COMPILATION OF DIGESTED CASES • To avoid collision, Capt. Jusep ordered a full stop of the vessel.
IN TORTS AND DAMAGES He succeeded in avoiding the power barge, but when the engine
CASES ON QUASI-DELICT
1. DELSAN TRANSPORT VS. C&A CONSTRUCTION, G.R NO.
156034, OCTOBER 1, 2003
CASE LAW/ DOCTRINE:
Under the emergency rule, one who suddenly finds himself in a
place of danger, and is required to act without time to consider the best
means that may be adopted to avoid the impending danger, is not guilty
of negligence, if he fails to adopt what subsequently and upon reflection
may appear to have been a better method, UNLESS the danger in which
he finds himself is brought about by his own negligence.
FACTS:
• Respondent C & A Construction, Inc. was engaged by the
National Housing Authority (NHA) to construct a deflector wall
at the Vitas Reclamation Area in Vitas, Tondo, Manila. The
project was completed in 1994 but it was not formally turned
over to NHA.
• October 9, 1994: M/V Delsan Express, a ship owned and
operated by petitioner Delsan Transport Lines, Inc., anchored at
the Navotas Fish Port for the purpose of installing a cargo pump
and clearing the cargo oil tank.
• October 20, 1994, 12:00 mn: Captain Demetrio T. Jusep of M/V
Delsan Express received a report from his radio head operator
in Japan that a typhoon was going to hit Manila in about eight
(8) hours.
• October 21, 1994, 8:35 am: Capt. Jusep tried to seek shelter at
the North Harbor but could not enter the area because it was
already congested.
• October 21, 1994, 10:00 a.m: Capt. Jusep decided to drop anchor
at the vicinity of Vitas mouth, 4 miles away from a Napocor
power barge. At that time, the waves were already reaching 8 to
10 feet high.
• Capt. Jusep ordered his crew to go full ahead to counter the
wind which was dragging the ship towards the Napocor power
barge.
was re-started and the ship was maneuvered full astern, it hit
the deflector wall constructed by respondent. The damage
caused by the incident amounted to P456,198.24.
• Respondent demanded payment of the damage from petitioner
but the latter refused to pay.
• Consequently, respondent filed a complaint for damages with
the Regional Trial Court of Manila.
• In its answer, petitioner claimed that the damage was caused by
a fortuitous event.
• The trial court dismissed the complaint. It ruled that petitioner
was not guilty of negligence because it had taken all the
necessary precautions to avoid the accident. Applying the
"emergency rule", it absolved petitioner of liability because the
latter had no opportunity to adequately weigh the best solution
to a threatening situation. It further held that even if the
maneuver chosen by petitioner was a wrong move, it cannot be
held liable as the cause of the damage sustained by respondent
was typhoon "Katring", which is an act of God.
• The Court of Appeals, reversed and set aside the decision of the
trial court. It found Capt. Jusep guilty of negligence in deciding
to transfer the vessel to the North Harbor only at 8:35 a.m. of
October 21, 1994 and thus held petitioner liable for damages.
• Hence, petitioner filed the instant petition contending that
Capt. Jusep was not negligent in waiting until 8:35 in the
morning of October 21, 1994 before transferring the vessel to the
North Harbor inasmuch as it was not shown that had the
transfer been made earlier, the vessel could have sought shelter.
ISSUE:
Whether or not Capt. Jusep is liable.
RULING:
Article 2176 of the Civil Code provides that whoever by act or
omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is
no pre-existing contractual relation between the parties, is called a
quasi-delict. The test for determining the existence of negligence in a
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particular case may be stated as follows: Did the defendant in doing the
alleged negligent act use the reasonable care and caution which an
ordinary prudent person would have used in the same situation? If not,
then he is guilty of negligence.
The Court of Appeals was correct in holding that Capt. Jusep was
negligent in deciding to transfer the vessel only at 8:35 in the morning
of October 21, 1994. As early as 12:00 midnight of October 20, 1994, he
received a report from his radio head operator in Japan that a typhoon
was going to hit Manila after 8 hours. This, notwithstanding, he did
nothing, until 8:35 in the morning of October 21, 1994, when he decided
to seek shelter at the North Harbor, which unfortunately was already
congested. The finding of negligence cannot be rebutted upon proof
that the ship could not have sought refuge at the North Harbor even if
the transfer was done earlier. It is not the speculative success or failure
of a decision that determines the existence of negligence in the present
case, but the failure to take immediate and appropriate action under the
circumstances. Capt. Jusep, despite knowledge that the typhoon was to
hit Manila in 8 hours, complacently waited for the lapse of more than 8
hours thinking that the typhoon might change direction. He cannot
claim that he waited for the sun to rise instead of moving the vessel at
midnight immediately after receiving the report because of the
difficulty of traveling at night. The hour of 8:35 a.m. is way past sunrise.
Furthermore, he did not transfer as soon as the sun rose because,
according to him, it was not very cloudy and there was no weather
disturbance yet.
When he ignored the weather report notwithstanding reasonable
foresight of harm, Capt. Jusep showed an inexcusable lack of care and
caution which an ordinary prudent person would have observed in the
same situation. Had he moved the vessel earlier, he could have had
greater chances of finding a space at the North Harbor considering that
the Navotas Port where they docked was very near North Harbor. Even
if the latter was already congested, he would still have time to seek
refuge in other ports.
The trial court erred in applying the emergency rule. Under this
rule, one who suddenly finds himself in a place of danger, and is
required to act without time to consider the best means that may be
adopted to avoid the impending danger, is not guilty of negligence, if
he fails to adopt what subsequently and upon reflection may appear to
have been a better method, unless the danger in which he finds himself
is brought about by his own negligence. Clearly, the emergency rule is
not applicable to the instant case because the danger where Capt. Jusep
found himself was caused by his own negligence.
Moreover, whenever an employee’s negligence causes damage
or injury to another, there instantly arises a presumption juris tantum
that the employer failed to exercise diligentissimipatris families in the
selection (culpa in eligiendo) or supervision (culpa in vigilando) of its
employees. To avoid liability for a quasi-delict committed by his
employee, an employer must overcome the presumption by presenting
convincing proof that he exercised the care and diligence of a good
father of a family in the selection and supervision of his employee.
In the case at bar, however, petitioner presented no evidence
that it formulated rules/guidelines for the proper performance of
functions of its employees and that it strictly implemented and
monitored compliance therewith. Failing to discharge the burden,
petitioner should therefore be held liable for the negligent act of Capt.
Jusep.
2. ALEKO LILUIS ET., AL VS.THE MANILA RAILROAD COMPANY
G.R NO. L-39587, MARCH 24, 1934
FACTS:
The petitioner and his family were travelling to Pagsanjan.
Suddenly, when they were about to cross a road they were surprised to
know that it was a railroad for failing to have installed any warning
device. The petitioner suffered damages and injuries. Petitioner filed a
complaint for damages based on quasi-delict against the employer of
the railroad company unmanned by his employees.
ISSUE: Whether or not the respondent should be held liable for qausi-
delict.
RULING:
Prior to the accident, there had been no notice nor sign of
the existence of the crossing, nor was there anybody to warn the
public of approaching trains. The flagman or switchman arrived
after the collision, coming from the station with a red flag in one
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hand and a green one in the other, both of which were wound on
their respective sticks. The said flagman and switchman had many
times absented himself from his post at the crossing upon the arrival of
a train. The train left Bay station a little late and therefore traveled at
great speed.
Upon examination of the oral as well as of the documentary
evidence which the parties presented at the trial in support of their
respective contentions, and after taking into consideration all the
circumstances of the case, this court is of the opinion that the accident
was due to negligence on the part of the defendant-appellant company,
for not having had on that occasion any semaphore at the crossing at
Dayap, to serve as a warning to passers-by of its existence in order that
they might take the necessary precautions before crossing the railroad;
and, on the part of its employees — the flagman and switchman, for
not having remained at his post at the crossing in question to warn
passers-by of the approaching train; the stationmaster, for failure to
send the said flagman and switchman to his post on time; and the
engineer, for not having taken the necessary precautions to avoid an
accident, in view of the absence of said flagman and switchman, by
slackening his speed and continuously ringing the bell and blowing the
whistle before arriving at the crossing. Although it is probable that the
defendant-appellant entity employed the diligence of a good father of a
family in selecting its aforesaid employees, however, it did not employ
such diligence in supervising their work and the discharge of their
duties because, otherwise, it would have had a semaphore or sign at the
crossing and, on previous occasions as well as on the night in question,
the flagman and switchman would have always been at his post at the
crossing upon the arrival of a train. The diligence of a good father of a
family, which the law requires in order to avoid damage, is not confined
to the careful and prudent selection of subordinates or employees but
includes inspection of their work and supervision of the discharge of their
duties.
3. AMADO PICART VS.FRANK SMITH G.R. NO. L-12219, MARCH 15,
1918
FACTS:
It appears that upon the occasion in question the plaintiff was
riding on his pony over said bridge. Before he had gotten half way
across, the defendant approached from the opposite direction in an
automobile, going at the rate of about ten or twelve miles per hour. As
the defendant neared the bridge he saw a horseman on it and blew his
horn to give warning of his approach. He continued his course and
after he had taken the bridge he gave two more successive blasts, as it
appeared to him that the man on horseback before him was not
observing the rule of the road.
The plaintiff, it appears, saw the automobile coming and heard
the warning signals. However, being perturbed by the novelty of the
apparition or the rapidity of the approach, he pulled the pony closely
up against the railing on the right side of the bridge instead of going to
the left. He says that the reason he did this was that he thought he did
not have sufficient time to get over to the other side. The bridge is
shown to have a length of about 75 meters and a width of 4.80 meters.
As the automobile approached, the defendant guided it toward his left,
that being the proper side of the road for the machine. In so doing the
defendant assumed that the horseman would move to the other side.
The pony had not as yet exhibited fright, and the rider had made no
sign for the automobile to stop. Seeing that the pony was apparently
quiet, the defendant, instead of veering to the right while yet some
distance away or slowing down, continued to approach directly toward
the horse without diminution of speed. When he had gotten quite near,
there being then no possibility of the horse getting across to the other
side, the defendant quickly turned his car sufficiently to the right to
escape hitting the horse alongside of the railing where it as then
standing; but in so doing the automobile passed in such close proximity
to the animal that it became frightened and turned its body across the
bridge with its head toward the railing. In so doing, it as struck on the
hock of the left hind leg by the flange of the car and the limb was
broken. The horse fell and its rider was thrown off with some violence.
From the evidence adduced in the case we believe that when the
accident occurred the free space where the pony stood between the
automobile and the railing of the bridge was probably less than one and
one half meters. As a result of its injuries the horse died. The plaintiff
received contusions which caused temporary unconsciousness and
required medical attention for several days.
ISSUE: Whether or not the defendant is liable for negligence.
RULING:
The test by which to determine the existence of negligence in a
particular case may be stated as follows: Did the defendant in doing
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the alleged negligent act use that reasonable care and caution
that a person would have used in the same situation? If not, then
he is guilty of negligence.
It goes without saying that the plaintiff himself was not free
from fault, for he was guilty of antecedent negligence in planting
himself on the wrong side of the road. But as we have already stated,
the defendant was also negligent; and in such case the problem always
is to discover which agent is immediately and directly responsible. It
will be noted that the negligent acts of the two parties were not
contemporaneous, since the negligence of the defendant succeeded the
negligence of the plaintiff by an appreciable interval. Under these
circumstances the law is that the person who has the last fair chance
to avoid the impending harm and fails to do so is chargeable with
the consequences, without reference to the prior negligence of the
other party.
4. PANTRANCO NORTH EXPRESS, INC. VS. BAESA ET., AL G.R.
NO 795051, NOVEMBER 14, 1989
FACTS:
At about 7:00 o’clock in the morning of June 12, 1981, the
spouses Ceasar and Marilyn Baesa and their children Harold Jim,
Marcelino and Maricar, together with spouses David Ico and Fe O. Ico
with their son Erwin Ico and seven other persons, were aboard a
passenger jeepney on their way to a picnic at Malalam River, Ilagan,
Isabela, to celebrate the fifth wedding anniversary of Ceasar and
Marilyn Baesa. The group, numbering fifteen (15) persons, rode in the
passenger jeepney driven by David Ico, who was also the registered
owner thereof. From Ilagan, Isabela, they proceeded to Barrio
Capayacan to deliver some viands to one Mrs. Bascos and thenceforth
to San Felipe, taking the highway going to Malalam River. Upon
reaching the highway, the jeepney turned right and proceeded to
Malalam River at a speed of about 20 kph. While they were proceeding
towards Malalam River, a speeding PANTRANCO bus from Aparri, on
its regular route to Manila, encroached on the jeepney’s lane while
negotiating a curve, and collided with it. In its answer, PANTRANCO,
aside from pointing to the late David Ico’s alleged negligence as the
proximate cause of the accident, invoked the defense of due diligence
in the selection and supervision of its driver, Ambrosio Ramirez. The
CFI rendered decision against petitioner. The CA affirmed the decision
of the trial court.
