G.R. No.

L-65295 March 10, 1987

PHOENIX CONSTRUCTION, INC. and ARMANDO U. CARBONEL, petitioners,

vs.
THE INTERMEDIATE APPELLATE COURT and LEONARDO DIONISIO, respondents.

FELICIANO, J:

In the early morning of 15 November 1975 — at about 1:30 a.m. — private respondent Leonardo
Dionisio was on his way home — he lived in 1214-B Zamora Street, Bangkal, Makati — from a
cocktails-and-dinner meeting with his boss, the general manager of a marketing corporation. During
the cocktails phase of the evening, Dionisio had taken "a shot or two" of liquor. Dionisio was driving
his Volkswagen car and had just crossed the intersection of General Lacuna and General Santos
Streets at Bangkal, Makati, not far from his home, and was proceeding down General Lacuna Street,
when his car headlights (in his allegation) suddenly failed. He switched his headlights on "bright" and
thereupon he saw a Ford dump truck looming some 2-1/2 meters away from his car. The dump
truck, owned by and registered in the name of petitioner Phoenix Construction Inc. ("Phoenix"), was
parked on the right hand side of General Lacuna Street (i.e., on the right hand side of a person
facing in the same direction toward which Dionisio's car was proceeding), facing the oncoming
traffic. The dump truck was parked askew (not parallel to the street curb) in such a manner as to
stick out onto the street, partly blocking the way of oncoming traffic. There were no lights nor any so-
called "early warning" reflector devices set anywhere near the dump truck, front or rear. The dump
truck had earlier that evening been driven home by petitioner Armando U. Carbonel, its regular
driver, with the permission of his employer Phoenix, in view of work scheduled to be carried out early
the following morning, Dionisio claimed that he tried to avoid a collision by swerving his car to the left
but it was too late and his car smashed into the dump truck. As a result of the collision, Dionisio
suffered some physical injuries including some permanent facial scars, a "nervous breakdown" and
loss of two gold bridge dentures.

Dionisio commenced an action for damages in the Court of First Instance of Pampanga basically
claiming that the legal and proximate cause of his injuries was the negligent manner in which
Carbonel had parked the dump truck entrusted to him by his employer Phoenix. Phoenix and
Carbonel, on the other hand, countered that the proximate cause of Dionisio's injuries was his own
recklessness in driving fast at the time of the accident, while under the influence of liquor, without his
headlights on and without a curfew pass. Phoenix also sought to establish that it had exercised due
rare in the selection and supervision of the dump truck driver.

The trial court rendered judgment in favor of Dionisio and against Phoenix and Carbonel and
ordered the latter:

(1) To pay plaintiff jointly and severally the sum of P 15,000.00 for hospital bills and
the replacement of the lost dentures of plaintiff;

(2) To pay plaintiff jointly and severally the sum of P 1,50,000.-00 as loss of expected
income for plaintiff brought about the accident in controversy and which is the result
of the negligence of the defendants;

(3) To pay the plaintiff jointly and severally the sum of P 10,000. as moral damages
for the unexpected and sudden withdrawal of plaintiff from his lifetime career as a
marketing man; mental anguish, wounded feeling, serious anxiety, social humiliation,
 besmirched reputation, feeling of economic insecurity, and the untold sorrows and
frustration in life experienced by plaintiff and his family since the accident in
controversy up to the present time;

(4) To pay plaintiff jointly and severally the sum of P 10,000.00 as damages for the
wanton disregard of defendants to settle amicably this case with the plaintiff before
the filing of this case in court for a smaller amount.

(5) To pay the plaintiff jointly and severally the sum of P 4,500.00 due as and for
attorney's fees; and

(6) The cost of suit. (Emphasis supplied)

Phoenix and Carbonel appealed to the Intermediate Appellate Court. That court in CA-G.R. No.
65476 affirmed the decision of the trial court but modified the award of damages to the following
extent:

1. The award of P15,000.00 as compensatory damages was reduced

to P6,460.71, the latter being the only amount that the appellate court
found the plaintiff to have proved as actually sustained by him;

2. The award of P150,000.00 as loss of expected income was

reduced to P100,000.00, basically because Dionisio had voluntarily
resigned his job such that, in the opinion of the appellate court, his
loss of income "was not solely attributable to the accident in
question;" and

3. The award of P100,000.00 as moral damages was held by the

appellate court as excessive and unconscionable and hence reduced
to P50,000.00.

The award of P10,000.00 as exemplary damages and P4,500.00 as

attorney's fees and costs remained untouched.

This decision of the Intermediate Appellate Court is now before us on a petition for review.

Both the trial court and the appellate court had made fairly explicit findings of fact relating to the
manner in which the dump truck was parked along General Lacuna Street on the basis of which both
courts drew the inference that there was negligence on the part of Carbonel, the dump truck driver,
and that this negligence was the proximate cause of the accident and Dionisio's injuries. We note,
however, that both courts failed to pass upon the defense raised by Carbonel and Phoenix that the
true legal and proximate cause of the accident was not the way in which the dump truck had been
parked but rather the reckless way in which Dionisio had driven his car that night when he smashed
into the dump truck. The Intermediate Appellate Court in its questioned decision casually conceded
that Dionisio was "in some way, negligent" but apparently failed to see the relevance of Dionisio's
negligence and made no further mention of it. We have examined the record both before the trial
court and the Intermediate Appellate Court and we find that both parties had placed into the record
sufficient evidence on the basis of which the trial court and the appellate court could have and
should have made findings of fact relating to the alleged reckless manner in which Dionisio drove his
car that night. The petitioners Phoenix and Carbonel contend that if there was negligence in the
manner in which the dump truck was parked, that negligence was merely a "passive and static
condition" and that private respondent Dionisio's recklessness constituted an intervening, efficient
cause determinative of the accident and the injuries he sustained. The need to administer
substantial justice as between the parties in this case, without having to remand it back to the trial
court after eleven years, compels us to address directly the contention put forward by the petitioners
and to examine for ourselves the record pertaining to Dionisio's alleged negligence which must bear
upon the liability, or extent of liability, of Phoenix and Carbonel.

There are four factual issues that need to be looked into: (a) whether or not private respondent
Dionisio had a curfew pass valid and effective for that eventful night; (b) whether Dionisio was
driving fast or speeding just before the collision with the dump truck; (c) whether Dionisio had
purposely turned off his car's headlights before contact with the dump truck or whether those
headlights accidentally malfunctioned moments before the collision; and (d) whether Dionisio was
intoxicated at the time of the accident.

As to the first issue relating to the curfew pass, it is clear that no curfew pass was found on the
person of Dionisio immediately after the accident nor was any found in his car. Phoenix's evidence
here consisted of the testimony of Patrolman Cuyno who had taken Dionisio, unconscious, to the
Makati Medical Center for emergency treatment immediately after the accident. At the Makati
Medical Center, a nurse took off Dionisio's clothes and examined them along with the contents of
pockets together with Patrolman Cuyno. 1 Private respondent Dionisio was not able to produce any curfew pass during the
trial. Instead, he offered the explanation that his family may have misplaced his curfew pass. He also offered a certification (dated two years
after the accident) issued by one Major Benjamin N. Libarnes of the Zone Integrated Police Intelligence Unit of Camp Olivas, San Fernando,
Pampanga, which was said to have authority to issue curfew passes for Pampanga and Metro Manila. This certification was to the effect that
private respondent Dionisio had a valid curfew pass. This certification did not, however, specify any pass serial number or date or period of
effectivity of the supposed curfew pass. We find that private respondent Dionisio was unable to prove possession of a valid curfew pass
during the night of the accident and that the preponderance of evidence shows that he did not have such a pass during that night. The
relevance of possession or non-possession of a curfew pass that night lies in the light it tends to shed on the other related issues: whether
Dionisio was speeding home and whether he had indeed purposely put out his headlights before the accident, in order to avoid detection and
possibly arrest by the police in the nearby police station for travelling after the onset of curfew without a valid curfew pass.

On the second issue — whether or not Dionisio was speeding home that night — both the trial court
and the appellate court were completely silent.

The defendants in the trial court introduced the testimony of Patrolman Cuyno who was at the scene
of the accident almost immediately after it occurred, the police station where he was based being
barely 200 meters away. Patrolman Cuyno testified that people who had gathered at the scene of
the accident told him that Dionisio's car was "moving fast" and did not have its headlights
on.   Dionisio, on the other hand, claimed that he was travelling at a moderate speed at 30
2

kilometers per hour and had just crossed the intersection of General Santos and General Lacuna
Streets and had started to accelerate when his headlights failed just before the collision took place.  3

Private respondent Dionisio asserts that Patrolman Cuyno's testimony was hearsay and did not fag
within any of the recognized exceptions to the hearsay rule since the facts he testified to were not
acquired by him through official information and had not been given by the informants pursuant to
any duty to do so. Private respondent's objection fails to take account of the fact that the testimony
of Patrolman Cuyno is admissible not under the official records exception to the hearsay rule   but 4

rather as part of the res gestae.   Testimonial evidence under this exception to the hearsay rule
5

consists of excited utterances made on the occasion of an occurrence or event sufficiently startling
in nature so as to render inoperative the normal reflective thought processes of the observer and
hence made as a spontaneous reaction to the occurrence or event, and not the result of reflective
thought.  6

We think that an automobile speeding down a street and suddenly smashing into a stationary object
in the dead of night is a sufficiently startling event as to evoke spontaneous, rather than reflective,
reactions from observers who happened to be around at that time. The testimony of Patrolman
Cuyno was therefore admissible as part of the res gestae and should have been considered by the
trial court. Clearly, substantial weight should have been ascribed to such testimony, even though it
did not, as it could not, have purported to describe quantitatively the precise velocity at winch
Dionisio was travelling just before impact with the Phoenix dump truck.

A third related issue is whether Dionisio purposely turned off his headlights, or whether his
headlights accidentally malfunctioned, just moments before the accident. The Intermediate Appellate
Court expressly found that the headlights of Dionisio's car went off as he crossed the intersection but
was non-committal as to why they did so. It is the petitioners' contention that Dionisio purposely shut
off his headlights even before he reached the intersection so as not to be detected by the police in
the police precinct which he (being a resident in the area) knew was not far away from the
intersection. We believe that the petitioners' theory is a more credible explanation than that offered
by private respondent Dionisio — i.e., that he had his headlights on but that, at the crucial moment,
these had in some mysterious if convenient way malfunctioned and gone off, although he succeeded
in switching his lights on again at "bright" split seconds before contact with the dump truck.

