Damages 1

CHAPTER 1
General Provisions
ARTICLE 2195. The provisions of this Title shall be respectively applicable to all obligations
mentioned in article 1157.
ARTICLE 2196. The rules under this Title are without prejudice to special provisions on damages
formulated elsewhere in this Code. Compensation for workmen and other employees in case of
death, injury or illness is regulated by special laws. Rules governing damages laid down in other
laws shall be observed insofar as they are not in conflict with this Code.
ARTICLE 2197. Damages may be:
(1) Actual or compensatory;
(2) Moral;
(3) Nominal;
(4) Temperate or moderate;
(5) Liquidated; or
(6) Exemplary or corrective.
ARTICLE 2198. The principles of the general law on damages are hereby adopted insofar as they
are not inconsistent with this Code.
CHAPTER 2
Actual or Compensatory Damages
ARTICLE 2199. Except as provided by law or by stipulation, one is entitled to an adequate
compensation only for such pecuniary loss suffered by him as he has duly proved. Such
compensation is referred to as actual or compensatory damages.

ARTICLE 2200. Indemnification for damages shall comprehend not only the value of the loss
suffered, but also that of the profits which the obligee failed to obtain. (1106)
ARTICLE 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in
good faith is liable shall be those that are the natural and probable consequences of the breach of
the obligation, and which the parties have foreseen or could have reasonably foreseen at the time
the obligation was constituted.

In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all
damages which may be reasonably attributed to the non-performance of the obligation. (1107a)
ARTICLE 2202. In crimes and quasi-delicts, the defendant shall be liable for all damages which are
the natural and probable consequences of the act or omission complained of. It is not necessary
that such damages have been foreseen or could have reasonably been foreseen by the defendant.
ARTICLE 2203. The party suffering loss or injury must exercise the diligence of a good father of a
family to minimize the damages resulting from the act or omission in question.
ARTICLE 2204. In crimes, the damages to be adjudicated may be respectively increased or
lessened according to the aggravating or mitigating circumstances.
ARTICLE 2205. Damages may be recovered:
(1) For loss or impairment of earning capacity in cases of temporary or permanent personal
injury;
(2) For injury to the plaintiff's business standing or commercial credit.
ARTICLE 2206. The amount of damages for death caused by a crime or quasi-delict shall be at
least three thousand pesos, even though there may have been mitigating circumstances. In
addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the
indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be assessed
and awarded by the court, unless the deceased on account of permanent physical disability not
caused by the defendant, had no earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of article 291, the
recipient who is not an heir called to the decedent's inheritance by the law of testate or intestate
succession, may demand support from the person causing the death, for a period not exceeding
five years, the exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may
demand moral damages for mental anguish by reason of the death of the deceased.
ARTICLE 2207. If the plaintiff's 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.
ARTICLE 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than
judicial costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons
or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's
plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's compensation and employer's liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney's fees and
expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.
ARTICLE 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs
in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the
payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is
six per cent per annum. (1108)

ARTICLE 2210. Interest may, in the discretion of the court, be allowed upon damages awarded for
breach of contract.
ARTICLE 2211. In crimes and quasi-delicts, interest as a part of the damages may, in a proper
case, be adjudicated in the discretion of the court.
ARTICLE 2212. Interest due shall earn legal interest from the time it is judicially demanded,
although the obligation may be silent upon this point. (1109a)
ARTICLE 2213. Interest cannot be recovered upon unliquidated claims or damages, except when
the demand can be established with reasonable certainty.
ARTICLE 2214. In quasi-delicts, the contributory negligence of the plaintiff shall reduce the
damages that he may recover.
ARTICLE 2215. In contracts, quasi-contracts, and quasi-delicts, the court may equitably mitigate
the damages under circumstances other than the case referred to in the preceding article, as in
the following instances:
(1) That the plaintiff himself has contravened the terms of the contract;
(2) That the plaintiff has derived some benefit as a result of the contract;
(3) In cases where exemplary damages are to be awarded, that the defendant acted upon the
advice of counsel;
(4) That the loss would have resulted in any event;
(5) That since the filing of the action, the defendant has done his best to lessen the plaintiff's loss
or injury.
CHAPTER 3
Other Kinds of Damages
ARTICLE 2216. No proof of pecuniary loss is necessary in order that moral, nominal, temperate,
liquidated or exemplary damages, may be adjudicated. The assessment of such damages, except
liquidated ones, is left to the discretion of the court, according to the circumstances of each case.
SECTION 1
Moral Damages
ARTICLE 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury.
Though incapable of pecuniary computation, moral damages may be recovered if they are the
proximate result of the defendant's wrongful act for omission.
ARTICLE 2218. In the adjudication of moral damages, the sentimental value of property, real or
personal, may be considered.
ARTICLE 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in article 309;
(10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.
The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article,
may also recover moral damages.
The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in
No. 9 of this article, in the order named.
ARTICLE 2220. Willful injury to property may be a legal ground for awarding moral damages if the
court should find that, under the circumstances, such damages are justly due. The same rule
applies to breaches of contract where the defendant acted fraudulently or in bad faith.
SECTION 2
Nominal Damages
ARTICLE 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has
been violated or invaded by the defendant, may be vindicated or recognized, and not for the
purpose of indemnifying the plaintiff for any loss suffered by him.
ARTICLE 2222. The court may award nominal damages in every obligation arising from any source
enumerated in article 1157, or in every case where any property right has been invaded.
ARTICLE 2223. The adjudication of nominal damages shall preclude further contest upon the right
involved and all accessory questions, as between the parties to the suit, or their respective heirs
and assigns.
SECTION 3
Temperate or Moderate Damages
ARTICLE 2224. Temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds that some pecuniary loss has
been suffered but its amount can not, from the nature of the case, be provided with certainty.
ARTICLE 2225. Temperate damages must be reasonable under the circumstances.
SECTION 4
Liquidated Damages
ARTICLE 2226. Liquidated damages are those agreed upon by the parties to a contract, to be paid
in case of breach thereof.
ARTICLE 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be
equitably reduced if they are iniquitous or unconscionable.
ARTICLE 2228. When the breach of the contract committed by the defendant is not the one
contemplated by the parties in agreeing upon the liquidated damages, the law shall determine the
measure of damages, and not the stipulation.
SECTION 5
Exemplary or Corrective Damages
ARTICLE 2229. Exemplary or corrective damages are imposed, by way of example or correction
for the public good, in addition to the moral, temperate, liquidated or compensatory damages.
ARTICLE 2230. In criminal offenses, exemplary damages as a part of the civil liability may be
imposed when the crime was committed with one or more aggravating circumstances. Such
damages are separate and distinct from fines and shall be paid to the offended party.
ARTICLE 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted with
gross negligence.
ARTICLE 2232. In contracts and quasi-contracts, the court may award exemplary damages if the
defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.
ARTICLE 2233. Exemplary damages cannot be recovered as a matter of right; the court will
decide whether or not they should be adjudicated.
ARTICLE 2234. While the amount of the exemplary damages need not be proved, the plaintiff
must show that he is entitled to moral, temperate or compensatory damages before the court
may consider the question of whether or not exemplary damages should be awarded. In case
liquidated damages have been agreed upon, although no proof of loss is necessary in order that
such liquidated damages may be recovered, nevertheless, before the court may consider the
question of granting exemplary in addition to the liquidated damages, the plaintiff must show that
he would be entitled to moral, temperate or compensatory damages were it not for the stipulation
for liquidated damages.
ARTICLE 2235. A stipulation whereby exemplary damages are renounced in advance shall be null
and void.

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MAY DAMAGES BE INCREASED ON APPEAL?

 Yes, an appeal opens the whole case on review by the appellate court, and this includes the
award of damages

WHAT SHOULD THE OFFENDED PARTY PROVE IF HE WANTS TO CLAIM ACTUAL

DAMAGES OR LOSS OF EARNING CAPACITY?
 The offended party must show proof of the amount of the
pecuniary loss, such as receipts
 Actual damages not supported by evidence may not be awarded
 However, if death results from the crime or the quasi-delict, the heirs need only to prove the
fact of death in order to claim actual or compensatory damages

WHAT ARE THE MANDATORY AWARDS IN CASE OF RAPE CASES?

 In rape cases, a civil indemnity of P50000 is mandatory
 An award of moral damages is also mandatory without need of pleading or proof.
 If it is qualified rape, the mandatory civil indemnity is P75,000

WHAT IS THE DIFFERENCE BETWEEN DAMAGE AND DAMAGES?

 Damages refers to the actionable loss resulting from another person’s act or omission. It is
the detriment, loss, or injury which is occasioned by reason of fault of another in the property or
person
 Damages refer to the sum of money which can be awarded for the damage done. These are the
pecuniary consequences which the law imposes for the breach of some duty or the violation of some
right
______________
When someone may be liable for malicious prosecution.

In Antonio Diaz v. Davao Light & Power Corp., et al., G.R. No. 160959, April 4, 2007
(Callejo, J), petitioner unilaterally installed a meter to replace another one. There was a notice
of disconnection and eventually, the connection was cut. There was a petition for mandatory
injunction to restore connection. It was however settled by way of a compromise agreement
where the parties agreed to reduce the respondent’s claim and to waive the counterclaim and
to install the electric service. There was no agreement to bar the institution of other action.
Thereafter, respondent filed criminal cases for theft against the petitioner, hence, a complaint
for damages for abuse of right under Article 19, NCC was filed.

Petitioner insisted that the compromise agreement as well as the decision based on it
already settled the controversies between them; yet, DLPC instituted the theft case against
petitioner, and worse, instituted another action for violation of P.D. 401, as amended by B.P.
876. Thus, the only conclusion that can be inferred from the acts of DLPC is that they were
designed to harass, embarrass, prejudice, and ruin him. He further averred that the
compromise agreement in civil case completely erased litigious matters that could necessarily
arise out of either Electric Meter No. 84737 or 86673509. Moreover, he asserted that the
evidence he presented is sufficient to prove the damages he suffered by reason of the
malicious institution of the criminal cases. In brushing aside his contentions, the SC

Held: Article 2028 of the Civil Code defines a compromise as a contract whereby the parties,
by making reciprocal concessions, avoid litigation or put an end to one already commenced.
The purpose of compromise is to settle the claims of the parties and bar all future disputes
and controversies. However, criminal liability is not affected by compromise for it is a public
offense which must be prosecuted and punished by the Government on its own motion,
though complete reparation should have been made of the damages suffered by the offended
party. A criminal case is committed against the People, and the offended party may not waive
or extinguish the criminal liability that the law imposes for the commission of the offense.
Moreover, a compromise is not one of the grounds prescribed by the Revised Penal Code for
the extinction of criminal liability.

Petitioner is not entitled to damages under Articles 19, 20 and 21, and Article 2217 and
2219(8) of the New Civil Code.

