner PLDT. Such findings were reached after an exhaustive assessment and evaluation of the evidence on
record, as evidenced by the respondent court's resolution of January 24, 1980 which we quote with approval:

First. Plaintiff's jeep was running along the inside lane of Lacson Street. If it had remained on that
inside lane, it would not have hit the ACCIDENT MOUND.
Exhibit B shows, through the tiremarks, that the ACCIDENT MOUND was hit by the jeep swerving
from the left that is, swerving from the inside lane. What caused the swerving is not disclosed; but,
as the cause of the accident, defendant cannot be made liable for the damages suffered by plaintiffs.
The accident was not due to the absence of warning signs, but to the unexplained abrupt swerving
of the jeep from the inside lane. That may explain plaintiff-husband's insistence that he did not see
the ACCIDENT MOUND for which reason he ran into it.

Second. That plaintiff's jeep was on the inside lane before it swerved to hit the ACCIDENT MOUND
could have been corroborated by a picture showing Lacson Street to the south of the ACCIDENT
MOUND.

It has been stated that the ditches along Lacson Street had already been covered except the 3 or 4
meters where the ACCIDENT MOUND was located. Exhibit B-1 shows that the ditches on Lacson
Street north of the ACCIDENT MOUND had already been covered, but not in such a way as to allow
the outer lane to be freely and conveniently passable to vehicles. The situation could have been
worse to the south of the ACCIDENT MOUND for which reason no picture of the ACCIDENT
MOUND facing south was taken.

Third. Plaintiff's jeep was not running at 25 kilometers an hour as plaintiff-husband claimed. At that
speed, he could have braked the vehicle the moment it struck the ACCIDENT MOUND. The jeep
would not have climbed the ACCIDENT MOUND several feet as indicated by the tiremarks in Exhibit
B. The jeep must have been running quite fast. If the jeep had been braked at 25 kilometers an hour,
plaintiff's would not have been thrown against the windshield and they would not have suffered their
injuries.

Fourth. If the accident did not happen because the jeep was running quite fast on the inside lane and
for some reason or other it had to swerve suddenly to the right and had to climb over the ACCIDENT
MOUND, then plaintiff-husband had not exercised the diligence of a good father of a family to avoid
the accident. With the drizzle, he should not have run on dim lights, but should have put on his
regular lights which should have made him see the ACCIDENT MOUND in time. If he was running
on the outside lane at 25 kilometers an hour, even on dim lights, his failure to see the ACCIDENT
MOUND in time to brake the car was negligence on his part. The ACCIDENT MOUND was relatively
big and visible, being 2 to 3 feet high and 1-1/2 feet wide. If he did not see the ACCIDENT MOUND
in time, he would not have seen any warning sign either. He knew of the existence and location of
the ACCIDENT MOUND, having seen it many previous times. With ordinary precaution, he should
have driven his jeep on the night of the accident so as to avoid hitting the ACCIDENT MOUND.29

The above findings clearly show that the negligence of respondent Antonio Esteban was not only contributory to his
injuries and those of his wife but goes to the very cause of the occurrence of the accident, as one of its determining
factors, and thereby precludes their right to recover damages.30 The perils of the road were known to, hence
appreciated and assumed by, private respondents. By exercising reasonable care and prudence, respondent
Antonio Esteban could have avoided the injurious consequences of his act, even assuming arguendo that there was
some alleged negligence on the part of petitioner.

The presence of warning signs could not have completely prevented the accident; the only purpose of said signs
was to inform and warn the public of the presence of excavations on the site. The private respondents already knew
of the presence of said excavations. It was not the lack of knowledge of these excavations which caused the jeep of
respondents to fall into the excavation but the unexplained sudden swerving of the jeep from the inside lane towards
the accident mound. As opined in some quarters, the omission to perform a duty, such as the placing of warning
signs on the site of the excavation, constitutes the proximate cause only when the doing of the said omitted act
would have prevented the injury.31 It is basic that private respondents cannot charge PLDT for their injuries where
their own failure to exercise due and reasonable care was the cause thereof. It is both a societal norm and necessity
that one should exercise a reasonable degree of caution for his own protection. Furthermore, respondent Antonio
Esteban had the last clear chance or opportunity to avoid the accident, notwithstanding the negligence he imputes
to petitioner PLDT. As a resident of Lacson Street, he passed on that street almost everyday and had knowledge of
the presence and location of the excavations there. It was his negligence that exposed him and his wife to danger,
hence he is solely responsible for the consequences of his imprudence.
Moreover, we also sustain the findings of respondent Court of Appeals in its original decision that there was
insufficient evidence to prove any negligence on the part of PLDT. We have for consideration only the self-serving
testimony of respondent Antonio Esteban and the unverified photograph of merely a portion of the scene of the
accident. The absence of a police report of the incident and the non-submission of a medical report from the hospital
where private respondents were allegedly treated have not even been satisfactorily explained.

As aptly observed by respondent court in its aforecited extended resolution of January 24, 1980

(a) There was no third party eyewitness of the accident. As to how the accident occurred, the Court
can only rely on the testimonial evidence of plaintiffs themselves, and such evidence should be very
carefully evaluated, with defendant, as the party being charged, being given the benefit of any doubt.
Definitely without ascribing the same motivation to plaintiffs, another person could have deliberately
engineered a similar accident in the hope and expectation that the Court can grant him substantial
moral and exemplary damages from the big corporation that defendant is. The statement is made
only to stress the disadvantageous position of defendant which would have extreme difficulty in
contesting such person's claim. If there were no witness or record available from the police
department of Bacolod, defendant would not be able to determine for itself which of the conflicting
testimonies of plaintiffs is correct as to the report or non-report of the accident to the police
department.32

A person claiming damages for the negligence of another has the burden of proving the existence of such fault or
negligence causative thereof. The facts constitutive of negligence must be affirmatively established by competent
evidence.33 Whosoever relies on negligence for his cause of action has the burden in the first instance of proving the
existence of the same if contested, otherwise his action must fail.

WHEREFORE, the resolutions of respondent Court of Appeals, dated March 11, 1980 and September 3,1980, are
hereby SET ASIDE. Its original decision, promulgated on September 25,1979, is hereby REINSTATED and
AFFIRMED.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 188363 February 27, 2013

ALLIED BANKING CORPORATION, Petitioner,


vs.
BANK OF THE PHILIPPINE ISLANDS, Respondents.

DECISION

VILLARAMA, JR., J.:

A collecting bank is guilty of contributory negligence when it accepted for deposit a post-dated check
notwithstanding that said check had been cleared by the drawee bank which failed to return the check within the 24-
hour reglementary period.

Petitioner Allied Banking Corporation appeals the Decision1 dated March 19, 2009 of the Court of Appeals (CA) in
CA-G.R. SP No. 97604 which set aside the Decision2 dated December 13, 2005 of the Regional Trial Court (RTC) of
Makati City, Branch 57 in Civil Case No. 05-418.

The factual antecedents:

On October 10, 2002, a check in the amount of 1,000,000.00 payable to "Mateo Mgt. Group International" (MMGI)
was presented for deposit and accepted at petitioner's Kawit Branch. The check, post-dated "Oct. 9, 2003", was
drawn against the account of Marciano Silva, Jr. (Silva) with respondent Bank of the Philippine Islands (BPI) Bel-Air
Branch. Upon receipt, petitioner sent the check for clearing to respondent through the Philippine Clearing House
Corporation (PCHC).3

The check was cleared by respondent and petitioner credited the account of MMGI with 1,000,000.00. On October
22, 2002, MMGIs account was closed and all the funds therein were withdrawn. A month later, Silva discovered the
debit of 1,000,000.00 from his account. In response to Silvas complaint, respondent credited his account with the
aforesaid sum.4

On March 21, 2003, respondent returned a photocopy of the check to petitioner for the reason: "Postdated."
Petitioner, however, refused to accept and sent back to respondent a photocopy of the check. Thereafter, the check,
or more accurately, the Charge Slip, was tossed several times from petitioner to respondent, and back to petitioner,
until on May 6, 2003, respondent requested the PCHC to take custody of the check. Acting on the request, PCHC
directed the respondent to deliver the original check and informed it of PCHCs authority under Clearing House
Operating Memo (CHOM) No. 279 dated 06 September 1996 to split 50/50 the amount of the check subject of a
"Ping-Pong" controversy which shall be implemented thru the issuance of Debit Adjustment Tickets against the
outward demands of the banks involved. PCHC likewise encouraged respondent to submit the controversy for
resolution thru the PCHC Arbitration Mechanism.5

However, it was petitioner who filed a complaint6 before the Arbitration Committee, asserting that respondent should
solely bear the entire face value of the check due to its negligence in failing to return the check to petitioner within
the 24-hour reglementary period as provided in Section 20.17 of the Clearing House Rules and Regulations8(CHRR)
2000. Petitioner prayed that respondent be ordered to reimburse the sum of 500,000.00 with 12% interest per
annum, and to pay attorneys fees and other arbitration expenses.
In its Answer with Counterclaims,9 respondent charged petitioner with gross negligence for accepting the post-dated
check in the first place. It contended that petitioners admitted negligence was the sole and proximate cause of the
loss.

On December 8, 2004, the Arbitration Committee rendered its Decision10 in favor of petitioner and against the
respondent. First, it ruled that the situation of the parties does not involve a "Ping-Pong" controversy since the
subject check was neither returned within the reglementary time or through the PCHC return window, nor coursed
through the clearing facilities of the PCHC.

As to respondents direct presentation of a photocopy of the subject check, it was declared to be without legal basis
because Section 21.111 of the CHRR 2000 does not apply to post-dated checks. The Arbitration Committee further
noted that respondent not only failed to return the check within the 24-hour reglementary period, it also failed to
institute any formal complaint within the contemplation of Section 20.312 and it appears that respondent was already
contented with the 50-50 split initially implemented by the PCHC. Finding both parties negligent in the performance
of their duties, the Committee applied the doctrine of "Last Clear Chance" and ruled that the loss should be
shouldered by respondent alone, thus:

WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff Allied Banking Corporation
and against defendant Bank of the Philippine Islands, ordering the latter to pay the former the following:

(a) The sum of 500,000.00, plus interest thereon at the rate of 12% per annum counted from the date of
filing of the complaint;

(b) Attorneys fees in the amount of 25,000.00;

(c) The sum of 2,090.00 as and by way of reimbursement of filing fees, plus the cost of suit.

SO ORDERED.13

Respondent filed a motion for reconsideration14 but it was denied by the PCHC Board of Directors under Board
Resolution No. 10-200515 dated April 22, 2005. The Board pointed out that what actually transpired was a "ping-
pong" "not of a check but of a Charge Slip (CS) enclosed in a carrier envelope that went back and forth through the
clearing system in apparent reaction by [petitioner] to the wrongful return via the PCHC clearing system."
Respondents conduct was held as a "gross and unmistakably deliberate violation" of Section 20.2,16 in relation to
Section 20.1(e) of the CHRR 2000.17

On May 13, 2005, respondent filed a petition for review18 in the RTC claiming that PCHC erred in constricting the
return of a post-dated check to Section 20.1, overlooking the fact that Section 20.3 is also applicable which provision
necessarily contemplates defects that are referred to in Section 20.1 as both sections are subsumed under the
general provision (Section 20) on the return of regular items. Respondent also argued that assuming it to be liable,
the PCHC erred in holding it solely responsible and should bear entirely the consequent loss considering that while
respondent may have the "last" opportunity in proximity, it was petitioner which had the longest, fairest and clearest
chance to discover the mistake and avoid the happening of the loss. Lastly, respondent assailed the award of
attorneys fees, arguing that PCHCs perception of "malice" against it and misuse of the clearing machinery is clearly
baseless and unfounded.

In its Decision dated December 13, 2005, the RTC affirmed with modification the Arbitration Committees decision
by deleting the award of attorneys fees. The RTC found no merit in respondents stance that through inadvertence it
failed to discover that the check was post-dated and that confirmation within 24 hours is often "elusive if not outright
impossible" because a drawee bank receives hundreds if not thousands of checks in an ordinary clearing day. Thus:

Petitioner admitted par. 4 in its Answer with Counterclaim and in its Memorandum, further adding that upon receipt
of the subject check "through inadvertence", it did not notice that the check was postdated, hence, petitioner did not
return the same to respondent."