A fourth and final issue relates to whether Dionisio was intoxicated at the time of the accident. The
evidence here consisted of the testimony of Patrolman Cuyno to the effect that private respondent
Dionisio smelled of liquor at the time he was taken from his smashed car and brought to the Makati
Medical Center in an unconscious condition.   This testimony has to be taken in conjunction with the
7

admission of Dionisio that he had taken "a shot or two" of liquor before dinner with his boss that
night. We do not believe that this evidence is sufficient to show that Dionisio was so heavily under
the influence of liquor as to constitute his driving a motor vehicle per se an act of reckless
imprudence.   There simply is not enough evidence to show how much liquor he had in fact taken
8

and the effects of that upon his physical faculties or upon his judgment or mental alertness. We are
also aware that "one shot or two" of hard liquor may affect different people differently.

The conclusion we draw from the factual circumstances outlined above is that private respondent
Dionisio was negligent the night of the accident. He was hurrying home that night and driving faster
than he should have been. Worse, he extinguished his headlights at or near the intersection of
General Lacuna and General Santos Streets and thus did not see the dump truck that was parked
askew and sticking out onto the road lane.

Nonetheless, we agree with the Court of First Instance and the Intermediate Appellate Court that the
legal and proximate cause of the accident and of Dionisio's injuries was the wrongful — or negligent
manner in which the dump truck was parked in other words, the negligence of petitioner Carbonel.
That there was a reasonable relationship between petitioner Carbonel's negligence on the one hand
and the accident and respondent's injuries on the other hand, is quite clear. Put in a slightly different
manner, the collision of Dionisio's car with the dump truck was a natural and foreseeable
consequence of the truck driver's negligence.

The petitioners, however, urge that the truck driver's negligence was merely a "passive and static
condition" and that private respondent Dionisio's negligence was an "efficient intervening cause and
that consequently Dionisio's negligence must be regarded as the legal and proximate cause of the
accident rather than the earlier negligence of Carbonel. We note that the petitioners' arguments are
drawn from a reading of some of the older cases in various jurisdictions in the United States but we
are unable to persuade ourselves that these arguments have any validity for our jurisdiction. We
note, firstly, that even in the United States, the distinctions between "cause" and "condition" which
the 'petitioners would have us adopt have already been "almost entirely discredited." Professors and
Keeton make this quite clear:
 Cause and condition. Many courts have sought to distinguish between the active
"cause" of the harm and the existing "conditions" upon which that cause operated. If
the defendant has created only a passive static condition which made the damage
possible, the defendant is said not to be liable. But so far as the fact of causation is
concerned, in the sense of necessary antecedents which have played an important
part in producing the result it is quite impossible to distinguish between active forces
and passive situations, particularly since, as is invariably the case, the latter are the
result of other active forces which have gone before. The defendant who spills
gasoline about the premises creates a "condition," but the act may be culpable
because of the danger of fire. When a spark ignites the gasoline, the condition has
done quite as much to bring about the fire as the spark; and since that is the very risk
which the defendant has created, the defendant will not escape responsibility. Even
the lapse of a considerable time during which the "condition" remains static will not
necessarily affect liability; one who digs a trench in the highway may still be liable to
another who fans into it a month afterward. "Cause" and "condition" still find
occasional mention in the decisions; but the distinction is now almost entirely
discredited. So far as it has any validity at all, it must refer to the type of case where
the forces set in operation by the defendant have come to rest in a position of
apparent safety, and some new force intervenes. But even in such cases, it is not the
distinction between "cause" and "condition" which is important but the nature of the
risk and the character of the intervening cause.  9

We believe, secondly, that the truck driver's negligence far from being a "passive and static
condition" was rather an indispensable and efficient cause. The collision between the dump truck
and the private respondent's car would in an probability not have occurred had the dump truck not
been parked askew without any warning lights or reflector devices. The improper parking of the
dump truck created an unreasonable risk of injury for anyone driving down General Lacuna Street
and for having so created this risk, the truck driver must be held responsible. In our view, Dionisio's
negligence, although later in point of time than the truck driver's negligence and therefore closer to
the accident, was not an efficient intervening or independent cause. What the Petitioners describe as
an "intervening cause" was no more than a foreseeable consequent manner which the truck driver
had parked the dump truck. In other words, the petitioner truck driver owed a duty to private
respondent Dionisio and others similarly situated not to impose upon them the very risk the truck
driver had created. Dionisio's negligence was not of an independent and overpowering nature as to
cut, as it were, the chain of causation in fact between the improper parking of the dump truck and the
accident, nor to sever the juris vinculum of liability. It is helpful to quote once more from Professor
and Keeton:

Foreseeable Intervening Causes. If the intervening cause is one which in ordinary

human experience is reasonably to be anticipated or one which the defendant has
reason to anticipate under the particular circumstances, the defendant may be
negligence among other reasons, because of failure to guard against it; or the
defendant may be negligent only for that reason. Thus one who sets a fire may be
required to foresee that an ordinary, usual and customary wind arising later wig
spread it beyond the defendant's own property, and therefore to take precautions to
prevent that event. The person who leaves the combustible or explosive material
exposed in a public place may foresee the risk of fire from some independent source.
... In all of these cases there is an intervening cause combining with the defendant's
conduct to produce the result and in each case the defendant's negligence consists
in failure to protect the plaintiff against that very risk.

Obviously the defendant cannot be relieved from liability by the fact that the risk or a
substantial and important part of the risk, to which the defendant has subjected the
 plaintiff has indeed come to pass. Foreseeable intervening forces are within the
scope original risk, and hence of the defendant's negligence. The courts are quite
generally agreed that intervening causes which fall fairly in this category will not
supersede the defendant's responsibility.

Thus it has been held that a defendant will be required to anticipate the usual
weather of the vicinity, including all ordinary forces of nature such as usual wind or
rain, or snow or frost or fog or even lightning; that one who leaves an obstruction on
the road or a railroad track should foresee that a vehicle or a train will run into it; ...

The risk created by the defendant may include the intervention of the foreseeable
negligence of others. ... [The standard of reasonable conduct may require the
defendant to protect the plaintiff against 'that occasional negligence which is one of
the ordinary incidents of human life, and therefore to be anticipated.' Thus, a
defendant who blocks the sidewalk and forces the plaintiff to walk in a street where
the plaintiff will be exposed to the risks of heavy traffic becomes liable when the
plaintiff is run down by a car, even though the car is negligently driven; and one who
parks an automobile on the highway without lights at night is not relieved of
responsibility when another negligently drives into it. ---  10

We hold that private respondent Dionisio's negligence was "only contributory," that the "immediate
and proximate cause" of the injury remained the truck driver's "lack of due care" and that
consequently respondent Dionisio may recover damages though such damages are subject to
mitigation by the courts (Article 2179, Civil Code of the Philippines).

Petitioners also ask us to apply what they refer to as the "last clear chance" doctrine. The theory
here of petitioners is that while the petitioner truck driver was negligent, private respondent Dionisio
had the "last clear chance" of avoiding the accident and hence his injuries, and that Dionisio having
failed to take that "last clear chance" must bear his own injuries alone. The last clear chance
doctrine of the common law was imported into our jurisdiction by Picart vs. Smith 11 but it is a matter for
debate whether, or to what extent, it has found its way into the Civil Code of the Philippines. The historical function of that doctrine in the
common law was to mitigate the harshness of another common law doctrine or rule that of gbutory negligence. 12 The common law rule of
contributory negligence prevented any recovery at all by a plaintiff who was also negligent, even if the plaintiff's negligence was relatively
minor as compared with the wrongful act or omission of the defendant. 13 The common law notion of last clear chance permitted courts to
grant recovery to a plaintiff who had also been negligent provided that the defendant had the last clear chance to avoid the casualty and
failed to do so. 14 Accordingly, it is difficult to see what role, if any, the common law last clear chance doctrine has to play in a jurisdiction
where the common law concept of contributory negligence as an absolute bar to recovery by the plaintiff, has itself been rejected, as it has
been in Article 2179 of the Civil Code of the Philippines. 15

Is there perhaps a general concept of "last clear chance" that may be extracted from its common law
matrix and utilized as a general rule in negligence cases in a civil law jurisdiction like ours? We do
not believe so. Under Article 2179, the task of a court, in technical terms, is to determine whose
negligence — the plaintiff's or the defendant's — was the legal or proximate cause of the injury. That
task is not simply or even primarily an exercise in chronology or physics, as the petitioners seem to
imply by the use of terms like "last" or "intervening" or "immediate." The relative location in the
continuum of time of the plaintiff's and the defendant's negligent acts or omissions, is only one of the
relevant factors that may be taken into account. Of more fundamental importance are the nature of
the negligent act or omission of each party and the character and gravity of the risks created by such
act or omission for the rest of the community. The petitioners urge that the truck driver (and therefore
his employer) should be absolved from responsibility for his own prior negligence because the
unfortunate plaintiff failed to act with that increased diligence which had become necessary to avoid
the peril precisely created by the truck driver's own wrongful act or omission. To accept this
proposition is to come too close to wiping out the fundamental principle of law that a man must
respond for the forseeable consequences of his own negligent act or omission. Our law on quasi-
delicts seeks to reduce the risks and burdens of living in society and to allocate them among the
members of society. To accept the petitioners' pro-position must tend to weaken the very bonds of
society.

Petitioner Carbonel's proven negligence creates a presumption of negligence on the part of his
employer Phoenix 16 in supervising its employees properly and adequately. The respondent appellate court in effect found, correctly
in our opinion, that Phoenix was not able to overcome this presumption of negligence. The circumstance that Phoenix had allowed its truck
driver to bring the dump truck to his home whenever there was work to be done early the following morning, when coupled with the failure to
show any effort on the part of Phoenix to supervise the manner in which the dump truck is parked when away from company premises, is an
affirmative showing of culpa in vigilando on the part of Phoenix.