The elements of abuse of rights are the following: (a) the existence of a legal right or
duty; (b) which is exercise in bad faith; and (c) for the sole intent of prejudicing or injuring
another. (Hongkong and Shanghai Banking Corp., Limited v. Catalan, G.R. No. 159591,
October 18, 2004, 440 SCRA 498, 511-512; Saber v. Court of Appeals, G.R. No. 132981,
August 31, 2004, 437 SCRA 259). Thus, malice or bad faith is at the core of the above
provisions. Good faith refers to the state of the mind which is manifested by the acts of the
individual concerned. In consists of the intention to abstain from taking an unconscionable
and unscrupulous advantage of another. Good faith is presumed and he who alleges bad faith
has the duty to prove the same. Bad faith, on the other hand, does not simply connote bad
judgment to simple negligence, dishonest purpose or some moral obloquy and conscious
doing of a wrong, a breach of known duty due to some motives or interest or ill-will that
partakes of the nature of fraud. Malice connotes ill-will or spite and speaks not in response to
duty. It implies an intention to do ulterior and unjustifiable harm. Malice is bad faith or bad
motive.
 There was no malice or bad faith. Petitioner himself alleged in his complaint that he
unilaterally installed a meter after it was removed by DLPC. No less than the Court,
admonished petitioner and reminded him that connections of electrical service and
installations of electric meters should always be upon mutual contract of the parties, and that
payments for electrical consumption should also be made promptly whenever due. Based on
these established facts, petitioner has not shown that the acts of respondent were done with
the sole intent of prejudicing and injuring him.

Petitioner may have suffered damages as a result of the filing of the complaints.
However, there is a material distinction between damages and injury. Injury is the illegal
invasion of a legal right; damage is the loss, hurt or harm which results from the injury; and
damages are the recompense or compensation awarded for the damage suffered. Thus, there
can be damage without injury in those instances in which the loss or harm was not the result
of a violation of a legal duty. In such cases, the consequences must be borne by the injured
person alone; the law affords no remedy for damages resulting from an act which does not
amount to a legal injury or wrong. These situations are often called damnum absque injuria.
(Far East Bank and Trust Company v. Pacilan, Jr., G.R. No. 157314, July 29, 2005, 465
SCRA 372, 384-385). Whatever damages petitioner may have suffered would have to be
borne by him alone since it was his acts which led to the filing of the complaints against him.

Concept of malicious prosecution.

On the other hand, malicious prosecution has been defined as an action for damages
brought by or against who a criminal prosecution, civil suit or other legal proceeding has been
instituted maliciously and without probable cause, after the termination of such prosecution,
suit, or other proceeding in favor of the defendant therein. (Yasonña v. De Ramos, 440
SCRA 154 (2004). It is an established rule that in order for malicious prosecution to
prosper, the following requisites must be proven by petitioner: (1) the fact of prosecution and
the further fact that the defendant (respondent) was himself the prosecutor, and that the
action finally terminated with an acquittal; (2) that in bringing the action, the prosecutor acted
without probable cause; and (3) that the prosecutor was actuated or impelled by legal malice,
that is, by improper or sinister motive. The foregoing are necessary to preserve a person’s
right to litigate which may be emasculated by the undue filing of malicious prosecution cases.
From the foregoing requirements, it can be inferred that malice and want of probable cause
must both be clearly established to justify an award of damages based on malicious
prosecution. (Id. At 158-159; Villanueva v. UCPB, G.R. No. 138291, March 7, 2000, 327
SCRA 391, 400; Ponce v. Legaspi, G.R. No. 79184, May 6, 1992, 208 SCRA 377, 388).

A claim for damages based on malicious prosecution will prosper only if the three
elements aforecited are shown to exist. In this case, the cases were dismissed by the
prosecutor before they could be filed in court, hence, they did not end in acquittal.

It cannot be likewise concluded that respondent DLPC acted without probable cause
when it instituted the actions. The events which led to the filing of the complaints are
undisputed, and respondent DLPC cannot be faulted for filing them. In the early case of
Buchanan v. Esteban, 32 Phil. 363 (1915) it was stressed that “one cannot be held liable in
damages for maliciously instituting a prosecution where he acted with probable cause.” As
Justice Moreland explained in that case:

Probable cause is the existence of such facts and circumstances as

would excite the belief, in a reasonable mind, acting on the facts within the
knowledge of the prosecutor, that the person charged was guilty of the crime for
which he was prosecuted. The general rule is well settled that one cannot be
held liable in damages for maliciously instituting a prosecution where he acted
with probable cause. In other words, a suit will lie only in cases where a legal
prosecution has been carried on without probable cause. And the reason for the
rule as stated by Blackstone, is that it would be a very great discouragement to
public justice is prosecutors, who had a tolerable ground of suspicion, were
liable to be sued at law when their indictments miscarried.

Thus, the element of malice and the absence of probable cause must be proved.
(China Banking Corp. v. CA, G.R. No. 94182, March 28, 1994, 231 SCRA 472, 478; Albenson
Enterprise Corp. v. CA, G.R. No. 88694, January 11, 1993, 217 SCRA 16, 29). There must be
proof that the prosecution was prompted by a sinister design to vex and humiliate a person,
and that it was initiated deliberately knowing that the charge was false and baseless to entitle
the victims to damages. The two elements must simultaneously exist; otherwise, the presence
of probable cause signifies, as a legal consequence, the absence of malice. (Lucas v. Royo,
G.R. No. 136185, October 30, 2000; 344 SCRA 481). In the instant case, it is evidence that
respondent DLPC was not motivated by malicious intent or by a sinister design to unduly
harass petitioner, but only by a well-founded anxiety to protect its rights. Respondent DLPC
cannot therefore be faulted in availing of the remedies provided for by the law.

In a free society, controversies are heard and settled under the rule of law in the forum
of the courts of justice. It is one of the virtues of our system of government that a person who
feels aggrieved does not have to take the law into his or her hands or resort to the use of
force for the vindication of injury. The courts are there to hear and act on the complaint. The
right to litigate is an escape valve to relieve the pressures of personal disagreements that
might otherwise explode in physical confrontation. It is necessary not only for upholding one’s
claims when they are unjustly denied but also for the maintenance of peace, if not goodwill,
among incipient antagonists. Without the right to litigate, conflicting claims cannot be
examined and resolved in accordance with one of the primary purposes of government, which
is to provide for a just and orderly society. Hence, the mere act of submitting a case to the
authorities for prosecution does not render a person liable for malicious prosecution should he
or she be unsuccessful, for the law could not have meant to impose a penalty on the right to
litigate. (Rivera v. Roman, G.R. No. 142402, September 20, 2005, 470 SCRA 276; Saber v,
CA, supra., at 290; China Banking Corp. v. CA, supra.).
Moral damages.

The award of moral and exemplary damages and attorney’s fees was likewise upheld:

“The award of moral damages is aimed at a restoration, within the limits

of the possible, of the spiritual status quo ante. (Roque v. Tomas, G.R. No.
157632, December 6, 2006). Moral damages are designed to compensate and
alleviate in some way the physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury unjustly caused a person. Although incapable of
pecuniary computation, they must be proportionate to the suffering inflicted.
(PNR v. Brunty, G.R. No. 169891, November 2, 2006). The amount of the award
bears no relation whatsoever with the wealth or means of the offender.

Evidence of moral damages.

Stephen Huang the victim and his parents Richard and Carmen Huang testified to the
intense suffering they continue to experience as a result of the accident. Stephen recounted
the nightmares and traumas he suffers almost every night when he relives the accident. He
also gets depression when he thinks of his bleak future. He feels frustration and
embarrassment in needing to be helped with almost everything and in his inability to do
simple things he used to do. Similarly, respondent spouses and the rest of the family undergo
their own private suffering. They live with the day-to-day uncertainty of respondent Stephen
Huang’s condition. They know that the chance of full recovery is nil. Moreover, respondent
Stephen Huang’s paralysis has made him prone to many other illnesses. His family, especially
respondent spouses, have to make themselves available for Stephen twenty-four hours a day.
They have patterned their daily life around taking care of him, ministering to his daily needs,
altering the lifestyle to which they had been accustomed.

Exemplary damages.

On the matter of exemplary damages, Art. 2231 of the Civil Code provides that in
cases of quasi-delicts, exemplary damages may be granted if the defendant acted with gross
negligence. At the time of the accident, the employee was driving without a license because
he was previously ticketed for reckless driving. The evidence also showed that he failed to
step on his brakes immediately after the impact. Had he done so, the injuries which the victim
sustained could have been greatly reduced. Wanton acts such as that committed by the
employer need be suppressed; and employers like Mercury Drug should be more circumspect
in the observance of due diligence in the selection and supervision of their employees. The
award of exemplary damages is therefore justified.

Attorney’s fees.
 With the award of exemplary damages, the award of attorney’s fees was upheld. (Art.
2208(1), NCC). In addition, attorney’s fees may be granted when a party is compelled to
litigate or incur expenses to protect his interest by reason of an unjustified act of the other
party. (Art. 2208(4), NCC).
RES IPSA LOQUITOR
Once again, the SC in Dr. Milagros Cantre v. Sps. Go, G.R. No. 160889, April 27, 2007, had the
occasion to say that the Hippocratic Oath mandates physicians to give primordial
consideration to the well-being of their patients. If a doctor fails to live up to this precept, he is
accountable for his acts. This notwithstanding, courts face a unique restraint in adjudicating
medical negligence cases because physicians are not guarantors of case and, they never set
out to intentionally cause injury to their patients. However, intent is immaterial in negligence
cases because where negligence exists and is proven, it automatically gives the injured a right
to reparation for the damage caused. (Ramos v. CA, G.R. No. 124354, December 29, 1999, 321
SCRA 584).

In cases involving medical negligence, the doctrine of res ipsa loquitur allows the mere
existence of an injury to justify a presumption of negligence on the part of the person who
controls the instrument causing the injury, provided that the following requisites concur:

1. The accident is of a kind which ordinarily does not occur in the absence of someone’s
negligence;

1. It is caused by an instrumentality within the exclusive control of the defendant or

defendants; and

1. the possibility of contributing conduct would make the plaintiff responsible is eliminated.

In this case, a woman gave birth. Due to the operation, there was profuse bleeding
inside her womb, hence, the doctors performed various medical procedures. Her blood
pressure was monitored with the use of a sphygmomamometer. It was observed later on that
there was a fresh gaping wound in the inner portion of her left arm. The NBI-Medico Legal
found out that it appeared to be a burn resulting in the placing of a droplight near her skin.
Despite surgical operation, there was an unsightly mark in her left arm and the pain remained
and her movements were restricted. A complaint was filed praying for damages where the
RTC rendered judgment holding the doctor liable. The CA affirmed, but modified the
judgment. On appeal to the SC it was contended that the wound was not caused by the
droplight but by the constant taking of her blood pressure.

The SC said that, that is immaterial. The medical practice is to deflate the blood
pressure cuff immediately after each use. Otherwise, the inflated band can cause injury to the
patient similar to what could have happened in this case. Thus, if the wound was caused by
the blood pressure cuff, then the taking of the blood pressure must have been done so
negligently as to have inflicted a gaping wound on her arm, for which the defendant cannot
escape liability under the “captain of the ship” doctrine.

The argument that the failed plastic surgery was not intended as a cosmetic procedure,
but rather as a measure to prevent complication does not help her case. It does not negate
negligence on her part.

Based on the foregoing, the presumption that defendant was negligent in the exercise
of her profession stands unrebutted. In this connection, the 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…

ART. 2217. Moral damages include physical suffering, mental anguish,

fright, serious anxiety, besmirched reputation, wounded feelings, moral shock,
social humiliation, and similar injury. Though incapable of pecuniary
computation, moral damages may be recovered if they are the proximate result
of the defendant’s wrongful act or omission.

Clearly, under the law, the defendant is obliged to pay plaintiff for moral damages
suffered by the latter as a proximate result of her negligence.

On the presumption of negligence under the principle of res ipsa loquitur, the SC in
applying the requirements of the rule said:

As to the first requirement, the gaping wound the plaintiff’s certainly not an ordinary
occurrence in the act of delivering a baby, far removed as the arm is from the organs involved
in the process of giving birth. Such injury could not have happened unless negligence had set
in somewhere.