ISSUE:
Whether or not the petitioner is liable for quasi-delict.
RULING:
Contrary to the petitioner’s contention, the doctrine of "last
clear chance" finds no application in this case. For the doctrine to be
applicable, it is necessary to show that the person who allegedly
had the last opportunity to avert the accident was aware of the
existence of the peril or should, with exercise of due care, have
been aware of it.
Moreover, both the trial court and the Court of Appeals found that
at the time of the accident the Pantranco bus was speeding towards
Manila [CA Decision, p. 2; Rollo, p. 45]. By the time David Ico must
have realized that the bus was not returning to its own lane, it was
already too late to swerve the jeepney to his right to prevent an
accident. The speed at which the approaching bus was running
prevented David Ico from swerving the jeepney to the right shoulder of
the road in time to avoid the collision. Thus, even assuming that the
jeepney driver perceived the danger a few seconds before the actual
collision, he had no opportunity to avoid it. This Court has held that
the last clear chance doctrine "can never apply where the party
charged is required to act instantaneously, and if the injury
cannot be avoided by the application of all means at hand after
the peril is or should have been discovered" [Ong v. Metropolitan
Water District, supra]
The finding of negligence on the part of its driver Ambrosio
Ramirez gave rise to the presumption of negligence on the part of
petitioner and the burden of proving that it exercised due diligence not
only in the selection of its employees but also in adequately supervising
their work rests with the petitioner [Lilius v. Manila Railroad Company,
59 Phil. 758 (1934); Umali v. Bacani, G.R. No. L-40570, June 30, 1976, 69
SCRA 623]. Contrary to petitioner’s claim, there is no presumption
that the usual recruitment procedures and safety standards were
observed. The mere issuance of rules and regulations and the
formulation of various company policies on safety, without
showing that they are being complied with, are not sufficient to
exempt petitioner from liability arising from the negligence of its
Page 4 of 28
employee. It is incumbent upon petitioner to show that in recruiting
and employing the erring driver, the recruitment procedures and
company policies on efficiency and safety were followed. Petitioner
failed to do this. Hence, the Court finds no cogent reason to disturb the
finding of both the trial court and the Court of Appeals that the
evidence presented by the petitioner, which consists mainly of the
uncorroborated testimony of its Training Coordinator, is insufficient to
overcome the presumption of negligence against petitioner.
5. VICENTE VERGARA VS.CA AND AMADEO AZARCON, G.R. NO.
77679, SEPTEMBER 30, 1987
FACTS:
Martin Belmonte was driving a cargo truck owned by petitioner
when it rammed the store residence of the private respondent. The
private respondent filed a case for damages. Petitioner argues that his
driver Martin Belmonte operated said cargo truck in a very diligent and
careful manner; that the steering wheel refused to respond to his effort
and as a result of a blown-out tire and despite application of his
brakes, the said cargo truck hit the store-residence of plaintiff and that
the said accident was an act of God for which he cannot be held liable.
The trial court rendered judgment in favor of private respondent. The
CA affirmed the ruling of the trial court.
ISSUE:
Whether or not the failure of the driver of the truck to apply
break due to blown-out tire was an act of God.
RULING: The findings of said court, affirmed by the respondent
court, which we are not prepared to now disturb, show that the fact of
occurrence of the "vehicular accident" was sufficiently established by
the policy report and the testimony of Patrolman Masiclat. And the fact
of negligence may be deduced from the surrounding circumstances
thereof. According to the police report, "the cargo truck was
travelling on the right side of the road going to Manila and then it
crossed to the center line and went to the left side of the highway;
it then bumped a tricycle; and then another bicycle; and then said
cargo truck rammed the store warehouse of the plaintiff."
Contrary to the claim of the petitioner, a mishap caused by
defective brakes cannot be consideration as fortuitous in character.
Certainly, the defects were curable and the accident preventable.
6. TEODORO UMALI VS HON. BACALI AND FIDEL H. SAYNES GR
NO L-40570, JANUARY 30, 1976
FACTS:
A storm hit the Municipality of Alcala Pangasinan. During the
storm there were banana plants located above the transmission lines.
The said banana’s fell down on the transmission lines and the live wires
were cut and had fallen to the ground. The following morning, the
Brgy., Captain saw the broken electric wire and warned the people not
to get near it. He called a laborer of the Electric Plant nearby and the
latter seek the help of the lineman as he was incapable of fixing the
wire. The live wire was left unattended. Unfortunately, the son of
private respondent got in contact with it and the boy died due to
electrocution. It was only after the incident that the live wire was
attended thereto. The Private respondent file a case for damages based
on quasi-delict. The petitioner argued that he that he could not be liable
under the concept of quasi-delict or tort as owner and manager of the
Alcala Electric Plant because the proximate cause of the boy's death
electrocution could not be due to any negligence on his part, but rather
to a fortuitous event-the storm that caused the banana plants to fall and
cut the electric line-pointing out the absence of negligence on the part of
his employee CiprianoBaldomero who tried to have the line repaired and
the presence of negligence of the parents of the child in allowing him to
leave his house during that time.
ISSUE:
Whether or not the petitioner can be held liable for damages
based on quasi-delict.
RULING:
A careful examination of the record convinces us that a series of
negligence on the part of defendants' employees in the Alcala Electric
Plant resulted in the death of the victim by electrocution. First, by the
very evidence of the defendant, there were big and tall banana plants at
the place of the incident standing on an elevated ground which were
about 30 feet high and which were higher than the electric post
supporting the electric line, and yet the employees of the defendant
Page 5 of 28
who, with ordinary foresight, could have easily seen that even in case of
moderate winds the electric line would be endangered by banana
plants being blown down, did not even take the necessary precaution to
eliminate that source of danger to the electric line. Second, even after
the employees of the Alcala Electric Plant were already aware of the
possible damage the storm of May 14, 1972, could have caused their
electric lines, thus becoming a possible threat to life and property, they
did not cut off from the plant the flow of electricity along the lines, an
act they could have easily done pending inspection of the wires to see if
they had been cut. Third, employee CiprianoBaldomero was negligent
on the morning of the incident because even if he was already made
aware of the live cut wire, he did not have the foresight to realize that
the same posed a danger to life and property, and that he should have
taken the necessary precaution to prevent anybody from approaching
the live wire; instead Baldomero left the premises because what was
foremost in his mind was the repair of the line, obviously forgetting
that if left unattended to it could endanger life and property.
The real proximate cause was the fallen live wire which posed a
threat to life and property on that morning due to the series of
negligence adverted to above committed by defendants' employees and
which could have killed any other person who might by accident get
into contact with it. Stated otherwise, even if the child was allowed to
leave the house unattended due to the parents' negligence, he would
not have died that morning where it not for the cut live wire he
accidentally touched.
Art. 2179 of the Civil Code provides that if the negligence of the
plaintiff (parents of the victim in this case) was only contributory, the
immediate and proximate cause of the injury being the defendants' lack
of due care, the plaintiff may recover damages, but the courts shall
mitigate the damages to be awarded. This law may be availed of by the
petitioner but does not exempt him from liability. Petitioner's liability
for injury caused by his employee’s negligence is well defined in par. 4,
of Article 2180 of the Civil Code, which states:
“The owner and manager 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 tile occasion of
their functions.”
The negligence of the employee is presumed to be the
negligence of the employer because the employer is supposed to
exercise supervision over the work of the employees. This liability of
the employer is primary and direct.
7. BUSTAMANTE ET., AL. VS. CA, FEDERICO DEL PILAR AND
EDILDERTO MONTESIANO GR NO. 89880 FEBUARY 6, 1991
FACTS:
A sand and gravel truck was driven by Montesiano, the driver,
owned by Del Pilar. A jeepney was driven by Susulin which carried the
victims. Both vehicles were situated in a highway on the opposite sides
of the road. While the truck was 30 meters away from the jeepney, the
driver noticed that the front wheels are wiggling towards his lane but
Montesiano regarded this as a joke. The truck driver, overtake a Kubota
hand tractor along the shoulder of the highway. Unfortunately, while
the bus was in the process of overtaking the tractor, the two vehicles
sideswiped each other. As a result, the passengers of the jeepney died.
The petitioner represented the victims in filing for a case for damages
based on quasi-delict. the trial court ruled "that the negligent acts of
both drivers contributed to or combined with each other in
directly causing the accident which led to the death of the
aforementioned persons. It could not be determined from the
evidence that it was only the negligent act of one of them which
was the proximate cause of the collision. In view of this, the
liability of the two drivers for their negligence must be solidary.”
However, the CA reversed and set aside the ruling of the trial court
based on the doctrine of last clear chance by elucidating that it was the
jeepney who has control of the circumstances because in a national
highway, the vehicle in a descending manner has the control or
momentum of the situation while the ascending vehicle loses its initial
speed in doing so.
ISSUE:
Whether or not the doctrine of last clear chance is properly
applied.
RULING:
The CA improperly apply the doctrine of last clear chance. The
practical import of the doctrine is that a negligent defendant is held
liable to a negligent plaintiff, or even to a plaintiff who has been grossly
Page 6 of 28
negligent in placing himself in peril, if he, aware of the plaintiff’s peril, negligence on the part of the respondent. Jalipa thereafter alleged that
or according to some authorities, should have been aware of it in the he no longer owns the vehicle as it was sold to Abraham Abubakar. The
reasonable exercise of due case, had in fact an opportunity later than trial court rendered judgment against petitioner. The CA affirmed the
that of the plaintiff to avoid an accident. ruling of the trail court.

In the recent case of Philippine Rabbit Bus Lines, Inc. v. ISSUE:

Intermediate Appellate Court, et al. (G.R. Nos. 66102-04, August 1. Whether or not there was contributory negligence on the
30, 1990), the Court citing the landmark decision held in the case part of the respondent.
of Anuran, et al. v. Buno, et al. (123 Phil. 1073) ruled that the 2. Whether or not the petitioner is jointly liable with Jalipa.
principle of "last clear chance" applies "in a suit between the
RULING:
owners and drivers of colliding vehicles. It does not arise where a
“When the plaintiff's own negligence was the immediate and
passenger demands responsibility from the carrier to enforce its
proximate cause of his injury, he cannot recover damages. But if his
contractual obligations. For it would be inequitable to exempt the
negligence was only contributory, the immediate and proximate cause
negligent driver of the jeepney and its owners on the ground that the
of the injury being the defendant's lack of due care, the plaintiff may
other driver was likewise guilty of negligence."
recover damages, but the courts shall mitigate the damages to be
awarded.
Furthermore, "as between defendants: The doctrine cannot
be extended into the field of joint tortfeasors as a test of whether
The underlying precept on contributory negligence is that a
only one of them should be held liable to the injured person by
plaintiff who is partly responsible for his own injury should not be
reason of his discovery of the latter's peril, and it cannot be
entitled to recover damages in full, but must proportionately bear
invoked as between defendants concurrently negligent. As against
the consequences of his own negligence. The defendant is thus
third persons, a negligent actor cannot defend by pleading that
held liable only for the damages actually caused by his negligence.
another had negligently failed to take action which could have
avoided the injury."
In this case, records show that when the accident happened, the
victim was standing on the shoulder, which was the uncemented
8. MEDARDO CADIENTE VS.BITHUEL MACAS GR NO. 161946,
portion of the highway. As noted by the trial court, the shoulder was
NOVEMBER 14, 2008.
intended for pedestrian use alone. Only stationary vehicles, such as
those loading or unloading passengers may use the shoulder. Running
FACTS:
vehicles are not supposed to pass through the said uncemented portion
The respondent is a student. He was standing on the shoulder
of the highway. However, the Ford Fiera in this case, without so much
of the road about 2 ½ meters away when he was bumped by a car
as slowing down, took off from the cemented part of the highway,
driven by Chona Cimafranca. The tortfeasor brought the respondent to
inexplicably swerved to the shoulder, and recklessly bumped and ran
the hospital. Respondent suffered injuries and the torfeasor absconded
over an innocent victim. The victim was just where he should be when
and disappeared. The car was registered in the name of petitioner. The
the unfortunate event transpired.
father of the respondent filed a case for damages based on quasi-delict
In PCI Leasing and Finance, Inc. v. UCPB General Insurance
against the tortfeasor and the petitioner being the registered owner of
Co., Inc., that the registered owner of any vehicle, even if he had
the vehicle. The petitioner argued that he cannot be held liable because
already sold it to someone else, is primarily responsible to the
the car was already sold to Jalipa and that the respondent was negligent
public for whatever damage or injury the vehicle may cause. We
due to the fact a witness, in particular Rosalinda who was only 2 ½
explained:
meter away from the vehicle was not hit, there must some contributory

Page 7 of 28

'Were a registered owner allowed to evade responsibility by
proving who the supposed transferee or owner is, it would be easy for
him, by collusion with others or otherwise, to escape said responsibility
and transfer the same to an indefinite person, or to one who possesses
no property with which to respond financially for the damage or injury
done. A victim of recklessness on the public highways is usually
without means to discover or identify the person actually causing the
injury or damage. He has no means other than by a recourse to the
registration in the Motor Vehicles Office to determine who is the
owner. The protection that the law aims to extend to him would
become illusory were the registered owner given the opportunity to
escape liability by disproving his ownership.