Turning to the award of damages and taking into account the comparative negligence of private
respondent Dionisio on one hand and petitioners Carbonel and Phoenix upon the other hand, 17 we
believe that the demands of substantial justice are satisfied by allocating most of the damages on a 20-80 ratio. Thus, 20% of the damages
awarded by the respondent appellate court, except the award of P10,000.00 as exemplary damages and P4,500.00 as attorney's fees and
costs, shall be borne by private respondent Dionisio; only the balance of 80% needs to be paid by petitioners Carbonel and Phoenix who
shall be solidarity liable therefor to the former. The award of exemplary damages and attorney's fees and costs shall be borne exclusively by
the petitioners. Phoenix is of course entitled to reimbursement from Carbonel. 18 We see no sufficient reason for disturbing the reduced
award of damages made by the respondent appellate court.

WHEREFORE, the decision of the respondent appellate court is modified by reducing the aggregate
amount of compensatory damages, loss of expected income and moral damages private respondent
Dionisio is entitled to by 20% of such amount. Costs against the petitioners.

SO ORDERED.
G.R. No. L-12191             October 14, 1918

JOSE CANGCO, plaintiff-appellant,
vs.
MANILA RAILROAD CO., defendant-appellee.

Ramon Sotelo for appellant.

Kincaid & Hartigan for appellee.

FISHER, J.:

At the time of the occurrence which gave rise to this litigation the plaintiff, Jose Cangco, was in the
employment of Manila Railroad Company in the capacity of clerk, with a monthly wage of P25. He
lived in the pueblo of San Mateo, in the province of Rizal, which is located upon the line of the
defendant railroad company; and in coming daily by train to the company's office in the city of Manila
where he worked, he used a pass, supplied by the company, which entitled him to ride upon the
company's trains free of charge. Upon the occasion in question, January 20, 1915, the plaintiff arose
from his seat in the second class-car where he was riding and, making, his exit through the door,
took his position upon the steps of the coach, seizing the upright guardrail with his right hand for
support.

On the side of the train where passengers alight at the San Mateo station there is a cement platform
which begins to rise with a moderate gradient some distance away from the company's office and
extends along in front of said office for a distance sufficient to cover the length of several coaches.
As the train slowed down another passenger, named Emilio Zuñiga, also an employee of the railroad
company, got off the same car, alighting safely at the point where the platform begins to rise from
the level of the ground. When the train had proceeded a little farther the plaintiff Jose Cangco
stepped off also, but one or both of his feet came in contact with a sack of watermelons with the
result that his feet slipped from under him and he fell violently on the platform. His body at once
rolled from the platform and was drawn under the moving car, where his right arm was badly
crushed and lacerated. It appears that after the plaintiff alighted from the train the car moved forward
possibly six meters before it came to a full stop.

The accident occurred between 7 and 8 o'clock on a dark night, and as the railroad station was
lighted dimly by a single light located some distance away, objects on the platform where the
accident occurred were difficult to discern especially to a person emerging from a lighted car.

The explanation of the presence of a sack of melons on the platform where the plaintiff alighted is
found in the fact that it was the customary season for harvesting these melons and a large lot had
been brought to the station for the shipment to the market. They were contained in numerous sacks
which has been piled on the platform in a row one upon another. The testimony shows that this row
of sacks was so placed of melons and the edge of platform; and it is clear that the fall of the plaintiff
was due to the fact that his foot alighted upon one of these melons at the moment he stepped upon
the platform. His statement that he failed to see these objects in the darkness is readily to be
credited.
The plaintiff was drawn from under the car in an unconscious condition, and it appeared that the
injuries which he had received were very serious. He was therefore brought at once to a certain
hospital in the city of Manila where an examination was made and his arm was amputated. The
result of this operation was unsatisfactory, and the plaintiff was then carried to another hospital
where a second operation was performed and the member was again amputated higher up near the
shoulder. It appears in evidence that the plaintiff expended the sum of P790.25 in the form of
medical and surgical fees and for other expenses in connection with the process of his curation.

Upon August 31, 1915, he instituted this proceeding in the Court of First Instance of the city of
Manila to recover damages of the defendant company, founding his action upon the negligence of
the servants and employees of the defendant in placing the sacks of melons upon the platform and
leaving them so placed as to be a menace to the security of passenger alighting from the company's
trains. At the hearing in the Court of First Instance, his Honor, the trial judge, found the facts
substantially as above stated, and drew therefrom his conclusion to the effect that, although
negligence was attributable to the defendant by reason of the fact that the sacks of melons were so
placed as to obstruct passengers passing to and from the cars, nevertheless, the plaintiff himself
had failed to use due caution in alighting from the coach and was therefore precluded form
recovering. Judgment was accordingly entered in favor of the defendant company, and the plaintiff
appealed.

It can not be doubted that the employees of the railroad company were guilty of negligence in piling
these sacks on the platform in the manner above stated; that their presence caused the plaintiff to
fall as he alighted from the train; and that they therefore constituted an effective legal cause of the
injuries sustained by the plaintiff. It necessarily follows that the defendant company is liable for the
damage thereby occasioned unless recovery is barred by the plaintiff's own contributory negligence.
In resolving this problem it is necessary that each of these conceptions of liability, to-wit, the primary
responsibility of the defendant company and the contributory negligence of the plaintiff should be
separately examined.

It is important to note that the foundation of the legal liability of the defendant is the contract of
carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at
all, from the breach of that contract by reason of the failure of defendant to exercise due care in its
performance. That is to say, its liability is direct and immediate, differing essentially, in legal
viewpoint from that presumptive responsibility for the negligence of its servants, imposed by article
1903 of the Civil Code, which can be rebutted by proof of the exercise of due care in their selection
and supervision. Article 1903 of the Civil Code is not applicable to obligations arising ex contractu,
but only to extra-contractual obligations — or to use the technical form of expression, that article
relates only to culpa aquiliana and not to culpa contractual.

Manresa (vol. 8, p. 67) in his commentaries upon articles 1103 and 1104 of the Civil Code, clearly
points out this distinction, which was also recognized by this Court in its decision in the case of
Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil. rep., 359). In commenting upon article 1093 Manresa
clearly points out the difference between "culpa, substantive and independent, which of itself
constitutes the source of an obligation between persons not formerly connected by any legal tie"
and culpa considered as an accident in the performance of an obligation already existing . . . ."

In the Rakes case (supra) the decision of this court was made to rest squarely upon the proposition
that article 1903 of the Civil Code is not applicable to acts of negligence which constitute the breach
of a contract.

Upon this point the Court said:

 The acts to which these articles [1902 and 1903 of the Civil Code] are applicable are
understood to be those not growing out of pre-existing duties of the parties to one another.
But where relations already formed give rise to duties, whether springing from contract or
quasi-contract, then breaches of those duties are subject to article 1101, 1103, and 1104 of
the same code. (Rakes vs. Atlantic, Gulf and Pacific Co., 7 Phil. Rep., 359 at 365.)

This distinction is of the utmost importance. The liability, which, under the Spanish law, is, in certain
cases imposed upon employers with respect to damages occasioned by the negligence of their
employees to persons to whom they are not bound by contract, is not based, as in the English
Common Law, upon the principle of respondeat superior — if it were, the master would be liable in
every case and unconditionally — but upon the principle announced in article 1902 of the Civil Code,
which imposes upon all persons who by their fault or negligence, do injury to another, the obligation
of making good the damage caused. One who places a powerful automobile in the hands of a
servant whom he knows to be ignorant of the method of managing such a vehicle, is himself guilty of
an act of negligence which makes him liable for all the consequences of his imprudence. The
obligation to make good the damage arises at the very instant that the unskillful servant, while acting
within the scope of his employment causes the injury. The liability of the master is personal and
direct. But, if the master has not been guilty of any negligence whatever in the selection and
direction of the servant, he is not liable for the acts of the latter, whatever done within the scope of
his employment or not, if the damage done by the servant does not amount to a breach of the
contract between the master and the person injured.

It is not accurate to say that proof of diligence and care in the selection and control of the servant
relieves the master from liability for the latter's acts — on the contrary, that proof shows that the
responsibility has never existed. As Manresa says (vol. 8, p. 68) the liability arising from extra-
contractual culpa is always based upon a voluntary act or omission which, without willful intent, but
by mere negligence or inattention, has caused damage to another. A master who exercises all
possible care in the selection of his servant, taking into consideration the qualifications they should
possess for the discharge of the duties which it is his purpose to confide to them, and directs them
with equal diligence, thereby performs his duty to third persons to whom he is bound by no
contractual ties, and he incurs no liability whatever if, by reason of the negligence of his servants,
even within the scope of their employment, such third person suffer damage. True it is that under
article 1903 of the Civil Code the law creates a presumption that he has been negligent in the
selection or direction of his servant, but the presumption is rebuttable and yield to proof of due care
and diligence in this respect.

The supreme court of Porto Rico, in interpreting identical provisions, as found in the Porto Rico
Code, has held that these articles are applicable to cases of extra-contractual culpa exclusively.
(Carmona vs. Cuesta, 20 Porto Rico Reports, 215.)

This distinction was again made patent by this Court in its decision in the case of Bahia vs. Litonjua
and Leynes, (30 Phil. rep., 624), which was an action brought upon the theory of the extra-
contractual liability of the defendant to respond for the damage caused by the carelessness of his
employee while acting within the scope of his employment. The Court, after citing the last paragraph
of article 1903 of the Civil Code, said:

From this article two things are apparent: (1) That when an injury is caused by the
negligence of a servant or employee there instantly arises a presumption of law that there
was negligence on the part of the master or employer either in selection of the servant or
employee, or in supervision over him after the selection, or both; and (2) that that
presumption is juris tantum and not juris et de jure, and consequently, may be rebutted. It
follows necessarily that if the employer shows to the satisfaction of the court that in selection
 and supervision he has exercised the care and diligence of a good father of a family, the
presumption is overcome and he is relieved from liability.

This theory bases the responsibility of the master ultimately on his own negligence and not
on that of his servant. This is the notable peculiarity of the Spanish law of negligence. It is, of
course, in striking contrast to the American doctrine that, in relations with strangers, the
negligence of the servant in conclusively the negligence of the master.