Second, whether the injury was caused by the droplight or by the blood pressure cuff is
of no moment. Both instruments are deemed within the exclusive control of the physician in
charge under the “captain of the ship” doctrine. This doctrine holds the surgeon in charge of
an operation liable for the negligence of his assistants during the time when those assistants
are under the surgeon’s control. (Black Law Dictionary, 192 (5 th ed., 1979). In this particular
case, it can be logically inferred that defendant, the senior consultant in charge during the
delivery of the baby, exercised control over the assistants assigned to both the use of the
droplight and the taking of the plaintiff’s blood pressure. Hence, the use of the droplight and
the blood pressure cuff is also within her exclusive control.

Third, the gaping wound on the plaintiff’s left arm, by its very nature and considering
her condition, could only be caused by something external to her and outside her control as
she was unconscious while in hypovolemic shock. Hence, plaintiff could not, by any stretch of
the imagination, have contributed to her own injury.

The defense that the wound was caused not by the droplight but by the constant taking
of her blood pressure, even if the latter was necessary given her condition, does not absolve
her from liability.

Nature of owner’s liability to Suppliers- ARTICLE 1729

Tendon Phils., Inc., et al., G.R. No. 148596, January 22, 2007, the SC had the occasion to
rule on nature of the liability of owners to suppliers of materials. It held that:

“Those who put their labor upon or furnish materials for a price of work
undertaken by the contractor have an action against the owner up to the amount
owing from the latter to the contractor at the time the claim is made. However,
the following shall not prejudice the laborers, employees and furnishers of
materials:

1. Payments made by the owner to the contractor before they are due;

2. Renunciation by the contractor of any amount due from the owner.

This article is subject to the provisions of special laws. (Art. 1729, NCC).

This provision imposes a direct liability on an owner of a piece of work in favor of

suppliers of materials (and laborers) hired by the contractor “up to the amount owing from the
[owner] to the contractor at the time the claim is made.” (Flores v. Ruelo, No. 13905-R,
September 29, 1955, 52 O.G. No. 2, 850). Thus, to this extent, the owner’s liability is solidary
with the contractor, if both are sued together. By creating a constructive vinculum between
suppliers of materials (and laborers), on the one hand, and the owner of a piece of work, on
the other hand, as an exception to the rule on privity of contracts, Article 1729 protects
suppliers of materials (and laborers) from unscrupulous contractors and possible connivance
between owners and contractors. (Velasco v. CA, L-47544, January 28, 1980, 95 SCRA 616).
The supplier’s cause of action under this provision, reckoned from the time of judicial or extra-
judicial demand, subsists so long as any amount remains owing from the owner to the
contractor. Only full payment of the agreed contract price serves as a defense against the
supplier’s claim. (JL Investment & Dev. Corp. v. Tendon Phils. Inc., et al., G.R. No. 148596,
January 22, 2007).

History of the doctrine of corporate negligence

Recent years have seen the doctrine of corporate negligence as the judicial answer to the
problem of allocating hospital’s liability for the negligent acts of health practitioners, absent
facts to support the application of respondeat superior or apparent authority. Its formulation
proceeds from the judiciary’s acknowledgment that in these modern times, the duty of
providing quality medical service is no longer the sole prerogative and responsibility of the
physician. The modern hospitals have changed structure. Hospitals now tend to organize a
highly-professional medical staff whose competence and performance need to be monitored
by the hospitals commensurate with their inherent responsibility to provide quality medical
care. (Purcell v. Zimberman, 18 Ariz. App. 75, 500 P 2d 335 (1972)).

The doctrine has its genesis in Darling v. Charleston Community Hospital, 33 Ill. 2d
326, 211 N.E. 2d 253). There, the Supreme Court of Illinois held that “the jury could have
found a hospital negligent, inter alia, in failing to have a sufficient number of trained nurses
attending the patient; failing to require a consultation with or examination by members of the
hospital staff; and failing to review the treatment rendered to the patient.” On the basis of
Darling, other jurisdictions held that a hospital’s corporate negligence extends to permitting a
physician known to be incompetent to practice at the hospital. (Corleto v. Hospital, 138 N.J.
Super. 302, 350 A. 2d 534 (Super. Ct. Law Div. 1975); Purcell v. Zimbelman, 18 Ariz. App.
75,500 P. 2d 335 (1972); Hospital Authority v. Joiner, 229 Ga. 140, 189 S.E. 2d 412 (1972)).
With the passage of time, more duties were expected from hospitals, among them: (1) the use
of reasonable care in the maintenance of safe and adequate facilities and equipment; (2) the
selection and retention of competent physicians; (3) the overseeing or supervision of all
persons who practice medicine within its walls; and (4) the formulation, adoption and
enforcement of adequate rules and policies that ensure quality care for its patients. (Welsh v.
Bulger, 548 Pa. 504, 698 A. 2d 581 (1997)). Thus, in Tucson Medical Center, Inc. v. Misevich,
115 Ariz. 34, 545 P 2d 958 (1976), it was held that a hospital, following the doctrine of
corporate responsibility, has the duty to see that it meets the standards of responsibilities for
the care of patients. Such duty includes the proper supervision of the members of its medical
staff. And in Bost v. Riley, 262 S.E. 2d 391, 300 NC 194, 269 S.E. 2d 621 (1980), the court
concluded that a patient who enters a hospital does so with the reasonable expectation that it
will attempt to cure him. The hospital accordingly has the duty to make a reasonable effort to
monitor and oversee the treatment prescribed and administered by the physicians practicing
in its premises.

Doctrine of corporate negligence or corporate responsibility

The complaint alleged that PSI as owner, operator and manager of Medical City Hospital did
not perform the necessary supervision or exercise diligent efforts in the supervision of Dr.
Ampil and Fuentes and its nursing staff, resident doctors, medical interns who assisted the
doctors in the performance of their duties. Hence, premised on the doctrine of corporate
negligence, PSI is directly liable for such breach of duty.

Is the contention correct? Why?

Held: Yes. It was duly established that PSI operates the Medical City Hospital for the purpose
and under the concept of providing comprehensive medical services to the public.
Accordingly, it has the duty to exercise reasonable care to protect from harm all patients
admitted into its facility for medical treatment. Unfortunately, PSI failed to perform such duty.
The findings of the trial court are convincing, thus:

x x x x PSI’s liability is traceable to its failure to conduct an

investigation of the matter reported in the nota bene of the count nurse.
Such failure established PSI’s part in the dark conspiracy of silence and
concealment about the gauzes. Ethical considerations, if not also legal,
dictated the holding of an immediate inquiry into the events, if not for the benefit
of the patient to whom the duty is primarily owed, then in the interest of arriving
at the truth. The Court cannot accept that the medical and the healing
professions, through their members like defendant surgeons, and their
institutions like PSI’s hospital facility, can callously turn their backs on and
disregard even a mere probability of mistake or negligence by refusing or failing
to investigate a report of such seriousness as the one in Natividad’s case.

It is worthy to note that Dr. Ampil and Dr. Fuentes operated on Natividad with the
assistance of the Medical City Hospital’s staff, composed of resident doctors, nurses, and
interns. As such, it is reasonable to conclude that PSI, as the operator of the hospital, has
actual or constructive knowledge of the procedures carried out, particularly the report of the
attending nurses that the two pieces of gauze were missing. In Fridena v. Evans,127 Ariz.
516, 622 P. 2d 463 (1980), it was held that a corporation is bound by the knowledge acquired
by or notice given to its agents or officers within the scope of their authority and in reference
to a matter to which their authority extends. This means that the knowledge of any of the staff
of Medical City Hospital constitutes knowledge of PSI. The failure of PSI, despite the
attending nurses’ report, to investigate and inform the patient regarding the missing gauzes
amounts to callous negligence. Not only did PSI breach its duties to oversee or supervise all
persons who practice medicine within its walls, it also failed to take an active step in fixing the
negligence committed. This renders PSI, not only vicariously liable for the negligence of Dr.
Ampil under Article 2180 of the Civil Code, but also directly liable for its own negligence under
Article 2176. In Fridena, the Supreme Court of Arizona held:

x x x In recent years, however, the duty of care owed to the patient by the
hospital has expanded. The emerging trend is to hold the hospital responsible
where the hospital has failed to monitor and review medical services being
provided within its walls. See Kahn Hospital Malpractice Prevention, 27 De Paul.
Rev. 23 (1977).

Among the cases indicative of the ‘emerging trend’ is Purcell v.

Zimbelman, 18 Ariz. App. 75,500 P. 2d 335 (1972). In Purcell, the hospital
argued that it could not be held liable for the malpractice of a medical
practitioner because he was an independent contractor within the hospital. The
Court of Appeals pointed out that the hospital had created a professional staff
whose competence and performance was to be monitored and reviewed by the
governing body of the hospital, and the court held that a hospital would be
negligent where it had knowledge or reason to believe that a doctor using the
 facilities was employing a method of treatment or care which fell below the
recognized standard of care.

Subsequent to the Purcell decision, the Arizona Court of Appeals held

that a hospital has certain inherent responsibilities regarding the quality of
medical care furnished to patients within its walls and it must meet the
standards of responsibility commensurate with this undertaking. Beeck v.
Tucson General Hospital, 18 Ariz. App. 165, 500 P. 2d 1153 (1972). This court
has confirmed the rulings of the Court of Appeals that a hospital has the duty of
supervising the competence of the doctors on its staff. xxx.

xxx xxx

In the amended complaint, the plaintiffs did plead that the operation was
performed at the hospital with its knowledge, aid, and assistance, and that the
negligence of the defendants was the proximate cause of the patient’s injuries.
We find that such general allegations of negligence, along with the evidence
produced at the trial of this case, are sufficient to support the hospital’s liability
based on the theory of negligent supervision.”

Anent the corollary issue of whether PSI is solidarily liable with Dr. Ampil for damages,
let it be emphasized that PSI, apart from a general denial of its responsibility, failed to adduce
evidence showing that it exercised the diligence of a good father of a family in the
accreditation and supervision of the latter. In neglecting to offer such proof, PSI failed to
discharge its burden under the last paragraph of Article 2180 cited earlier, and, therefore,
must be adjudged solidarily liable with Dr. Ampil. Moreover, as we have discussed, PSI is also
directly liable to the Aganas.

One final word. Once a physician undertakes the treatment and care of a patient, the
law imposes on him certain obligations. In order to escape liability, he must possess that
reasonable degree of learning, skill and experience required by his profession. At the same
time, he must apply reasonable care and diligence in the exercise of his skill and the
application of his knowledge, and exert his best judgment.

Doctrine of apparent authority or the holding out theory; or doctrine of ostensible agency or
agency by estoppel.

This doctrine imposes liability, not as the result of the reality of a contractual
relationship, but rather because of the actions of a principal or an employer in somehow
misleading the public into believing that the relationship or the authority exists. (Irving v.
Doctors Hospital of Lake Worth, Inc., 415 So. 2d 55 (1982), quoting Arthur v. St. Peters
Hospital, 169 N.J. 575, 405 A 2d 443 (1979)). The concept is essentially one of estoppel.

Under the rule, the principal is bound by the acts of his agent with the apparent
authority which he knowingly permits the agent to assume, or which he holds to the agent out
to the public as possessing. The question in every case is whether the principal has by his
voluntary act placed the agent with business usages and the nature of the particular business,
is justified in presuming that such agent has authority to perform the particular act in question.
(Hudson C., Loan Assn., Inc. v. Horowytz, 116 N.J.L. 605, 608 A 437 (Supp. Ct. 1936).