These contradict petitioners belated contention that it discovered the defect only after the lapse of the reglementary
period. What the evidence on record discloses is that petitioner received the check on October 10, 2002, that it was
promptly sent for clearing, that through inadvertence, it did not notice that the check was postdated. Petitioner did
not even state when it discovered the defect in the subject check.

Likewise, petitioners contention that its discovery of the defect was a non-issue in view of the admissions made in
its Answer is unavailing. The Court has noted the fact that the PCHC Arbitration Committee conducted a clarificatory
hearing during which petitioner admitted that its standard operating procedure as regards confirmation of checks
was not followed. No less than petitioners witness admitted that BPI tried to call up the drawer of the check, as their
procedure dictates when it comes to checks in large amounts. However, having initially failed to contact the drawer,
no follow up calls were made nor other actions taken. Despite these, petitioner cleared the check. Having admitted
making said calls, it is simply impossible for petitioner to have missed the fact that the check was
postdated.19 (Emphasis supplied)

With the denial of its motion for partial reconsideration, respondent elevated the case to the CA by filing a petition for
review under Rule 42 of the 1997 Rules of Civil Procedure, as amended.

By Decision dated March 19, 2009, the CA set aside the RTC judgment and ruled for a 60-40 sharing of the loss as
it found petitioner guilty of contributory negligence in accepting what is clearly a post-dated check. The CA found
that petitioners failure to notice the irregularity on the face of the check was a breach of its duty to the public and a
telling sign of its lack of due diligence in handling checks coursed through it. While the CA conceded that the drawee
bank has a bigger responsibility in the clearing of checks, it declared that the presenting bank cannot take lightly its
obligation to make sure that only valid checks are introduced into the clearing system. According to the CA,
considerations of public policy and substantial justice will be served by allocating the damage on a 60-40 ratio, as it
thus decreed:

WHEREFORE, the decision of the Regional Trial Court of Makati City (Branch 57) dated December 13, 2005 is
ANNULLED and SET ASIDE and judgment is rendered ordering petitioner to pay respondent Allied Banking
Corporation the sum of 100,000.00 plus interest thereon at the rate of 6% from July 10, 2003, which shall become
12% per annum from finality hereof, until fully paid, aside from costs.

SO ORDERED.20

Its motion for reconsideration having been denied by the CA, petitioner is now before the Court seeking a partial
reversal of the CAs decision and affirmance of the December 13, 2005 Decision of the RTC.

Essentially, the two issues for resolution are: (1) whether the doctrine of last clear chance applies in this case; and
(2) whether the 60-40 apportionment of loss ordered by the CA was justified.

As well established by the records, both petitioner and respondent were admittedly negligent in the encashment of a
check post-dated one year from its presentment.

Petitioner argues that the CA should have sustained PCHCs finding that despite the antecedent negligence of
petitioner in accepting the postdated check for deposit, respondent, by exercising reasonable care and prudence,
might have avoided injurious consequences had it not negligently cleared the check in question. It pointed out that in
applying the doctrine of last clear chance, the PCHC cited the case of Philippine Bank of Commerce v. Court of
Appeals21 which ruled that assuming the banks depositor, private respondent, was negligent in entrusting cash to a
dishonest employee, thus providing the latter with the opportunity to defraud the company, it cannot be denied that
petitioner bank had the last clear opportunity to avert the injury incurred by its client, simply by faithfully observing
their self-imposed validation procedure.

Petitioner underscores respondents failure to observe clearing house rules and its own standard operating
procedure which, the PCHC said constitute further negligence so much so that respondent should be solely liable
for the loss. Specifically, respondent failed to return the subject check within the 24-hour reglementary period under
Section 20.1 and to institute any formal complaint within the contemplation of Section 20.3 of the CHRR 2000. The
PCHC likewise faulted respondent for not making follow-up calls or taking any other action after it initially attempted,
without success, to contact by telephone the drawer of the check, and clearing the check despite such lack of
confirmation from its depositor in violation of its own standard procedure for checks involving large amounts.
The doctrine of last clear chance, 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 plaintiffs negligence.22The
doctrine necessarily assumes negligence on the part of the defendant and contributory negligence on the part of the
plaintiff, and does not apply except upon that assumption.23 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.24Moreover, in
situations where the doctrine has been applied, it was defendants failure to exercise such ordinary care, having the
last clear chance to avoid loss or injury, which was the proximate cause of the occurrence of such loss or injury.25

In this case, the evidence clearly shows that the proximate cause of the unwarranted encashment of the subject
check was the negligence of respondent who cleared a post-dated check sent to it thru the PCHC clearing facility
without observing its own verification procedure. As correctly found by the PCHC and upheld by the RTC, if only
respondent exercised ordinary care in the clearing process, it could have easily noticed the glaring defect upon
seeing the date written on the face of the check "Oct. 9, 2003". Respondent could have then promptly returned the
check and with the check thus dishonored, petitioner would have not credited the amount thereof to the payees
account. Thus, notwithstanding the antecedent negligence of the petitioner in accepting the post-dated check for
deposit, it can seek reimbursement from respondent the amount credited to the payees account covering the check.

What petitioner omitted to mention is that in the cited case of Philippine Bank of Commerce v. Court of
Appeals,26while the Court found petitioner bank as the culpable party under the doctrine of last clear chance since it
had, thru its teller, the last opportunity to avert the injury incurred by its client simply by faithfully observing its own
validation procedure, it nevertheless ruled that the plaintiff depositor (private respondent) must share in the loss on
account of its contributory negligence. Thus:

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 under Article 2179 of the New Civil Code, to wit:

"x x x. When the plaintiffs 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 25,000.00
attorneys fees, shall be borne by private respondent RMC; only the balance of 60% needs to be paid by the
petitioners. The award of attorneys fees shall be borne exclusively by the petitioners.27 (Italics in the original;
emphasis supplied)

In another earlier case,28 the Court refused to hold petitioner bank solely liable for the loss notwithstanding the
finding that the proximate cause of the loss was due to its negligence. Since the employees of private respondent
bank were likewise found negligent, its claim for damages is subject to mitigation by the courts. Thus:

Both banks were negligent in the selection and supervision of their employees resulting in the encashment of the
forged checks by an impostor. Both banks were not able to overcome the presumption of negligence in the selection
and supervision of their employees. It was the gross negligence of the employees of both banks which resulted in
the fraud and the subsequent loss. While it is true that petitioner BPIs negligence may have been the
proximate cause of the loss, respondent CBCs negligence contributed equally to the success of the
impostor in encashing the proceeds of the forged checks. Under these circumstances, we apply Article 2179 of
the Civil Code to the effect that while respondent CBC may recover its losses, such losses are subject to mitigation
by the courts. x x x

Considering the comparative negligence of the two (2) banks, we rule that the demands of substantial justice are
satisfied by allocating the loss of 2,413,215.16 and the costs of the arbitration proceedings in the amount of
7,250.00 and the costs of litigation on a 60-40 ratio. Conformably with this ruling, no interests and attorneys fees
can be awarded to either of the parties.29 (Emphasis supplied)

Apportionment of damages between parties who are both negligent was followed in subsequent cases involving
banking transactions notwithstanding the courts finding that one of them had the last clear opportunity to avoid the
occurrence of the loss.

In Bank of America NT & SA v. Philippine Racing Club,30 the Court ruled:

In the case at bar, petitioner cannot evade responsibility for the loss by attributing negligence on the part of
respondent because, even if we concur that the latter was indeed negligent in pre-signing blank checks, the former
had the last clear chance to avoid the loss. To reiterate, petitioners own operations manager admitted that they
could have called up the client for verification or confirmation before honoring the dubious checks. Verily, petitioner
had the final opportunity to avert the injury that befell the respondent. x x x Petitioners negligence has been
undoubtedly established and, thus, pursuant to Art. 1170 of the NCC, it must suffer the consequence of said
negligence.

In the interest of fairness, however, we believe it is proper to consider respondents own negligence to
mitigate petitioners liability. Article 2179 of the Civil Code provides:
1wphi1

xxxx

Explaining this provision in Lambert v. Heirs of Ray Castillon, the Court held:

"The underlying precept on contributory negligence is that a plaintiff who is partly responsible for his own injury
should not be entitled to recover damages in full but must bear the consequences of his own negligence. The
defendant must thus be held liable only for the damages actually caused by his negligence. xxx xxx xxx"

xxxx

Following established jurisprudential precedents, we believe the allocation of sixty percent (60%) of the actual
damages involved in this case (represented by the amount of the checks with legal interest) to petitioner is proper
under the premises. Respondent should, in light of its contributory negligence, bear forty percent (40%) of its
own loss.31 (Emphasis supplied)

In Philippine National Bank v. F.F. Cruz and Co., Inc.,32 the Court made a similar disposition, thus:

Given the foregoing, we find no reversible error in the findings of the appellate court that PNB was negligent in the
handling of FFCCIs combo account, specifically, with respect to PNBs failure to detect the forgeries in the subject
applications for managers check which could have prevented the loss. x x x PNB failed to meet the high standard of
diligence required by the circumstances to prevent the fraud. In Philippine Bank of Commerce v. Court of
Appeals and The Consolidated Bank & Trust Corporation v. Court of Appeals, where the banks negligence is the
proximate cause of the loss and the depositor is guilty of contributory negligence, we allocated the damages
between the bank and the depositor on a 60-40 ratio. We apply the same ruling in this case considering that, as
shown above, PNBs negligence is the proximate cause of the loss while the issue as to FFCCIs contributory
negligence has been settled with finality in G.R. No. 173278. Thus, the appellate court properly adjudged PNB to
bear the greater part of the loss consistent with these rulings.33

"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."34 Admittedly,
petitioners acceptance of the subject check for deposit despite the one year postdate written on its face was a clear
violation of established banking regulations and practices. In such instances, payment should be refused by the
drawee bank and returned through the PCHC within the 24-hour reglementary period. As aptly observed by the CA,
petitioners failure to comply with this basic policy regarding post-dated checks was "a telling sign of its lack of due
diligence in handling checks coursed through it."35
It bears stressing that "the diligence required of banks is more than that of a Roman paterfamilias or a good father of
a family. The highest degree of diligence is expected,"36 considering the nature of the banking business that is
imbued with public interest. While it is true that respondent's liability for its negligent clearing of the check is greater,
petitioner cannot take lightly its own violation of the long-standing rule against encashment of post-dated checks and
the injurious consequences of allowing such checks into the clearing system.

Petitioner repeatedly harps on respondent's transgression of clearing house rules when the latter resorted to direct
presentment way beyond the reglementary period but glosses over its own negligent act that clearly fell short of the
conduct expected of it as a collecting bank. Petitioner must bear the consequences of its omission to exercise
extraordinary diligence in scrutinizing checks presented by its depositors.

Assessing the facts and in the light of the cited precedents, the Court thus finds no error committed by the CA in
allocating the resulting loss from the wrongful encashment of the subject check on a 60-40 ratio.

WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated March 19, 2009 of the Court of
Appeals in CA-G.R. SP No. 97604 is hereby AFFIRMED.

No pronouncement as to costs.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

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 LI, petitioner,


vs.
COURT OF APPEALS and LOURDES VALENZUELA, respondents.

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. 64-65,
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."23 It 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 non-official
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 non-official
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.
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. 7This 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. 8 There 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 16in 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

NATIONAL POWER G.R. No. 165969


CORPORATION,
Petitioner, Present:
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
- versus - CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

Promulgated:
HEIRS OF NOBLE CASIONAN,
Respondents. November 27, 2008

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

DECISION

REYES, R.T., J.:

PETITIONING power company pleads for mitigation of awarded damages on ground of


contributory negligence. But is the victim in this case partly to blame for his electrocution and
eventual demise?