The opinion there expressed by this Court, to the effect that in case of extra-contractual culpa based
upon negligence, it is necessary that there shall have been some fault attributable to the defendant
personally, and that the last paragraph of article 1903 merely establishes a rebuttable presumption,
is in complete accord with the authoritative opinion of Manresa, who says (vol. 12, p. 611) that the
liability created by article 1903 is imposed by reason of the breach of the duties inherent in the
special relations of authority or superiority existing between the person called upon to repair the
damage and the one who, by his act or omission, was the cause of it.

On the other hand, the liability of masters and employers for the negligent acts or omissions of their
servants or agents, when such acts or omissions cause damages which amount to the breach of a
contact, is not based upon a mere presumption of the master's negligence in their selection or
control, and proof of exercise of the utmost diligence and care in this regard does not relieve the
master of his liability for the breach of his contract.

Every legal obligation must of necessity be extra-contractual or contractual. Extra-contractual

obligation has its source in the breach or omission of those mutual duties which civilized society
imposes upon it members, or which arise from these relations, other than contractual, of certain
members of society to others, generally embraced in the concept of status. The legal rights of each
member of society constitute the measure of the corresponding legal duties, mainly negative in
character, which the existence of those rights imposes upon all other members of society. The
breach of these general duties whether due to willful intent or to mere inattention, if productive of
injury, give rise to an obligation to indemnify the injured party. The fundamental distinction between
obligations of this character and those which arise from contract, rests upon the fact that in cases of
non-contractual obligation it is the wrongful or negligent act or omission itself which creates
the vinculum juris, whereas in contractual relations the vinculum exists independently of the breach
of the voluntary duty assumed by the parties when entering into the contractual relation.

With respect to extra-contractual obligation arising from negligence, whether of act or omission, it is
competent for the legislature to elect — and our Legislature has so elected — whom such an
obligation is imposed is morally culpable, or, on the contrary, for reasons of public policy, to extend
that liability, without regard to the lack of moral culpability, so as to include responsibility for the
negligence of those person who acts or mission are imputable, by a legal fiction, to others who are in
a position to exercise an absolute or limited control over them. The legislature which adopted our
Civil Code has elected to limit extra-contractual liability — with certain well-defined exceptions — to
cases in which moral culpability can be directly imputed to the persons to be charged. This moral
responsibility may consist in having failed to exercise due care in the selection and control of one's
agents or servants, or in the control of persons who, by reason of their status, occupy a position of
dependency with respect to the person made liable for their conduct.

The position of a natural or juridical person who has undertaken by contract to render service to
another, is wholly different from that to which article 1903 relates. When the sources of the obligation
upon which plaintiff's cause of action depends is a negligent act or omission, the burden of proof
rests upon plaintiff to prove the negligence — if he does not his action fails. But when the facts
averred show a contractual undertaking by defendant for the benefit of plaintiff, and it is alleged that
plaintiff has failed or refused to perform the contract, it is not necessary for plaintiff to specify in his
pleadings whether the breach of the contract is due to willful fault or to negligence on the part of the
defendant, or of his servants or agents. Proof of the contract and of its nonperformance is
sufficient prima facie to warrant a recovery.

As a general rule . . . it is logical that in case of extra-contractual culpa, a suing creditor

should assume the burden of proof of its existence, as the only fact upon which his action is
based; while on the contrary, in a case of negligence which presupposes the existence of a
contractual obligation, if the creditor shows that it exists and that it has been broken, it is not
necessary for him to prove negligence. (Manresa, vol. 8, p. 71 [1907 ed., p. 76]).

As it is not necessary for the plaintiff in an action for the breach of a contract to show that the breach
was due to the negligent conduct of defendant or of his servants, even though such be in fact the
actual cause of the breach, it is obvious that proof on the part of defendant that the negligence or
omission of his servants or agents caused the breach of the contract would not constitute a defense
to the action. If the negligence of servants or agents could be invoked as a means of discharging the
liability arising from contract, the anomalous result would be that person acting through the medium
of agents or servants in the performance of their contracts, would be in a better position than those
acting in person. If one delivers a valuable watch to watchmaker who contract to repair it, and the
bailee, by a personal negligent act causes its destruction, he is unquestionably liable. Would it be
logical to free him from his liability for the breach of his contract, which involves the duty to exercise
due care in the preservation of the watch, if he shows that it was his servant whose negligence
caused the injury? If such a theory could be accepted, juridical persons would enjoy practically
complete immunity from damages arising from the breach of their contracts if caused by negligent
acts as such juridical persons can of necessity only act through agents or servants, and it would no
doubt be true in most instances that reasonable care had been taken in selection and direction of
such servants. If one delivers securities to a banking corporation as collateral, and they are lost by
reason of the negligence of some clerk employed by the bank, would it be just and reasonable to
permit the bank to relieve itself of liability for the breach of its contract to return the collateral upon
the payment of the debt by proving that due care had been exercised in the selection and direction
of the clerk?

This distinction between culpa aquiliana, as the source of an obligation, and culpa contractual as a

mere incident to the performance of a contract has frequently been recognized by the supreme court
of Spain. (Sentencias of June 27, 1894; November 20, 1896; and December 13, 1896.) In the
decisions of November 20, 1896, it appeared that plaintiff's action arose ex contractu, but that
defendant sought to avail himself of the provisions of article 1902 of the Civil Code as a defense.
The Spanish Supreme Court rejected defendant's contention, saying:

These are not cases of injury caused, without any pre-existing obligation, by fault or
negligence, such as those to which article 1902 of the Civil Code relates, but of damages
caused by the defendant's failure to carry out the undertakings imposed by the
contracts . . . .

A brief review of the earlier decision of this court involving the liability of employers for damage done
by the negligent acts of their servants will show that in no case has the court ever decided that the
negligence of the defendant's servants has been held to constitute a defense to an action for
damages for breach of contract.

In the case of Johnson vs. David (5 Phil. Rep., 663), the court held that the owner of a carriage was
not liable for the damages caused by the negligence of his driver. In that case the court commented
on the fact that no evidence had been adduced in the trial court that the defendant had been
negligent in the employment of the driver, or that he had any knowledge of his lack of skill or
carefulness.

In the case of Baer Senior & Co's Successors vs. Compania Maritima (6 Phil. Rep., 215), the plaintiff
sued the defendant for damages caused by the loss of a barge belonging to plaintiff which was
allowed to get adrift by the negligence of defendant's servants in the course of the performance of a
contract of towage. The court held, citing Manresa (vol. 8, pp. 29, 69) that if the "obligation of the
defendant grew out of a contract made between it and the plaintiff . . . we do not think that the
provisions of articles 1902 and 1903 are applicable to the case."

In the case of Chapman vs. Underwood (27 Phil. Rep., 374), plaintiff sued the defendant to recover
damages for the personal injuries caused by the negligence of defendant's chauffeur while driving
defendant's automobile in which defendant was riding at the time. The court found that the damages
were caused by the negligence of the driver of the automobile, but held that the master was not
liable, although he was present at the time, saying:

. . . unless the negligent acts of the driver are continued for a length of time as to give the
owner a reasonable opportunity to observe them and to direct the driver to desist therefrom. .
. . The act complained of must be continued in the presence of the owner for such length of
time that the owner by his acquiescence, makes the driver's acts his own.

In the case of Yamada vs. Manila Railroad Co. and Bachrach Garage & Taxicab Co. (33 Phil. Rep.,
8), it is true that the court rested its conclusion as to the liability of the defendant upon article 1903,
although the facts disclosed that the injury complaint of by plaintiff constituted a breach of the duty to
him arising out of the contract of transportation. The express ground of the decision in this case was
that article 1903, in dealing with the liability of a master for the negligent acts of his servants "makes
the distinction between private individuals and public enterprise;" that as to the latter the law creates
a rebuttable presumption of negligence in the selection or direction of servants; and that in the
particular case the presumption of negligence had not been overcome.

It is evident, therefore that in its decision Yamada case, the court treated plaintiff's action as though
founded in tort rather than as based upon the breach of the contract of carriage, and an examination
of the pleadings and of the briefs shows that the questions of law were in fact discussed upon this
theory. Viewed from the standpoint of the defendant the practical result must have been the same in
any event. The proof disclosed beyond doubt that the defendant's servant was grossly negligent and
that his negligence was the proximate cause of plaintiff's injury. It also affirmatively appeared that
defendant had been guilty of negligence in its failure to exercise proper discretion in the direction of
the servant. Defendant was, therefore, liable for the injury suffered by plaintiff, whether the breach of
the duty were to be regarded as constituting culpa aquiliana or culpa contractual. As Manresa points
out (vol. 8, pp. 29 and 69) whether negligence occurs an incident in the course of the performance of
a contractual undertaking or its itself the source of an extra-contractual undertaking obligation, its
essential characteristics are identical. There is always an act or omission productive of damage due
to carelessness or inattention on the part of the defendant. Consequently, when the court holds that
a defendant is liable in damages for having failed to exercise due care, either directly, or in failing to
exercise proper care in the selection and direction of his servants, the practical result is identical in
either case. Therefore, it follows that it is not to be inferred, because the court held in the Yamada
case that defendant was liable for the damages negligently caused by its servants to a person to
whom it was bound by contract, and made reference to the fact that the defendant was negligent in
the selection and control of its servants, that in such a case the court would have held that it would
have been a good defense to the action, if presented squarely upon the theory of the breach of the
contract, for defendant to have proved that it did in fact exercise care in the selection and control of
the servant.
The true explanation of such cases is to be found by directing the attention to the relative spheres of
contractual and extra-contractual obligations. The field of non- contractual obligation is much more
broader than that of contractual obligations, comprising, as it does, the whole extent of juridical
human relations. These two fields, figuratively speaking, concentric; that is to say, the mere fact that
a person is bound to another by contract does not relieve him from extra-contractual liability to such
person. When such a contractual relation exists the obligor may break the contract under such
conditions that the same act which constitutes the source of an extra-contractual obligation had no
contract existed between the parties.

The contract of defendant to transport plaintiff carried with it, by implication, the duty to carry him in
safety and to provide safe means of entering and leaving its trains (civil code, article 1258). That
duty, being contractual, was direct and immediate, and its non-performance could not be excused by
proof that the fault was morally imputable to defendant's servants.