In the case of Villanueva v. Domingo, we said that the policy
behind vehicle registration is the easy identification of the owner
who can be held responsible in case of accident, damage or injury
caused by the vehicle. This is so as not to inconvenience or
prejudice a third party injured by one whose identity cannot be
secured.
9. PHEONIX CONSTRUCTION, INC., AND ARMANDO U.
CARBONEL SV. IAC AND LEONARDO DIONISIO GR NO L-65259
MARCH 10, 1987.
FACTS:
Leonardo Dionisio was driving home after a cocktail party
wherein he had a shot or two of liquor. While he was driving home and
after he crossed an intersection and while proceeding thereat, the
headlights of his car suddenly failed. When he switches the headlight
on, he saw a dump truck parked askew 2 ½ meters from his car on the
right side of the street where Dionisio was. However, Dionisio bumped
the truck as he could not swerve to the left. As a result, Dionisio
suffered injury. Dionissio filed for damages basically claiming that
the legal and proximate cause of his injuries was the negligent
manner in which Carbonel had parked the dump truck entrusted
to him by his employer Phoenix. Phoenix and Carbonel, on the
other hand, countered that the proximate cause of Dionisio's
injuries was his own recklessness in driving fast at the time of the
accident, while under the influence of liquor, without his
headlights on and without a curfew pass. Phoenix also sought to
establish that it had exercised due care in the selection and
supervision of the dump truck driver. The trial court rendered
decision in favor of Dionisio. The CA affirmed the ruling of the trial
court. Both courts adopting the reasoning of Dionisio. The petitioners
Phoenix and Carbonel contend that if there was negligence in the
manner in which the dump truck was parked, that negligence was
merely a "passive and static condition" and that private respondent
Dionisio's recklessness constituted an intervening, efficient cause
determinative of the accident and the injuries he sustained.
ISSUE:
(a) Whether or not private respondent Dionisio had a curfew pass valid
and effective for that eventful night;
(b) Whether Dionisio was driving fast or speeding just before the
collision with the dump truck;
(c) Whether Dionisio had purposely turned off his car's headlights
before contact with the dump truck or whether those headlights
accidentally malfunctioned moments before the collision; and
(d) Whether Dionisio was intoxicated at the time of the accident.
RULING:
1. It is clear that no curfew pass was found on the person of Dionisio
immediately after the accident nor was any found in his car. The
relevance of possession or non-possession of a curfew pass
that night lies in the light it tends to shed on the other related
issues: whether Dionisio was speeding home and whether he
had indeed purposely put out his headlights before the
accident, in order to avoid detection and possibly arrest by the
police in the nearby police station for travelling after the onset
of curfew without a valid curfew pass.
2. Patrolman Cuyno testified that people who had gathered at the
scene of the accident told him that Dionisio's car was "moving
fast" and did not have its headlights on. Private respondent's
objection fails to take account of the fact that the
testimony of Patrolman Cuyno is admissible not under the
official records exception to the hearsay rule but rather as
part of the res gestae. Testimonial evidence under this
exception to the hearsay rule consists of excited utterances
Page 8 of 28
 made on the occasion of an occurrence or event sufficiently
startling in nature so as to render inoperative the normal
reflective thought processes of the observer and hence
made as a spontaneous reaction to the occurrence or
event, and not the result of reflective thought. We think
that an automobile speeding down a street and suddenly
smashing into a stationary object in the dead of night is a
sufficiently startling event as to evoke spontaneous, rather than
reflective, reactions from observers who happened to be around
at that time. The testimony of Patrolman Cuyno was therefore
admissible as part of the res gestae and should have been
considered by the trial court.
3. It is the petitioners' contention that Dionisio purposely shut off
his headlights even before he reached the intersection so as not
to be detected by the police in the police precinct which he
(being a resident in the area) knew was not far away from the
intersection. We believe that the petitioners' theory is a more
credible explanation than that offered by private respondent
Dionisio — i.e., that he had his headlights on but that, at the
crucial moment, these had in some mysterious if convenient
way malfunctioned and gone off, although he succeeded in
switching his lights on again at "bright" split seconds before
contact with the dump truck.
4. There simply is not enough evidence to show how much liquor
he had in fact taken and the effects of that upon his physical
faculties or upon his judgment or mental alertness. We are also
aware that "one shot or two" of hard liquor may affect different
people differently.
The petitioners, however, urge that the truck driver's
negligence was merely a "passive and static condition" and that
private respondent Dionisio's negligence was an "efficient
intervening cause and that consequently Dionisio's negligence
must be regarded as the legal and proximate cause of the accident
rather than the earlier negligence of Carbonel. We note that the
petitioners' arguments are drawn from a reading of some of the older
cases in various jurisdictions in the United States but we are unable to
persuade ourselves that these arguments have any validity for our
jurisdiction. We note, firstly, that even in the United States, the
distinctions between "cause" and "condition" which the 'petitioners
would have us adopt have already been "almost entirely discredited."
Professors and Keeton make this quite clear:
Cause and condition. Many courts have sought to distinguish
between the active "cause" of the harm and the existing "conditions"
upon which that cause operated. If the defendant has created only a
passive static condition which made the damage possible, the
defendant is said not to be liable. But so far as the fact of causation is
concerned, in the sense of necessary antecedents which have played an
important part in producing the result it is quite impossible to
distinguish between active forces and passive situations, particularly
since, as is invariably the case, the latter are the result of other active
forces which have gone before. The defendant who spills gasoline about
the premises creates a "condition," but the act may be culpable because
of the danger of fire. When a spark ignites the gasoline, the condition
has done quite as much to bring about the fire as the spark; and since
that is the very risk which the defendant has created, the defendant will
not escape responsibility. Even the lapse of a considerable time during
which the "condition" remains static will not necessarily affect liability;
one who digs a trench in the highway may still be liable to another who
fans into it a month afterward. "Cause" and "condition" still find
occasional mention in the decisions; but the distinction is now almost
entirely discredited. So far as it has any validity at all, it must refer to
the type of case where the forces set in operation by the defendant have
come to rest in a position of apparent safety, and some new force
intervenes. But even in such cases, it is not the distinction between
"cause" and "condition" which is important but the nature of the risk
and the character of the intervening cause.
In our view, Dionisio's negligence, although later in point
of time than the truck driver's negligence and therefore closer to
the accident, was not an efficient intervening or independent
cause.What the Petitioners describe as an "intervening cause" was
no more than a foreseeable consequent manner which the truck
driver had parked the dump truck. In other words, the petitioner
truck driver owed a duty to private respondent Dionisio and others
similarly situated not to impose upon them the very risk the truck
Page 9 of 28
driver had created. Dionisio's negligence was not of an independent
and overpowering nature as to cut, as it were, the chain of causation in
fact between the improper parking of the dump truck and the accident,
nor to sever the juris vinculum of liability. It is helpful to quote once
more from Professor and Keeton:
Foreseeable Intervening Causes. If the intervening cause is one
which in ordinary human experience is reasonably to be
anticipated or one which the defendant has reason to anticipate
under the particular circumstances, the defendant may be
negligence among other reasons, because of failure to guard
against it; or the defendant may be negligent only for that reason.
Thus one who sets a fire may be required to foresee that an ordinary,
usual and customary wind arising later wig spread it beyond the
defendant's own property, and therefore to take precautions to prevent
that event. The person who leaves the combustible or explosive
material exposed in a public place may foresee the risk of fire from
some independent source. ... In all of these cases there is an intervening
cause combining with the defendant's conduct to produce the result
and in each case the defendant's negligence consists in failure to
protect the plaintiff against that very risk.
10. GEORGE MCKEE AND ARACELI KOH MCKEE VS. IAC, JAIME
TAYAG AND ROSALINDA MANALO, GR NO L-68102, JULY 16, 1992
FACTS:
This is a vehicular collision case. The cargo truck was driven by
Ruben Galang owned by private respondents. The car was driven by the
father of petitioner with his wife and children in the car. While both car
was approaching the bridge, the cargo truck was bound for manila,
while the car was bound for Angeles City. While approaching the
bridge, the driver of the car swerved to the left into the lane of the
cargo truck because of the two boys who darted from the right side of
the bridge. While the car was on the lane of the truck, the driver
switched on the headlights of the car to signal the truck to reduce its
speed to be able to return to his proper lane but to no avail. Thus, the
driver died and his wife and one of his children and the baby sitter.
As a result, two civil cases were filed. Private respondents
asserted that it was the Ford Escort car which "invaded and
bumped the lane of the truck driven by Ruben Galang. The Trial
court rendered decision dismissing the case for lack of preponderance
of evidence. The CA reversed and set aside the decision of the trail
court stating that the driver of the car was negligent because he
encroached the lane of the truck and that Jose Koh’s negligence was the
immediate and proximate cause of the accident.
ISSUE:
Whether or not there is negligence on the part Jose Koh in
encroaching the lane of the cargo truck.
RULING:
There is merit in the petition. Before We take on the main task
of dissecting the arguments and counter-arguments, some observations
on the procedural vicissitudes of these cases are in order.
Civil Cases Nos. 4477 and 4478, which were for the recovery of
civil liability arising from a quasi-delict under Article 2176 in relation to
Article 2180 of the Civil Code, were filed ahead of Criminal Case No.
3751. Civil Case No. 4478 was eventually consolidated with Civil Case
No. 4477 for joint trial in Branch III of the trial court. The records do
not indicate any attempt on the part of the parties, and it may therefore
be reasonably concluded that none was made, to consolidate Criminal
Case No. 3751 with the civil cases, or vice-versa. The parties may have
then believed, and understandably so, since by then no specific
provision of law or ruling of this Court expressly allowed such a
consolidation, that an independent civil action, authorized under
Article 33 in relation to Article 2177 of the Civil Code, such as the civil
cases in this case, cannot be consolidated with the criminal case.
Indeed, such consolidation could have been farthest from their minds
as Article 33 itself expressly provides that the "civil action shall proceed
independently of the criminal prosecution, and shall require only a
preponderance of evidence." Be that as it may, there was then no legal
impediment against such consolidation. Section 1, Rule 31 of the Rules
of Court, which seeks to avoid a multiplicity of suits, guard against
oppression and abuse, prevent delays, clear congested dockets to
simplify the work of the trial court, or in short, attain justice with the
least expense to the parties litigants, 36 would have easily sustained a
consolidation, thereby preventing the unseeming, if no ludicrous,
spectacle of two (2) judges appreciating, according to their respective
orientation, perception and perhaps even prejudice, the same facts
differently, and thereafter rendering conflicting decisions. Such was
Page 10 of 28
what happened in this case. It should not, hopefully, happen anymore.
In the recent case of Cojuangco vs. Court of Appeals, this Court held
that the present provisions of Rule 111 of the Revised Rules of Court
allow a consolidation of an independent civil action for the recovery of
civil liability authorized under Articles 32, 33, 34 or 2176 of the Civil
Code with the criminal action subject, however, to the condition that
no final judgment has been rendered in that criminal case.
The test of negligence is that “did the defendant in doing the
alleged negligent act use that reasonable care and caution which an
ordinary prudent person would have used in the same situation? If not,
then he is guilty of negligence.
On the basis of the foregoing definition, the test of negligence
and the facts obtaining in this case, it is manifest that no negligence
could be imputed to Jose Koh. Any reasonable and ordinary prudent
man would have tried to avoid running over the two boys by swerving
the car away from where they were even if this would mean entering
the opposite lane. Avoiding such immediate peril would be the natural
course to take particularly where the vehicle in the opposite lane would
be several meters away and could very well slow down, move to the
side of the road and give way to the oncoming car. Moreover, under
what is known as the emergency rule, "one who suddenly finds
himself in a place of danger, and is required to act without time to
consider the best means that may be adopted to avoid the
impending danger, is not guilty of negligence, if he fails to adopt
what subsequently and upon reflection may appear to have been a
better method, unless the emergency in which he finds himself is
brought about by his own negligence."
Considering the sudden intrusion of the two (2) boys into the
lane of the car, we find that Jose Koh adopted the best means possible
in the given situation to avoid hitting them. Applying the above test,
therefore, it is clear that he was not guilty of negligence.
Even if Jose Koh was indeed negligent, the doctrine of last
clear chance finds application here. Last clear chance is a doctrine
in the law of torts which states that the contributory negligence of
the party injured will not defeat the claim for damages if it is
shown that the defendant might, by the exercise of reasonable
care and prudence, have avoided the consequences of the
negligence of the injured party. In such cases, the person who had
the last clear chance to avoid the mishap is considered in law
solely responsible for the consequences thereof.