This is a review on certiorari of the Decision[1] of the Court of Appeals (CA) which found the
National Power Corporation (NPC) liable for damages for the death of Noble Casionan due to
electrocution from the companys high tension transmission lines.

The Facts

The facts, as found by the trial court are as follows:


Respondents are the parents of Noble Casionan, 19 years old at the time of the incident that
claimed his life on June 27, 1995. He would have turned 20 years of age on November 9 of that
year. Noble was originally from Cervantes, Ilocos Sur. He worked as a pocket miner in Dalicno,
Ampucao, Itogon, Benguet.

A trail leading to Sangilo, Itogon, existed in Dalicno and this trail was regularly used by
members of the community. Sometime in the 1970s, petitioner NPC installed high-tension
electrical transmission lines of 69 kilovolts (KV) traversing the trail. Eventually, some of the
transmission lines sagged and dangled reducing their distance from the ground to only about
eight to ten feet. This posed a great threat to passersby who were exposed to the danger of
electrocution especially during the wet season.

As early as 1991, the leaders of Ampucao, Itogon made verbal and written requests for
NPC to institute safety measures to protect users of the trail from their high tension wires. On June
18, 1991 and February 11, 1993, Pablo and Pedro Ngaosie, elders of the community, wrote Engr.
Paterno Banayot, Area Manager of NPC, to make immediate and appropriate repairs of the high
tension wires. They reiterated the danger it posed to small-scale miners especially during the wet
season. They related an incident where one boy was nearly electrocuted.

In a letter dated March 1, 1995, Engr. Banayot informed Itogon Mayor Cresencio Pacalso
that NPC had installed nine additional poles on their Beckel-Philex 60 KV line. They likewise
identified a possible rerouting scheme with an estimated total cost of 1.7 million pesos to improve
the distance from its deteriorating lines to the ground.

On June 27, 1995, Noble and his co-pocket miner, Melchor Jimenez, were at Dalicno. They
cut two bamboo poles for their pocket mining. One was 18 to 19 feet long and the other was 14
feet long. Each man carried one pole horizontally on his shoulder: Noble carried the shorter pole
while Melchor carried the longer pole. Noble walked ahead as both passed through the trail
underneath the NPC high tension transmission lines on their way to their work place.

As Noble was going uphill and turning left on a curve, the tip of the bamboo pole he was
carrying touched one of the dangling high tension wires. Melchor, who was walking behind him,
narrated that he heard a buzzing sound when the tip of Nobles pole touched the wire for only
about one or two seconds. Thereafter, he saw Noble fall to the ground. Melchor rushed to Noble
and shook him but the latter was already dead. Their co-workers heard Melchors shout for help
and together they brought the body of Noble to their camp.

A post-mortem examination by Dra. Ignacia Reyes Ciriaco, Municipal Health Officer of


Itogon, Benguet, determined the cause of death to be cardiac arrest, secondary to ventricular
fibulation, secondary to electrocution.[2] She also observed a small burned area in the middle right
finger of the victim.

Police investigators who visited the site of the incident confirmed that portions of the high
tension wires above the trail hung very low, just about eight to ten feet above the ground. They
noted that the residents, school children, and pocket miners usually used the trail and had to pass
directly underneath the wires. The trail was the only viable way since the other side was a
precipice. In addition, they did not see any danger warning signs installed in the trail.

The elders and leaders of the community, through Mayor Cresencio Pacalso, informed the
General Manager of NPC in Itogon of the incident. After learning of the electrocution, NPC
repaired the dangling and sagging transmission lines and put up warning signs around the area.

Consequently, the heirs of the deceased Noble filed a claim for damages against the NPC
before the Regional Trial Court (RTC) in Benguet. In its answer, NPC denied being negligent in
maintaining the safety of the high tension transmission lines. It averred that there were danger
and warning signs installed but these were stolen by children.Excavations were also made to
increase the necessary clearance from the ground to about 17 to 18 feet but some towers or poles
sank due to pocket mining in the area.

At the trial, NPC witnesses testified that the cause of death could not have been
electrocution because the victim did not suffer extensive burns despite the strong 69 KV carried
by the transmission lines. NPC argued that if Noble did die by electrocution, it was due to his
own negligence. The company counter-claimed for attorneys fees and cost of litigation.

RTC Disposition

On February 17, 1998, the RTC decided in favor of respondents. The fallo of its decision
reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against


the defendant NPC as follows:

1. Declaring defendant NPC guilty of Negligence (Quasi-Delict) in connection


with the death of Noble Casionan;

2. Ordering NPC as a consequence of its negligence, to pay the plaintiffs Jose


and Linda Casionan, as heirs of the deceased, Noble Casionan, the following Damages:

a. P50,000.00 as indemnity for the death of their son Noble Casionan;


b. P100,000.00 as moral damages;

c. P50,000.00 as exemplary damages;

d. P52,277.50 as actual damages incurred for the expenses of burial and


wake in connection with the death of Noble Casionan;

e. P720,000.00 as the loss of unearned income; and

f. P20,000.00 as attorneys fees and the cost of suit; and

3. Dismissing the counter claim of the NPC for lack of merit.[3]

The RTC gave more credence to the testimony of witnesses for respondents than those of
NPC who were not actually present at the time of the incident. The trial court observed that
witnesses for NPC were biased witnesses because they were all employed by the company, except
for the witness from the Department of Environment and Natural Resources
(DENR). The RTC found:

Melchor Jimenez was very vivid in his account. He declared that he and Noble
Casionan cut two bamboo poles, one 14 feet and the other about 18 feet. The shorter
bamboo pole was carried by Noble Casionan and the longer bamboo pole was carried
by him. And they walked along the trail underneath the transmission lines. He was
following Noble Casionan. And when they were going uphill in the trail and Noble
Casionan was to turn left in a curve, the bamboo pole of Casionan swung around and
its tip at the back touched for one or two seconds or for a split moment the transmission
line that was dangling and a buzzing sound was heard. And Casionan immediately fell
dead and simply stopped breathing. What better account would there be than
this? Melchor Jimenez was an eye witness as to how it all happened.[4] (Emphasis
added)

The RTC ruled that the negligence of NPC in maintaining the high-tension wires was
established by preponderance of evidence. On this score, the RTC opined:

2. On the matter of whether plaintiffs have a cause of action against defendant


NPC, obviously, they would have. x x x This negligence of the NPC was well
established and cannot be denied because previous to this incident, the attention of
NPC has already been called by several requests and demands in 1991, 1993 and 1995
by elders and leaders of the community in the area to the fact that their transmission
lines were dangling and sagging and the clearance thereof from the line to the ground
was only 8 to 10 feet and not within the standard clearance of 18 to 20 feet but no safety
measures were taken. They did not even put danger and warning signs so as to warn
persons passing underneath.[5] (Emphasis added)
Disagreeing with the ruling of the trial court, NPC elevated the case to the CA. In its appeal, it
argued that the RTC erred in ruling that NPC was liable for Nobles
death. Further, even assuming that Noble died of electrocution, the RTC erred in not finding that
he was guilty of contributory negligence and in awarding excessive damages.

CA Disposition

On June 30, 2004, the CA promulgated its decision, disposing as follows:

WHEREFORE, the appealed Decision is hereby AFFIRMED, with the


MODIFICATION that the amount of moral damages is REDUCED to Fifty Thousand
Pesos (P50,000.00); and the award of attorneys fees in the sum of Twenty Thousand
Pesos (P20,000.00) is DELETED.[6]

The CA sustained the findings of fact of the trial court but reduced the award of moral damages
from P100,000.00 to P50,000.00. The CA further disallowed the award of attorneys fees because
the reason for the award was not expressly stated in the body of the decision.

Issues

The following issues are presented for Our consideration: (i) Whether the award for damages
should be deleted in view of the contributory negligence of the victim; and (ii) Whether the award
for unearned income, exemplary, and moral damages should be deleted for lack of factual and
legal bases.[7]

Our Ruling

That the victim Noble died from being electrocuted by the high-tension transmission wires
of petitioner is not contested by petitioner. We are, however, asked to delete or mitigate the
damages awarded by the trial and appellate courts in view of what petitioner alleges to be
contributory negligence on the part of the victim.

As a rule, only questions of law may be entertained on appeal by certiorari under Rule 45. The
finding of negligence on the part of petitioner by the trial court and affirmed by the CA is a
question of fact which We cannot pass upon since it would entail going into factual matters on
which the finding of negligence was based.[8] Corollary to this, the finding by both courts of the
lack of contributory negligence on the part of the victim is a factual issue which is deemed
conclusive upon this Court absent any compelling reason for Us to rule otherwise.

But even if We walk the extra mile, the finding of liability on the part of petitioner
must stay.

Petitioner contends that the mere presence of the high tension wires above the trail did not
cause the victims death. Instead, it was Nobles negligent carrying of the bamboo pole that caused
his death. It insists that Noble was negligent when he allowed the bamboo pole he was carrying
to touch the high tension wires. This is especially true because other people traversing the trail
have not been similarly electrocuted.

Petitioners contentions are absurd.

The sagging high tension wires were an accident waiting to happen. As established during
trial, the lines were sagging around 8 to 10 feet in violation of the required distance of 18 to 20
feet. If the transmission lines were properly maintained by petitioner, the bamboo pole carried by
Noble would not have touched the wires. He would not have been electrocuted.

Petitioner cannot excuse itself from its failure to properly maintain the wires by attributing
negligence to the victim. In Ma-ao Sugar Central Co., Inc. v. Court of Appeals,[9] this Court held
that the responsibility of maintaining the rails for the purpose of preventing derailment accidents
belonged to the company. The company should not have been negligent in ascertaining that the
rails were fully connected than to wait until a life was lost due to an accident. Said the Court:

In this petition, the respondent court is faulted for finding the petitioner guilty of
negligence notwithstanding its defense of due diligence under Article 2176 of the Civil
Code and for disallowing the deductions made by the trial court.

Investigation of the accident revealed that the derailment of the locomotive was
caused by protruding rails which had come loose because they were not connected and
fixed in place by fish plates. Fish plates are described as strips of iron 8" to 12" long
and 3 " thick which are attached to the rails by 4 bolts, two on each side, to keep the
rails aligned. Although they could be removed only with special equipment, the fish
plates that should have kept the rails aligned could not be found at the scene of the
accident.

There is no question that the maintenance of the rails, for the purpose, inter alia,
of preventing derailments, was the responsibility of the petitioner, and that this
responsibility was not discharged. According to Jose Reyes, its own witness, who was
in charge of the control and supervision of its train operations, cases of derailment in
the milling district were frequent and there were even times when such derailments
were reported every hour. The petitioner should therefore have taken more prudent
steps to prevent such accidents instead of waiting until a life was finally lost because of
its negligence.[10]

Moreover, We find no contributory negligence on Nobles part.

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, whereby
such other person suffers injury.[11] On the other hand, 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 which he is required to conform for his own
protection.[12] There is contributory negligence when the partys act showed lack of ordinary care
and foresight that such act could cause him harm or put his life in danger.[13] It is an act or
omission amounting to want of ordinary care on the part of the person injured which, concurring
with the defendants negligence, is the proximate cause of the injury.[14]

The underlying precept on contributory negligence is that a plaintiff who is partly


responsible for his own injury should not be entitled to recover damages in full but must bear the
consequences of his own negligence.[15] If indeed there was contributory negligence on the part
of the victim, then it is proper to reduce the award for damages. This is in consonance with the
Civil Code provision that liability will be mitigated in consideration of the contributory
negligence of the injured party. Article 2179 of the Civil Code is explicit on this score:

When the plaintiffs 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 defendants lack of due care, the
plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.

In Ma-ao Sugar Central, it was held that to hold a person as having contributed to his
injuries, it must be shown that he performed an act that brought about his injuries in disregard of
warnings or signs on an impending danger to health and body. This Court held then that the
victim was not guilty of contributory negligence as there was no showing that the caboose where
he was riding was a dangerous place and that he recklessly dared to stay there despite warnings
or signs of impending danger.[16]

In this case, the trail where Noble was electrocuted was regularly used by members of the
community. There were no warning signs to inform passersby of the impending danger to their
lives should they accidentally touch the high tension wires. Also, the trail was the only viable
way from Dalicon to Itogon. Hence, Noble should not be faulted for simply doing what was
ordinary routine to other workers in the area.
Petitioner further faults the victim in engaging in pocket mining, which is prohibited by the DENR
in the area.