The applicability of the doctrine of apparent authority in the field of hospital liability has
been upheld in Irving v. Doctor Hospital of Lake Worth Inc.. In this case, it was said that there
does not appear to be any rational basis for excluding the concept of apparent authority from
the field of hospital liability. In cases where it can be shown that a hospital, by its actions, has
held out a particular physician as its agent and/or employee and that the patient has accepted
treatment from the physician in the reasonable belief that it is being tendered in behalf of the
hospital, then the hospital will be liable for the physician’s negligence.

The Civil Code recognizes the concept of agency by implication or estoppel. Article
1869 of the Civil Code provides:

“Agency may be express, or implied from the acts of the principal, from
his silence or lack of action, or his failure to repudiate the agency, knowing that
another person is acting on his behalf without authority.”

The defendant Professional Services, Inc. displayed in the lobby of the Medical City
Hospital the names and specializations of the physicians associated or accredited by it. It is
estopped from passing all blame to the physicians whose names it proudly paraded in the
public directory leading the public to believe that it vouched for their skill and competence.
That is tantamount to holding out to the public that the hospital through its accredited
physicians, offers quality health care services. By accrediting the doctors and publicly
advertising their qualifications, the hospital created the impression that they were agents,
authorized to perform medical and surgical services for its patients. As expected, the patients
accepted the services on the reasonable belief that such were being rendered by the hospital
or its employees, agents or servants.

As aptly said by the trial court:

“x x x regardless of the education and status in life of the patient, he ought not
be burdened with the defense of absence of employer-employee relationship
between the hospital and the independent physician whose name and
competence are certainly certified to the general public by the hospital’s act of
listing him and his specialty in its lobby. The high costs of today’s medical and
health care should not at least exact on the hospital greater, if not broader, legal
responsibility for the conduct of treatment and surgery within its facility by its
accredited physician or surgeon, regardless of whether he is independent or
employed.”
 The wisdom of such reasoning is easy to discern. Corporate entities like hospitals are
capable of acting only through other individuals like physicians. If these accredited physicians
do their job well, the hospital succeeds in its mission of offering quality medical services and
thus, profits financially. Logically, where negligence mars the quality of its services, the
hospital should not be allowed to escape liability for the acts of its ostensible agents.
(Professional Services, Inc. v. Agana, G.R. No. 126297; Agana v. Juan Fuentes, G.R. No.
126467; Ampil v. Agana, G.R. No. 127590, January 31, 2007).

CAPTAIN OF THE SHIP RULE

Dr. Ampil was the lead surgeon during the operation of Natividad. He requested the assistance
of Dr. Fuentes only to perform hysterectomy when he found that the malignancy in her sigmoid
area had spread to her left ovary. Dr. Fuentes performed the surgery and thereafter reported
and showed his work to Dr. Ampil. The latter examined it and finding everything to be in order,
allowed Dr. Fuentes to leave the operating room. Dr. Ampil then resumed operating on
Natividad. He was about to finish the procedure when the attending nurses informed him that
two pieces of gauze were missing. A “diligent search” was conducted, but the misplaced
gauzes were not found. Dr. Ampil then directed that the incision be closed. During this entire
period, Dr. Fuentes was no longer in the operating room and had, in fact, left the hospital.

Under the “Captain of the Ship” rule, the operating surgeon is the person in complete
charge of the surgery room and all personnel connected with the operation. Their duty is to
obey his orders. (Rural Educational Assn. v. Bush, 42 Tenn. App. 34, 298 S.W. 2d 761
(1956)). As stated before, Dr. Ampil was the lead surgeon. In other words, he was the
“Captain of the Ship”. That he discharged such role is evidenced from his following conduct:
(1) calling Dr. Fuentes to perform a hysterectomy; (2) examining the work of Dr. Fuentes and
finding it in order; (3) granting Dr. Fuentes’ permission to leave; and (4) ordering the closure of
the incision. It was this act of ordering the closure of the incision notwithstanding that two
pieces of gauze remained unaccounted for, that caused injury to Natividad’s body. Clearly, the
control and management of the thing which caused the injury was in the hands of Dr. Ampil,
not Dr. Fuentes.

In this jurisdiction, res ipsa loquitur is not a rule of substantive law, hence, does not per
se create or constitute an independent or separate ground of liability, being a mere
evidentiary rule. In other words, mere invocation and application of the doctrine does not
dispense with the requirement of proof of negligence. Here, the negligence was proven to
have been committed by Dr. Ampil and not by Dr. Fuentes.

(3) Whether PSI is liable for the negligence of Dr. Ampil.

The third issue necessitates a glimpse at the historical development of hospitals and
the resulting theories concerning their liability for the negligence of physicians.

Until the mid-nineteenth century, hospitals were generally charitable institutions,

providing medical services to the lowest classes of society, without regard for a patient’s
ability to pay. Those who could afford medical treatment were usually treated at home by their
doctors. However, the days of house calls and philanthropic health care are over. The modern
health care industry continues to distance itself from its charitable past and has experienced a
significant conversion from a not-for-profit health care to for-profit hospital business.
Consequently, significant changes in health law have accompanied the business-related
changes in the hospital industry. One important legal change is an increase in hospital liability
for medical malpractice. Many courts now allow claims for hospital vicarious liability under the
theories of respondeat superior, apparent authority, ostensible authority, or agency by
estoppel.

The statute governing liability for negligent acts is Article 2176 of the Civil Code, which
reads:

Article 2176. Whoever by act or omission causes damage to another, there

being fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the parties, is
called a quasi-delict and is governed by the provisions of this Chapter.

A derivated of this provision is Article 2180, the rule governing vicarious liability under
the doctrine of respondeat superior, thus:

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

xxx xxx

The owners and managers of an establishment or enterprise are likewise

responsible for damages caused by their employees in the service of the
branches in which the latter are employed or on the occasion of their functions.

Employers shall be liable for the damages caused by their employees

and household helpers acting within the scope of their assigned tasks even
though the former are not engaged in any business or industry.

xxx xxx

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.

Professionals engaged by an employer, such as physicians, dentists, and pharmacists,

are not “employees” under this article because the manner in which they perform their work is
not within the control of the latter (employer). In other words, professionals are considered
personally liable for the fault or negligence they commit in the discharge of their duties, and
their employer cannot be held liable for such fault or negligence. In the context of the present
case, “a hospital cannot be held liable for the fault or negligence of a physician or surgeon in
the treatment or operation of patients.

Such view is grounded on the traditional notion that the professional status and the
very nature of the physician’s calling preclude him from being classed as an agent or
employee of a hospital, whenever he acts in a professional capacity. It has been said that
medical practice strictly involves highly developed and specialized knowledge, such that
physicians are generally free to exercise their own skill and judgment in rendering medical
services sans interference. Hence, when a doctor practices medicine in a hospital setting, the
hospital and its employees are deemed to subserve him in his ministrations to the patient and
his actions are of his own responsibility.

The case of Schloendorff v. Society of New York Hospital, 211 N.Y. 125, 105 N.E. 92,
52 L.R.A., N.S. 505 (1914), was then considered an authority for this view. The “Schloendorff
doctrine” regards a physician, even if employed by a hospital, as an independent contractor
because of the skill he exercises and the lack of control exerted over his work. Under this
doctrine, hospitals are exempt from the application of the respondeat superior principle for
fault or negligence committed by physicians in the discharge of their profession.

However, the efficacy of such doctrine has weakened with the significant developments
in medical care. Courts came to realize that modern hospitals are increasingly taking active
role in supplying and regulating medical care to patients. No longer were a hospital’s
functions limited to furnishing room, food, facilities for treatment and operation, and
attendants for its patients. Thus, in Bing v. Thunig, 2 N.Y. 2d 656, 163 NYS 2d 3, 143 (1957),
the New York Court of Appeals deviated from the Schloendorff doctrine, noting that modern
hospitals actually do far more than provide facilities for treatment. Rather, they regularly
employ, on a salaried basis, a large staff of physicians, interns, nurses, administrative and
manual workers. They charge patients for medical care and treatment, even collecting for
such services through legal action, if necessary. The court then concluded that there is no
reason to exempt hospitals from the universal rule of respondeat superior.

In our shores, the nature of the relationship between the hospital and the physicians is
rendered inconsequential in view of our categorical pronouncement in Ramos v. Court of
Appeals, that for purposes of apportioning responsibility in medical negligence cases, an
employer-employee relationship in effect exists between hospitals and their attending and
visiting physicians. Thus, it was held:

“We now discuss the responsibility of the hospital in this particular

incident. The unique practice (among private hospitals) of filling up specialist
staff with attending and visiting “consultants”, who are allegedly not hospital
employees, presents problems in apportioning responsibility for negligence in
medical malpractice cases. However, the difficulty is more apparent than real.
 In the first place, hospitals exercise significant control in the hiring and
firing of consultants and in the conduct of their work within the hospital
premises. Doctors who apply for ‘consultant’ slots, visiting or attending, are
required to submit proof of completion of residency, their educational
qualifications, generally, evidence of accreditation by the appropriate board
(diplomate), evidence of fellowship in most cases, and references. These
requirements are carefully scrutinized by members of the hospital administration
or by a review committee set up by the hospital who either accept or reject the
application.

After a physician is accepted, either as a visiting or attending consultant,

he is normally required to attend clinico-pathological conferences, conduct
bedside rounds for clerks, interns and residents, moderate grand rounds and
patient audits and perform other tasks and responsibilities, for the privilege of
being able to maintain a clinic in the hospital, and/or for the privilege of admitting
patients into the hospital. In addition to these, the physician’s performance as a
specialist is generally evaluated by a peer review committee on the basis of
mortality and morbidity statistics, and feedback from patients, nurses, interns
and residents. A consultant remiss in his duties, or a consultant who regularly
falls short of the minimum standards acceptable to the hospital or its peer
review committee, is normally politely terminated.

In other words, private hospitals, hire, fire and exercise real control over
their attending and visiting ‘consultant’ staff. While ‘consultants’ are not,
technically employees, x x x , the control exercised, the hiring, and the right to
terminate consultants all fulfill the important hallmarks of an employer-employee
relationship, with the exception of the payment of wages. In assessing whether
such a relationship in fact exists, the control test is determining. Accordingly, on
the basis of the foregoing, we rule that for the purpose of allocating
responsibility in medical negligence cases, an employer-employee relationship
in effect exists between hospitals and their attending and visiting physicians.”

Liability of hospitals under the doctrine of apparent authority and doctrine of corporate
negligence

Civil Law - Torts and Damages

The case of Professional Services, Inc. v. Agana, G.R. No. 126297; Agana, et al. v. Fuentes,
G.R. No. 126467; Ampil v. Agana, et al., G.R. No. 127590, January 31, 2007 set the
precedent for the liability of hospitals for the negligence of doctors employed by it, or even
consultants. The SC said that courts in holding a hospital liable for damages, having
undertaken one of mankind’s most important and delicate endeavors, must assume the grave
responsibility of pursuing it with appropriate care. The care and service dispensed through
this high trust, however technical, complex and esoteric its character may be, must meet
standards of responsibility commensurate with the undertaking to preserve and protect the
health, and indeed, the very lives of those placed in the hospital’s keeping. (Beeck v. Tuzon
General Hospital, 500 P. 2d 1153 (1972), citing Darling v. Charleston Community Memorial
Hospital, 33 Ill. 2d 326, 211 N.E. 2d 253).
 Dr. Ampil, assisted by the medical staff of the Medical City Hospital, performed an
anterior resection surgery on Natividad. He found that the malignancy in her sigmoid area had
spread on her left ovary, necessitating the removal of certain portions of it. Thus, Dr. Ampil
obtained the consent of Natividad’s husband, Enrique Agana, to permit Dr. Juan Fuentes, to
perform hysterectomy on her.