11. LAMBERT RAMOS VS. COL REALTY CORP. GR NO. 184905,
AUGUST 28, 2009
FACTS:
(C.O.L. Realty) averred that its driver, Aquilino, was slowly
driving the Toyota Altis car at a speed of five to ten kilometers per hour
along Rajah Matanda Street and has just crossed the center lane of
Katipunan Avenue when (Ramos) Ford Expedition violently rammed
against the cars right rear door and fender. With the force of the
impact, the sedan turned 180 degrees towards the direction where it
came from. COL Realty Corp demanded reimbursement for repair of
the car but to no avail of Ramos. Thereafter, the respondent filed a
complaint for damages based on quasi-delict. (Ramos) denied liability
for damages insisting that it was the negligence of Aquilino, (C.O.L.
Realtys) driver, which was the proximate cause of the accident.
(Ramos) maintained that the sedan car crossed Katipunan Avenue from
Rajah Matanda Street despite the concrete barriers placed thereon
prohibiting vehicles to pass through the intersection. (Ramos) further
claimed that he was not in the vehicle when the mishap occurred. He
asserted that he exercised the diligence of a good father of a family in
the selection and supervision of his driver, Rodel. The MetC rendered
decision exculpating Ramos of its liability. COL appealed to the trial
court which affirmed the decision of the MetC. The CA rendered a
decision by modifying the decision of the RTC stating that Aquilino was
negligent in crossing the said intersection as it is prohibited to cross
such intersection as mandated by the MMDA it also ruled that Ramos
was also negligent by moving at a high speed in a busy area and held to
be solidarily liable with Aquilino to pay damages.
ISSUE:
Whether or not Ramos may be held solidarily liable with
RodelAquilino to pay damages to COL Realty Corp despite the findings
that Aquilino was also negligent.
RULING:
Ramos is not solidarily liable to respondent.
Article 2179. When the plaintiffs own negligence was the
immediate and proximate cause of his injury, he cannot recover
damages. But if his negligence was only contributory, the immediate
Page 11 of 28
and proximate cause of the injury being the defendants lack of due
care, the plaintiff may recover damages, but the courts shall mitigate
the damages to be awarded.
Article 2185. Unless there is proof to the contrary, it is presumed
that a person driving a motor vehicle has been negligent if at the time
of the mishap, he was violating any traffic regulation.
If the master is injured by the negligence of a third person and
by the concurring contributory negligence of his own servant or agent,
the latter’s negligence is imputed to his superior and will defeat the
superiors action against the third person, assuming of course that the
contributory negligence was the proximate cause of the injury of which
complaint is made.
Applying the foregoing principles of law to the instant case,
Aquilinos act of crossing Katipunan Avenue via Rajah Matanda
constitutes negligence because it was prohibited by law. Moreover, it
was the proximate cause of the accident, and thus precludes any
recovery for any damages suffered by respondent from the accident.
Proximate cause is defined as that cause, which, in natural
and continuous sequence, unbroken by any efficient intervening
cause, produces the injury, and without which the result would
not have occurred. And more comprehensively, the proximate legal
cause is that acting first and producing the injury, either
immediately or by setting other events in motion, all constituting
a natural and continuous chain of events, each having a close
causal connection with its immediate predecessor, the final event
in the chain immediately effecting the injury as a natural and
probable result of the cause which first acted, under such
circumstances that the person responsible for the first event
should, as an ordinary prudent and intelligent person, have
reasonable ground to expect at the moment of his act or default
that an injury to some person might probably result therefrom.
If Aquilino heeded the MMDA prohibition against crossing
Katipunan Avenue from Rajah Matanda, the accident would not have
happened. This specific untoward event is exactly what the MMDA
prohibition was intended for. Thus, a prudent and intelligent person
who resides within the vicinity where the accident occurred, Aquilino
had reasonable ground to expect that the accident would be a natural
and probable result if he crossed Katipunan Avenue since such crossing
is considered dangerous on account of the busy nature of the
thoroughfare and the ongoing construction of the Katipunan-Boni
Avenue underpass. It was manifest error for the Court of Appeals to
have overlooked the principle embodied in Article 2179 of the Civil
Code, that when the plaintiffs own negligence was the immediate and
proximate cause of his injury, he cannot recover damages.
12. ILOCOS NORTE ELECTRIC COMPANY VS CA, LILIAN LUIS,
JANE YABES, VIRGINIA CID, GLORIA CARAG, AND PURISIMA
JUAN, GR NO. L-53401, NOVEMBER 6, 1989
FACTS:
A typhoon hit llocos Norte. In the morning of June 29, after the
typhoon had stricken. Nana Belen went to the street headed to her
store despite the flooding. While she was walking towards her grocery
store she was electrocuted by a live wire. As a result, a case for damages
was filed against petitioner for its negligence. The petitioner argued
that the deceased could have died simply either by drowning or by
electrocution due to negligence attributable only to herself and not to
petitioner. In this regard, it was pointed out that the deceased, without
petitioner's knowledge, caused the installation of a burglar deterrent by
connecting a wire from the main house to the iron gate and fence of
steel matting, thus, charging the latter with electric current whenever
the switch is on. Petitioner then conjectures that the switch to said
burglar deterrent must have been left on, hence, causing the deceased's
electrocution when she tried to open her gate that early morning of
June 29, 1967. The trail court rendered judgment in favor of the
petitioner and dismissed the case. The CA reversed the decision of the
trial court.
ISSUE:
(1) Whether or not the deceased died of electrocution;
(2) Whether or not petitioner may be held liable for the
deceased's death; and
(3) Whether or not the respondent CA's substitution of the trial
court's factual findings for its own was proper.
RULING:
1. The deceased was electrocuted as testified by Dr. Jovencio Castro
who examined the body of the deceased and corroborated by
Page 12 of 28
 witnesses namely Linda Estavillo and Aida Bulong. the admission
of the res gestae in evidence, the following requisites must be
present: (1) that the principal act, the res gestae, be a startling
occurrence; (2) that the statements were made before the
declarant had time to contrive or devise; (3) that the
statements made must concern the occurrence in question and
its immediately attending circumstances. Linda Alonzo
Estavillo, a ticket seller, and Aida Bulong, a salesgirl, were with the
deceased during that fateful morning of June 29, 1967. This Court
has not been offered any sufficient reason to discredit the
testimonies of these two young ladies. They were one in the
affirmation that the deceased, while wading in the waist-deep flood
on Guerrero Street five or six meters ahead of them, suddenly
screamed "Ay" and quickly sank into the water. When they
approached the deceased to help, they were stopped by the sight of
an electric wire dangling from a post and moving in snake-like
fashion in the water. Ernesto dela Cruz also tried to approach the
deceased, but he turned back shouting that the water was
grounded. These bits of evidence carry much weight. For the
subject of the testimonies was a startling occurrence, and the
declarations may be considered part of the res gestae.
2. On the issue whether or not the defendant incurred liability for the
electrocution and consequent death of the late Isabel Lao Juan,
defendant called to the witness-stand its electrical engineer, chief
lineman, and lineman to show exercise of extraordinary diligence
and to negate the charge of negligence. The witnesses testified in a
general way about their duties and the measures which defendant
usually adopts to prevent hazards to life and limb. From these
testimonies, the lower court found "that the electric lines and
other equipment of defendant corporation were properly
maintained by a well-trained team of lineman, technicians and
engineers working around the clock to insure that these
equipments were in excellent condition at all times." (P. 40,
Record on Appeal) The finding of the lower court, however,
was based on what the defendant's employees were supposed
to do, not on what they actually did or failed to do on the date
in question, and not on the occasion of the emergency
situation brought about by the typhoon.
The lower court made a mistake in assuming that defendant's
employees worked around the clock during the occurrence of the
typhoon on the night of June 28 and until the early morning of June 29,
1967, Engr. Antonio Juan of the National Power Corporation affirmed
that when he first set out on an inspection trip between 6:00 and 6:30
A.M. on June 29, 1967, he saw grounded and disconnected electric lines
of the defendant but he saw no INELCO lineman. The INELCO Office
at the Life theatre on Rizal Street was still closed, even the witnesses of
defendant contradict the finding of the lower court. ConradoAsis,
defendant's electrical engineer, testified that he conducted a general
inspection of the franchise area of the INELCO only on June 30, 1967,
the day following the typhoon. The reason he gave for the delay was
that all their vehicles were submerged. According to Asis, he arrived at
his office at 8:00 A.M. on June 30 and after briefing his men on what to
do they started out. One or two days after the typhoon, the INELCO
people heard "rumors that someone was electrocuted" so he sent one of
his men to the place but his man reported back that there was no
damaged wire. Loreto Abijero, chief lineman of defendant,
corroborated Engr. Juan. He testified that at about 8:00 A.M. on June
29, 1967 Engr. Juan came to the INELCO plant and asked the INELCO
people to inspect their lines. He went with Engr. Juan and their
inspection lasted from 8:00 A.M. to 12:00 noon. FabicoAbijero lineman
of defendant, testified that at about 6:00 on June 29, 1967 the typhoon
ceased. At that time, he was at the main building of the Divine Word
College of Laoag where he had taken his family for refuge.
In times of calamities such as the one which occurred in Laoag
City on the night of June 28 until the early hours of June 29, 1967,
extraordinary diligence requires a supplier of electricity to be in
constant vigil to prevent or avoid any probable incident that might
imperil life or limb. The evidence does not show that defendant did
that. On the contrary, evidence discloses that there were no men
(linemen or otherwise) policing the area, nor even manning its office.
(CA Decision, pp. 24-25, Rollo)
Indeed, under the circumstances of the case, petitioner was
negligent in seeing to it that no harm is done to the general public"...
considering that electricity is an agency, subtle and deadly, the measure
of care required of electric companies must be commensurate with or
proportionate to the danger. The duty of exercising this high degree of
Page 13 of 28
diligence and care extends to every place where persons have a right to
be" (Astudillo vs. Manila Electric, 55 Phil. 427). The negligence of
petitioner having been shown, it may not now absolve itself from
liability by arguing that the victim's death was solely due to a fortuitous
event. "When an act of God combines or concurs with the negligence of
the defendant to produce an injury, the defendant is liable if the injury
would not have resulted but for his own negligent conduct or omission"
(38 Am. Jur., p. 649).
Likewise, the maxim "volenti non fit injuria" relied upon by
petitioner finds no application in the case at bar. It is imperative to
note the surrounding circumstances which impelled the deceased to
leave the comforts of a roof and brave the subsiding typhoon. As
testified by Linda Alonzo Estavillo and Aida Bulong, the deceased,
accompanied by the former two, were on their way to the latter's
grocery store "to see to it that the goods were not flooded." As such,
shall We punish her for exercising her right to protect her property
from the floods by imputing upon her the unfavorable presumption
that she assumed the risk of personal injury? Definitely not. For it has
been held that a person is excused from the force of the rule, that when
he voluntarily assents to a known danger he must abide by the
consequences, if an emergency is found to exist or if the life or property
of another is in peril (65A C.S.C. Negligence(174(5), p. 301), or when he
seeks to rescue his endangered property (Harper and James, "The Law
of Torts." Little, Brown and Co., 1956, v. 2, p. 1167). Clearly, an
emergency was at hand as the deceased's property, a source of her
livelihood, was faced with an impending loss. Furthermore, the
deceased, at the time the fatal incident occurred, was at a place where
she had a right to be without regard to petitioner's consent as she was
on her way to protect her merchandise. Hence, private respondents, as
heirs, may not be barred from recovering damages as a result of the
death caused by petitioner's negligence (ibid., p. 1165, 1166).
13. MA. LOURDES VALENZUELA VS CA, RICHARD LI AND
ALEXANDER COMMERCIAL GR NO. 115024 FEB. 7, 1996
x-x-x-x-x-x
RICHARD LI vs. COURT OF APPEALS and LOURDES
VALENZUELA, GR NO. 117944, February 7, 1996
FACTS:
Plaintiff was traveling for manila when she noticed that she had
a flat tire. She alighted at a lighted place, turned on her emergency
lights, and checked if indeed her tire was flat. The people around the
place where she stopped confirm that indeed her car tire was flat and in
need of immediate fixing. Thereafter, she proceeded to her trunk to get
the tools needed for the repair with the help of a man when suddenly
she was stricken by a car driven by Mr. Li registered in the name of
Alexander Commercial Corp. As a result, she was thrown into the
windshield of the respondent car and was severely injured. Thus, she
filed a case for damages based on quasi-delict. The respondent argued
that he was not negligent in driving the car and considering that it was
raining, visibility was affected and the road was wet. Respondent also
alleged that petitioner was negligent for not putting up any emergency
device. The trial court rendered a decision finding Mr. Li guilty of gross
negligence and Alexander Commercial Corp., solidarily liable for
damages. The CA affirmed the trial court’s ruling but absolved
Alexander Commercial Corp of any liability. Hence the appeal. The
petitioner argues that the registered owner of the car must be held
solidarily liable with the driver due to the ownership of the car. On the
other hand, Mr. Li, on his appeal he argued that petitioner was guilty of
contributory negligence such that their liability should be mitigated.
ISSUE:
Whether or not the respondents are liable for damages based
on quasi-delict.
Whether or not petitioner was guilty of contributory
negligence.