The railroad company's defense involves the assumption that even granting that the negligent
conduct of its servants in placing an obstruction upon the platform was a breach of its contractual
obligation to maintain safe means of approaching and leaving its trains, the direct and proximate
cause of the injury suffered by plaintiff was his own contributory negligence in failing to wait until the
train had come to a complete stop before alighting. Under the doctrine of comparative negligence
announced in the Rakes case (supra), if the accident was caused by plaintiff's own negligence, no
liability is imposed upon defendant's negligence and plaintiff's negligence merely contributed to his
injury, the damages should be apportioned. It is, therefore, important to ascertain if defendant was in
fact guilty of negligence.

It may be admitted that had plaintiff waited until the train had come to a full stop before alighting, the
particular injury suffered by him could not have occurred. Defendant contends, and cites many
authorities in support of the contention, that it is negligence per se for a passenger to alight from a
moving train. We are not disposed to subscribe to this doctrine in its absolute form. We are of the
opinion that this proposition is too badly stated and is at variance with the experience of every-day
life. In this particular instance, that the train was barely moving when plaintiff alighted is shown
conclusively by the fact that it came to stop within six meters from the place where he stepped from
it. Thousands of person alight from trains under these conditions every day of the year, and sustain
no injury where the company has kept its platform free from dangerous obstructions. There is no
reason to believe that plaintiff would have suffered any injury whatever in alighting as he did had it
not been for defendant's negligent failure to perform its duty to provide a safe alighting place.

We are of the opinion that the correct doctrine relating to this subject is that expressed in
Thompson's work on Negligence (vol. 3, sec. 3010) as follows:

The test by which to determine whether the passenger has been guilty of negligence in
attempting to alight from a moving railway train, is that of ordinary or reasonable care. It is to
be considered whether an ordinarily prudent person, of the age, sex and condition of the
passenger, would have acted as the passenger acted under the circumstances disclosed by
the evidence. This care has been defined to be, not the care which may or should be used
by the prudent man generally, but the care which a man of ordinary prudence would use
under similar circumstances, to avoid injury." (Thompson, Commentaries on Negligence, vol.
3, sec. 3010.)

Or, it we prefer to adopt the mode of exposition used by this court in Picart vs. Smith (37 Phil. rep.,
809), we may say that the test is this; Was there anything in the circumstances surrounding the
plaintiff at the time he alighted from the train which would have admonished a person of average
prudence that to get off the train under the conditions then existing was dangerous? If so, the plaintiff
should have desisted from alighting; and his failure so to desist was contributory negligence. 1awph!l.net

As the case now before us presents itself, the only fact from which a conclusion can be drawn to the
effect that plaintiff was guilty of contributory negligence is that he stepped off the car without being
able to discern clearly the condition of the platform and while the train was yet slowly moving. In
considering the situation thus presented, it should not be overlooked that the plaintiff was, as we
find, ignorant of the fact that the obstruction which was caused by the sacks of melons piled on the
platform existed; and as the defendant was bound by reason of its duty as a public carrier to afford
to its passengers facilities for safe egress from its trains, the plaintiff had a right to assume, in the
absence of some circumstance to warn him to the contrary, that the platform was clear. The place,
as we have already stated, was dark, or dimly lighted, and this also is proof of a failure upon the part
of the defendant in the performance of a duty owing by it to the plaintiff; for if it were by any
possibility concede that it had right to pile these sacks in the path of alighting passengers, the
placing of them adequately so that their presence would be revealed.

As pertinent to the question of contributory negligence on the part of the plaintiff in this case the
following circumstances are to be noted: The company's platform was constructed upon a level
higher than that of the roadbed and the surrounding ground. The distance from the steps of the car
to the spot where the alighting passenger would place his feet on the platform was thus reduced,
thereby decreasing the risk incident to stepping off. The nature of the platform, constructed as it was
of cement material, also assured to the passenger a stable and even surface on which to alight.
Furthermore, the plaintiff was possessed of the vigor and agility of young manhood, and it was by no
means so risky for him to get off while the train was yet moving as the same act would have been in
an aged or feeble person. In determining the question of contributory negligence in performing such
act — that is to say, whether the passenger acted prudently or recklessly — the age, sex, and
physical condition of the passenger are circumstances necessarily affecting the safety of the
passenger, and should be considered. Women, it has been observed, as a general rule are less
capable than men of alighting with safety under such conditions, as the nature of their wearing
apparel obstructs the free movement of the limbs. Again, it may be noted that the place was
perfectly familiar to the plaintiff as it was his daily custom to get on and of the train at this station.
There could, therefore, be no uncertainty in his mind with regard either to the length of the step
which he was required to take or the character of the platform where he was alighting. Our
conclusion is that the conduct of the plaintiff in undertaking to alight while the train was yet slightly
under way was not characterized by imprudence and that therefore he was not guilty of contributory
negligence.

The evidence shows that the plaintiff, at the time of the accident, was earning P25 a month as a
copyist clerk, and that the injuries he has suffered have permanently disabled him from continuing
that employment. Defendant has not shown that any other gainful occupation is open to plaintiff. His
expectancy of life, according to the standard mortality tables, is approximately thirty-three years. We
are of the opinion that a fair compensation for the damage suffered by him for his permanent
disability is the sum of P2,500, and that he is also entitled to recover of defendant the additional sum
of P790.25 for medical attention, hospital services, and other incidental expenditures connected with
the treatment of his injuries.

The decision of lower court is reversed, and judgment is hereby rendered plaintiff for the sum of
P3,290.25, and for the costs of both instances. So ordered.

Arellano, C.J., Torres, Street and Avanceña, JJ., concur.

G.R. No. 115024             February 7, 1996

MA. LOURDES VALENZUELA, petitioner,

vs.
COURT OF APPEALS, RICHARD LI and ALEXANDER COMMERCIAL, INC., respondents.

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

G.R. No. 117944             February 7, 1996

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

DECISION

KAPUNAN, J.:

These two petitions for review on certiorari under Rule 45 of the Revised Rules of Court stem from
an action to recover damages by petitioner Lourdes Valenzuela in the Regional Trial Court of
Quezon City for injuries sustained by her in a vehicular accident in the early morning of June 24,
1990. The facts found by the trial court are succinctly summarized by the Court of Appeals below:

This is an action to recover damages based on quasi-delict, for serious physical injuries
sustained in a vehicular accident.

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

Defendant Richard Li denied that he was negligent. He was on his way home, travelling at
55 kph; considering that it was raining, visibility was affected and the road was wet. Traffic
was light. He testified that he was driving along the inner portion of the right lane of Aurora
Blvd. towards the direction of Araneta Avenue, when he was suddenly confronted, in the
vicinity of A. Lake Street, San Juan, with a car coming from the opposite direction, travelling
at 80 kph, with "full bright lights". Temporarily blinded, he instinctively swerved to the right to
avoid colliding with the oncoming vehicle, and bumped plaintiff's car, which he did not see
because it was midnight blue in color, with no parking lights or early warning device, and the
area was poorly lighted. He alleged in his defense that the left rear portion of plaintiff's car
was protruding as it was then "at a standstill diagonally" on the outer portion of the right lane
towards Araneta Avenue (par. 18, Answer). He confirmed the testimony of plaintiff's witness
that after being bumped the car of the plaintiff swerved to the right and hit another car parked
on the sidewalk. Defendants counterclaimed for damages, alleging that plaintiff was reckless
or negligent, as she was not a licensed driver.

The police investigator, Pfc. Felic Ramos, who prepared the vehicular accident report and
the sketch of the three cars involved in the accident, testified that the plaintiff's car was "near
the sidewalk"; this witness did not remember whether the hazard lights of plaintiff's car were
on, and did not notice if there was an early warning device; there was a street light at the
corner of Aurora Blvd. and F. Roman, about 100 meters away. It was not mostly dark, i.e.
"things can be seen" (p. 16, tsn, Oct. 28, 1991).

A witness for the plaintiff, Rogelio Rodriguez, testified that after plaintiff alighted from her car
and opened the trunk compartment, defendant's car came approaching very fast ten meters
from the scene; the car was "zigzagging". The rear left side of plaintiff's car was bumped by
the front right portion of defendant's car; as a consequence, the plaintiff's car swerved to the
right and hit the parked car on the sidewalk. Plaintiff was thrown to the windshield of
defendant's car, which was destroyed, and landed under the car. He stated that defendant
was under the influence of liquor as he could "smell it very well" (pp. 43, 79, tsn, June 17,
1991).

After trial, the lower court sustained the plaintiff's submissions and found defendant Richard Li guilty
of gross negligence and liable for damages under Article 2176 of the Civil Code. The trial court
likewise held Alexander Commercial, Inc., Li's employer, jointly and severally liable for damages
pursuant to Article 2180. It ordered the defendants to jointly and severally pay the following amounts:

1. P41,840.00, as actual damages, representing the miscellaneous expenses of the plaintiff

as a result of her severed left leg;

2. The sums of (a) P37,500.00, for the unrealized profits because of the stoppage of
plaintiff's Bistro La Conga restaurant three (3) weeks after the accident on June 24, 1990; (b)
P20,000.00, a month, as unrealized profits of the plaintiff in her Bistro La Conga restaurant,
from August, 1990 until the date of this judgment and (c) P30,000.00, a month for unrealized
profits in plaintiff's two (2) beauty salons from July, 1990 until the date of this decision;

3. P1,000,000.00, in moral damages;

4. P50,000.00, as exemplary damages;

 5. P60,000.00, as reasonable attorney's fees; and

6. Costs.

As a result of the trial court's decision, defendants filed an Omnibus Motion for New Trial and for
Reconsideration, citing testimony in Criminal Case O.C. No. 804367 (People vs. Richard Li), tending
to show that the point of impact, as depicted by the pieces of glass/debris from the parties' cars,
appeared to be at the center of the right lane of Aurora Blvd. The trial court denied the motion.
Defendants forthwith filed an appeal with the respondent Court of Appeals. In a Decision rendered
March 30, 1994, the Court of Appeals found that there was "ample basis from the evidence of record
for the trial court's finding that the plaintiff's car was properly parked at the right, beside the sidewalk
when it was bumped by defendant's car." Dismissing the defendants' argument that the plaintiff's car
1 

was improperly parked, almost at the center of the road, the respondent court noted that evidence
which was supposed to prove that the car was at or near center of the right lane was never
presented during the trial of the case. The respondent court furthermore observed that:
2 

Defendant Li's testimony that he was driving at a safe speed of 55 km./hour is self serving; it
was not corroborated. It was in fact contradicted by eyewitness Rodriguez who stated that he
was outside his beerhouse located at Aurora Boulevard after A. Lake Street, at or about 2:00
a.m. of June 24, 1990 when his attention was caught by a beautiful lady (referring to the
plaintiff) alighting from her car and opening the trunk compartment; he noticed the car of
Richard Li "approaching very fast ten (10) meters away from the scene"; defendant's car was
zigzagging", although there were no holes and hazards on the street, and "bumped the leg of
the plaintiff" who was thrown against the windshield of defendant's care, causing its
destruction. He came to the rescue of the plaintiff, who was pulled out from under
defendant's car and was able to say "hurting words" to Richard Li because he noticed that
the latter was under the influence of liquor, because he "could smell it very well" (p.
36, et. seq., tsn, June 17, 1991). He knew that plaintiff owned a beerhouse in Sta. Mesa in
the 1970's, but did not know either plaintiff or defendant Li before the accident.