In Aonuevo v. Court of Appeals,[17] this Court ruled that the violation of a statute is not
sufficient to hold that the violation was the proximate cause of the injury, unless the very injury
that happened was precisely what was intended to be prevented by the statute. In said case, the
allegation of contributory negligence on the part of the injured party who violated traffic
regulations when he failed to register his bicycle or install safety gadgets thereon was struck
down. We quote:

x x x The bare fact that Villagracia was violating a municipal ordinance at the
time of the accident may have sufficiently established some degree of negligence on his
part, but such negligence is without legal consequence unless it is shown that it was a
contributing cause of the injury. If anything at all, it is but indicative of Villagracias
failure in fulfilling his obligation to the municipal government, which would then be
the proper party to initiate corrective action as a result. But such failure alone is not
determinative of Villagracias negligence in relation to the accident. Negligence is
relative or comparative, dependent upon the situation of the parties and the degree of
care and vigilance which the particular circumstances reasonably require. To determine
if Villagracia was negligent, it is not sufficient to rely solely on the violations of the
municipal ordinance, but imperative to examine Villagracias behavior in relation to the
contemporaneous circumstances of the accident.

xxxx

Under American case law, the failures imputed on Villagracia are


not grievous enough so as to negate monetary relief. In the absence of statutory
requirement, one is not negligent as a matter of law for failing to equip a horn, bell, or
other warning devise onto a bicycle. In most cases, the absence of proper lights on a
bicycle does not constitute negligence as a matter of law but is a question for the jury
whether the absence of proper lights played a causal part in producing a collision with
a motorist. The absence of proper lights on a bicycle at night, as required by statute or
ordinance, may constitute negligence barring or diminishing recovery if the bicyclist is
struck by a motorist as long as the absence of such lights was a proximate cause of the
collision; however, the absence of such lights will not preclude or diminish recovery if
the scene of the accident was well illuminated by street lights, if substitute lights were
present which clearly rendered the bicyclist visible, if the motorist saw the bicycle in
spite of the absence of lights thereon, or if the motorist would have been unable to see
the bicycle even if it had been equipped with lights. A bicycle equipped with defective
or ineffective brakes may support a finding of negligence barring or diminishing
recovery by an injured bicyclist where such condition was a contributing cause of the
accident.
The above doctrines reveal a common thread. The failure of the bicycle owner
to comply with accepted safety practices, whether or not imposed by ordinance or
statute, is not sufficient to negate or mitigate recovery unless a causal connection is
established between such failure and the injury sustained. The principle likewise finds
affirmation in Sanitary Steam, wherein we declared that the violation of a traffic statute
must be shown as the proximate cause of the injury, or that it substantially contributed
thereto. Aonuevo had the burden of clearly proving that the alleged negligence of
Villagracia was the proximate or contributory cause of the latters injury. [18] (Emphasis
added)

That the pocket miners were unlicensed was not a justification for petitioner to leave their
transmission lines dangling. We quote with approval the observation of the RTCon this matter:

The claim of NPC that the pocket miners have no right to operate within the area
of Dalicno, Itogon, Benguet as there was no permit issued by DENR is beside the
point. The fact is that there were not only pocket miners but also there were many
residents in the area of Dalicno, Ampucao, Itogon, Benguet using the trail. These
residents were using this trail underneath the transmission lines x x x. They were using
this trail even before the transmission lines were installed in the 1970s by NPC. The
pocket miners, although they have no permit to do pocket mining in the area, are also
human beings who have to eke out a living in the only way they know how. The fact that
they were not issued a permit by the DENR to do pocket mining is no justification for
NPC to simply leave their transmission lines dangling or hanging 8 to 10 feet above the
ground posing danger to the life and limb of everyone in said community. x x
x[19] (Emphasis added)

In sum, the victim was not guilty of contributory negligence. Hence, petitioner is not
entitled to a mitigation of its liability.

II

We now determine the propriety of the awards for loss of unearned income, moral,
and exemplary damages.

From the testimony of the victims mother, it was duly established during trial that he was
earning P3,000.00 a month. To determine the compensable amount of lost earnings, We
consider (1) the number of years for which the victim would otherwise have lived (life
expectancy); and (2) the rate of loss sustained by the heirs of the
deceased. Life expectancy is computed by applying the formula (2/3 x [80 - age at death])
adopted in the American Expectancy Table of Mortality or the
Actuarial Combined Experience Table of Mortality. The second factor is computed by
multiplying the life expectancy by the net earnings of the deceased, i.e., the total earnings less
expenses necessary in the creation of such earnings or income and less living and other incidental
expenses. The net earning is ordinarily computed at fifty percent (50%) of the gross
earnings. Thus, the formula used by this Court in computing loss of earning capacity is: Net
Earning Capacity = [2/3 x (80 age at time of death) x (gross annual income reasonable and
necessary living expenses)].[20]

We sustain the trial court computation of unearned income of the victim:

x x x the loss of his unearned income can be computed as follows: two-thirds of


80 years, minus 20 years, times P36,000.00 per year, equals P1,440,000.00. This is
because Noble Casionan, at the time of his death, was 20 years old and was healthy and
strong. And, therefore, his life expectancy would normally reach up to 80 years old in
accordance with the above formula illustrated in the aforesaid cases. Thus, Noble
Casionan had 60 more years life expectancy since he was 20 years old at the time of his
death on June 27, 1995. Two-thirds of 60 years times P36,000.00 since he was earning
about P3,000.00 a month of P36,000.00 a year would be P1,440,000.00.

However, in determining the unearned income, the basic concern is to determine the
damages sustained by the heirs or dependents of the deceased Casionan. And here, the
damages consist not of the full amount of his earnings but the support they would have
received from the deceased had he not died as a consequence of the unlawful act of the
NPC. x x x The amount recoverable is not the loss of the entire earnings but the loss of
that portion of the earnings which the heirs would have received as support. Hence,
from the amount of P1,440,000.00, a reasonable amount for the necessary expenses of
Noble Casionan had he lived would be deducted. Following the ruling in People v.
Quilaton, 205 SCRA 279, the Court deems that 50 percent of the gross earnings of the
deceased of P1,440,000.00 should be deducted for his necessary expenses had he lived,
thus leaving the other half of about P720,000.00 as the net earnings that would have
gone for the support of his heirs. This is the unearned income of which the heirs were
deprived of.[21]

In quasi delicts, exemplary damages are awarded where the offender was guilty of gross
negligence.[22] Gross negligence has been defined to be the want or absence of even slight care or
diligence as to amount to a reckless disregard of the safety of person or property. It evinces a
thoughtless disregard of consequences without exerting any effort to avoid them. [23]

Petitioner demonstrated its disregard for the safety of the members of the community of
Dalicno who used the trail regularly when it failed to address the sagging high tension wires
despite numerous previous requests and warnings. It only exerted efforts to rectify the danger it
posed after a death from electrocution already occurred. Gross negligence was thus apparent,
warranting the award of exemplary damages.
As to the award of moral damages, We sustain the CA reduction of the award. Moral
damages are designed to compensate the claimant for actual injury suffered and not to impose a
penalty on the wrongdoer. It is not meant to enrich the complainant but to enable the injured party
to obtain means to obviate the moral suffering experience. Trial courts should guard against the
award of exorbitant damages lest they be accused of prejudice or corruption in their decision
making.[24] We find that the CA correctly reduced the award from P100,000.00 to P50,000.00.

As for the award for attorneys fees, well-settled is the rule that the reason for the award
must be discussed in the text of the courts decision and not only in the dispositive
portion.[25] Except for the fallo, a discussion on the reason for the award for attorneys fees was
not included by the RTC in its decision. The CA thus correctly disallowed it on appeal.

WHREFORE, the petition is DENIED and the appealed decision of the Court of
Appeals AFFIRMED.

SO ORDERED.
SECOND DIVISION

G.R. No. 121413 January 29, 2001

PHILIPPINE COMMERCIAL INTERNATIONAL BANK (formerly INSULAR BANK OF ASIA AND


AMERICA),petitioner,
vs.
COURT OF APPEALS and FORD PHILIPPINES, INC. and CITIBANK, N.A., respondents.

G.R. No. 121479 January 29, 2001

FORD PHILIPPINES, INC., petitioner-plaintiff,


vs.
COURT OF APPEALS and CITIBANK, N.A. and PHILIPPINE COMMERCIAL INTERNATIONAL
BANK, respondents.

G.R. No. 128604 January 29, 2001

FORD PHILIPPINES, INC., petitioner,


vs.
CITIBANK, N.A., PHILIPPINE COMMERCIAL INTERNATIONAL BANK and COURT OF APPEALS, respondents.

QUISUMBING, J.:

These consolidated petitions involve several fraudulently negotiated checks.

The original actions a quo were instituted by Ford Philippines to recover from the drawee bank, CITIBANK, N.A.
(Citibank) and collecting bank, Philippine Commercial International Bank (PCIBank) [formerly Insular Bank of Asia
and America], the value of several checks payable to the Commissioner of Internal Revenue, which were embezzled
allegedly by an organized syndicate. 1wphi1.nt

G.R. Nos. 121413 and 121479 are twin petitions for review of the March 27, 1995 Decision1 of the Court of Appeals
in CA-G.R. CV No. 25017, entitled "Ford Philippines, Inc. vs. Citibank, N.A. and Insular Bank of Asia and America
(now Philipppine Commercial International Bank), and the August 8, 1995 Resolution,2 ordering the collecting bank,
Philippine Commercial International Bank, to pay the amount of Citibank Check No. SN-04867.

In G.R. No. 128604, petitioner Ford Philippines assails the October 15, 1996 Decision3 of the Court of Appeals and
its March 5, 1997 Resolution4 in CA-G.R. No. 28430 entitled "Ford Philippines, Inc. vs. Citibank, N.A. and Philippine
Commercial International Bank," affirming in toto the judgment of the trial court holding the defendant drawee bank,
Citibank, N.A., solely liable to pay the amount of P12,163,298.10 as damages for the misapplied proceeds of the
plaintiff's Citibanl Check Numbers SN-10597 and 16508.

I. G.R. Nos. 121413 and 121479


The stipulated facts submitted by the parties as accepted by the Court of Appeals are as follows:

"On October 19, 1977, the plaintiff Ford drew and issued its Citibank Check No. SN-04867 in the amount of
P4,746,114.41, in favor of the Commissioner of Internal Revenue as payment of plaintiff;s percentage or
manufacturer's sales taxes for the third quarter of 1977.

The aforesaid check was deposited with the degendant IBAA (now PCIBank) and was subsequently cleared
at the Central Bank. Upon presentment with the defendant Citibank, the proceeds of the check was paid to
IBAA as collecting or depository bank.

The proceeds of the same Citibank check of the plaintiff was never paid to or received by the payee thereof,
the Commissioner of Internal Revenue.

As a consequence, upon demand of the Bureau and/or Commissioner of Internal Revenue, the plaintiff was
compelled to make a second payment to the Bureau of Internal Revenue of its percentage/manufacturers'
sales taxes for the third quarter of 1977 and that said second payment of plaintiff in the amount of
P4,746,114.41 was duly received by the Bureau of Internal Revenue.

It is further admitted by defendant Citibank that during the time of the transactions in question, plaintiff had
been maintaining a checking account with defendant Citibank; that Citibank Check No. SN-04867 which was
drawn and issued by the plaintiff in favor of the Commissioner of Internal Revenue was a crossed check in
that, on its face were two parallel lines and written in between said lines was the phrase "Payee's Account
Only"; and that defendant Citibank paid the full face value of the check in the amount of P4,746,114.41 to
the defendant IBAA.