RULING:
Valenzuela's version of the incident was fully corroborated by
an uninterested witness, Rogelio Rodriguez, the owner-operator of an
establishment located just across the scene of the accident. On trial, he
testified that he observed a car being driven at a "very fast" speed,
racing towards the general direction of Araneta Avenue. Rodriguez
further added that he was standing in front of his establishment, just
ten to twenty feet away from the scene of the accident, when he saw
the car hit Valenzuela, hurtling her against the windshield of the
defendant's Mitsubishi Lancer, from where she eventually fell under the
Page 14 of 28
defendant's car. Spontaneously reacting to the incident, he crossed the
street, noting that a man reeking with the smell of liquor had alighted
from the offending vehicle in order to survey the incident. Equally
important, Rodriguez declared that he observed Valenzuela's car
parked parallel and very near the sidewalk,8 contrary to Li's allegation
that Valenzuela's car was close to the center of the right lane. We agree
that as between Li's "self-serving" asseverations and the observations of
a witness who did not even know the accident victim personally and
who immediately gave a statement of the incident similar to his
testimony to the investigator immediately after the incident, the latter's
testimony deserves greater weight. As the court emphasized:
The issue is one of credibility and from Our own examination of
the transcript, we are not prepared to set aside the trial court's reliance
on the testimony of Rodriguez negating defendant's assertion that he
was driving at a safe speed. While Rodriguez drives only a motorcycle,
his perception of speed is not necessarily impaired. He was subjected to
cross-examination and no attempt was made to question his
competence or the accuracy of his statement that defendant was
driving "very fast". This was the same statement he gave to the police
investigator after the incident, as told to a newspaper report (Exh. "P").
We see no compelling basis for disregarding his testimony.
Contributory negligence is conduct on the part of the
injured party, contributing as a legal cause to the harm he has
suffered, which falls below the standard to which he is required to
conform for his own protection. Based on the foregoing definition,
the standard or act to which, according to petitioner Li,
Valenzuela ought to have conformed for her own protection was
not to park at all at any point of Aurora Boulevard, a no parking
zone. We cannot agree.
Courts have traditionally been compelled to recognize that an
actor who is confronted with an emergency is not to be held up to the
standard of conduct normally applied to an individual who is in no
such situation. The law takes stock of impulses of humanity when
placed in threatening or dangerous situations and does not require the
same standard of thoughtful and reflective care from persons
confronted by unusual and oftentimes threatening conditions.
Under the "emergency rule" adopted by this Court in Gan vs.
Court of Appeals, an individual who suddenly finds himself in a
situation of danger and is required to act without much time to
consider the best means that may be adopted to avoid the
impending danger, is not guilty of negligence if he fails to
undertake what subsequently and upon reflection may appear to
be a better solution, unless the emergency was brought by his own
negligence.
While the emergency rule applies to those cases in which
reflective thought, or the opportunity to adequately weigh a
threatening situation is absent, the conduct which is required of an
individual in such cases is dictated not exclusively by the
suddenness of the event which absolutely negates thoroughful
care, but by the over-all nature of the circumstances. A woman
driving a vehicle suddenly crippled by a flat tire on a rainy night
will not be faulted for stopping at a point which is both
convenient for her to do so and which is not a hazard to other
motorists. She is not expected to run the entire boulevard in
search for a parking zone or turn on a dark street or alley where
she would likely find no one to help her. It would be hazardous for
her not to stop and assess the emergency (simply because the
entire length of Aurora Boulevard is a no-parking zone) because
the hobbling vehicle would be both a threat to her safety and to
other motorists. In the instant case, Valenzuela, upon reaching that
portion of Aurora Boulevard close to A. Lake St., noticed that she had a
flat tire. To avoid putting herself and other motorists in danger, she did
what was best under the situation. As narrated by respondent court:
"She stopped at a lighted place where there were people, to verify
whether she had a flat tire and to solicit help if needed. Having been
told by the people present that her rear right tire was flat and that she
cannot reach her home she parked along the sidewalk, about 1 1/2 feet
away, behind a Toyota Corona Car."20 In fact, respondent court noted,
Pfc. Felix Ramos, the investigator on the scene of the accident
confirmed that Valenzuela's car was parked very close to the
sidewalk.21 The sketch which he prepared after the incident showed
Valenzuela's car partly straddling the sidewalk, clear and at a
convenient distance from motorists passing the right lane of Aurora
Boulevard. This fact was itself corroborated by the testimony of witness
Rodriguez.22
Under the circumstances described, Valenzuela did exercise the
standard reasonably dictated by the emergency and could not be
considered to have contributed to the unfortunate circumstances
Page 15 of 28
which eventually led to the amputation of one of her lower extremities.
The emergency which led her to park her car on a sidewalk in Aurora
Boulevard was not of her own making, and it was evident that she had
taken all reasonable precautions.
There is no evidence, not even defendant Li's testimony, that
the visit was in connection with official matters. His functions as
assistant manager sometimes required him to perform work
outside the office as he has to visit buyers and company clients,
but he admitted that on the night of the accident he came from BF
Homes Paranaque he did not have "business from the company"
(pp. 25-26, ten, Sept. 23, 1991). The use of the company car was partly
required by the nature of his work, but the privilege of using it for non-
official business is a "benefit", apparently referring to the fringe benefits
attaching to his position.
Under the civil law, an employer is liable for the negligence of
his employees in the discharge of their respective duties, the basis of
which liability is not respondeat superior, but the relationship of pater
familias, which theory bases the liability of the master ultimately on his
own negligence and not on that of his servant (Cuison v. Norton and
Harrison Co., 55 Phil. 18). Before an employer may be held liable for
the negligence of his employee, the act or omission which caused
damage must have occurred while an employee was in the actual
performance of his assigned tasks or duties (Francis High School vs.
Court of Appeals, 194 SCRA 341). In defining an employer's liability for
the acts done within the scope of the employee's assigned tasks, the
Supreme Court has held that this includes any act done by an
employee, in furtherance of the interests of the employer or for the
account of the employer at the time of the infliction of the injury or
damage (Filamer Christian Institute vs. Intermediate Appellate Court,
212 SCRA 637). An employer is expected to impose upon its employees
the necessary discipline called for in the performance of any act
"indispensable to the business and beneficial to their employer" (at p.
645).
In light of the foregoing, We are unable to sustain the trial
court's finding that since defendant Li was authorized by the company
to use the company car "either officially or socially or even bring it
home", he can be considered as using the company car in the service of
his employer or on the occasion of his functions. Driving the company
car was not among his functions as assistant manager; using it for non-
official purposes would appear to be a fringe benefit, one of the perks
attached to his position. But to impose liability upon the employer
under Article 2180 of the Civil Code, earlier quoted, there must be
a showing that the damage was caused by their employees in the
service of the employer or on the occasion of their functions.
There is no evidence that Richard Li was at the time of the
accident performing any act in furtherance of the company's
business or its interests, or at least for its benefit. The imposition
of solidary liability against defendant Alexander Commercial
Corporation must therefore fail.
14. PEOPLE OF THE PHILIPPINES VS HEINRICH S. RITTER, GR
NO. 88582, MARCH 5, 1991
FACTS:
The accused is an American Citizen. She befriended two
victims, one of which was Rosario Baluyot, a minor. The accused
invited the said victim with another boy to consumed carnal
knowledge. After having been able to consume carnal knowledge he
paid them both money. Thereafter, Rosario Baluyot, 12 years old was
hospitalized due to the insertion of a foreign object in her vaginal
canal. After she was operated, she died the following day. A case for
statutory rape was filed against the accused. However, the case failed
for failure of the prosecution to establish the age of the accused as
there was no credible evidence for that matter. The prosecution tried to
prove the crime of rape but to no avail due to the fact that the
prosecution failed to establish force or intimidation. Thereafter the
accused was tried for homicide but the evidence of the prosecution was
weak as it is merely circumstantial and it cannot defeat the
presumption of innocence of the accused.
ISSUE:
Whether or not the accused may be held civilly liable.
RULING:
Furthermore, it does not necessarily follow that the appellant is
also free from civil liability which is impliedly instituted with the
criminal action. (Rule III, Section 1) The well-settled doctrine is that a
Page 16 of 28
person while not criminally liable, may still be civilly liable. We
reiterate what has been stated in Urbano v. IAC, supra.
. . . While the guilt of the accused in a criminal prosecution must be
established beyond reasonable doubt, only a preponderance of
evidence is required in a civil action for damages. (Article 29, Civil
Code). The judgment of acquittal extinguishes the civil liability of the
accused only when it includes a declaration that the facts from which
the civil liability might arise did not exist. (Padilla v. Court of Appeals,
129 SCRA 559).
The reason for the provisions of Article 29 of the Civil Code,
which provides that the acquittal of the accused on the ground that his
guilt has not been proved beyond reasonable doubt does not
necessarily exempt him from civil liability for the same act or omission,
has been explained by the Code Commission as follows:
The old rule that the acquittal of the accused in a criminal case
also releases him from civil liability is one of the most serious flaws in
the Philippine legal system. It has given rise to numberless instances of
miscarriage of justice, where the acquittal was due to a reasonable
doubt in the mind of the court as to the guilt of the accused. The
reasoning followed is that inasmuch as the civil responsibility is derived
from the criminal offense, when the latter is not proved, civil liability
cannot be demanded.
This is one of those causes where confused thinking leads to
unfortunate and deplorable consequences. Such reasoning fails to draw
a clear line of demarcation between criminal liability and civil
responsibility, and to determine the logical result of the distinction.
The two liabilities are separate and distinct from each other. One
affects the social order and the other, private rights. One is for the
punishment or correction of the offender while the other is for the
reparation of damages suffered by the aggrieved party. The two
responsibilities are so different from each other that article 1813 of the
present (Spanish) Civil Code reads thus: "There may be a compromise
upon the civil action arising from a crime; but the public action for the
imposition of the legal penalty shall not thereby be extinguished." It is
just and proper that, for the purposes of the imprisonment of or fine
upon the accused, the offense should be proved beyond reasonable
doubt. But for the purpose of indemnifying the complaining party, why
should the offense also be proved beyond reasonable doubt? Is not the
invasion or violation of every private right to be proved only by a
preponderance of evidence? Is the right of the aggrieved person any
less private because the wrongful act is also punishable by the criminal
law?
For these reasons, the Commission recommends the adoption
of the reform under discussion. It will correct a serious defect in our
law. It will close up an inexhaustible source of injustice—a cause for
disillusionment on the part of the innumerable persons injured or
wronged.
CASES ON DAMAGES
1. THE INSULAR LIFE ASSURANCE COMPANY, LTD. V. CA AND
SUN BROTHER’S COMPANY
FACTS: Sun Brother’s and Company filed a petition for declaratory
relief with the RTC seeking judicial interpretation of the option to
renew clause under a contract of lease. It alleged that since the lease
contract does not contain any provision as to the rental or any
provision for any new or additional terms or conditions in case of
renewal, the terms and conditions of the renewal of lease should be the
same and the monthly rental should remain as is. RTC ruled against its
favor. Petitioner filed a motion for reconsideration however denied.
The case was appealed to the CA where it affirmed the trial court’s
decision. Hence, the petition.
ISSUE: W/N Petitioner is entitled to an award of moral and exemplary
damages and attorneys fees?
RULING:
As to moral damages, petitioner’s claim is not tenable. The rule
is that moral damages cannot be granted in favor of a corporation.
Being an artificial person and having existence only in legal
contemplation, a corporation has no feelings, no emotions, no sense; it
cannot, therefore, experience physical suffering, mental anguish, fright,
serious anxiety, wounded feelings or moral shock or social humiliation,
which can be suffered only by one having a nervous system.
As to its plea for exemplary damages, the court finds the same
meritorious. In contracts and quasi-contracts, the court may award
exemplary damages if the defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner. Sun Brothers was in
evident bad faith when in the course of negotiations for the third
Page 17 of 28
renewal of the lease contract, it wantonly and oppressively insisted that
it had a unilateral right to renew to lease thereby resulting in an
impasse between the parties and which it took advantage of and used
as a basis for instituting the proceedings for declaratory relief although
it was well-aware that there must be a mutual agreement regarding the
renewal of the contract.
Under Article 2208 of the Civil Code, attorneys fees may be
awarded not only when exemplary damages is awarded but also when a
party is compelled to litigate or to incur expenses to protect its interest
by reason of an unjustified act of the other party. Thus, petitioner is
entitled to its claim for attorneys fees.
2. FILIPINAS BROADCASTING NETWORK, INC., V. AGO MEDICAL
AND EDUCATIONAL CENTER-BICOL CHRISTIAN COLLEGE OF
MEDICINE (AMEC-BCCM) and ANGELITA F. AGO
FACTS: Expos is a radio documentary program hosted by Carmelo Mel
Rima (Rima) and Hermogenes Jun Alegre (Alegre) aired every morning
over DZRC-AM which is owned by herein petitioner. Rima and Alegre
exposed various alleged compalints from students, teachers and parents
against AMEC and its adminstrators. Claiming that the broadcasts were
defamatory, AMEC and Angelita Ago (Ago), as Dean of AMECs College
of Medicine, filed a complaint for damages against FBNI, Rima and
Alegre. The complaint further alleged that AMEC is a reputable
learning institution. With the supposed exposs, petitioner, Rima and
Alegre transmitted malicious imputations, and as such, destroyed the
respondent’s reputation. The trial court rendered a decision against
petitioner which decision was affirmed by CA. Hence, this petition.