After Dr. Fuentes had completed the hysterectomy, Dr. Ampil took over, completed the
operation and closed the incision.

The operation appeared to be flawed, because the attending nurse entered these
remarks:

“sponge count lacking 2

“announced to surgeon searched (sic) done but to no avail
continue for closure.”

Natividad was released from the hospital, but later on complained of excruciating pain
in her anal region. She consulted both doctors about it. They told her that the pain is the
natural consequence of the surgery. Dr. Ampil then recommended that she consult an
oncologist to examine the cancerous nodes which were not removed during the operation.

Accompanied by her husband she went to the United States to seek further treatment.
After four months of consultations and laboratory examinations, she was told she was free of
cancer. Hence, she was advised to return to the Philippines.

After her return to the Philippines, her daughter found a piece of gauze protruding from
her vagina. Upon being informed about it, Dr. Ampil proceeded to her house where he
managed to extract by hand a piece of gauze measuring 1.5 inches in width. He then assured
her that the pains would soon vanish.

Dr. Ampil’s assurance did not come true. Instead, the pains intensified, prompting
Natividad to seek treatment at the Polymedic General Hospital. While confined there, Dr.
Ramon Gutierrez detected the presence of another foreign object in her vagina – a foul-
smelling gauze measuring 1.5 inches in width badly infected her vaginal vault. A recto-vaginal
fistula had formed in her reproductive organs which forced stool to excrete through the
vagina. Another surgical operation was needed to remedy the damage. Thus, in October
1984, she underwent another surgery.

The spouses filed a complaint for damages alleging that the doctors are liable for
negligence for leaving two pieces of gauze inside Natividad’s body and malpractice for
concealing their acts of negligence.
 On February 16, 1986, pending the outcome of the above case, she died and was duly
substituted by her children.

The trial court rendered a judgment holding the doctors liable for negligence and
malpractice.

On appeal, the CA dismissed the case against Dr. Fuentes but affirmed the judgment
against Dr. Ampil and the hospital.

On September 6, 1996, the Court of Appeals rendered its Decision jointly disposing of
CA-GR CV No. 42062 and CA-GR SP No. 32198, dismissing the case against Dr. Fuentes
and holding PSI and Dr. Ampil solidarily liable.

Only Dr. Ampil filed a motion for reconsideration, but was denied.

PSI alleged in its petition that the Court of Appeals erred in holding that: (1) it is
estopped from raising the defense that Dr. Ampil is not its employee; (2) it is solidarily liable
with Dr. Ampil; and (3) it is not entitled to its counterclaim against the Aganas. PSI contended
that Dr. Ampil is not its employee, but a mere consultant or independent contractor. As such,
he alone should answer for his negligence.

The Aganas maintained that the Court of Appeals erred in finding that Dr. Fuentes is
not guilty of negligence or medical malpractice, invoking the doctrine of res ipsa loquitur. They
contended that the pieces of gauze are prima facie proofs that the operating surgeons have
been negligent.

Dr. Ampil asserted that the Court of Appeals erred in finding him liable for negligence
and malpractice sans evidence that he left the two pieces of gauze in Natividad’s vagina. He
pointed to other probable cause, such as: (1) it was Dr. Fuentes who used gauzes in
performing the hysterectomy; (2) the attending nurses’ failure to properly count the gauzes
used during surgery; and (3) the medical intervention of the American doctors who examined
Natividad in the United States of America.
The issues submitted to the court were: first, whether the Court of Appeals erred in
holding Dr. Ampil liable for negligence and malpractice; second, whether the Court of Appeals
erred in absolving Dr. Fuentes of any liability; and third, whether PSI may be held solidarily
liable for the negligence of Dr. Ampil.

Held: (1) Whether the Court of Appeals erred in holding Dr. Ampil liable for negligence and
malpractice.
 Dr. Ampil argued that the Court should not discount either of the following possibilities:
first, Dr. Fuentes left the gauzes in Natividad’s body after performing hysterectomy; second,
the attending nurses erred in counting the gauzes; and third, the American doctors were the
ones who placed the gauzes in Natividad’s body.
The arguments are purely conjectural and without basis. Records show that he did not
present any evidence to prove that the American doctors were the ones who put or left the
gauzes in Natividad’s body. Neither did he submit evidence to rebut the correctness of the
record of operation, particularly the number of gauzes used. As to the alleged negligence of
Dr. Fuentes, Dr. Ampil examined his work and found it in order.

The glaring truth is that all the major circumstances, taken together, as specified by the
Court of Appeals, directly point to Dr. Ampil as the negligent party, thus:

First, it is not disputed that the surgeons used gauzes as sponges to

control the bleeding of the patient during the surgical operation.

Second, immediately after the operation, the nurses who assisted in the
surgery noted in their support that the ‘sponge count (was) lacking 2’; that such
anomaly was ‘announced to surgeon’ and that a ‘search was done but to
no avail’ prompting Dr. Ampil to ‘continue for closure’ x x x.

Third, after the operation, two (2) gauzes were extracted from the same
spot of the body of Mrs. Agana where the surgery was performed.

An operation requiring the placing of sponges in the incision is not complete until the
sponges are properly removed, and it is settled that the leaving of sponges or other foreign
substances in the wound after the incision has been closed is at least prima facie negligence
by the operating surgeon. (Rule v. Cheeseman, 317 P. 2d 472 (1957), citing Russel v.
Newman, 116 Kan. 268 P. 752; Bernsden v. Johnson, 174 Kan. 230, 255 P. 2d 1033). To put
simply, such act is considered so inconsistent with due care as to raise an inference of
negligence. There are even legions of authorities to the effect that such act is negligence per
se.

The SC further ruled that it is not blind to the reality that there are times when danger
to a patient’s life precludes a surgeon from further searching missing sponges or foreign
objects left in the body. But this does not leave him free from any obligation. Even if it has
been shown that a surgeon was required by the urgent necessities of the case to leave a
sponge in his patient’s abdomen, because of the dangers attendant upon delay, still, it is his
legal duty to so inform his patient within a reasonable time thereafter by advising her of what
he had been compelled to do. This is in order that she might seek relief from the effects of the
foreign object left in her body as her condition might permit. In Smith v. Zeagler, it was ruled,
thus:
 “The removal of all sponges used is part of a surgical operation, and
when a physician or surgeon fails to remove a sponge he has placed in his
patient’s body that should be removed as part of the operation, he thereby
leaves his operation uncompleted and creates a new condition which
imposes upon him the legal duty of calling the new condition to his
patient’s attention, and endeavoring with the means he has at hand to
minimize and avoid untoward results likely to ensue therefrom. (157 So.
328 Pla. (1934)).

Dr. Ampil did not inform Natividad about the missing two pieces of gauze. Worse, he
even misled her that the pain she was experiencing was the ordinary consequence of her
operation. Had he been more candid, Natividad could have taken the immediate and
appropriate medical remedy to remove the gauzes from her body. What was initially an act of
negligence by Dr. Ampil has ripened into a deliberate wrongful act of deceiving his patient.

To successfully pursue this kind of case, a patient must only prove that a health care
provider either failed to do something which a reasonably prudent health care provider would
have done, or that he did something that a reasonably prudent provider would not have done;
and that failure or action caused injury to the patient. (Garcia-Rueda v. Pascasio, G.R. No.
118141, September 5, 1997, 278 SCRA 769). Simply put, the elements are duty, breach,
injury and proximate causation. Dr. Ampil, as the lead surgeon, had the duty to remove all
foreign objects, such as gauzes, from Natividad’s body before closure of the incision. When
he failed to do so, it was his duty to inform Natividad about it. Dr. Ampil breached both duties.
Such breach caused injury to Natividad, necessitating her further examination by American
doctors and another surgery. That Dr. Ampil’s negligence is the proximate cause of
Natividad’s injury could be traced from his act of closing the incision despite the information
given by the attending nurses that two pieces of gauze were still missing. That they were later
on extracted from Natividad’s vagina established the causal link between Dr. Ampil’s
negligence and the injury. And what further aggravated such injury was his deliberate
concealment of the missing gauzes from the knowledge of Natividad and her family.

(2) Whether the Court of Appeals erred in absolving Dr. Fuentes of any liability.

The Aganas assailed the dismissal by the trial court of the case against Dr. Fuentes on
the ground that it is contrary to the doctrine of res ipsa loquitur. According to them, the fact
that the two pieces of gauze were left inside Natividad’s body is a prima facie evidence of Dr.
Fuentes’ negligence.

Held: The SC ruled otherwise.

Literally, res ipsa loquitur means “the thing speaks for itself”. It is the rule that the fact
of the occurrence of an injury, taken with the surrounding circumstances, may permit an
inference or raise a presumption of negligence, or make out a plaintiff’s prima facie case, and
present a question of fact for defendant to meet with an explanation. (Ramos v. CA, G.R. No.
124354, December 29, 1999, 321 SCRA 584). Stated differently, where the thing which
caused the injury, without the fault of the injured, is under the exclusive control of the
defendant and the injury is such that it should not have occurred if he, having such control
used proper care, it affords reasonable evidence, in the absence of explanation that the injury
arose from the defendant’s want of care, and the burden of proof is shifted to him to establish
that he has observed due care and diligence. (Africa v. Caltex (Phils.) Inc., 123 Phil. 280).

From the foregoing statements of the rule, the requisites for the applicability of the
doctrine of res ipsa loquitur are: (1) the occurrence of an injury; (2) the thing which caused the
injury was under the control and management of the defendant; (3) the occurrence was such
that in the ordinary course of things, would not have happened if those who had control or
management used proper care; and (4) the absence of explanation by the defendant. Of the
foregoing requisites, the most instrumental is the “control and management of the thing which
cause the injury”.

The element of “control and management of the thing which caused the injury” are
wanting in the case. Hence, the doctrine of res ipsa loquitur will not lie.

LIABILITY OF REGISTERED OWNER OF THE VEHICLE

It has been consistently ruled that the registered owner of any vehicle is directly and primarily
responsible to the public and third persons while it is being operated. The rationale behind
such doctrine was explained way back in 1957 in Erezo vs. Jepte where it was said that the
principle upon which this doctrine is based is that in dealing with vehicles registered under the
Public Service Law, the public has the right to assume or presume that the registered owner is
the actual owner thereof, for it would be difficult for the public to enforce the actions that they
may have for injuries caused to them by the vehicles being negligently operated if the public
should be required to prove who the actual owner is. How would the public or third persons
know against whom to enforce their rights in case of subsequent transfers of the vehicles? We
do not imply by his doctrine, however, that the registered owner may not recover whatever
amount he had paid by virtue of his liability to third persons from the person to whom he had
actually sold, assigned or conveyed the vehicle. (Villanueva vs. Domingo, et al., G.R. No.
144274, September 20, 2004).