In agreeing with the trial court that the defendant Li was liable for the injuries sustained by the
plaintiff, the Court of Appeals, in its decision, however, absolved the Li's employer, Alexander
Commercial, Inc. from any liability towards petitioner Lourdes Valenzuela and reduced the amount of
moral damages to P500,000.00. Finding justification for exemplary damages, the respondent court
allowed an award of P50,000.00 for the same, in addition to costs, attorney's fees and the other
damages. The Court of Appeals, likewise, dismissed the defendants' counterclaims. 3

Consequently, both parties assail the respondent court's decision by filing two separate petitions
before this Court. Richard Li, in G.R. No. 117944, contends that he should not be held liable for
damages because the proximate cause of the accident was Ma. Lourdes Valenzuela's own
negligence. Alternatively, he argues that in the event that this Court finds him negligent, such
negligence ought to be mitigated by the contributory negligence of Valenzuela.

On the other hand, in G.R. No. 115024, Ma. Lourdes Valenzuela assails the respondent court's
decision insofar as it absolves Alexander Commercial, Inc. from liability as the owner of the car
driven by Richard Li and insofar as it reduces the amount of the actual and moral damages awarded
by the trial court. 4

As the issues are intimately related, both petitions are hereby consolidated.

It is plainly evident that the petition for review in G.R. No. 117944 raises no substantial questions of
law. What it, in effect, attempts to have this Court review are factual findings of the trial court, as
sustained by the Court of Appeals finding Richard Li grossly negligent in driving the Mitsubishi
Lancer provided by his company in the early morning hours of June 24, 1990. This we will not do. As
a general rule, findings of fact of the Court of Appeals are binding and conclusive upon us, and this
Court will not normally disturb such factual findings unless the findings of fact of the said court are
palpably unsupported by the evidence on record or unless the judgment itself is based on a
misapprehension of facts. 5

In the first place, Valenzuela's version of the incident was fully corroborated by an uninterested
witness, Rogelio Rodriguez, the owner-operator of an establishment located just across the scene of
the accident. On trial, he testified that he observed a car being driven at a "very fast" speed, racing
towards the general direction of Araneta Avenue. Rodriguez further added that he was standing in
6 

front of his establishment, just ten to twenty feet away from the scene of the accident, when he saw
the car hit Valenzuela, hurtling her against the windshield of the defendant's Mitsubishi Lancer, from
where she eventually fell under the defendant's car. Spontaneously reacting to the incident, he
crossed the street, noting that a man reeking with the smell of liquor had alighted from the offending
vehicle in order to survey the incident. Equally important, Rodriguez declared that he observed
7 

Valenzuela's car parked parallel and very near the sidewalk, contrary to Li's allegation that
8 

Valenzuela's car was close to the center of the right lane. We agree that as between Li's "self-
serving" asseverations and the observations of a witness who did not even know the accident victim
personally and who immediately gave a statement of the incident similar to his testimony to the
investigator immediately after the incident, the latter's testimony deserves greater weight. As the
court emphasized:

The issue is one of credibility and from Our own examination of the transcript, We are not
prepared to set aside the trial court's reliance on the testimony of Rodriguez negating
defendant's assertion that he was driving at a safe speed. While Rodriguez drives only a
motorcycle, his perception of speed is not necessarily impaired. He was subjected to cross-
examination and no attempt was made to question .his competence or the accuracy of his
statement that defendant was driving "very fast". This was the same statement he gave to
the police investigator after the incident, as told to a newspaper report (Exh. "P"). We see no
compelling basis for disregarding his testimony.

The alleged inconsistencies in Rodriguez' testimony are not borne out by an examination of
the testimony. Rodriguez testified that the scene of the accident was across the street where
his beerhouse is located about ten to twenty feet away (pp. 35-36, tsn, June 17, 1991). He
did not state that the accident transpired immediately in front of his establishment. The
ownership of the Lambingan se Kambingan is not material; the business is registered in the
name of his mother, but he explained that he owns the establishment (p. 5, tsn, June 20,
1991). Moreover, the testimony that the streetlights on his side of Aurora Boulevard were on
the night the accident transpired (p. 8) is not necessarily contradictory to the testimony of
Pfc. Ramos that there was a streetlight at the corner of Aurora Boulevard and F. Roman
Street (p. 45, tsn, Oct. 20, 1991).

With respect to the weather condition, Rodriguez testified that there was only a drizzle, not a
heavy rain and the rain has stopped and he was outside his establishment at the time the
accident transpired (pp. 64-65, tsn, June 17, 1991). This was consistent with plaintiff's
testimony that it was no longer raining when she left Bistro La Conga (pp. 10-11, tsn, April
29, 1991). It was defendant Li who stated that it was raining all the way in an attempt to
explain why he was travelling at only 50-55 kph. (p. 11, tsn, Oct. 14, 1991). As to the
testimony of Pfc. Ramos that it was raining, he arrived at the scene only in response to a
telephone call after the accident had transpired (pp. 9-10, tsn, Oct. 28, 1991). We find no
substantial inconsistencies in Rodriguez's testimony that would impair the essential integrity
 of his testimony or reflect on his honesty. We are compelled to affirm the trial court's
acceptance of the testimony of said eyewitness.

Against the unassailable testimony of witness Rodriguez we note that Li's testimony was peppered
with so many inconsistencies leading us to conclude that his version of the accident was merely
adroitly crafted to provide a version, obviously self-serving, which would exculpate him from any and
all liability in the incident. Against Valenzuela's corroborated claims, his allegations were neither
backed up by other witnesses nor by the circumstances proven in the course of trial. He claimed that
he was driving merely at a speed of 55 kph. when "out of nowhere he saw a dark maroon lancer
right in front of him, which was (the) plaintiff's car". He alleged that upon seeing this sudden
"apparition" he put on his brakes to no avail as the road was slippery. 9

One will have to suspend disbelief in order to give credence to Li's disingenuous and patently self-
serving asseverations. The average motorist alert to road conditions will have no difficulty applying
the brakes to a car traveling at the speed claimed by Li. Given a light rainfall, the visibility of the
street, and the road conditions on a principal metropolitan thoroughfare like Aurora Boulevard, Li
would have had ample time to react to the changing conditions of the road if he were alert - as every
driver should be - to those conditions. Driving exacts a more than usual toll on the senses.
Physiological "fight or flight"  mechanisms are at work, provided such mechanisms were not dulled
10 

by drugs, alcohol, exhaustion, drowsiness, etc. Li's failure to react in a manner which would have
11 

avoided the accident could therefore have been only due to either or both of the two factors: 1) that
he was driving at a "very fast" speed as testified by Rodriguez; and 2) that he was under the
influence of alcohol. Either factor working independently would have diminished his responsiveness
12 

to road conditions, since normally he would have slowed down prior to reaching Valenzuela's car,
rather than be in a situation forcing him to suddenly apply his brakes. As the trial court noted (quoted
with approval by respondent court):

Secondly, as narrated by defendant Richard Li to the San Juan Police immediately after the
incident, he said that while driving along Aurora Blvd., out of nowhere he saw a dark maroon
lancer right in front of him which was plaintiff's car, indicating, again, thereby that, indeed, he
was driving very fast, oblivious of his surroundings and the road ahead of him, because if he
was not, then he could not have missed noticing at a still far distance the parked car of the
plaintiff at the right side near the sidewalk which had its emergency lights on, thereby
avoiding forcefully bumping at the plaintiff who was then standing at the left rear edge of her
car.

Since, according to him, in his narration to the San Juan Police, he put on his brakes when
he saw the plaintiff's car in front of him, but that it failed as the road was wet and slippery,
this goes to show again, that, contrary to his claim, he was, indeed, running very fast. For,
were it otherwise, he could have easily completely stopped his car, thereby avoiding the
bumping of the plaintiff, notwithstanding that the road was wet and slippery. Verily, since, if,
indeed, he was running slow, as he claimed, at only about 55 kilometers per hour, then,
inspite of the wet and slippery road, he could have avoided hitting the plaintiff by the mere
expedient or applying his brakes at the proper time and distance.

It could not be true, therefore, as he now claims during his testimony, which is contrary to
what he told the police immediately after the accident and is, therefore, more believable, that
he did not actually step on his brakes but simply swerved a little to the right when he saw the
on-coming car with glaring headlights, from the opposite direction, in order to avoid it.

For, had this been what he did, he would not have bumped the car of the plaintiff which was
properly parked at the right beside the sidewalk. And, it was not even necessary for him to
 swerve a little to the right in order to safely avoid a collision with the on-coming car,
considering that Aurora Blvd. is a double lane avenue separated at the center by a dotted
white paint, and there is plenty of space for both cars, since her car was running at the right
lane going towards Manila on the on-coming car was also on its right lane going to Cubao. 13

Having come to the conclusion that Li was negligent in driving his company-issued Mitsubishi
Lancer, the next question for us to determine is whether or not Valenzuela was likewise guilty of
contributory negligence in parking her car alongside Aurora Boulevard, which entire area Li points
out, is a no parking zone.