ISSUE:1. W/N AMEC is entitled to moral damages since it is a
corporation.
2. W/N the award of attorneys fees is proper.
3. W/N FBNI is solidarily liable with Rima and Alegre for
payment of moral damages, attorneys fees and costs of suit
RULING:1. YES. A juridical person generally is not entitled to moral
damages because, unlike a natural person, it cannot experience
physical suffering, or such sentiments as wounded feelings, serious
anxiety, mental anguish or moral shock. However, AMEC’s claim for
moral damages falls under item 7 of Article 2219 of the Civil Code. The
provision expressly authorizes the recovery of moral damages in cases
of libel, slander or any other form of defamation. It does not qualify
whether the plaintiff is a natural or juridical person. Therefore, a
juridical person such as a corporation can validly complain for libel or
any other form of defamation and claim for moral damages. Moreover,
where the broadcast is libelous per se, the law implies damages. In
such a case, evidence of an honest mistake or the want of
character or reputation of the party libeled goes only in mitigation
of damages. Neither in such a case is the plaintiff required to introduce
evidence of actual damages as a condition precedent to the recovery of
some damages. In this case, the broadcasts are libelous per se.
Thus, AMEC is entitled to moral damages.
2. NO. The award of attorneys fees is not proper because AMEC
failed to justify satisfactorily its claim for attorneys fees.
3. YES. The basis of the present action is a tort. Joint tortfeasors
are jointly and severally liable for the tort which they commit. Joint
tortfeasors are all persons who command, instigate, promote,
ecourage, advise, countenance, cooperate in, aid or abet the
commission of a tort, or who approve of it after it is done, if done for
their benefit. Thus, MEC, correctly anchored its cause of action
against FBNI on Articles 2176 and 2180 of the Civil Code.
3. METROPOLITAN BANK AND TRUST COMPANY (Formerly
Asianbank Corporation) vs. BA FINANCE CORPORATION and
MALAYAN INSURANCE CO., INC., G.R. No. 179952, December 04,
2009
FACTS: LambertoBitanga (Bitanga) obtained from respondent BA
Finance Corporation (BA Finance) a loan to secure which, he
mortgaged his car to respondent BA Finance. Bitanga thus had the
mortgaged car insured by respondent Malayan Insurance Co., Inc.
(Malayan Insurance). The car was stolen. On Bitangas claim, Malayan
Insurance issued a check payable to the order of B.A. Finance
Corporation and LambertoBitanga for P224,500, drawn against China
Banking Corporation (China Bank). The check was crossed with the
notation For Deposit Payees Account Only. Without the indorsement
or authority of his co-payee BA Finance, Bitanga deposited the check to
his account with the Asianbank Corporation (Asianbank), now merged
with petitioner Metropolitan Bank and Trust Company (Metrobank).
Bitanga subsequently withdrew the entire proceeds of the check. In the
meantime, Bitangas loan became past due, but despite demands, he
Page 18 of 28
failed to settle it. BA Finance thereupon demanded the payment of the
value of the check from Asianbank but to no avail, prompting it to file a
complaint for sum of money and damages against Asianbank and
Bitanga alleging that, inter alia, it is entitled to the entire proceeds of
the check.
The trial court, holding that Asianbank was negligent in
allowing Bitanga to deposit the check to his account and to withdraw
the proceeds thereof, without his co-payee BA Finance having either
indorsed it or authorized him to indorse it in its behalf, found
Asianbank and Bitanga jointly and severally liable to BA Finance
following Section 41 of the Negotiable Instruments Law. The appellate
court, affirming the trial court’s decision, held that BA Finance has a
cause of action against [it] even if the subject check had not been
delivered to BA Finance by the issuer itself. Hence, the present Petition
for Review on Certiorari filed by Metrobank to which Asianbank was, as
earlier stated, merged, faulting the appellate court.
ISSUE 1: Whether or not BA Finance has a cause of action against
Petitioner Metropolitan Bank and Trust CO., even if the subject check
had not been delivered to BA Finance by the issuer itself?
RULING: YES. Section 41 of the Negotiable Instruments Law provides:
Where an instrument is payable to the order of two or more payees or
indorsees who are not partners, all must indorse unless the one indorsing
has authority to indorse for the others.
Bitanga alone endorsed the crossed check, and petitioner allowed the
deposit and release of the proceeds thereof, despite the absence of
authority of Bitangas co-payee BA Finance to endorse it on its behalf.
Petitioners argument that since there was neither forgery, nor
unauthorized indorsement because Bitanga was a co-payee in the
subject check, the dictum in Associated Bank v. CA does not apply in
the present case. The payment of an instrument over a missing
indorsement is the equivalent of payment on a forged indorsement or
an unauthorized indorsement in itself in the case of joint payees.
Accordingly, one who credits the proceeds of a check to the
account of the indorsing payee is liable in conversion to the non-
indorsing payee for the entire amount of the check.
ISSUE 2: Whether or not Petitioner is liable to BA Finance for the full
value of the check, under the Negotiable Instruments Law.
RULING: YES. Section 68 of the Negotiable Instruments Law instructs
that joint payees who indorse are deemed to indorse jointly and
severally. When the maker dishonors the instrument, the holder
thereof can turn to those secondarily liable the indorser for recovery.
A collecting bank, Asianbank in this case, where a check is
deposited and which indorses the check upon presentment with the
drawee bank, is an indorser. his is because in indorsing a check to the
drawee bank, a collecting bank stamps the back of the check with the
phrase all prior endorsements and/or lack of endorsement guaranteed
and, for all intents and purposes, treats the check as a negotiable
instrument, hence, assumes the warranty of an indorser.
Petitioner, as the collecting bank or last indorser, generally
suffers the loss because it has the duty to ascertain the genuineness of
all prior indorsements considering that the act of presenting the check
for payment to the drawee is an assertion that the party making the
presentment has done its duty to ascertain the genuineness of prior
indorsements.
ISSUE 3: Whether or not the awarding by the appellate court of
exemplary damages to respondent BA Finance is proper in the absence of
moral, temperate, liquidated or compensatory damages and absence of a
finding of fact that Asianbank acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner.
RULING: The awarding of exemplary damages is proper. Contrary to
petitioner's claim that no moral, temperate, liquidated or
compensatory damages were awarded by the trial court, the RTC did in
fact award compensatory or actual damages of P224,500, the value of
the check, plusinterest thereon. Petitioner’s argument based on Article
2232 of the Civil Code holds no ground since petitioner's liability is
based not on contract or quasi-contract, but rather, on quasi-delict
since there is no pre-existing contractual relation between the parties.
Article 2231 of the Civil Code, which provides that in quasi-delict,
exemplary damages may be granted if the defendant acted with gross
negligence, thus applies. For "gross negligence" implies a want or
absence of or failure to exercise even slight care or diligence, or the
Page 19 of 28
entire absence of care, evincing a thoughtless disregard of
consequences without exerting any effort to avoid them.
4. SIMEX INTERNATIONAL (MANILA) INCORPORATED
vs. THE HONORABLE COURT OF APPEALS AND TRADERS
ROYAL BANK, G.R. No. 88013, March 19, 1990
FACTS: Petitioner, a private corporation engaged in the exportation of
food products, was a depositor maintaining a checking account with
respondent Traders Royal Bank. Petitioner deposited to its account
increasing its balance and subsequently, issued several checks but was
surprised to learn that it had been dishonored for insufficient funds. As
a consequence, petitioner received demand letters from its suppliers for
the dishonored checks. Investigation disclosed that the deposit was not
credited to it. The error was rectified and the dishonored checks were
consequently paid. Petitioner demanded reparation from respondent
bank for its gross and wanton negligence but the latter did not heed.
Petitioner then filed a complaint in the then Court of First Instance of
Rizal claiming from the private respondent moral damages in the sum
of P1,000,000.00 and exemplary damages in the sum of P500,000.00,
plus 25% attorney's fees, and costs.
The trial court held that moral and exemplary damages were
not called for under the circumstances. However, observing that the
plaintiff's right had been violated, the trial court ordered the defendant
to pay nominal damages in the amount of P20,000.00 plus P5,000.00
attorney's fees and costs. This decision was affirmed in toto by the
respondent court. The respondent court found with the trial court that
the private respondent was guilty of negligence but agreed that the
petitioner was nevertheless not entitled to moral damages.
ISSUE: Whether or not petitioner is entitled to damages due to
respondent bank’s negligence.
RULING: YES. As the Court sees it, the initial carelessness of the
respondent bank, aggravated by the lack of promptitude in repairing its
error, justifies the grant of moral damages. This rather lackadaisical
attitude toward the complaining depositor constituted the gross
negligence, if not wanton bad faith, that the respondent court said had
not been established by the petitioner. We shall recognize that the
petitioner did suffer injury because of the private respondent’s
negligence that caused the dishonor of the checks issued by it. The
immediate consequence was that its prestige was impaired because of
the bouncing checks and confidence in it as a reliable debtor was
diminished.
The point is that as a business affected with public interest and
because of the nature of its functions, the bank is under obligation to
treat the accounts of its depositors with meticulous care, always having
in mind the fiduciary nature of their relationship. In the case at bar, it
is obvious that the respondent bank was remiss in that duty and
violated that relationship. What is especially deplorable is that, having
been informed of its error in not crediting the deposit in question to
the petitioner, the respondent bank did not immediately correct it but
did so only one week later or twenty-three days after the deposit was
made. It bears repeating that the record does not contain any
satisfactory explanation of why the error was made in the first place
and why it was not corrected immediately after its discovery. Such
ineptness comes under the concept of the wanton manner
contemplated in the Civil Code that calls for the imposition of
exemplary damages.
5. RADIO COMMUNICATION OF THE PHILIPPINES INC. VS.
ALFONSO VERCHEZ, ET AL. GR NO. 164349, JANUARY 31, 2006
FACTS: On January 21 1991 EdithaVerchez was confined in a hospital in
Sorsogon due to an ailment. Her daughter grace immediately sent a
telegram via RCPI to her sister Zenaida living in Manila. After 3 days
without reply grace send another letter thru JRS delivery service.
Immediately after receiving the letter Zenaida left for Sorsogon, on her
arrival she disclaimed that she received the telegram sent thru RCPI.
The said telegram was only delivered after 25 days without notice to the
sender of the technical difficulties encountered by RCPI. The
explanation given by RCPI to the respondent is that the delay was due
to radio noise and interference and was not received by the station in
Manila.
Editha died on April 17 1992 and on September 1993
Respondents filed a case for damages against herein Petitioner the RTC
rendered judgement against petitioner and on appeal the CA affirmed
Page 20 of 28
the decision of the RTC granting moral damages to herein
Respondents.
ISSUE: Is the award for moral damages proper even if the Trial Court
found there was no direct connection between the injury and the
alleged negligent acts.
RULING: The Supreme Court held in the affirmative. The liability is
anchored on culpa contractual with regard to Grace and on Tort with
regard to her Co-plaintiff.
Article 1170 of the Civil Code provides that Those who in the
performance of their obligations are guilty of fraud, negligence, or
delay, and those who in any manner contravene the tenor thereof, are
liable for damages. RCPI bound itself to deliver the telegram within the
shortest possible time. It took 25 days, however, for RCPI to deliver it.
In their defense petitioner invoked force majeur. However for force
majeur to prosper it is necessary that one has committed no negligence
or misconduct that may have occasioned the loss. Clearly RCPI was
negligent in failing to inform respondent of the non transmission and
non delivery of the telegram.
RCPI is liable to Graces co-respondents following Article 2176 of
the Civil Code which provides: Whoever by act or omission causes
damage to another, there being fault or negligence, is obliged to pay for
the damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter. RCPI failed to prove that it
observed all the diligence of a good father of a family to prevent
damage.
Respecting the assailed award of moral damages, a
determination of the presence of the following requisites to justify the
award is in order: firstly, evidence of besmirched reputation or physical,
mental or psychological suffering sustained by the claimant; secondly, a
culpable act or omission factually established; thirdly, proof that the
wrongful act or omission of the defendant is the proximate cause of
damages sustained by the claimant; and fourthly, that the case is
predicated on any of the instances expressed or envisioned by Article
2219 and Article 2220 of the Civil Code. The tortious acts and/or
omissions complained of in this case are, therefore, analogous to acts
mentioned under Article 26 of the Civil Code, which are among the
instances of quasi-delict when courts may award moral damages under
Article 2219 of the Civil Code.