QUAIS-DELICT
An employer’s liability based on a quasi-delict is primary and direct, while the employer’s
liability based on a delict is merely subsidiary. (People vs. Fabro, 93 SCRA 200 (1979). The
words “primary and direct” as contrasted with “subsidiary”, refer to the remedy provided by
law for enforcing the obligation rather than to the character and limits of the obligation. (33A
Words and Phrases 215 (197, Ed.). Although liability under Article 2180 originates from
negligent act of the employee, the aggrieved party may sue the employer directly. When an
employee causes damage, the law presumes that the employer has himself committed an act
of negligence in not preventing or avoiding the damage. This is the fault that the law
condemns. While the employer is civilly liable in a subsidiary capacity for the employee’s
criminal negligence, the employer is also civilly liable directly and separately for his own civil
negligence in failing to exercise due diligence in selecting and supervising his employee.

Liability of the employer for the acts or omissions of the employee

Once again, the SC in Mercury Drug, et al. v. Sps. Huang, et al., G.R. No. 172122, June 22,
2007, (Puno, J) had the occasion to rule on the liability of the employer for the negligent act of
the employee while in the performance of his duties and functions.

The liability of the employer under Art. 2180 of the Civil Code is direct or immediate. It
is not conditioned on a prior recourse against the negligent employee, or a prior showing of
insolvency of such employee. It is also joint and solidary with the employee. (Art. 2194, NCC).

To be relieved of liability, the employer should show that it exercised the diligence of a
good father of a family, both in the selection of the employee and in the supervision of the
performance of his duties. Thus, in the selection of its prospective employees, the employer is
required to examine them as to their qualifications, experience, and service records. (Estacion
v. Bernardo, G.R. No. 144723, February 27, 2006, 483 SCRA 222; Campo v. Camarote, 100
Phil. 459 (1056)). With respect to the supervision of its employees, the employer should
formulate standard operating procedures, monitor their implementation, and impose
disciplinary measures for their breach. To establish compliance with these requirements,
employers must submit concrete proof, including documentary evidence. (Victory Liner, Inc. v.
Heirs of Andres Malecdan, G.R. No. 154278, December 27, 2002, 394 SCRA 520).

In this case, the employer, Mercury Drug presented testimonial evidence on its hiring
procedure. According to Mrs. Merlie Caamic, the Recruitment and Training Manager of
petitioner Mercury Drug, applicants are required to take theoretical and actual driving tests,
and psychological examination. In the case of employee, however, Mrs. Caamic admitted that
he took the driving tests and psychological examination when he applied for the position of
Delivery Man, but not when he applied for the position of Truck Man. Mrs. Caamic also
admitted that employee used a Galant which is a light vehicle, instead of a truck during the
driving tests. Further, no tests were conducted on the motor skills development, perceptual
speed, visual attention, depth visualization, eye and hand coordination and steadiness of the
employee. No NBI and police clearances were also presented. Lastly, he attended only three
driving seminars. In effect, the only seminar he attended before the accident which occurred
in 1996 was held twelve years ago in 1984.

Furthermore, in this case, the employer did back-up driver for long trips. At the time of
the accident, the employee has been out on the road for more than thirteen hours, without
any alternate. The witness admitted that she did not know of any company policy requiring
back-up drivers for long trips.

The employer likewise failed to show that it exercised due diligence on the supervision
and discipline over its employees. In fact, on the day of the accident, the employee was
driving without a license. He was holding a TVR for reckless driving. He testified that he
reported the incident to his superior, but nothing was done about it. He was not suspended or
reprimanded. No disciplinary action whatsoever was taken against him. Thus, the employer
failed to discharge its burden of proving that it exercised due diligence in the selection and
supervision of its employee.
 TORTS & DAMAGES

2000

MMTC v. CA (May 2000)

Torts; Vicarious Liability of Employers; Damages . X Company is the operator of buses. Spouses Y
sued the bus company for the death of their daughter who was hit by one of the buses of X. . RTC
found X & their driver guilty of negligence & who ordered to pay actual, moral & exemplary damages,
including atty's. fees & costs of lawsuit.

RULINGS: Employers may be relieved of responsibility for the negligent acts of their employees
within the scope of their assigned tasks only if they can show that "they observed all the diligence of a
good father of a family to prevent damage, “ both in the selection of the employee who committed the
quasi-delict and in the supervision of the performance of his duties.
Moral damages. - The award of moral damages is aimed at a restoration, within the limits of
the possible, of the spiritual status quo ante; and therefore, it must be proportionate to the suffering
inflicted.
Compensation for loss of earning capacity - Compensation of this nature is awarded not for
loss of earnings but for loss of capacity to earn money. Evidence must be presented that the victim,
if not yet employed at the time of death, was reasonably certain to complete training for a specific
profession. It is not necessary that education, as a guide to future earnings, relate to a specific
occupation like lawyer or doctor. Evidence of education in general studies is admissible to ascertain
future earning.

FOOD TERMINAL INC. vs. CA (G.R. No. 108397, June 21, 2000.)
Torts; Negligence; Damages
X engaged the services to Y company for the care and custody of X’s goods. The basic issue
raised is whether or not the Y was negligent in the care and custody of the goods during storage. Y
practically admitted that it failed to maintain the agreed temperature of the cold storage area at 2 to 4
degrees centigrade at all times, and this caused the deterioration of the yeast stored therein. But Y
claimed that temperature was not the sole cause for the deterioration of the goods. Since negligence
has been established, Y is liable for damages.

PEOPLE V. LIBRANDO (GR No, 132251, July 6, 2000)

Damages as Earning Capacity - X killed Y and was convicted of murder. The heirs of Y was awarded
compensation for the loss of the earning capacity of Y.
The Sc has consistently fixed the indemnity for the loss of the earning capacity of the
deceased by taking into consideration the victim’s net income at the time of his death and his probable
life expectancy.

Net earning capacity =

2/3 (80- age of victim at time of his death) X net income (i.e. gross annual income less living
expenses)
In the absence of proof showing the deceased’s living expenses, net income is estimated to
be 50% of the gross annual income.

RADIOWEALTH V. DEL ROSARIO (GR No. 138739, July 6, 2000)

Liquidated Damages - X executed a promissory note (PN) in favor of Y company. The PN provided for
a late payment penalty of 2.5% monthly atty’s fees equivalent to 25% of the amount due in case legal
action is instituted and 10% of the same as liquidated damages. X defaulted payment despite
repeated demand. Y filed complaint against X.
Liquidated damages should no longer be imposed for being unconscionable. Such damages
should also be deemed included in the 2.5% monthly penalty. Y is entitled only to atty.’s fees, but only
in a sum equal to 10% of the amount due which the SC deem reasonable under the proven facts.

PEOPLE V. DAROY (Gr No. 118942, July 18, 2000)

Damages as Earning Capacity - X was convicted of murder for the death of Y. Heirs of Y were
awarded indemnity for loss of earning capacity despite absence of evidence to support the widow’s
claim for loss of earning capacity.
An indemnity for loss of earning capacity is justified, it appearing from the testimony of the
surviving spouse that the deceased was 40 years old at the time of his untimely death and earned
P4,200 monthly. The testimony of the surviving spouse is sufficient to establish a basis from which the
court can make a fair and reasonable estimate of the damages for the loss of the earning capacity of
the victim.

PEOPLE V. DE LA TONGGA (GR No. 133246, July 31, 2000)

Damages, Actual and Temperate - X was found guilty by the trial court , of murdering Y. X was
sentenced by the TC to pay the heirs of Y indemnity as well as actual damages. X questioned the
award of actual damages because other than the testimony of the widow for hospital and funeral
expenses, no documentary evidence was presented by the prosecution to support this claim.
The SC agrees with X. To recover actual damages, it is necessary to prove the actual amount
of loss with a reasonable degree of certainty, on the basis of competent proof and the best evidence
obtainable by the injured party. In this case, there were no such proof to sustain award of actual
damages.
In lieu of actual damages, X should pay temperate damage. Art 2224 of the Civil Code
provides that temperate damages may be recovered when the court finds that some pecuniary loss
has been suffered but its amount cannot, from the nature of the case be proved with certainty.

MAGAT V. CA (GR No. 124221, Aug 4, 2000)

Damages, Actual and Exemplary - X&Y entered into a contract whereon X would purchase for Y
radio transreceivers from Japan. Y commenced operations after winning a bid in Subic Naval Base
without the transreceivers from Japan by borrowing radio units from third party. X thus cancelled his
order with this Japanese supplier. X filed complaint for breach of contract.
Damages cannot be awarded even if assuming there was breach. Damnum absque injure.
There was no bad faith. Y borrowed the equipment because he was faced with the danger of
his bid with Subic cancelled if he did not commence operations immediately. Exemplary damages is
awarded only if breach is wanton, fraudulent, oppressive, malevolent. Neither can actual damages be
awarded. The amount of loss must not only be capable of proof, but must be proven with a
reasonable degree of certainty. The claim must be premised upon competent proof or upon best
evidence obtainable, such as receipts or other documentary proof. Only the testimonies of X’s
witnesses were presented.

PEOPLE V. DIAZ (337 SCRA 521 August 9, 2000)

Crime of rape was committed. The award of civil indemnity to the victim must be increased to
P50,000 in accordance with current jurisprudence. In addition, moral damages in the amount of
P50,000 must be awarded to the victim without need of further proof other than tat rape was
committed against the victim.

PEOPLE V. PACINA (GR No. 123150 August 16, 2000)

Moral damages, Rape - X was convicted of rape by the Trial Court. The TC granted P500,000 to the
victim as moral damages.
 SC ruled that the grant of moral damages amounting to P500,000 is unreasonable. Moral
damages are not intended to enrich the victim, rather they are awarded to allow them to obtain means
for diversion and amusement that could serve to alleviate their moral and psychological sufferings.

ACE HAULERS CORP V. CA (GR No. 127934, 23 August 2000)

Civil liability in Criminal Cases
A vehicular mishap occurred involving a truck, a jeepney and a motorcycle. The motorcycle
was bumped by the jeepney and X, the motorcycle rider was run over by the truck. X died. Issue is
whether or not in an action for damages arising from a vehicular accident, X may recover damages
against the employer of the accused driver both in the criminal case (delict) and the civil case for
damages based on culpa aquiliana.
In negligence case, the offended party has the option between an action for enforcement of
civil liability based on culpa criminal under RPC and action for recovery of damages based on culpa
aquiliana under the Civil Code. But he cannot recover damages twice for the same negligent act or
omission.
Consequently, a separate civil action for damages lies against the offender in a criminal act,
whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended
party is not allowed to recover damages on both scores, and would be entitled only to the bigger
amount of the 2, assuming the awards vary in 2 cases.

PEOPLE V. TOQUERO (25 August 2000)

Award in Rape cases – In rape cases, P50,000 is awarded as moral damages without need of proof of
mental and physical suffering. In addition, P50,000 is awarded to the complainant as civil indemnity
ex-delicto.

PEOPLE V. DUBRIA (26 September 2000)

Loss of earning capacity as damages – The fact that the prosecution did not present documentary
evidence to support its claim for damages for loss of earning capacity of the deceased does not
preclude recovery of said damages. The testimony of the mother of the victim, as to the earning
capacity of her son, sufficiently establishes the basis ofr making such an award.

1999

BORJAL v. CA (Jan. 14, 1999)

Civil Law/Damages: Damages cannot be awarded in the absence of ill-motive in the filing of the
complaint. Private respondent can’t be said to have instituted the present suit in abuse of the legal
processes and with hostility to the press; or that he acted maliciously, wantonly oppressively,
fraudulently and for the sole purpose of harassing petitioners, thereby entitling the latter to damages.
On the contrary, private respondent acted with his right to protect his honor from what he perceived to
be malicious imputations against him. Proof and motive that the institution of the action was
prompted be a sinister design to vex and humiliate a person must be clearly and preponderantly
established to entitle the victim to damages. The law could not have meant to impose a penalty on the
right to litigate, nor should counsel’s fees be awarded every time a party wins a suit.