It has been duly established that for the payment of plaintiff's percentage tax for the last quarter of 1977, the
Bureau of Internal Revenue issued Revenue Tax Receipt No. 18747002, dated October 20, 1977,
designating therein in Muntinlupa, Metro Manila, as the authorized agent bank of Metrobanl, Alabang branch
to receive the tax payment of the plaintiff.

On December 19, 1977, plaintiff's Citibank Check No. SN-04867, together with the Revenue Tax Receipt
No. 18747002, was deposited with defendant IBAA, through its Ermita Branch. The latter accepted the
check and sent it to the Central Clearing House for clearing on the samd day, with the indorsement at the
back "all prior indorsements and/or lack of indorsements guaranteed." Thereafter, defendant IBAA
presented the check for payment to defendant Citibank on same date, December 19, 1977, and the latter
paid the face value of the check in the amount of P4,746,114.41. Consequently, the amount of
P4,746,114.41 was debited in plaintiff's account with the defendant Citibank and the check was returned to
the plaintiff.

Upon verification, plaintiff discovered that its Citibank Check No. SN-04867 in the amount of P4,746,114.41
was not paid to the Commissioner of Internal Revenue. Hence, in separate letters dated October 26, 1979,
addressed to the defendants, the plaintiff notified the latter that in case it will be re-assessed by the BIR for
the payment of the taxes covered by the said checks, then plaintiff shall hold the defendants liable for
reimbursement of the face value of the same. Both defendants denied liability and refused to pay.

In a letter dated February 28, 1980 by the Acting Commissioner of Internal Revenue addressed to the
plaintiff - supposed to be Exhibit "D", the latter was officially informed, among others, that its check in the
amount of P4, 746,114.41 was not paid to the government or its authorized agent and instead encashed by
unauthorized persons, hence, plaintiff has to pay the said amount within fifteen days from receipt of the
letter. Upon advice of the plaintiff's lawyers, plaintiff on March 11, 1982, paid to the Bureau of Internal
Revenue, the amount of P4,746,114.41, representing payment of plaintiff's percentage tax for the third
quarter of 1977.

As a consequence of defendant's refusal to reimburse plaintiff of the payment it had made for the second
time to the BIR of its percentage taxes, plaintiff filed on January 20, 1983 its original complaint before this
Court.
On December 24, 1985, defendant IBAA was merged with the Philippine Commercial International Bank
(PCI Bank) with the latter as the surviving entity.

Defendant Citibank maintains that; the payment it made of plaintiff's Citibank Check No. SN-04867 in the
amount of P4,746,114.41 "was in due course"; it merely relied on the clearing stamp of the
depository/collecting bank, the defendant IBAA that "all prior indorsements and/or lack of indorsements
guaranteed"; and the proximate cause of plaintiff's injury is the gross negligence of defendant IBAA in
indorsing the plaintiff's Citibank check in question.

It is admitted that on December 19, 1977 when the proceeds of plaintiff's Citibank Check No. SN-048867
was paid to defendant IBAA as collecting bank, plaintiff was maintaining a checking account with defendant
Citibank."5

Although it was not among the stipulated facts, an investigation by the National Bureau of Investigation (NBI)
revealed that Citibank Check No. SN-04867 was recalled by Godofredo Rivera, the General Ledger Accountant of
Ford. He purportedly needed to hold back the check because there was an error in the computation of the tax due to
the Bureau of Internal Revenue (BIR). With Rivera's instruction, PCIBank replaced the check with two of its own
Manager's Checks (MCs). Alleged members of a syndicate later deposited the two MCs with the Pacific Banking
Corporation.

Ford, with leave of court, filed a third-party complaint before the trial court impleading Pacific Banking Corporation
(PBC) and Godofredo Rivera, as third party defendants. But the court dismissed the complaint against PBC for lack
of cause of action. The course likewise dismissed the third-party complaint against Godofredo Rivera because he
could not be served with summons as the NBI declared him as a "fugitive from justice".

On June 15, 1989, the trial court rendered its decision, as follows:

"Premises considered, judgment is hereby rendered as follows:

"1. Ordering the defendants Citibank and IBAA (now PCI Bank), jointly and severally, to pay the
plaintiff the amount of P4,746,114.41 representing the face value of plaintiff's Citibank Check No.
SN-04867, with interest thereon at the legal rate starting January 20, 1983, the date when the
original complaint was filed until the amount is fully paid, plus costs;

"2. On defendant Citibank's cross-claim: ordering the cross-defendant IBAA (now PCI Bank) to
reimburse defendant Citibank for whatever amount the latter has paid or may pay to the plaintiff in
accordance with next preceding paragraph;

"3. The counterclaims asserted by the defendants against the plaintiff, as well as that asserted by
the cross-defendant against the cross-claimant are dismissed, for lack of merits; and

"4. With costs against the defendants.

SO ORDERED."6

Not satisfied with the said decision, both defendants, Citibank and PCIBank, elevated their respective petitions for
review on certiorari to the Courts of Appeals. On March 27, 1995, the appellate court issued its judgment as follows:

"WHEREFORE, in view of the foregoing, the court AFFIRMS the appealed decision with modifications.

The court hereby renderes judgment:

1. Dismissing the complaint in Civil Case No. 49287 insofar as defendant Citibank N.A. is
concerned;

2. Ordering the defendant IBAA now PCI Bank to pay the plaintiff the amount of P4,746,114.41
representing the face value of plaintiff's Citibank Check No. SN-04867, with interest thereon at the
legal rate starting January 20, 1983, the date when the original complaint was filed until the amount
is fully paid;

3. Dismissing the counterclaims asserted by the defendants against the plaintiff as well as that
asserted by the cross-defendant against the cross-claimant, for lack of merits.

Costs against the defendant IBAA (now PCI Bank).

IT IS SO ORDERED."7

PCI Bank moved to reconsider the above-quoted decision of the Court of Appeals, while Ford filed a "Motion for
Partial Reconsideration." Both motions were denied for lack of merit.

Separately, PCIBank and Ford filed before this Court, petitions for review by certiorari under Rule 45.

In G.R. No. 121413, PCIBank seeks the reversal of the decision and resolution of the Twelfth Division of the Court
of Appeals contending that it merely acted on the instruction of Ford and such casue of action had already
prescribed.

PCIBank sets forth the following issues for consideration:

I. Did the respondent court err when, after finding that the petitioner acted on the check drawn by
respondent Ford on the said respondent's instructions, it nevertheless found the petitioner liable to the said
respondent for the full amount of the said check.

II. Did the respondent court err when it did not find prescription in favor of the petitioner.8

In a counter move, Ford filed its petition docketed as G.R. No. 121479, questioning the same decision and
resolution of the Court of Appeals, and praying for the reinstatement in toto of the decision of the trial court which
found both PCIBank and Citibank jointly and severally liable for the loss.

In G.R. No. 121479, appellant Ford presents the following propositions for consideration:

I. Respondent Citibank is liable to petitioner Ford considering that:

1. As drawee bank, respondent Citibank owes to petitioner Ford, as the drawer of the subject check
and a depositor of respondent Citibank, an absolute and contractual duty to pay the proceeds of the
subject check only to the payee thereof, the Commissioner of Internal Revenue.

2. Respondent Citibank failed to observe its duty as banker with respect to the subject check, which
was crossed and payable to "Payee's Account Only."

3. Respondent Citibank raises an issue for the first time on appeal; thus the same should not be
considered by the Honorable Court.

4. As correctly held by the trial court, there is no evidence of gross negligence on the part of
petitioner Ford.9

II. PCI Bank is liable to petitioner Ford considering that:

1. There were no instructions from petitioner Ford to deliver the proceeds of the subject check to a
person other than the payee named therein, the Commissioner of the Bureau of Internal Revenue;
thus, PCIBank's only obligation is to deliver the proceeds to the Commissioner of the Bureau of
Internal Revenue.10
2. PCIBank which affixed its indorsement on the subject check ("All prior indorsement and/or lack of
indorsement guaranteed"), is liable as collecting bank.11

3. PCIBank is barred from raising issues of fact in the instant proceedings.12

4. Petitioner Ford's cause of action had not prescribed.13

II. G.R. No. 128604

The same sysndicate apparently embezzled the proceeds of checks intended, this time, to settle Ford's percentage
taxes appertaining to the second quarter of 1978 and the first quarter of 1979.

The facts as narrated by the Court of Appeals are as follows:

Ford drew Citibank Check No. SN-10597 on July 19, 1978 in the amount of P5,851,706.37 representing the
percentage tax due for the second quarter of 1978 payable to the Commissioner of Internal Revenue. A BIR
Revenue Tax Receipt No. 28645385 was issued for the said purpose.

On April 20, 1979, Ford drew another Citibank Check No. SN-16508 in the amount of P6,311,591.73, representing
the payment of percentage tax for the first quarter of 1979 and payable to the Commissioner of Internal Revenue.
Again a BIR Revenue Tax Receipt No. A-1697160 was issued for the said purpose.

Both checks were "crossed checks" and contain two diagonal lines on its upper corner between, which were written
the words "payable to the payee's account only."

The checks never reached the payee, CIR. Thus, in a letter dated February 28, 1980, the BIR, Region 4-B,
demanded for the said tax payments the corresponding periods above-mentioned.

As far as the BIR is concernced, the said two BIR Revenue Tax Receipts were considered "fake and spurious". This
anomaly was confirmed by the NBI upon the initiative of the BIR. The findings forced Ford to pay the BIR a new,
while an action was filed against Citibank and PCIBank for the recovery of the amount of Citibank Check Numbers
SN-10597 and 16508.

The Regional Trial Court of Makati, Branch 57, which tried the case, made its findings on the modus operandi of the
syndicate, as follows:

"A certain Mr. Godofredo Rivera was employed by the plaintiff FORD as its General Ledger Accountant. As
such, he prepared the plaintiff's check marked Ex. 'A' [Citibank Check No. Sn-10597] for payment to the BIR.
Instead, however, fo delivering the same of the payee, he passed on the check to a co-conspirator named
Remberto Castro who was a pro-manager of the San Andres Branch of PCIB.* In connivance with one
Winston Dulay, Castro himself subsequently opened a Checking Account in the name of a fictitious person
denominated as 'Reynaldo reyes' in the Meralco Branch of PCIBank where Dulay works as Assistant
Manager.

After an initial deposit of P100.00 to validate the account, Castro deposited a worthless Bank of America
Check in exactly the same amount as the first FORD check (Exh. "A", P5,851,706.37) while this worthless
check was coursed through PCIB's main office enroute to the Central Bank for clearing, replaced this
worthless check with FORD's Exhibit 'A' and accordingly tampered the accompanying documents to cover
the replacement. As a result, Exhibit 'A' was cleared by defendant CITIBANK, and the fictitious deposit
account of 'Reynaldo Reyes' was credited at the PCIB Meralco Branch with the total amount of the FORD
check Exhibit 'A'. The same method was again utilized by the syndicate in profiting from Exh. 'B' [Citibank
Check No. SN-16508] which was subsequently pilfered by Alexis Marindo, Rivera's Assistant at FORD.

From this 'Reynaldo Reyes' account, Castro drew various checks distributing the sahres of the other
participating conspirators namely (1) CRISANTO BERNABE, the mastermind who formulated the method for
the embezzlement; (2) RODOLFO R. DE LEON a customs broker who negotiated the initial contact between
Bernabe, FORD's Godofredo Rivera and PCIB's Remberto Castro; (3) JUAN VASTILLO who assisted de
Leon in the initial arrangements; (4) GODOFREDO RIVERA, FORD's accountant who passed on the first
check (Exhibit "A") to Castro; (5) REMERTO CASTRO, PCIB's pro-manager at San Andres who performed
the switching of checks in the clearing process and opened the fictitious Reynaldo Reyes account at the
PCIB Meralco Branch; (6) WINSTON DULAY, PCIB's Assistant Manager at its Meralco Branch, who
assisted Castro in switching the checks in the clearing process and facilitated the opening of the fictitious
Reynaldo Reyes' bank account; (7) ALEXIS MARINDO, Rivera's Assistant at FORD, who gave the second
check (Exh. "B") to Castro; (8) ELEUTERIO JIMENEZ, BIR Collection Agent who provided the fake and
spurious revenue tax receipts to make it appear that the BIR had received FORD's tax payments.