CASES ON HUMAN RELATIONS
1. TITUS VILLANUEVA VS.EMMA M. ROSQUETA, GR NO. 180764
JANUARY 19 2010
FACTS: Respondent tendered her courtesy resignation as deputy
commissioner of the Revenue and Collection group of the Bureau of
Customs. Five months after she withdrew the same. A month after her
withdrawal of her resignation President Arroyo appointed Gil Valera to
respondent Rosqueta’s position.
Rosqueta filed for prohibition, quo warranto , and injunction
against petitioner. The RTC granted the injunction the case was
elevated to the CA which in turn issued a writ of Preliminary
Injunction.
While the preliminary injunction was in force petitioner
Villanueva issued a memorandum which authorizes Valera to exercise
the powers and function of the deputy commissioner. During the
celebration of the bureau’s centennial anniversary respondent was
excluded from the Panorama magazine special edition which featured
all of the Customs Official. Respondent was also excluded from the
commemorative Billboard.
Respondent filed a complaint for damages alleging that
petitioner maliciously excluded her from the centennial memorabilia
and furthermore she claimed that she was prevented to do her duties,
withheld her salaries, and refused to act on her leave application.
The RTC dismissed the complaint and on Appeal the CA
reversed the decision holding that petitioner’s refusal to comply with
the preliminary injunction earned respondent the right to receive
moral damages citing the abuse of right principle.
ISSUE: Whether or not the Court of Appeals erred in holding the
petitioner Villanueva liable in damages to respondent Rosqueta.
Page 21 of 28
RULING: Under the Abuse of Right principle found in Article 19 and
complementing this principle are Articles 20 and 21 of the Civil Code
petitioners are liable to indemnify respondent for the injury she
suffered because of such abuse of right or duty.
Petitioner Villanueva ignored the injunction which showed bad
faith and intent to spite Respondent Rosqueta. His exclusion of her
from the centennial anniversary memorabilia was not an honest
mistake. He withheld her salary and prevented her from assuming
position.
A party’s refusal to abide by court order enjoining him from
doing an act, otherwise lawful, constitutes an abuse and an unlawful
exercise of right.
2. CECILIO PE, ET AL VS. ALFONSO PE, GR NO. L-17396, MAY 30,
1993
FACTS: Alfonso Pe, the defendant, was a married man, agent of La
Perla Cigar and Cigarette Factory in GasanMarinduque who was treated
like a son by CecilioPe, one of the petitioners. ◦Cecilio introduced
Alfonso to his children and was given access to visit their house.
Alfonso got fond of Lolita, 24 year old single, daughter of Cecilio. ◦The
defendant frequented the house of Lolita sometime in 1952 on the
pretext that he wanted her to teach him how to pray the rosary.
Eventually they fell in love with each other. ◦ The rumors about their
love affairs reached the ears of Lolita's parents sometime, in 1955, and
since then defendant was forbidden from going to their house and from
further seeing Lolita. The plaintiffs even filed deportation proceedings
against defendant who is a Chinese national. The affair between
defendant and Lolita continued nonetheless. ◦ Plaintiff brought action
before lower court of Manila and failed to prove Alfonso deliberately
and in bad faith tried to win Lolita’s affection. The case on moral
damages was dismissed.
ISSUE: Whether or not defendant is liable to Lolita’s family on the
ground of moral, good custom and public policy due to their illicit
affair.
RULING: Alfonso committed an injury to Lolita’s family in a manner
contrary to morals, good customs and public policy contemplated in
Article 20 of the civil code. The defendant took advantage of the trust
of Cecilio and even used the praying of rosary as a reason to get close
with Lolita. The wrong caused by Alfonso is immeasurable considering
the fact that he is a married man. WHEREFORE, the decision appealed
from is reversed. Defendant is hereby sentenced to pay the plaintiffs
the sum of P5,000.00 as damages and P2,000.00 as attorney's fees and
expenses of litigations. Costs against appellee.
3. COGEO-CUBAO OPERATORS AND DRIVERS ASSOCIATION V
CAGR 100727, MARCH 18, 1992
FACTS: In 1983, a CPC to operate a jeepney service was issued to
LungsodSilangan Transport Services to ply the CogeoCubao route.
CogeoCubao Operators and Drivers Association (CCODA), composed
of jeepney drivers and operators in the area, was perturbed by
Resolution No. 9 of the LungsodSilangan Board, which adopted a
“Bandera system”, wherein a member of the cooperative can queue on
behalf of passengers in exchange for a fee of twenty pesos (which would
be set aside for the Christmas program of drivers and other benefits),
CCODA formed a human barricade on November 11, 1985 and assumed
the dispatching of passenger jeepneys. As a result, LungsodSilangan
sued them for damages. CCODA denied the insinuation of a take over
and at the same time raised the defense that it was formed not to
compete with LungsodSilangan. The RTC ordered the payment of
actual damages and attorney’s fees to LungsodSilangan. Elevated to the
CA, the RTC decision was affirmed. Hence this appeal of the petitioner.
ISSUE: Whether or not the petitioner Cogeo-Cubao operators usurped
the property right of the respondent which entitle the latter to the
award of nominal damages.
RULING: Yes petitioner Cogeo operators usurped or violated the
property right of the respondent Lungsod Corp. Respondent is a holder
of a certificate of public convenience wihic is an authorization issued
by the Public Service Commission for the operation of public services.
A certification of public convenience is included in the term “property”
. Under the PUBLIC Service Law, CPC can be sold because it has
considerable value and is considered as a valuable asset . Although
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there is no doubt that it is a private property, it is affected with a public 500.00 for actual and compensatory damages; the sum of P5, 000.00 as
interest and must be submitted to the control of the government for moral damages; and the further sum of 500.00 as attorney's fees for
the common good. Also, CPC cannot be taken or interefered with plaintiff, with costs against defendant.
without due process of law. Appropriate actions may be maintained in On appeal taken by petitioner, the Court of Appeals affirmed
courts by the holder against those who have not been authorized to this decision, except as to the actual and compensatory damages and
operate in competition with the former and those who invsade the the moral damages, which were increased to P5,614.25 and P7,000.00,
rights which the former has pursuant to the authority granted by the respectively.
Public Service Commission. According to Art 2222 of the civil code, the
court may award nominal damages in every obligation arising from any ISSUE: WON Moral Damages are recoverable for breach of promise to
source or in every case where any property right has been invaded. marry?
Thus, respondent corporation is entitled to the award of nominal
damages. RULING: The Court ruled in De Jesus vs. Syquia (58 Phil., 866), that
"the action for breach of promises to marry has no standing in the civil
law, apart from the right to recover money or property advanced . . . upon
4. FRANCISCO HERMOSISIMAvs.THE HON. COURT OF APPEALS,
the faith of such promise".
ET AL., G.R. No. L-14628 September 30, 1960
In the light of the clear and manifest intent of our
lawmaking body not to sanction actions for breach of promise to
FACTS: Private complainant Soledad Cagigas, was born in July 1917.
marry, the award of moral damages made by the lower courts is,
Soledad was then a teacher in the Sibonga Provincial High School in
accordingly, untenable. The Court of Appeals said award:
Cebu, and petitioner, Francisco Hermosisima, who was almost ten (10)
Moreover, it appearing that because of defendant-appellant's
years younger than she, used to go around together and were regarded
seduction power, plaintiff-appellee, overwhelmed by her love for him
as engaged, although he had made no promise of marriage prior
finally yielded to his sexual desires in spite of her age and self-control,
thereto.
she being a woman after all, we hold that said defendant-appellant is
In 1951, private complainant gave up teaching and became a life
liable for seduction and, therefore, moral damages may be recovered
insurance underwriter in the City of Cebu, where intimacy developed
from him under the provision of Article 2219, paragraph 3, of the new
among her and the petitioner. One evening in 1953, after coming from
Civil Code.
the movies, they had sexual intercourse in the cabin of the petitioner,
Apart from the fact that the general tenor of said Article 2219,
M/V "Escaño," to which he was then attached as apprentice pilot.
particularly the paragraphs preceding and those following the one cited
Their child, Chris Hermosisima, was born on June 17, 1954, in a
by the Court of Appeals, and the language used in said paragraph
private maternity and clinic. However, subsequently, or on July 24,
strongly indicates that the "seduction" therein contemplated is
1954, defendant married one Romanita Perez. Hence, the present
the crime punished as such in Article as such in Article 337 and 338 of
action, which was commenced on or about October 4, 1954.
the Revised Penal Code, which admittedly does not exist in the present
On October 4, 1954, private complaint, filed with said of her
case, we find ourselves unable to say that petitioner is morally guilty of
child, Chris Hermosisima, as natural child and moral damages for
seduction, not only because he is approximately ten (10) years younger
alleged breach of promise. Petitioner admitted the paternity of child
than the complainant — who around thirty-six (36) years of age, and as
and expressed willingness to support the latter, but denied having ever
highly enlightened as a former high school teacher and a life insurance
promised to marry the complainant.
agent are supposed to be — when she became intimate with petitioner,
Upon her motion, said court ordered petitioner, on October 27,
then a mere apprentice pilot, but, also, because, the court of first
1954, to pay, by way of alimony pendente lite, P50.00 a month, which
instance found that, complainant "surrendered herself" to petitioner
was, on February 16, 1955, reduced to P30.00 a month; the sum of P4,
because, "overwhelmed by her love" for him, she "wanted to bind" "by

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having a fruit of their engagement even before they had the benefit of
clergy."
The CFI sentenced petitioner to pay the following: (1) a monthly
pension of P30.00 for the support of the child: (2) P4,500, representing
the income that complainant had allegedly failed to earn during her
pregnancy and shortly after the birth of the child, as actual and
compensation damages; (3) P5,000, as moral damages; and (4) P500.00,
as attorney's fees.
The Court of Appeals added to the second item the sum of
P1,114.25 — consisting of P144.20, for hospitalization and medical
attendance, in connection with the parturition, and the balance
representing expenses incurred to support the child — and increased
the moral damages to P7,000.00.
With the elimination of this award for damages, the decision of
the Court of Appeals is hereby affirmed, therefore, in all other respects,
without special pronouncement as to cost in this instance. It is so
ordered.
CASES ON NUISANCE
1. RTC JUDGE CAMILO E. TAMIN vs. COURT OF APPEALS,
VICENTE MEDINA and FORTUNATA ROSELLON, G.R. No. 97477
May 8, 1992
ABATEMENT OF PUBLIC NUISANCE
FACTS: Petitioner municipality represented by its mayor Real filed in
the RTC a complaint for the ejectment of respondents. It is alleged that
the municipality owns a parcel of residential land located in
Zamboanga del Sur and the said parcel of land was reserved for public
plaza under PD 365 and that during the mayor, the municipality leased
the area to the defendants subject to the condition that they should
vacate the place in case it is needed for public purposes and the
defendants paid the rentals religiously until 1967. They refused to
vacate the said land despite the efforts of the government since money
is allocated for the construction of a municipal gymnasium within the
public plaza and such construction could not continue because of the
presence of the buildings constructed by the defendants.
ISSUE:
Whether or not the municipality has a cause of action for the
abatement of public nuisance under Article 694 of the Civil Code?
RULING:
Yes based on the definition of a nuisance provided for in the CC which
states that “Art. 694. A nuisance is any act, omission, establishment,
business, condition of property or anything else which: … hinders or
impairs the use of the property.” Article 695. Nuisance is either public
or private. A public nuisance affects a community or neighborhood or
any considerable number of persons, although the extent of the
annoyance, danger or damage upon individuals may be equal.”
Article 699 provides for the following remedies against public nuisance:
1. A prosecution under the penal code or any local ordinance
2. Civil action
3. Abatement without judicial proceedings In the present case, the
municipality chose to file a civil action for the recovery of
possession of the parcel of land occupied by the PR. Under the
Local Government Code, the Sangguniang Bayan has to first
pass an ordinance before summarily abate a public nuisance.
Considering the facts in the complaint is true then the writ of
possession and writ of demolition would have been justified. A writ of
demolition would have been sufficient to eject the private respondent.
2. DIOSDADO SITCHON VS.ALEJO AQUINOG.R. NO. L-8191
FEBRUARY 27, 1956
FACTS: The decision stems from six (6) class suits. All the petitioners
impleaded Aquino (City Engineer of Manila) as respondent enjoining
him from causing the demolition of their respective houses claiming
said houses constitute public nuisances. Petitioners occupied the
subject portions of the public streets, and constructed houses therein
without the consent of the authorities. However, all of them
subsequently paid concession fees to the collector of the city treasurer
for the use of the land with the agreement that such payment shall be
without prejudice to an order to vacate. Years later, respondent City
Engineer advised and ordered the petitioners to vacate the occupied
streets. Unheeded, he threatened to demolish the houses. Petitioner
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contends that the power to remove public nuisances is vested in the specific performance. The SC ordered Endencia to convey the entire
District Health Officer, by virtue of Arts. 700 and 702 of the New Civil tract to Daywalt.