1998

BPI EXPRESS CARD CORPORATION v. CA

Civil Law/ Moral Damages/ Terms and Conditions of Credit Card and New Agreement/ Abuse of Right/
Damages and Injury Distinguished: This is a case where private respondent, Marasigan, won an
award in the trial court and in the CA for damages allegedly sustained when his BPI credit card was
rejected by a restaurant where he was entertaining some guests on December 8, 1989. The SC
reversed the CA and held that there was no injury suffered by Marasigan as it was shown that he was
at fault why his credit card was dishonored. He was sent a letter by BPI informing him that he was
indebted to them and ordering him to pay his obligation. Marasigan did pay using a postdated check,
dated December 15, 1989.
By using the postdated check as payment, Marasigan failed to comply with his agreement with
the bank to settle his account in order that his credit card would not be suspended. Settled is the
doctrine that a check is only a substitute for money and not money, the delivery of such an instrument
does not, by itself operate as payment. Thus, the BPI was justified in suspending his credit card. As
such, BPI did not abuse its right under the terms and conditions of the contract.
The following are the elements for an abuse of right to exist: (1) there is a legal right or duty;
(2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another.
Lastly, there is a material distinction between damages and injury. Injury is the illegal invasion
of a legal right; damage is the loss, hurt or harm which results from the injury; and damages are the
recompense or compensation awarded for the damages suffered. Thus, in cases where there is
damage without injury, in those instances in which the harm or loss was not the result of the violation
of a legal duty, the injured party bears the consequences alone. The award for tort damages is based
on the premise that an individual was injured in contemplation of law. There must be a breach of a
duty, which breach must primarily cause the injury.

1997

PNB v. CA (G.R. No. 116181, Jan. 6, 1997)

Civil Law/Damages/ Quantum Meruit: Quantum meruit allows recovery of the reasonable value
regardless of any agreement as to value. It entitles the party to as much as he reasonably deserves,
as distinguished from quantum valebant, ot ro as what is reasonably worth.
Unliquidated claims present a justiciable question ripe for judicial determination which is
beyond the powers of COA to adjudicate. (See Phil. Operations v. Auditor-General, 94 Phil. 868
[1954]) Recovery based on quantum meruit is in the nature of such claim because its settlement
requires the application of judgment and discretion and cannot be adjusted by simple arithmetical
processes. In Eslao, the Court found it necessary to refer to the COA the task of determining the total
compensation due to the claimants considering that the matter on the exact amount was not in issue
and the determination thereof involves a review of the factual findings and evidence in support thereof.
On the other hand, the lower court here, had already made a factual finding on the amount reasonably
due to petitioner and scrutinized the evidence to sustain the claim. Besides, there is nothing in the
cited cases which would imply that only the COA can determine the specific amount due to a
contractor guided by the established principle of quantum meruit. As our courts are both courts of law
and equity, they are not powerless to determine a factual matter in accordance with both standards.

DEL ROSARIO v. CA (G.R. No. 118325, Jan. 29, 1997)

Civil Law/ Contracts/ Negligence: There is merit in the petition. The issue is whether or not MFC is
answerable to petitioners for the damage caused to petitioners' residence when its roof, made of
shingles purchased from and installed by the former, was blown away by a typhoon. The Court rules
that it is.
What matters here is that MFC's employees delivered and installed the shingles. Thus, all the
quibbling about whether Puno acted as agent of MFC or the spouses, is pointless. The matter is not a
factor in determining MFC's liability for its workers' use of inferior materials and their defective
installation of the shingles. What likewise matters is that MFC's employees, in installing the shingles,
used inferior materials and assembled them in a manner contrary to specifications, in bad faith and
with gross negligence. Hence, MFC infringed and is liable on its warranties.

PAL v. CA (July 1997)

Civil Law/ Commercial Law/Transportation Law/ Damages
Pantejo boarded a PAL plane in Manila and disembarked in Cebu City where he was supposed to take
his connecting flight to Surigao City. Due to a typhoon, the connecting flight was cancelled. PAL gave
each passenger a total of P300.00 cash assistance for the 2-day stay in Cebu. Pantejo requested that
he be billeted at PAL's expense as he did not have cash with him, but PAL refused. Pantejo learned
that the hotel expenses of 2 other passengers were reimbursed by PAL. Pantejo told PAL's manager
that he was going to sue for discrimination. It was only then that PAL offered to pay Pantejo, but due
to his ordeal and anguish, Pantejo refused.
What makes PAL liable for damages here is its blatant refusal to accord the amenities equally
to all its stranded passengers. No compelling reason was advanced to explain this discriminatory
conduct.
Moral damages are not intended to enrich plaintiff, merely to obtain means, diversion or
amusements that will serve to alleviate the moral suffering he underwent due to defendant's culpable
action and must, perforce, be proportional to the suffering inflicted. However, substantial damages do
not translate into excessive damages.
The interest of 6% imposed by the CA should be computed from the date of rendition of
judgment and not from the filing of the complaint. This is because at the time of the filing the
complaint, the amount of damages to which plaintiff may be entitled remains unliquidated and not
known until definitely ascertained, assessed and determined by the courts, and only after presentation
of proof.

GARCIA-RUEDA v. PASCASIO (September 1997)

Civil Law/Torts/Medical Malpractice Cases: There are 4 elements involved in medical negligence
cases: duty, breach, injury and proximate causation.
When the victim employed the services of the doctors, a physician-patient relationship was
created. In accepting the case, the doctors in effect represented that, having the needed training and
skill possessed by physicians and surgeons practicing in the same filed, they will employ such training,
care and skill in the treatment of their patients. They have a duty to use at least the same level of care
that any other reasonably competent doctor would use to treat a condition under the same
circumstances. The breach of these professional duties of skill and care, or their improper
performance, by a physician surgeon whereby the patient is injured in body or in health, constitutes
actionable malpractice. Thus, in the event that any injury results to the patient from want of due care
or skill during the operation, the surgeons may be held answerable in damages for negligence.
Moreover, in malpractice or negligence cases involving the administration of anaesthesia, the
necessity of expert testimony and the availability of the charge of res ipsa to the plaintiff, have been
applied in actions against anaesthesiologists to hold the defendant liable for the death or injury of a
patient under excessive or improper anaesthesia. Essentially, it requires 2-pronged evidence:
evidence as to the recognized standards of the medical community in the particular kind of case, and
a showing that the physician in question negligently departed from this standard in his treatment.
Another element in medical negligence cases is causation which is divided into 2 inquiries:
whether the doctor's actions in fact casued the harm to the patient and whether these were the
proximate cause of the patient's injury.

NEGROS NAVIGATION v. CA (November 1997)

Civil Law/ Commercial Law/Transportation Law/ Insurance/Torts and Damages: (1) Private respondent
need not prove presence of their relative-victims as passengers on the ship There is no reason he
should claim members of his family perished merely to sue. People do not normally lie about so grave
a matter as the loss of dear ones. It would be more difficult to conceal relatives if they were alive than
it is for petitioner to show the contrary.
(2) Petitioner breached its duty to exercise extraordinary diligence. It was found in Mecenas v.
CA (180 SCRA 83 [1989]) there that although proximate cause was negligence of Tacloban City's
crew, Don Juan's crew was equally negligent as its master was playing mahjong at the time of collision
and the officer on watch admitted that he failed to call the attention of the master to the imminent
danger; further, the Don Juan was overloaded and not seaworthy as it sank within 10 to 15 minutes of
impact.
(3) A shipowner is liable notwithstanding total loss of the ship if fault can be attributed to the
shipowner.
(4) Petitioner's contention that the expenses for the erection of a monument and other
expenses for memorial services for the victim should be considered included in the death indemnity =
without merit. Death indemnity is given to compensate for violation of the rights to life and physical
integrity of the deceased. Damages incidental to or arising out of such death are for pecuniary losses
of the beneficiaries of the deceased.

CRUZ v. CA (November 1997)

Civil Law/Torts/Medical Malpractice Suit: A medical malpractice suit is the type of claim which a victim
has available to him or her to redress a wrong committed by a medical professional which has caused
bodily harm. (Garcia-Rueda v. Pascasio, G.R. No. 118141, 5 September 1997) In this jurisdiction,
these claims are most often brought as a civil action for damages under Art. 2176, NCC, and in some
instances, as a criminal case under Art. 365, RPC, with which the civil action for damages is impliedly
instituted.
The elements of reckless imprudence are: (1) the offender does or fails to do an act; (2) the
doing or failure to do that act is voluntary; (3) that it be without malice; (4) that material damage results
from the reckless imprudence; and (5) that there is inexcusable lack of precaution on the part of the
offender, considering his employment or occupation, degree of intelligence, physical condition, and
other circumstances regarding person, time and place.
Whether or not a physician has committed an "inexcusable lack of precaution" in the treatment
of his patient is to be determined according to the standard of care observed by other members of the
profession in good standing under similar circumstances bearing in mind the advanced state of the
profession at the time of treatment or the present state of medical science.
All 3 courts below bewailed the inadequacy of the facilities/supplies/provisions and untidiness
of petitioner's clinic; the failure to subject the patient to a cardio-pulmonary test prior to the operation;
the omission of any form of blood typing before the transfusion; and even the subsequent transfer of
Lydia to the SPDH and the reoperation performed on her by petitioner. But while it may be true that
the circumstances pointed out by the courts below seemed beyond cavil to constitute reckless
imprudence on the part of the surgeon, this conclusion is still best arrived at not through the educated
surmises nor conjectures of laymen, including judges, but by the unquestionable knowledge of expert
witnesses. For whether a physician or surgeon has exercised the requisite degree of skill and care in
the treatment of his patients is, in the generality of cases, a matter of expert opinion. The deference of
courts to the expert opinion of qualified physicians stems from its realization that the latter possess
unusual technical skills which laymen in most instances are incapable of intelligently evaluating.
Expert testimony should have been offered to prove that the circumstances cited by the courts below
constituted conduct falling below the standard of care employed by other physicians in good standing
when performing the same operation.

1996

VALENZUELA v. CA (February 1996)

Civil Law/Torts & Damages/ Contributory Negligence/ Vicarious Liability: Was V guilty of contributory
negligence in parking her car alongside Aurora Blvd., which, L points out, is a no parking zone? No.
When V discovered she had a flat tire, she stopped at a lighted place where she parked the car very
close to the sidewalk. Under these circumstances, V exercised the standard reasonably dictated by
the emergency and could not be considered to have contributed to the unfortunate circumstances.
The emergency which lead her to park her car on a sidewalk in Aurora Blvd. was not of her own
making, and it was evidence that she had taken all reasonable precautions.
The vicarious liability of L's employer 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 good father diligence in the selection and
supervision of his employees.
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.
As such, in providing for a company car, the 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 car capably and responsibly.
[There must be evidence] as to whether or not the company took the steps necessary to
determine or ascertain the driving proficiency and history of L, to whom it gave full and unlimited use
of a company car. Not having been able to overcome the burden of demonstrating that it should be
absolved of liability for entrusting its company car to L, said company, based on the principal of bonus
pater familias, ought to be jointly and severally liable with the former for the injuries sustained by V
during the accident.