Several other persons and entities were utilized by the syndicate as conduits in the disbursements of the
proceeds of the two checks, but like the aforementioned participants in the conspiracy, have not been
impleaded in the present case. The manner by which the said funds were distributed among them are
traceable from the record of checks drawn against the original "Reynaldo Reyes" account and indubitably
identify the parties who illegally benefited therefrom and readily indicate in what amounts they did so."14

On December 9, 1988, Regional Trial Court of Makati, Branch 57, held drawee-bank, Citibank, liable for the value of
the two checks while adsolving PCIBank from any liability, disposing as follows:

"WHEREFORE, judgment is hereby rendered sentencing defendant CITIBANK to reimburse plaintiff FORD
the total amount of P12,163,298.10 prayed for in its complaint, with 6% interest thereon from date of first
written demand until full payment, plus P300,000.00 attorney's fees and expenses litigation, and to pay the
defendant, PCIB (on its counterclaim to crossclaim) the sum of P300,000.00 as attorney's fees and costs of
litigation, and pay the costs.

SO ORDERED."15

Both Ford and Citibank appealed to the Court of Appeals which affirmed, in toto, the decision of the trial court.
Hence, this petition.

Petitioner Ford prays that judgment be rendered setting aside the portion of the Court of Appeals decision and its
resolution dated March 5, 1997, with respect to the dismissal of the complaint against PCIBank and holding Citibank
solely responsible for the proceeds of Citibank Check Numbers SN-10597 and 16508 for P5,851,706.73 and
P6,311,591.73 respectively.

Ford avers that the Court of Appeals erred in dismissing the complaint against defendant PCIBank considering that:

I. Defendant PCIBank was clearly negligent when it failed to exercise the diligence required to be exercised
by it as a banking insitution.

II. Defendant PCIBank clearly failed to observe the diligence required in the selection and supervision of its
officers and employees.

III. Defendant PCIBank was, due to its negligence, clearly liable for the loss or damage resulting to the
plaintiff Ford as a consequence of the substitution of the check consistent with Section 5 of Central Bank
Circular No. 580 series of 1977.

IV. Assuming arguedo that defedant PCIBank did not accept, endorse or negotiate in due course the subject
checks, it is liable, under Article 2154 of the Civil Code, to return the money which it admits having received,
and which was credited to it its Central bank account.16

The main issue presented for our consideration by these petitions could be simplified as follows: Has petitioner Ford
the right to recover from the collecting bank (PCIBank) and the drawee bank (Citibank) the value of the checks
intended as payment to the Commissioner of Internal Revenue? Or has Ford's cause of action already prescribed?

Note that in these cases, the checks were drawn against the drawee bank, but the title of the person negotiating the
same was allegedly defective because the instrument was obtained by fraud and unlawful means, and the proceeds
of the checks were not remitted to the payee. It was established that instead of paying the checks to the CIR, for the
settlement of the approprite quarterly percentage taxes of Ford, the checks were diverted and encashed for the
eventual distribution among the mmbers of the syndicate. As to the unlawful negotiation of the check the applicable
law is Section 55 of the Negotiable Instruments Law (NIL), which provides:

"When title defective -- The title of a person who negotiates an instrument is defective within the meaning of
this Act when he obtained the instrument, or any signature thereto, by fraud, duress, or fore and fear, or
other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith or under
such circumstances as amount to a fraud."

Pursuant to this provision, it is vital to show that the negotiation is made by the perpetator in breach of faith
amounting to fraud. The person negotiating the checks must have gone beyond the authority given by his principal.
If the principal could prove that there was no negligence in the performance of his duties, he may set up the
personal defense to escape liability and recover from other parties who. Though their own negligence, alowed the
commission of the crime.

In this case, we note that the direct perpetrators of the offense, namely the embezzlers belonging to a syndicate, are
now fugitives from justice. They have, even if temporarily, escaped liability for the embezzlement of millions of
pesos. We are thus left only with the task of determining who of the present parties before us must bear the burden
of loss of these millions. It all boils down to thequestion of liability based on the degree of negligence among the
parties concerned.

Foremost, we must resolve whether the injured party, Ford, is guilty of the "imputed contributory negligence" that
would defeat its claim for reimbursement, bearing ing mind that its employees, Godofredo Rivera and Alexis
Marindo, were among the members of the syndicate.

Citibank points out that Ford allowed its very own employee, Godofredo Rivera, to negotiate the checks to his co-
conspirators, instead of delivering them to the designated authorized collecting bank (Metrobank-Alabang) of the
payee, CIR. Citibank bewails the fact that Ford was remiss in the supervision and control of its own employees,
inasmuch as it only discovered the syndicate's activities through the information given by the payee of the checks
after an unreasonable period of time.

PCIBank also blames Ford of negligence when it allegedly authorized Godofredo Rivera to divert the proceeds of
Citibank Check No. SN-04867, instead of using it to pay the BIR. As to the subsequent run-around of unds of
Citibank Check Nos. SN-10597 and 16508, PCIBank claims that the proximate cause of the damge to Ford lies in its
own officers and employees who carried out the fradulent schemes and the transactions. These circumstances were
not checked by other officers of the company including its comptroller or internal auditor. PCIBank contends that the
inaction of Ford despite the enormity of the amount involved was a sheer negligence and stated that, as between
two innocent persons, one of whom must suffer the consequences of a breach of trust, the one who made it
possible, by his act of negligence, must bear the loss.

For its part, Ford denies any negligence in the performance of its duties. It avers that there was no evidence
presented before the trial court showing lack of diligence on the part of Ford. And, citing the case of Gempesaw vs.
Court of Appeals,17 Ford argues that even if there was a finding therein that the drawer was negligent, the drawee
bank was still ordered to pay damages.

Furthermore, Ford contends the Godofredo rivera was not authorized to make any representation in its behalf,
specifically, to divert the proceeds of the checks. It adds that Citibank raised the issue of imputed negligence against
Ford for the first time on appeal. Thus, it should not be considered by this Court.

On this point, jurisprudence regarding the imputed negligence of employer in a master-servant relationship is
instructive. Since a master may be held for his servant's wrongful act, the law imputes to the master the act of the
servant, and if that act is negligent or wrongful and proximately results in injury to a third person, the negligence or
wrongful conduct is the negligence or wrongful conduct of the master, for which he is liable.18 The general rule is
that if the master is injured by the negligence of a third person and by the concuring contributory negligence of his
own servant or agent, the latter's negligence is imputed to his superior and will defeat the superior's action against
the third person, asuming, of course that the contributory negligence was the proximate cause of the injury of
which complaint is made.19
Accordingly, we need to determine whether or not the action of Godofredo Rivera, Ford's General Ledger
Accountant, and/or Alexis Marindo, his assistant, was the proximate cause of the loss or damage. AS defined,
proximate cause is that which, in the natural and continuous sequence, unbroken by any efficient, intervening cause
produces the injury and without the result would not have occurred.20

It appears that although the employees of Ford initiated the transactions attributable to an organized syndicate, in
our view, their actions were not the proximate cause of encashing the checks payable to the CIR. The degree of
Ford's negligence, if any, could not be characterized as the proximate cause of the injury to the parties.

The Board of Directors of Ford, we note, did not confirm the request of Godofredo Rivera to recall Citibank Check
No. SN-04867. Rivera's instruction to replace the said check with PCIBank's Manager's Check was not in
theordinary course of business which could have prompted PCIBank to validate the same.

As to the preparation of Citibank Checks Nos. SN-10597 and 16508, it was established that these checks were
made payable to the CIR. Both were crossed checks. These checks were apparently turned around by Ford's
emploees, who were acting on their own personal capacity.

Given these circumstances, the mere fact that the forgery was committed by a drawer-payor's confidential employee
or agent, who by virtue of his position had unusual facilities for perpertrating the fraud and imposing the forged
paper upon the bank, does notentitle the bank toshift the loss to the drawer-payor, in the absence of some
circumstance raising estoppel against the drawer.21 This rule likewise applies to the checks fraudulently negotiated
or diverted by the confidential employees who hold them in their possession.

With respect to the negligence of PCIBank in the payment of the three checks involved, separately, the trial courts
found variations between the negotiation of Citibank Check No. SN-04867 and the misapplication of total proceeds
of Checks SN-10597 and 16508. Therefore, we have to scrutinize, separately, PCIBank's share of negligence when
the syndicate achieved its ultimate agenda of stealing the proceeds of these checks.

G.R. Nos. 121413 and 121479

Citibank Check No. SN-04867 was deposited at PCIBank through its Ermita Branch. It was coursed through the
ordinary banking transaction, sent to Central Clearing with the indorsement at the back "all prior indorsements
and/or lack of indorsements guaranteed," and was presented to Citibank for payment. Thereafter PCIBank, instead
of remitting the proceeds to the CIR, prepared two of its Manager's checks and enabled the syndicate to encash the
same.

On record, PCIBank failed to verify the authority of Mr. Rivera to negotiate the checks. The neglect of PCIBank
employees to verify whether his letter requesting for the replacement of the Citibank Check No. SN-04867 was duly
authorized, showed lack of care and prudence required in the circumstances.

Furthermore, it was admitted that PCIBank is authorized to collect the payment of taxpayers in behalf of the BIR. As
an agent of BIR, PCIBank is duty bound to consult its principal regarding the unwarranted instructions given by the
payor or its agent. As aptly stated by the trial court, to wit:

"xxx. Since the questioned crossed check was deposited with IBAA [now PCIBank], which claimed to be a
depository/collecting bank of BIR, it has the responsibility to make sure that the check in question is
deposited in Payee's account only.

xxx xxx xxx

As agent of the BIR (the payee of the check), defendant IBAA should receive instructions only from its
principal BIR and not from any other person especially so when that person is not known to the defendant. It
is very imprudent on the part of the defendant IBAA to just rely on the alleged telephone call of the one
Godofredo Rivera and in his signature considering that the plaintiff is not a client of the defendant IBAA."
It is a well-settled rule that the relationship between the payee or holder of commercial paper and the bank to which
it is sent for collection is, in the absence of an argreement to the contrary, that of principal and agent.22 A bank which
receives such paper for collection is the agent of the payee or holder.23

Even considering arguendo, that the diversion of the amount of a check payable to the collecting bank in behalf of
the designated payee may be allowed, still such diversion must be properly authorized by the payor. Otherwise
stated, the diversion can be justified only by proof of authority from the drawer, or that the drawer has clothed his
agent with apparent authority to receive the proceeds of such check.

Citibank further argues that PCI Bank's clearing stamp appearing at the back of the questioned checks stating that
ALL PRIOR INDORSEMENTS AND/OR LACK OF INDORSEMENTS GURANTEED should render PCIBank liable
because it made it pass through the clearing house and therefore Citibank had no other option but to pay it. Thus,
Citibank had no other option but to pay it. Thus, Citibank assets that the proximate cause of Ford's injury is the
gross negligence of PCIBank. Since the questione dcrossed check was deposited with PCIBank, which claimed to
be a depository/collecting bank of the BIR, it had the responsibility to make sure that the check in questions is
deposited in Payee's account only.

Indeed, the crossing of the check with the phrase "Payee's Account Only," is a warning that the check should be
deposited only in the account of the CIR. Thus, it is the duty of the collecting bank PCIBank to ascertain that the
check be deposited in payee's account only. Therefore, it is the collecting bank (PCIBank) which is bound to
scruninize the check and to know its depositors before it could make the clearing indorsement "all prior
indorsements and/or lack of indorsement guaranteed".

In Banco de Oro Savings and Mortgage Bank vs. Equitable Banking Corporation,24 we ruled:

"Anent petitioner's liability on said instruments, this court is in full accord with the ruling of the PCHC's Board
of Directors that:

'In presenting the checks for clearing and for payment, the defendant made an express guarantee on the
validity of "all prior endorsements." Thus, stamped at the back of the checks are the defedant's clear
warranty: ALL PRIOR ENDORSEMENTS AND/OR LACK OF ENDORSEMENTS GUARANTEED. Without
such warranty, plaintiff would not have paid on the checks.'