Code, and not in the City Engineer. Meanwhile, La Corporacion de los Padres Agustinos Recoletos
(Recoletos), was a religious corp., w/c owned an estate immediately
ISSUE: Whether or not the City Engineer have the authority to cause adjacent to the property sold by Endencia to Daywalt. Italso happened
the abatement of the nuisance? that Fr. Sanz, the representative of the Recoletos, exerted some
influence and ascendancy over Endencia, who was a woman of little
force and easily subject to the influence of other people. Fr. Sanz knew
RULING: Yes, the City Engineer, is vested with authority to effect the of the existence of the contracts with Daywalt and discouraged her
abatement of the nuisances by virtue of the Revised Charter of Manila. from conveying the entire tract.
While it is true that Articles 700 and 702 of the New Civil Code
Daywalt filed an action for damages against the Recoletos on
provides that the District Heath Officer shall have the power to remove
the ground that it unlawfully induced Endencia to refrain from the
public nuisances, however, such provision should yield to section 31 of
performance of her contract for the sale of the land in question and to
the Revised Charter of Manila which specifically places upon the City
withhold delivery of the Torrens title. Daywalt’s claim for damages
Engineer the removal of buildings and structures erected in obstructing
against the Recoletos was for the huge sum of P 500000 [in the year
the public streets, since the latter is a special provision specifically
1919], since he claims that because of the interference of the Recoletos,
designed for the City of Manila, whereas, the former are general
he failed to consummate a contract with another person for the sale of
provisions.
the property and its conversion into a sugar mill.
Art. 694 par. 4 of the New Civil Code classifies as a nuisance the
obstruction of the free passage of any public highway or street. A
nuisance is public if it affects a community or a neighborhood or any ISSUE: Whether Recoletos is liable to Daywalt?
considerable number of persons although the extent of the annoyance,
danger or damage upon individuals may be unequal. Since the subject RULING: No, it is not liable.
houses delimit the use of the streets for the public, the removal of
The stranger who interferes in a contract between other parties
which may be authorized by the said ordinance of Manila.
cannot become more extensively liable in damages for the non-
performance of the contract than the party in whose behalf he
CASE ON INFERENCE WITH CONTRACTUAL RELATIONS intermediates. Hence, in order to determine the liability of the
1. DAYWALT VS CORPORATION EPP. AGUSTINOS RECOLETOS Recoletos, there is first a need to consider the liability of Endencia to
ET. AL, 39 PHIL 58 Daywalt. The damages claimed by Daywalt from Endencia cannot be
recovered from her, first, because these are special damages w/c were
FACTS: In 1902, Teodorica Endencia executed a contract whereby she
not w/in the contemplation of the parties when the contract was made,
obligated herself to convey to Geo W. Daywalt a 452-hectare parcel of
and secondly, these damages are too remote to be the subject of
land for P 4000. They agreed that a deed should be executed as soon as
recovery. Since Endencia is not liable for damages to Daywalt, neither
Endencia’s title to the land was perfected in the Court of Land
can the Recoletos be held liable. As already suggested, by advising
Registration and a Torrens title issued in her name. When the Torrens
Endencia not to perform the contract, the Recoletos could in no event
title was issued, Endencia found out that the property measured 1248
render itself more extensively liable than the principal in the contract.
hectares instead of 452 hectares, as she initially believed. Because of
this, she became reluctant to transfer the whole tract to Daywalt,
claiming that she never intended to sell so large an amount and that
she had been misinformed as to its area. Daywalt filed an action for

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 CASES ON LAWS ON INTELLECTUAL CREATIONS
1. KABUSHI KAISHA ISETAN VS. LAC GR 75420, 15 NOVEMBER 1991
Facts: Kabushi Kaisha Isetan is a Japanese corporation, and owner of
the trademark “Isetan” and the “Young leave design”. Isetann
Department Store, on the other hand, is a domestic corporation, and
owner fo the trademark “Isetann” and “flover design.” In 1980, Kabushi
Kaisha Isetan field petitions for the cancellation of the supplemental
registration of Isetann with the Philippine Patent Office. It also filed for
the cancellation Intellectual Property Law, 2004 ( 3 ) Digests (Berne
Guerrero) of the mark Isetan from the corporate name of Isetann
Department Store with the SEC. Both the SEC and the Director of
Patents, eventually, ruled against Kabushi Kaisha Isetan. It appealed to
the intermediate Appellate Court, which denied the petition for being
filed out of time.
Issue: Whether Kabushi Kaisha Isetan has the right to seek for the
cancellation of the word “Isetan” from the corporate name of Isetann
Department Store.
Ruling: No. A Fundamental principle in Trademark Law is that the
actual use in commerce in the Philippines is a pre-requisite to the
acquisition of ownership over a trademark or a tradename. Kabushi
Kaisha Isetan has never conducted any business in the Philippines. It
has never promoted its trademark or tradename in the Philippines. It
has absolutely no business goodwill in the Philippines. It is unknown to
Filipinos except the very few who may have noticed it while traveling
abroad. It has never paid a single centavo of tax to the Philippine
Government. Under the law, it has no right to the remedy it seeks.
Isetann Department Store is entitled to use its trademark in the
Philippines.
2. ANG vs TEODORO (75 PHIL 50)
FACTS: Respondent Toribio Teodoro, has continuously used
"AngTibay," both as a trade-mark and as a trade-name, in the
manufacture and sale of slippers, shoes, and indoor baseballs . He
formally registered it as trade-mark on September 29, 1915, and as
trade-name on January 3, 1933.
Petitioner registered the same trade-mark "AngTibay" for pants
and shirts on April 11, 1932, and established a factory for the
manufacture of said articles in the year 1937.
Respondent filed an action for infringement of the trademark
and trade-name against the herein petitioner. The trial court absolved
the defendant from the on the grounds that the two trademarks are
dissimilar and are used on different and non-competing goods; that
there had been no exclusive use of the trade-mark by the plaintiff; and
that there had been no fraud in the use of the said trade-mark by the
defendant because the goods on which it is used are essentially
different from those of the plaintiff.
CA, however, reversed that judgment, holding that by
uninterrupted an exclusive use in the manufacture of slippers and
shoes, respondent's trade-mark has acquired a secondary meaning; that
the goods or articles on which the two trade-marks are used are similar
or belong to the same class; and that the use by petitioner of said trade-
mark constitutes infringement.
.
Issues:1.Whether or not ‘ANG TIBAY’ is a descriptive term not
registrable.
2. Whether or not the trademark ‘ANG TIBAY’ has acquired a
secondary meaning.
3. Whether or not there is trademark infringement and/or unfair
competition between non-competing goods.
Ruling: 1. No. An inquiry in the etmology and meaning of the Tagalog
words ‘’ÄngTibay’’ shows that the phrase is never used adjectively to
define or describe an object. It is , therefore, not a descriptive within
the meaning of Trade-mark Law but rather a fanciful or coined phrase
which may be properly and legally appropriated as a trade-mark or
trade-name. Hence, it was originally capable of exclusive appropriation
as a trade-mark by respondent.
2. No. The function of a trade-mark is to point distinctively, either by
its own meaning or by association, to the origin or ownership of the
wares to which it is applied. ."AngTibay," as used by the respondent
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 to designate his wares, had exactly performed that function for
twenty-two years before the petitioner adopted it as a trade-mark in
her own business. AngTibay shoes and slippers are, by association,
products of the AngTibay factory owned and operated by the
respondent, even if ‘’AngTibay’’ therefore, were not capable of
exclusive expropriation as a trade-mark doctrine of secondary
meaning could nevertheless be fully sustained because, in any
event, by respondent’s long and exclusive use of said phrase with
reference to his products and his business, it has acquired a
proprietary connotation.
This doctrine is to the effect that a word or phrase originally
incapable of exclusive appropriation with reference to an article of
the market, because geographically or otherwise descriptive, might
nevertheless have been used so long and so exclusively by one
producer with reference to his article that, in that trade and to that
branch of the purchasing public, the word or phrase has come to
mean that the article was his product.
3. Yes. The law on Trade-Marks, Unfair Competition, and Unfair
Trading, the test employed by the courts to determine whether
noncompeting goods are or are not of the same class is confusion as
to the origin of the goods of the second user.
Although two noncompeting articles may be classified under two
different classes by the Patent Office because they are deemed not to
possess the same descriptive properties, they would, nevertheless, be
held by the courts to belong to the same class if the simultaneous use
on them of identical or closely similar trade-marks would be likely to
cause confusion as to the origin, or personal source, of the second
user’s goods. They would be considered as not falling under the same
class only if they are “so dissimilar or so foreign to each other as to
make it unlikely that the purchaser would think the first user made the
second user’s goods. Such construction of the law is induced by cogent
reasons of equity and fair dealing. Therefore, the pants and slippers are
goods similar to shoes and slippers within the meaning of Trade-mark
law.
3. UNNO COMMERCIAL ENTERPRISES, INCORPORATEDvs.
GENERAL MILLING CORPORATION and TIBURCIO S. EVALLE, in
his capacity as Director of Patents, G.R. No. L-28554 February 28,
1983
FACTS: The Court affirms respondent Director of Patent's decision
declaring respondent General Milling Corporation as the prior user of
the trademark "All Montana" on wheat flour in the Philippines and
ordering the cancellation of the certificate of registration for the same
trademark previously issued in favor of petitioner Unno Commercial
Enterprises, Incorporated, it appearing that Unno Commercial
Enterprises, Inc. merely acted as exclusive distributor of All Montana
wheat flour in the Philippines. Only the owner of a trademark, trade
name or service mark may apply for its registration and an importer,
broker, indent or distributor acquires no rights to the trademark of the
goods he is dealing with in the absence of a valid transfer or assignment
of the trade mark. On December 11, 1962, respondent General Milling
Corporation filed an application for the registration of the trademark
"All Montana" to be used in the sale of wheat flour. In view of the fact
that the same trademark was previously, registered in favor of
petitioner Unno Commercial Enterprises, Inc.. Respondent General
Milling Corporation, in its application for registration, alleged that it
started using the trademark "All Montana" on August 31, 1955 and
subsequently was licensed to use the same by Centennial Mills, Inc. by
virtue of a deed of assignment executed on September 20, 1962. On the
other hand petitioner Unno Commercial Enterprises, Inc. argued that
the same trademark had been registered in its favor on March 8,
1962 asserting that it started using the trademark on June 30, 1956, as
indentor or broker for S.H. Huang Bros. & Co., a local firm. The
Director of Patents, after hearing, ruled in favor of respondent
General Milling Corporation. and rendered its decision as follows
ISSUE: Whether or not director of patents can issue cancellation of
the certification of registration?
RULING: The Court finds without merit petitioner's argument that the
Director of Patents could not order the cancellation of' its certificate of
registration in an interference proceeding and that the question of
whether or not a certificate of registration is to be cancelled should
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have been brought in cancellation proceedings. Under Rule 178 of the satisfactorily discharged the burden of proving priority of adoption and
Rules of the Patent Office in Trademark Cases, the Director of Patents use and is entitled to registration." It is well-settled that we are
is expressly authorized to order the cancellation of a registered mark or precluded from making further inquiry, since the findings of fact of the
trade name or name or other mark of ownership in an inter partes case, Director of Patents in the absence of any showing that there was grave
such as the interference proceeding at bar. The right to register abuse of discretion is binding on us and the findings of facts by
trademark is based on ownership. the Director of Patents are deemed conclusive in the Supreme Court
When the applicant is not the owner of the trademark being provided that they are supported by substantial evidence.
applied for, he has no right to apply for the registration of the same. Petitioner has failed to show that the findings of fact of the
Under the Trademark Law only the owner of the trademark, trade Director of Patents are not substantially supported by evidence nor that
name or service mark used to distinguish his goods, business or service any grave abuse of discretion was committed.
from the goods, business or service of others is entitled to register the
same.
The term owner does not include the importer of the goods
bearing the trademark, trade name, service mark, or other mark of
ownership, unless such importer is actually the owner thereof in the
country from which the goods are imported. A local importer, however,
may make application for the registration of a foreign trademark, trade
name or service mark if he is duly authorized by the actual owner of the
name or other mark of ownership.
Thus, petitioner's contention that it is the owner of the mark
"All Montana" because of its certificate of registration issued by the
Director of Patents, must fail, since ownership of a trademark is not
acquired by the mere fact of registration alone.
Registration merely creates prima facie presumption of the
validity of the registration, of the registrant's ownership of the
trademark and of the exclusive right to the use thereof, registration
does not perfect a trademark right.
As conceded itself by petitioner, evidence may be presented to
overcome the presumption. Prior use by one will controvert a claim of
legal appropriation, by subsequent users. In the case at bar, the
Director of Patents found that "ample evidence was presented in the
record that Centennial Mills, Inc. was the owner and prior user in the
Philippines of the trademark 'All Montana' through a local importer
and broker. Use of a trademark by a mere importer, indentor
or exporter (the Senior Party herein) inures to the benefit of the foreign
manufacturer whose goods are Identified by the trademark. The
Junior Party has hereby established a continuous chain of title and,
consequently, prior adoption and use" and ruled that "based on the
facts established, it is safe to conclude that the Junior Party has

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