We agree with the respondent court that Valenzuela was not guilty of contributory negligence.

Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to
the harm he has suffered, which falls below the standard to which he is required to conform for his
own protection. Based on the foregoing definition, the standard or act to which, according to
14 

petitioner Li, Valenzuela ought to have conformed for her own protection was not to park at all at any
point of Aurora Boulevard, a no parking zone. We cannot agree.

Courts have traditionally been compelled to recognize that an actor who is confronted with an
emergency is not to be held up to the standard of conduct normally applied to an individual who is in
no such situation. The law takes stock of impulses of humanity when placed in threatening or
dangerous situations and does not require the same standard of thoughtful and reflective care from
persons confronted by unusual and oftentimes threatening conditions. 15

Under the "emergency rule" adopted by this Court in Gan vs. Court of Appeals, an individual who
16 

suddenly finds himself in a situation of danger and is required to act without much time to consider
the best means that may be adopted to avoid the impending danger, is not guilty of negligence if he
fails to undertake what subsequently and upon reflection may appear to be a better solution, unless
the emergency was brought by his own negligence. 17

Applying this principle to a case in which the victims in a vehicular accident swerved to the wrong
lane to avoid hitting two children suddenly darting into the street, we held, in Mc Kee
vs. Intermediate Appellate Court, that the driver therein, Jose Koh, "adopted the best means
18 

possible in the given situation" to avoid hitting the children. Using the "emergency rule" the Court
concluded that Koh, in spite of the fact that he was in the wrong lane when the collision with an
oncoming truck occurred, was not guilty of negligence. 19

While the emergency rule applies to those cases in which reflective thought, or the opportunity to
adequately weigh a threatening situation is absent, the conduct which is required of an individual in
such cases is dictated not exclusively by the suddenness of the event which absolutely negates
thoroughful care, but by the over-all nature of the circumstances. A woman driving a vehicle
suddenly crippled by a flat tire on a rainy night will not be faulted for stopping at a point which is both
convenient for her to do so and which is not a hazard to other motorists. She is not expected to run
the entire boulevard in search for a parking zone or turn on a dark street or alley where she would
likely find no one to help her. It would be hazardous for her not to stop and assess the emergency
(simply because the entire length of Aurora Boulevard is a no-parking zone) because the hobbling
vehicle would be both a threat to her safety and to other motorists. In the instant case, Valenzuela,
upon reaching that portion of Aurora Boulevard close to A. Lake St., noticed that she had a flat tire.
To avoid putting herself and other motorists in danger, she did what was best under the situation. As
narrated by respondent court: "She stopped at a lighted place where there were people, to verify
whether she had a flat tire and to solicit help if needed. Having been told by the people present that
her rear right tire was flat and that she cannot reach her home she parked along the sidewalk, about
1 1/2 feet away, behind a Toyota Corona Car." In fact, respondent court noted, Pfc. Felix Ramos,
20 

the investigator on the scene of the accident confirmed that Valenzuela's car was parked very close
to the sidewalk. The sketch which he prepared after the incident showed Valenzuela's car partly
21 

straddling the sidewalk, clear and at a convenient distance from motorists passing the right lane of
Aurora Boulevard. This fact was itself corroborated by the testimony of witness Rodriguez. 22

Under the circumstances described, Valenzuela did exercise the standard reasonably dictated by
the emergency and could not be considered to have contributed to the unfortunate circumstances
which eventually led to the amputation of one of her lower extremities. The emergency which led her
to park her car on a sidewalk in Aurora Boulevard was not of her own making, and it was evident
that she had taken all reasonable precautions.

Obviously in the case at bench, the only negligence ascribable was the negligence of Li on the night
of the accident. "Negligence, as it is commonly understood is conduct which creates an undue risk of
harm to others." It is the failure to observe that degree of care, precaution, and vigilance which the
23 

circumstances justly demand, whereby such other person suffers injury. We stressed, in Corliss
24 

vs. Manila Railroad Company, that negligence is the want of care required by the circumstances.
25 

The circumstances established by the evidence adduced in the court below plainly demonstrate that
Li was grossly negligent in driving his Mitsubishi Lancer. It bears emphasis that he was driving at a
fast speed at about 2:00 A.M. after a heavy downpour had settled into a drizzle rendering the street
slippery. There is ample testimonial evidence on record to show that he was under the influence of
liquor. Under these conditions, his chances of effectively dealing with changing conditions on the
road were significantly lessened. As Presser and Keaton emphasize:

[U]nder present day traffic conditions, any driver of an automobile must be prepared for the
sudden appearance of obstacles and persons on the highway, and of other vehicles at
intersections, such as one who sees a child on the curb may be required to anticipate its
sudden dash into the street, and his failure to act properly when they appear may be found
to amount to negligence. 26

Li's obvious unpreparedness to cope with the situation confronting him on the night of the accident
was clearly of his own making.

We now come to the question of the liability of Alexander Commercial, Inc. Li's employer. In denying
liability on the part of Alexander Commercial, the respondent court held that:

There is no evidence, not even defendant Li's testimony, that the visit was in connection with
official matters. His functions as assistant manager sometimes required him to perform work
outside the office as he has to visit buyers and company clients, but he admitted that on the
night of the accident he came from BF Homes Paranaque he did not have "business from
the company" (pp. 25-26, ten, Sept. 23, 1991). The use of the company car was partly
required by the nature of his work, but the privilege of using it for non-official business is a
"benefit", apparently referring to the fringe benefits attaching to his position.

Under the civil law, an employer is liable for the negligence of his employees in the discharge
of their respective duties, the basis of which liability is not respondeat superior, but the
relationship of pater familias, which theory bases the liability of the master ultimately on his
own negligence and not on that of his servant (Cuison v. Norton and Harrison Co., 55 Phil.
18). Before an employer may be held liable for the negligence of his employee, the act or
omission which caused damage must have occurred while an employee was in the actual
performance of his assigned tasks or duties (Francis High School vs. Court of Appeals, 194
 SCRA 341). In defining an employer's liability for the acts done within the scope of the
employee's assigned tasks, the Supreme Court has held that this includes any act done by
an employee, in furtherance of the interests of the employer or for the account of the
employer at the time of the infliction of the injury or damage (Filamer Christian Institute vs.
Intermediate Appellate Court, 212 SCRA 637). An employer is expected to impose upon its
employees the necessary discipline called for in the performance of any act "indispensable
to the business and beneficial to their employer" (at p. 645).

In light of the foregoing, We are unable to sustain the trial court's finding that since defendant
Li was authorized by the company to use the company car "either officially or socially or even
bring it home", he can be considered as using the company car in the service of his
employer or on the occasion of his functions. Driving the company car was not among his
functions as assistant manager; using it for non-official purposes would appear to be a fringe
benefit, one of the perks attached to his position. But to impose liability upon the employer
under Article 2180 of the Civil Code, earlier quoted, there must be a showing that the
damage was caused by their employees in the service of the employer or on the occasion of
their functions. There is no evidence that Richard Li was at the time of the accident
performing any act in furtherance of the company's business or its interests, or at least for its
benefit. The imposition of solidary liability against defendant Alexander Commercial
Corporation must therefore fail.27

We agree with the respondent court that the relationship in question is not based on the principle
of respondeat superior, which holds the master liable for acts of the servant, but that of pater
familias, in which the liability ultimately falls upon the employer, for his failure to exercise the
diligence of a good father of the family in the selection and supervision of his employees. It is up to
this point, however, that our agreement with the respondent court ends. Utilizing the bonus pater
familias standard expressed in Article 2180 of the Civil Code,  we are of the opinion that Li's
28 

employer, Alexander Commercial, Inc. is jointly and solidarily liable for the damage caused by the
accident of June 24, 1990.

First, the case of St. Francis High School vs. Court of Appeals upon which respondent court has
29 

placed undue reliance, dealt with the subject of a school and its teacher's supervision of students
during an extracurricular activity. These cases now fall under the provision on special parental
authority found in Art. 218 of the Family Code which generally encompasses all authorized school
activities, whether inside or outside school premises.

Second, the employer's primary liability under the concept of pater familias embodied by Art 2180 (in
relation to Art. 2176) of the Civil Code is quasi-delictual or tortious in character. His liability is
relieved on a showing that he exercised the diligence of a good father of the family in the selection
and supervision of its employees. Once evidence is introduced showing that the employer exercised
the required amount of care in selecting its employees, half of the employer's burden is overcome.
The question of diligent supervision, however, depends on the circumstances of employment.

Ordinarily, evidence demonstrating that the employer has exercised diligent supervision of its
employee during the performance of the latter's assigned tasks would be enough to relieve him of
the liability imposed by Article 2180 in relation to Article 2176 of the Civil Code. The employer is not
expected to exercise supervision over either the employee's private activities or during the
performance of tasks either unsanctioned by the former or unrelated to the employee's tasks. The
case at bench presents a situation of a different character, involving a practice utilized by large
companies with either their employees of managerial rank or their representatives.
It is customary for large companies to provide certain classes of their employees with courtesy
vehicles. These company cars are either wholly owned and maintained by the company itself or are
subject to various plans through which employees eventually acquire their vehicles after a given
period of service, or after paying a token amount. Many companies provide liberal "car plans" to
enable their managerial or other employees of rank to purchase cars, which, given the cost of
vehicles these days, they would not otherwise be able to purchase on their own.

Under the first example, the company actually owns and maintains the car up to the point of turnover
of ownership to the employee; in the second example, the car is really owned and maintained by the
employee himself. In furnishing vehicles to such employees, are companies totally absolved of
responsibility when an accident involving a company-issued car occurs during private use after
normal office hours?

Most pharmaceutical companies, for instance, which provide cars under the first plan, require
rigorous tests of road worthiness from their agents prior to turning over the car (subject of company
maintenance) to their representatives. In other words, like a good father of a family, they entrust the
company vehicle only after they are satisfied that the employee to whom the car has been given full
use of the said company car for company or private purposes will not be a threat or menace to
himself, the company or to others. When a company gives full use and enjoyment of a company car
to its employee, it in effect guarantees that it is, like every good father, satisfied that its employee will
use the privilege reasonably and responsively.