No amount of legal jargon can reverse the clear meaning of defendant's warranty. As the warranty has
proven to be false and inaccurate, the defendant is liable for any damage arising out of the falsity of its
representation."25

Lastly, banking business requires that the one who first cashes and negotiates the check must take some
percautions to learn whether or not it is genuine. And if the one cashing the check through indifference or othe
circumstance assists the forger in committing the fraud, he should not be permitted to retain the proceeds of the
check from the drawee whose sole fault was that it did not discover the forgery or the defect in the title of the person
negotiating the instrument before paying the check. For this reason, a bank which cashes a check drawn upon
another bank, without requiring proof as to the identity of persons presenting it, or making inquiries with regard to
them, cannot hold the proceeds against the drawee when the proceeds of the checks were afterwards diverted to
the hands of a third party. In such cases the drawee bank has a right to believe that the cashing bank (or the
collecting bank) had, by the usual proper investigation, satisfied itself of the authenticity of the negotiation of the
checks. Thus, one who encashed a check which had been forged or diverted and in turn received payment thereon
from the drawee, is guilty of negligence which proximately contributed to the success of the fraud practiced on the
drawee bank. The latter may recover from the holder the money paid on the check.26

Having established that the collecting bank's negligence is the proximate cause of the loss, we conclude that
PCIBank is liable in the amount corresponding to the proceeds of Citibank Check No. SN-04867.

G.R. No. 128604


The trial court and the Court of Appeals found that PCIBank had no official act in the ordinary course of business
that would attribute to it the case of the embezzlement of Citibank Check Numbers SN-10597 and 16508, because
PCIBank did not actually receive nor hold the two Ford checks at all. The trial court held, thus:

"Neither is there any proof that defendant PCIBank contributed any official or conscious participation in the
process of the embezzlement. This Court is convinced that the switching operation (involving the checks
while in transit for "clearing") were the clandestine or hidden actuations performed by the members of the
syndicate in their own personl, covert and private capacity and done without the knowledge of the defendant
PCIBank"27

In this case, there was no evidence presented confirming the conscious particiapation of PCIBank in the
embezzlement. As a general rule, however, a banking corporation is liable for the wrongful or tortuous acts and
declarations of its officers or agents within the course and scope of their employment.28 A bank will be held liable for
the negligence of its officers or agents when acting within the course and scope of their employment. It may be
liable for the tortuous acts of its officers even as regards that species of tort of which malice is an essential element.
In this case, we find a situation where the PCIBank appears also to be the victim of the scheme hatched by a
syndicate in which its own management employees had particiapted.

The pro-manager of San Andres Branch of PCIBank, Remberto Castro, received Citibank Check Numbers SN-
10597 and 16508. He passed the checks to a co-conspirator, an Assistant Manager of PCIBank's Meralco Branch,
who helped Castro open a Checking account of a fictitious person named "Reynaldo Reyes." Castro deposited a
worthless Bank of America Check in exactly the same amount of Ford checks. The syndicate tampered with the
checks and succeeded in replacing the worthless checks and the eventual encashment of Citibank Check Nos. SN
10597 and 16508. The PCIBank Ptro-manager, Castro, and his co-conspirator Assistant Manager apparently
performed their activities using facilities in their official capacity or authority but for their personal and private gain or
benefit.

A bank holding out its officers and agents as worthy of confidence will not be permitted to profit by the frauds these
officers or agents were enabled to perpetrate in the apparent course of their employment; nor will t be permitted to
shirk its responsibility for such frauds, even though no benefit may accrue to the bank therefrom. For the general
rule is that a bank is liable for the fraudulent acts or representations of an officer or agent acting within the course
and apparent scope of his employment or authority.29 And if an officer or employee of a bank, in his official capacity,
receives money to satisfy an evidence of indebetedness lodged with his bank for collection, the bank is liable for his
misappropriation of such sum.30

Moreover, as correctly pointed out by Ford, Section 531 of Central Bank Circular No. 580, Series of 1977 provides
that any theft affecting items in transit for clearing, shall be for the account of sending bank, which in this case is
PCIBank.

But in this case, responsibility for negligence does not lie on PCIBank's shoulders alone.

The evidence on record shows that Citibank as drawee bank was likewise negligent in the performance of its duties.
Citibank failed to establish that its payment of Ford's checjs were made in due course and legally in order. In its
defense, Citibank claims the genuineness and due execution of said checks, considering that Citibank (1) has no
knowledge of any informity in the issuance of the checks in question (2) coupled by the fact that said checks were
sufficiently funded and (3) the endorsement of the Payee or lack thereof was guaranteed by PCI Bank (formerly
IBAA), thus, it has the obligation to honor and pay the same.

For its part, Ford contends that Citibank as the drawee bank owes to Ford an absolute and contractual duty to pay
the proceeds of the subject check only to the payee thereof, the CIR. Citing Section 6232 of the Negotiable
Instruments Law, Ford argues that by accepting the instrument, the acceptro which is Citibank engages that it will
pay according to the tenor of its acceptance, and that it will pay only to the payee, (the CIR), considering the fact
that here the check was crossed with annotation "Payees Account Only."

As ruled by the Court of Appeals, Citibank must likewise answer for the damages incurred by Ford on Citibank
Checks Numbers SN 10597 and 16508, because of the contractual relationship existing between the two. Citibank,
as the drawee bank breached its contractual obligation with Ford and such degree of culpability contributed to the
damage caused to the latter. On this score, we agree with the respondent court's ruling.
Citibank should have scrutinized Citibank Check Numbers SN 10597 and 16508 before paying the amount of the
proceeds thereof to the collecting bank of the BIR. One thing is clear from the record: the clearing stamps at the
back of Citibank Check Nos. SN 10597 and 16508 do not bear any initials. Citibank failed to notice and verify the
absence of the clearing stamps. Had this been duly examined, the switching of the worthless checks to Citibank
Check Nos. 10597 and 16508 would have been discovered in time. For this reason, Citibank had indeed failed to
perform what was incumbent upon it, which is to ensure that the amount of the checks should be paid only to its
designated payee. The fact that the drawee bank did not discover the irregularity seasonably, in our view, consitutes
negligence in carrying out the bank's duty to its depositors. 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.33

Thus, invoking the doctrine of comparative negligence, we are of the view that both PCIBank and Citibank failed in
their respective obligations and both were negligent in the selection and supervision of their employees resulting in
the encashment of Citibank Check Nos. SN 10597 AND 16508. Thus, we are constrained to hold them equally liable
for the loss of the proceeds of said checks issued by Ford in favor of the CIR.

Time and again, we have stressed that banking business is so impressed with public interest where the trust and
confidence of the public in general is of paramount umportance such that the appropriate standard of diligence must
be very high, if not the highest, degree of diligence.34 A bank's liability as obligor is not merely vicarious but primary,
wherein the defense of exercise of due diligence in the selection and supervision of its employees is of no
moment.35

Banks handle daily transactions involving millions of pesos.36 By the very nature of their work the degree of
responsibility, care and trustworthiness expected of their employees and officials is far greater than those of ordinary
clerks and employees.37 Banks are expected to exercise the highest degree of diligence in the selection and
supervision of their employees.38

On the issue of prescription, PCIBank claims that the action of Ford had prescribed because of its inability to seek
judicial relief seasonably, considering that the alleged negligent act took place prior to December 19, 1977 but the
relief was sought only in 1983, or seven years thereafter.

The statute of limitations begins to run when the bank gives the depositor notice of the payment, which is ordinarily
when the check is returned to the alleged drawer as a voucher with a statement of his account,39 and an action upon
a check is ordinarily governed by the statutory period applicable to instruments in writing.40

Our laws on the matter provide that the action upon a written contract must be brought within ten year from the time
the right of action accrues.41 hence, the reckoning time for the prescriptive period begins when the instrument was
issued and the corresponding check was returned by the bank to its depositor (normally a month thereafter).
Applying the same rule, the cause of action for the recovery of the proceeds of Citibank Check No. SN 04867 would
normally be a month after December 19, 1977, when Citibank paid the face value of the check in the amount of
P4,746,114.41. Since the original complaint for the cause of action was filed on January 20, 1984, barely six years
had lapsed. Thus, we conclude that Ford's cause of action to recover the amount of Citibank Check No. SN 04867
was seasonably filed within the period provided by law.

Finally, we also find thet Ford is not completely blameless in its failure to detect the fraud. Failure on the part of the
depositor to examine its passbook, statements of account, and cancelled checks and to give notice within a
reasonable time (or as required by statute) of any discrepancy which it may in the exercise of due care and diligence
find therein, serves to mitigate the banks' liability by reducing the award of interest from twelve percent (12%) to six
percent (6%) per annum. As provided in Article 1172 of the Civil Code of the Philippines, respondibility arising from
negligence in the performance of every kind of obligation is also demandable, but such liability may be regulated by
the courts, according to the circumstances. In quasi-delicts, the contributory negligence of the plaintiff shall reduce
the damages that he may recover.42

WHEREFORE, the assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 25017
are AFFIRMED. PCIBank, know formerly as Insular Bank of Asia and America, id declared solely responsible for the
loss of the proceeds of Citibank Check No SN 04867 in the amount P4,746,114.41, which shall be paid together
with six percent (6%) interest thereon to Ford Philippines Inc. from the date when the original complaint was filed
until said amount is fully paid.
However, the Decision and Resolution of the Court of Appeals in CA-G.R. No. 28430 are MODIFIED as follows:
PCIBank and Citibank are adjudged liable for and must share the loss, (concerning the proceeds of Citibank Check
Numbers SN 10597 and 16508 totalling P12,163,298.10) on a fifty-fifty ratio, and each bank is ORDERED to pay
Ford Philippines Inc. P6,081,649.05, with six percent (6%) interest thereon, from the date the complaint was filed
until full payment of said amount.
1wphi 1.nt

Costs against Philippine Commercial International Bank and Citibank N.A.

SO ORDERED.
THIRD DIVISION

LAMBERT S. RAMOS, G.R. No. 184905


Petitioner,
Present:
Ynares-Santiago, J. (Chairperson),
- versus - Chico-Nazario,
Velasco, Jr.,
Nachura, and
Peralta, JJ.
C.O.L. REALTY CORPORATION,
Respondent. Promulgated:

August 28, 2009


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

DECISION

YNARES-SANTIAGO, J.:

The issue for resolution is whether petitioner can be held solidarily liable with his driver,
Rodel Ilustrisimo, to pay respondent C.O.L. Realty the amount of P51,994.80 as actual damages
suffered in a vehicular collision.

The facts, as found by the appellate court, are as follows:


On or about 10:40 oclock in the morning of 8 March 2004, along Katipunan
(Avenue), corner Rajah Matanda (Street), Quezon City, a vehicular accident took place
between a Toyota Altis Sedan bearing Plate Number XDN 210, owned by petitioner
C.O.L. Realty Corporation, and driven by Aquilino Larin (Aquilino), and a Ford
Expedition, owned by x x x Lambert Ramos (Ramos) and driven by Rodel Ilustrisimo
(Rodel), with Plate Number LSR 917. A passenger of the sedan, one Estela Maliwat
(Estela) sustained injuries. She was immediately rushed to the hospital for treatment.

(C.O.L. Realty) averred that its driver, Aquilino, was slowly driving the Toyota
Altis car at a speed of five to ten kilometers per hour along Rajah Matanda Street and
has just crossed the center lane of Katipunan Avenue when (Ramos) Ford Espedition
violently rammed against the cars right rear door and fender. With the force of the
impact, the sedan turned 180 degrees towards the direction where it came from.

Upon investigation, the Office of the City Prosecutor of Quezon City found
probable cause to indict Rodel, the driver of the Ford Expedition, for Reckless
Imprudence Resulting in Damage to Property. In the meantime, petitioner demanded
from respondent reimbursement for the expenses incurred in the repair of its car and
the hospitalization of Estela in the aggregate amount of P103,989.60. The demand fell
on deaf ears prompting (C.O.L. Realty) to file a Complaint for Damages based on quasi-
delict before the Metropolitan Trial Court of Metro Manila (MeTC), Quezon City,
docketed as Civil Case No. 33277, and subsequently raffled to Branch 42.