SPOUSES CUSTODIO v. CA (February 1996)

Civil Law/Torts & Damages/ Injury and Damage Distinguished/Damnum Absque Injuria: Injury is the
illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and
damages are the recompense or compensation awarded for the damage suffered. In order that the
law will give redress for an act causing damage, that act must be not only hurtful, but wrongful. There
must be damnum et injuria.
In case at bar, although there was damage, there was no injury.
Contrary to claim of private respondents, petitioners could not be said to have violated the
principle of abuse of right. In order that said principle can be applied, the following requisites must
concur: (1) the defendant acted in a manner that is contrary to morals, good customs or public
policy; (2) the acts should be willful; and (3) there was damage or injury to the plaintiff. (Art. 21,
Civil Code)
Petitioners' act in constructing a fence within their lot is a valid exercise of their right as owners,
hence not contrary to morals, etc. (see Art. 430, Civil Code). At the time the fence was constructed,
the lot was not subject to any servitudes. There was no easement of way existing in favor of private
respondents, either by law or contract.
The proper exercise of a lawful right cannot constitute a legal wrong for which an action will lie,
although the act may result in damage to another, for no legal right has been invaded. One may use
any lawful means to accomplish a lawful purpose and though the means adopted may cause damage
another, no cause of action arises in the latter's favor. The courts can give no redress for hardship to
an individual resulting from action reasonably calculated to achieve a lawful end by lawful means.

MANIAGO v. CA (March 1996)

Civil law/Torts & Damage/Action for Damages: The right to bring an action for damages under the Civil
Code must be reserved as required by Rule 111, §1, otherwise it should be dismissed.
The right of the injured party to sue separately for the recovery of the civil liability whether
arising from crimes or quasi-delicts must be reserved otherwise, they will be deemed instituted with
the criminal action. (Dulay v. CA, 243 SCRA 220 [1995]; Yakult v. CA, 190 SCRA 347 [1990])

TRANS-ASIA SHIPPING v. CA (March 1996)

Civil Law/ Torts & Damages/ Actual & Moral Damages: In the case at bench, private respondent's
delay was due to his insistence on disembarking, which forced the vessel to return to its port of origin.
Had he remained on the vessel, it would have reached it destination, albeit, half a day late. Moreover,
private respondent failed to prove that he did not receive his salary, nor that his absence was not
excused. Thus, no actual damages can be awarded.
But moral and exemplary damages must be awarded as petitioner allowed its vessel to leave
the port of origin with full awareness that it was unseaworthy, hence, it acted with bad faith and in a
wanton and reckless manner.
MALALUAN v. COMELEC (March 1996)
Civil Law/Torts & Damages/ Actual Damages: In light of Arts. 2199 and 2201, Civil Code, actual
damages are appropriate only in breaches of obligations in cases of contracts and quasi-contracts,
and on the occasion of crimes and quasi-delicts. Thus, the claim of a party in an election case for
actual damages must hinge upon these. In their absence, the claimant must be able to point out a
specific provision of law authorizing a money claim for election protest expenses against the losing
party. (Atienza, 239 SCRA 298) For instance, the claimant may cite Arts. 19, 20 and 32(5), Civil Code,
which create obligations not by contract, crime or negligence, but directly by law.

PEOPLE v. PATROLLA JR. y VEGA (March 1996)

Civil Law/Torts & Damages/ Exemplary Damages: Exemplary damages may be awarded in criminal
cases where the crime was committed with one or more aggravating circumstances. No aggravating
circumstance is present, other than treachery, which qualified the killing to murder and abuse of
superior strength which was however absorbed in treachery, to warrant an award of thereof.

SABENA v. CA (March 1996)

Civil Law/ Torts & Damages/Loss of Luggage: Petitioner contends that the alleged negligence of
private respondent should be considered the primary cause of the loss of her luggage, as despite her
awareness that the flight ticket had been confirmed only for Casablanca and Brussels, and that her
flight from Brussels to Manila had yet to be confirmed, she did not retrieve the luggage upon arrival at
Brussels.
It remained undisputed that private respondent's luggage was lost while in the custody of
petitioner. When she discovered her bag was missing, she promptly accomplished and filed a
Property Irregularity report, followed up her claim, and even filed a formal letter-complaint. She felt
relieved when she was advised that her luggage had been found, with its contents intact when
examined, and that she could expect it to arrive 4 days later. The then waited anxiously only to be told
later that her luggage had been lost for the second time. Thus, it was clear that petitioner was guilty of
gross negligence.
As held in Alitalia v. IAC (192 SCRA 9, 16-18), the Hague Protocol amended the Warsaw
Convention by removing the provision that if the airline took all necessary steps to avoid the damage,
it could exculpate itself completely, and declared the stated limits of liability not applicable 'if it is
proved that the damage resulted from an act or omission of the carrier. The Convention does not thus
operate as an exclusive enumeration of the instances of an airline's liability, or as an absolute limit of
the extent of that liability.[I]t should be deemed a limit of liability only in those cases where the cause
of death or injury to person, or destruction, loss or damage to property or delay in its transport is not
attributable to or attended by any willful misconduct, etc.

PNB v. CA (April 1996)

Civil Law/ Torts Damages/ Moral & Exemplary Damages: Moral damages awarded must be
commensurate with the loss or injury suffered. Moral damages though incapable of pecuniary
estimations, are in the category of an award designed to compensate the claimant for actual injury
suffered and not to impose a penalty on the wrongdoer. Moral damages are emphatically not intended
to enrich a complainant at the expense of the defendant. They are awarded only to enable the injured
party to obtain means, diversion or amusements that will serve to obviate the moral suffering he has
undergone, by reason of the defendant's culpable action. Its award is aimed at the restoration, within
the limits of the possible, of the spiritual status quo ante, and it must be proportional to the suffering
inflicted.
Exemplary damages are imposed not to enrich one party or impoverish another but to serve as
a deterrent against or as a negative incentive to curb socially deleterious actions.

BALIWAG TRANSIT v. CA (May 1996)

Civil Law/ Commercial Law/ Transportation/ Common Carriers/ Torts/ Negligence: The use of a
kerosene lamp substantially complies with Section 34 (g) of the Land Transportation Code. Said law
clearly allows the use not only of an EWD of the triangular reflectorized plates variety but also parking
lights or flares visible one hundred meters away. No negligence, therefore, may be imputed to A & J
Trading and its driver.
To prove actual damages, the best evidence available to the injured party must be presented.
The court cannot rely on uncorroborated testimony whose truth is suspect, but must depend upon
competent proof that damages have been actually suffered.
In a breach of contract of carriage, moral damages are recoverable if the carrier, through its
agent, acted fraudulently or in bad faith. The evidence shows the gross negligence of the driver of
Baliwag bus which amounted to bad faith.

PHILIPPINE AIRLINES v. CA (June 1996)

Civil Law/Commercial Law/ Transportation Law/ Damages: Moral damages are recoverable in suits
predicated on breach of a contract of carriage where it is proved that the carrier was guilty of fraud or
bad faith. Inattention to and lack of care for the interests of its passengers amount to bad faith. What
the law considers as bad faith which may furnish the ground for an award of moral damages would be
bad faith in securing the contract and in the execution thereof, as well as in the enforcement of its
terms, or any other kind of deceit. Such unprofessional and proscribed conduct is attributable to
petitioner airline.
It must, of course, be borne in mind that moral damages are not awarded to penalize the
defendant but to compensate the plaintiff. In a contractual or quasi-contractual relationship,
exemplary damages, on the other hand, may be awarded only if the defendant had acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner. Attorney's fees in the concept of damages
may be awarded where there is a finding of bad faith. The evidence on record amply sustains that the
awards assessed against petitioner are justified and reasonable.

FABRE v. CA (July 1996)

Civil Law/Damages: The CA erred in increasing the amount of compensatory damages because
private respondents did not question this award as inadequate. To the contrary, the award of P500,000
by the RTC as actual damages is reasonable considering the contingent nature of her income as a
casual employee of a company and as distributor of beauty products and the fact that the possibility
that she might be able to work again has not been foreclosed.
With respect to the other awards:
· Moral damages are granted since the driver's gross negligence amounted to bad faith.
· Exemplary damages and attorney's fees proper. Error for CA to increase award of moral
damages and reduce attorney's fees, for same reason as compensatory damages.
· Bus driver and owners jointly and severally liable.

BALIWAG TRANSIT v. CA (G.R. No. 116624, September 1996)

Civil Law/Torts and Damages/ Employer's Vicarious Liability: 1) Circumstances showing negligence
of driver: he boarded the bus, sat on the driver's seat and was at the steering wheel when the bus
moved pinning down the deceased who was reparing the defective brake system below. The driver
should have known that his brake system was being repaired as he was the one who told the
deceased to do so. The driver should have parked the bus properly and safely. After alighting from
the bus to tell the gasman to fill the tank, he should have placed a stopper or any hard object against a
tire or two of the bus. But without taking the necessary precautions, he boarded the bus, causing it to
move, which lead to the accident.
2) Presumption of negligence on employer's part in the selection of or supervision over employee
is rebuttable by clear showing of good father diligence. Hence, to escape solidary liability for quasi-
delict committed by an employee, the employer must adduce sufficient proof that it exercised such
degree of care. (citations omitted)
3) Damages awarded were the following: actual damages (life expectancy and loss of earning
capacity); pecuniary loss, loss of support and service; and moral and mental suffering. The loss of
earning capacity is based on 2 factors: number of years on the basis of which the damages shall be
computed, and the rate at which the loss sustained by the heirs should be fixed [Gives Villa Rey
formula].

FOOD TERMINAL, INC. v. CA (September 1996)

Civil Law/Damages/Interest: When an obligation not constituting a loan or forbearance of money is
breached then an interest on the amount of damages awarded may be imposed at the court's
discretion at the rate of 6% p.a. in accordance with Art. 2209, NCC. However, as declared in Eastern
Shipping v. CA (234 SCRA 78), the interim period from the finality of the judgment awarding a
monetary claim and until payment thereof, is deemed to be equivalent to a forbearance of credit.
Thus, from the time the judgment becomes final until its full satisfaction, the applicable rate of legal
interest shall be 12%.
The award of the trial court shall earn interest at the rate of 6% p.a. from 15 May 1984 (the
date fixed by the trial court) until fully satisfied, but before judgment becomes final. From date of
finality of judgment until the obligation is totally paid, a rate of 12% is imposed.

PEOPLE v. SEQUIÑO (G.R. No. 117397, November 1996)

Civil Law/ Damages/ Award of Moral Exemplary Damages: There is no factual basis for the award of
moral and exemplary damages insofar as 2 of the private complainants are concerned since they did
not ask for and testify thereon. Only 1 private complainant asked for moral damages of P50,000.00
for her worries due to the death of her husband. As to exemplary damages, the law is clear that they
are recoverable in criminal cases only when the crime was committed with one or more aggravating
circumstances, none of which are proven here.

1995

FAR EAST BANK v. CA (241 SCRA 671 [Feb. 1995])

Civil Law/Torts & Damages: A quasi-delict can be the cause for breaching a contract that might
thereby permit the application of applicable tort principles even where there is a pre-existing contract
between plaintiff and defendant.

CHUA v. CA (242 SCRA 341[Mar 1995])

Civil Law/Torts & Damages/ Damages for Malicious Prosecution: Malicious prosecution has been
expanded to include baseless civil suits which are meant to harass or humiliate a defendant, but both
malice and lack of probable cause must be clearly shown to justify an award of damages.