As could well be expected, (Ramos) denied liability for damages insisting that it
was the negligence of Aquilino, (C.O.L. Realtys) driver, which was the proximate cause
of the accident. (Ramos) maintained that the sedan car crossed Katipunan
Avenue from Rajah Matanda Street despite the concrete barriers placed thereon
prohibiting vehicles to pass through the intersection.

(Ramos) further claimed that he was not in the vehicle when the mishap
occurred. He asserted that he exercised the diligence of a good father of a family in
the selection and supervision of his driver, Rodel.

Weighing the respective evidence of the parties, the MeTC rendered the
Decision dated 1 March 2006 exculpating (Ramos) from liability, thus:
WHEREFORE, the instant case is DISMISSED for lack of merit. The
Counterclaims of the defendant are likewise DISMISSED for lack of
sufficient factual and legal basis.

SO ORDERED.

The aforesaid judgment did not sit well with (C.O.L. Realty) so that he (sic)
appealed the same before the RTC of Quezon City, raffled to Branch 215, which
rendered the assailed Decision dated 5 September 2006, affirming the MeTCs
Decision. (C.O.L. Realtys) Motion for Reconsideration met the same fate as it was
denied by the RTC in its Order dated 5 June 2007.[1]

C.O.L. Realty appealed to the Court of Appeals which affirmed the view that Aquilino was
negligent in crossing Katipunan Avenue from Rajah Matanda Street since, as per Certification of
the Metropolitan Manila Development Authority (MMDA) dated November 30, 2004, such act
is specifically prohibited. Thus:

This is to certify that as per records found and available in this office the
crossing of vehicles at Katipunan Avenue from Rajah Matanda Street to Blue Ridge
Subdivision, Quezon City has (sic) not allowed since January 2004 up to the present
in view of the ongoing road construction at the area.[2] (Emphasis supplied)

Barricades were precisely placed along the intersection of Katipunan Avenue and Rajah
Matanda Street in order to prevent motorists from crossing Katipunan Avenue. Nonetheless,
Aquilino crossed Katipunan Avenue through certain portions of the barricade which were
broken, thus violating the MMDA rule.[3]

However, the Court of Appeals likewise noted that at the time of the collision, Ramos
vehicle was moving at high speed in a busy area that was then the subject of an ongoing
construction (the Katipunan Avenue-Boni Serrano Avenue underpass), then smashed into the
rear door and fender of the passengers side of Aquilinos car, sending it spinning in a 180-degree
turn.[4] It therefore found the driver Rodel guilty of contributory negligence for driving the Ford
Expedition at high speed along a busy intersection.

Thus, on May 28, 2008, the appellate court rendered the assailed Decision,[5] the
dispositive portion of which reads, as follows:

WHEREFORE, the Decision dated 5 September 2006 of the Regional Trial Court
of Quezon City, Branch 215 is hereby MODIFIED in that respondent Lambert Ramos is
held solidarily liable with Rodel Ilustrisimo to pay petitioner C.O.L. Realty Corporation
the amount of P51,994.80 as actual damages. Petitioner C.O.L. Realty Corporations
claim for exemplary damages, attorneys fees and cost of suit are DISMISSED for lack
of merit.

SO ORDERED.

Petitioner filed a Motion for Reconsideration but it was denied. Hence, the instant
petition, which raises the following sole issue:

THE COURT OF APPEALS DECISION IS CONTRARY TO LAW AND JURISPRUDENCE,


AND THE EVIDENCE TO SUPPORT AND JUSTIFY THE SAME IS INSUFFICIENT.

We resolve to GRANT the petition.

There is no doubt in the appellate courts mind that Aquilinos violation of the MMDA
prohibition against crossing Katipunan Avenue from Rajah Matanda Street was theproximate
cause of the accident. Respondent does not dispute this; in its Comment to the instant petition,
it even conceded that petitioner was guilty of mere contributory negligence.[6]

Thus, the Court of Appeals acknowledged that:


The Certification dated 30 November 2004 of the Metropolitan Manila
Development Authority (MMDA) evidently disproved (C.O.L. Realtys) barefaced
assertion that its driver, Aquilino, was not to be blamed for the accident

TO WHOM IT MAY CONCERN:

This is to certify that as per records found and available in this


office the crossing of vehicles at Katipunan Avenue from Rajah Matanda
Street to Blue Ridge Subdivision, Quezon City has (sic) not allowed since
January 2004 up to the present in view of the ongoing road construction
at the area.

This certification is issued upon request of the interested parties


for whatever legal purpose it may serve.

(C.O.L. Realty) admitted that there were barricades along the intersection
of Katipunan Avenue and Rajah Matanda Street. The barricades were placed thereon
to caution drivers not to pass through the intersecting roads. This prohibition stands
even if, as (C.O.L. Realty) claimed, the barriers were broken at that point creating a
small gap through which any vehicle could pass. What is clear to Us is that Aquilino
recklessly ignored these barricades and drove through it. Without doubt, his
negligence is established by the fact that he violated a traffic regulation. This finds
support in Article 2185 of the Civil Code

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.

Accordingly, there ought to be no question on (C.O.L. Realtys) negligence which


resulted in the vehicular mishap.[7]

However, it also declared Ramos liable vicariously for Rodels contributory negligence in
driving the Ford Expedition at high speed along a busy intersection. On this score, the appellate
court made the following pronouncement:
As a professional driver, Rodel should have known that driving his vehicle at a
high speed in a major thoroughfare which was then subject of an on-going
construction was a perilous act. He had no regard to (sic) the safety of other vehicles
on the road. Because of the impact of the collision, (Aquilinos) sedan made a 180-
degree turn as (Ramos) Ford Expedition careened and smashed into its rear door and
fender. We cannot exculpate Rodel from liability.

Having thus settled the contributory negligence of Rodel, this created a


presumption of negligence on the part of his employer, (Ramos). For the employer to
avoid the solidary liability for a tort committed by his employee, an employer must
rebut the presumption by presenting adequate and convincing proof that in the
selection and supervision of his employee, he or she exercises the care and diligence
of a good father of a family. Employers must submit concrete proof, including
documentary evidence, that they complied with everything that was incumbent on
them.

(Ramos) feebly attempts to escape vicarious liability by averring that Rodel was
highly recommended when he applied for the position of family driver by the Social
Service Committee of his parish. A certain Ramon Gomez, a member of the churchs
livelihood program, testified that a background investigation would have to be made
before an applicant is recommended to the parishioners for employment. (Ramos)
supposedly tested Rodels driving skills before accepting him for the job. Rodel has
been his driver since 2001, and except for the mishap in 2004, he has not been
involved in any road accident.

Regrettably, (Ramos) evidence which consisted mainly of testimonial evidence


remained unsubstantiated and are thus, barren of significant weight. There is nothing
on the records which would support (Ramos) bare allegation of Rodels 10-year
unblemished driving record. He failed to present convincing proof that he went to the
extent of verifying Rodels qualifications, safety record, and driving history.

So too, (Ramos) did not bother to refute (C.O.L. Realtys) stance that his driver
was texting with his cellphone while running at a high speed and that the latter did
not slow down albeit he knew that Katipunan Avenue was then undergoing repairs
and that the road was barricaded with barriers. The presumption juris tantum that
there was negligence in the selection of driver remains unrebutted. As the employer
of Rodel, (Ramos) is solidarily liable for the quasi-delict committed by the former.

Certainly, in the selection of prospective employees, employers are required to


examine them as to their qualifications, experience and service records. In the
supervision of employees, the employer must formulate standard operating
procedures, monitor their implementation and impose disciplinary measures for the
breach thereof. These, (Ramos) failed to do.[8]

Petitioner disagrees, arguing that since Aquilinos willful disregard of the MMDA
prohibition was the sole proximate cause of the accident, then respondent alone should suffer
the consequences of the accident and the damages it incurred. He argues:

20. It becomes apparent therefore that the only time a plaintiff, the respondent
herein, can recover damages is if its negligence was only contributory, and such
contributory negligence was the proximate cause of the accident. It has been clearly
established in this case, however, that respondents negligence was not merely
contributory, but the sole proximate cause of the accident.

xxxx

22. As culled from the foregoing, respondent was the sole proximate cause of
the accident. Respondents vehicle should not have been in that position since crossing
the said intersection was prohibited. Were it not for the obvious negligence of
respondents driver in crossing the intersection that was prohibited, the accident
would not have happened. The crossing of respondents vehicle in a prohibited
intersection unquestionably produced the injury, and without which the accident
would not have occurred. On the other hand, petitioners driver had the right to be
where he was at the time of the mishap. As correctly concluded by the RTC, the
petitioners driver could not be expected to slacken his speed while travelling along
said intersection since nobody, in his right mind, would do the same. Assuming,
however, that petitioners driver was indeed guilty of any contributory negligence,
such was not the proximate cause of the accident considering that again, if
respondents driver did not cross the prohibited intersection, no accident would have
happened. No imputation of any lack of care on Ilustrisimos could thus be concluded.
It is obvious then that petitioners driver was not guilty of any negligence that would
make petitioner vicariously liable for damages.

23. As the sole proximate cause of the accident was respondents own driver,
respondent cannot claim damages from petitioner.[9]

On the other hand, respondent in its Comment merely reiterated the appellate courts
findings and pronouncements, conceding that petitioner is guilty of mere contributory
negligence, and insisted on his vicarious liability as Rodels employer under Article 2184 of the
Civil Code.

Articles 2179 and 2185 of the Civil Code on quasi-delicts apply in this case, viz:

Article 2179. When the plaintiffs 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
defendants lack of due care, the plaintiff may recover damages, but the courts shall
mitigate the damages to be awarded.

Article 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.

If the master is injured by the negligence of a third person and by the concurring
contributory negligence of his own servant or agent, the latters negligence is imputed to his
superior and will defeat the superiors action against the third person, assuming of course
that the contributory negligence was the proximate cause of the injury of which complaint is
made.[10]

Applying the foregoing principles of law to the instant case, Aquilinos act of
crossing Katipunan Avenue via Rajah Matanda constitutes negligence because it was prohibited
by law. Moreover, it was the proximate cause of the accident, and thus precludes any recovery
for any damages suffered by respondent from the accident.

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.[11]

If Aquilino heeded the MMDA prohibition against crossing Katipunan Avenue from Rajah
Matanda, the accident would not have happened. This specific untoward event is exactly what
the MMDA prohibition was intended for. Thus, a prudent and intelligent person who resides
within the vicinity where the accident occurred, Aquilino had reasonable ground to expect that
the accident would be a natural and probable result if he crossed Katipunan Avenue since such
crossing is considered dangerous on account of the busy nature of the thoroughfare and the
ongoing construction of the Katipunan-Boni Avenue underpass. It was manifest error for the
Court of Appeals to have overlooked the principle embodied in Article 2179 of the Civil Code,
that when the plaintiffs own negligence was the immediate and proximate cause of his injury,
he cannot recover damages.

Hence, we find it unnecessary to delve into the issue of Rodels contributory negligence,
since it cannot overcome or defeat Aquilinos recklessness which is the immediate and proximate
cause of the accident. Rodels contributory negligence has relevance only in the event that
Ramos seeks to recover from respondent whatever damages or injuries he may have suffered
as a result; it will have the effect of mitigating the award of damages in his favor. In other words,
an assertion of contributory negligence in this case would benefit only the petitioner; it could
not eliminate respondents liability for Aquilinos negligence which is the proximate result of the
accident.

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated May
28, 2008 in CA-G.R. SP No. 99614 and its Resolution of October 13, 2008 are hereby REVERSED
and SET ASIDE. The Decision of the Regional Trial Court of Quezon City, Branch 215 dated
September 5, 2006 dismissing for lack of merit respondents complaint for damages is
hereby REINSTATED.

SO ORDERED.

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