In the ordinary course of business, not all company employees are given the privilege of using a
company-issued car. For large companies other than those cited in the example of the preceding
paragraph, the privilege serves important business purposes either related to the image of success
an entity intends to present to its clients and to the public in general, or - for practical and utilitarian
reasons - to enable its managerial and other employees of rank or its sales agents to reach clients
conveniently. In most cases, providing a company car serves both purposes. Since important
business transactions and decisions may occur at all hours in all sorts of situations and under all
kinds of guises, the provision for the unlimited use of a company car therefore principally serves the
business and goodwill of a company and only incidentally the private purposes of the individual who
actually uses the car, the managerial employee or company sales agent. As such, in providing for a
company car for business use and/or for the purpose of furthering the company's image, a company
owes a responsibility to the public to see to it that the managerial or other employees to whom it
entrusts virtually unlimited use of a company issued car are able to use the company issue capably
and responsibly.

In the instant case, Li was an Assistant Manager of Alexander Commercial, Inc. In his testimony
before the trial court, he admitted that his functions as Assistant Manager did not require him to
scrupulously keep normal office hours as he was required quite often to perform work outside the
office, visiting prospective buyers and contacting and meeting with company clients.  These30 

meetings, clearly, were not strictly confined to routine hours because, as a managerial employee
tasked with the job of representing his company with its clients, meetings with clients were both
social as well as work-related functions. The service car assigned to Li by Alexander Commercial,
Inc. therefore enabled both Li - as well as the corporation - to put up the front of a highly successful
entity, increasing the latter's goodwill before its clientele. It also facilitated meeting between Li and its
clients by providing the former with a convenient mode of travel.

Moreover, Li's claim that he happened to be on the road on the night of the accident because he was
coming from a social visit with an officemate in Paranaque was a bare allegation which was never
corroborated in the court below. It was obviously self-serving. Assuming he really came from his
officemate's place, the same could give rise to speculation that he and his officemate had just been
from a work-related function, or they were together to discuss sales and other work related
strategies.

In fine, Alexander Commercial, inc. has not demonstrated, to our satisfaction, that it exercised the
care and diligence of a good father of the family in entrusting its company car to Li. No allegations
were made as to whether or not the company took the steps necessary to determine or ascertain the
driving proficiency and history of Li, to whom it gave full and unlimited use of a company car. Not
31 

having been able to overcome the burden of demonstrating that it should be absolved of liability for
entrusting its company car to Li, said company, based on the principle of bonus pater familias, ought
to be jointly and severally liable with the former for the injuries sustained by Ma. Lourdes Valenzuela
during the accident.

Finally, we find no reason to overturn the amount of damages awarded by the respondent court,
except as to the amount of moral damages. In the case of moral damages, while the said damages
are not intended to enrich the plaintiff at the expense of a defendant, the award should nonetheless
be commensurate to the suffering inflicted. In the instant case we are of the opinion that the
reduction in moral damages from an amount of P1,000,000.00 to P800,000,00 by the Court of
Appeals was not justified considering the nature of the resulting damage and the
predictable sequelae of the injury.

As a result of the accident, Ma. Lourdes Valenzuela underwent a traumatic amputation of her left
lower extremity at the distal left thigh just above the knee. Because of this, Valenzuela will forever be
deprived of the full ambulatory functions of her left extremity, even with the use of state of the art
prosthetic technology. Well beyond the period of hospitalization (which was paid for by Li), she will
be required to undergo adjustments in her prosthetic devise due to the shrinkage of the stump from
the process of healing.

These adjustments entail costs, prosthetic replacements and months of physical and occupational
rehabilitation and therapy. During her lifetime, the prosthetic devise will have to be replaced and re-
adjusted to changes in the size of her lower limb effected by the biological changes of middle-age,
menopause and aging. Assuming she reaches menopause, for example, the prosthetic will have to
be adjusted to respond to the changes in bone resulting from a precipitate decrease in calcium
levels observed in the bones of all post-menopausal women. In other words, the damage done to
her would not only be permanent and lasting, it would also be permanently changing and adjusting
to the physiologic changes which her body would normally undergo through the years. The
replacements, changes, and adjustments will require corresponding adjustive physical and
occupational therapy. All of these adjustments, it has been documented, are painful.

The foregoing discussion does not even scratch the surface of the nature of the resulting damage
because it would be highly speculative to estimate the amount of psychological pain, damage and
injury which goes with the sudden severing of a vital portion of the human body. A prosthetic device,
however technologically advanced, will only allow a reasonable amount of functional restoration of
the motor functions of the lower limb. The sensory functions are forever lost. The resultant anxiety,
sleeplessness, psychological injury, mental and physical pain are inestimable.

As the amount of moral damages are subject to this Court's discretion, we are of the opinion that the
amount of P1,000,000.00 granted by the trial court is in greater accord with the extent and nature of
the injury - physical and psychological - suffered by Valenzuela as a result of Li's grossly negligent
driving of his Mitsubishi Lancer in the early morning hours of the accident.

WHEREFORE, PREMISES CONSIDERED, the decision of the Court of Appeals is modified with the
effect of REINSTATING the judgment of the Regional Trial Court.
SO ORDERED.

Padilla, Bellosillo and Hermosisima, Jr., JJ., concur.

G.R. No. 34840           September 23, 1931

NARCISO GUTIERREZ, plaintiff-appellee,
vs.
BONIFACIO GUTIERREZ, MARIA V. DE GUTIERREZ, MANUEL GUTIERREZ, ABELARDO
VELASCO, and SATURNINO CORTEZ, defendants-appellants.

L.D. Lockwood for appellants Velasco and Cortez.

San Agustin and Roxas for other appellants.
Ramon Diokno for appellee.

MALCOLM, J.:

This is an action brought by the plaintiff in the Court of First Instance of Manila against the five
defendants, to recover damages in the amount of P10,000, for physical injuries suffered as a result
of an automobile accident. On judgment being rendered as prayed for by the plaintiff, both sets of
defendants appealed.

On February 2, 1930, a passenger truck and an automobile of private ownership collided while
attempting to pass each other on the Talon bridge on the Manila South Road in the municipality of
Las Piñas, Province of Rizal. The truck was driven by the chauffeur Abelardo Velasco, and was
owned by Saturnino Cortez. The automobile was being operated by Bonifacio Gutierrez, a lad 18
years of age, and was owned by Bonifacio's father and mother, Mr. and Mrs. Manuel Gutierrez. At
the time of the collision, the father was not in the car, but the mother, together will several other
members of the Gutierrez family, seven in all, were accommodated therein. A passenger in the
autobus, by the name of Narciso Gutierrez, was en route from San Pablo, Laguna, to Manila. The
collision between the bus and the automobile resulted in Narciso Gutierrez suffering a fracture right
leg which required medical attendance for a considerable period of time, and which even at the date
of the trial appears not to have healed properly.

It is conceded that the collision was caused by negligence pure and simple. The difference between
the parties is that, while the plaintiff blames both sets of defendants, the owner of the passenger
truck blames the automobile, and the owner of the automobile, in turn, blames the truck. We have
given close attention to these highly debatable points, and having done so, a majority of the court
are of the opinion that the findings of the trial judge on all controversial questions of fact find
sufficient support in the record, and so should be maintained. With this general statement set down,
we turn to consider the respective legal obligations of the defendants.

In amplification of so much of the above pronouncement as concerns the Gutierrez family, it may be
explained that the youth Bonifacio was in incompetent chauffeur, that he was driving at an excessive
rate of speed, and that, on approaching the bridge and the truck, he lost his head and so contributed
by his negligence to the accident. The guaranty given by the father at the time the son was granted a
license to operate motor vehicles made the father responsible for the acts of his son. Based on
these facts, pursuant to the provisions of article 1903 of the Civil Code, the father alone and not the
minor or the mother, would be liable for the damages caused by the minor.

We are dealing with the civil law liability of parties for obligations which arise from fault or
negligence. At the same time, we believe that, as has been done in other cases, we can take
cognizance of the common law rule on the same subject. In the United States, it is uniformly held
that the head of a house, the owner of an automobile, who maintains it for the general use of his
family is liable for its negligent operation by one of his children, whom he designates or permits to
run it, where the car is occupied and being used at the time of the injury for the pleasure of other
members of the owner's family than the child driving it. The theory of the law is that the running of
the machine by a child to carry other members of the family is within the scope of the owner's
business, so that he is liable for the negligence of the child because of the relationship of master and
servant. (Huddy On Automobiles, 6th ed., sec. 660; Missell vs. Hayes [1914], 91 Atl., 322.) The
liability of Saturnino Cortez, the owner of the truck, and of his chauffeur Abelardo Velasco rests on a
different basis, namely, that of contract which, we think, has been sufficiently demonstrated by the
allegations of the complaint, not controverted, and the evidence. The reason for this conclusion
reaches to the findings of the trial court concerning the position of the truck on the bridge, the speed
in operating the machine, and the lack of care employed by the chauffeur. While these facts are not
as clearly evidenced as are those which convict the other defendant, we nevertheless hesitate to
disregard the points emphasized by the trial judge. In its broader aspects, the case is one of two
drivers approaching a narrow bridge from opposite directions, with neither being willing to slow up
and give the right of way to the other, with the inevitable result of a collision and an accident.

The defendants Velasco and Cortez further contend that there existed contributory negligence on
the part of the plaintiff, consisting principally of his keeping his foot outside the truck, which
occasioned his injury. In this connection, it is sufficient to state that, aside from the fact that the
defense of contributory negligence was not pleaded, the evidence bearing out this theory of the case
is contradictory in the extreme and leads us far afield into speculative matters.

The last subject for consideration relates to the amount of the award. The appellee suggests that the
amount could justly be raised to P16,517, but naturally is not serious in asking for this sum, since no
appeal was taken by him from the judgment. The other parties unite in challenging the award of
P10,000, as excessive. All facts considered, including actual expenditures and damages for the
injury to the leg of the plaintiff, which may cause him permanent lameness, in connection with other
adjudications of this court, lead us to conclude that a total sum for the plaintiff of P5,000 would be
fair and reasonable. The difficulty in approximating the damages by monetary compensation is well
elucidated by the divergence of opinion among the members of the court, three of whom have
inclined to the view that P3,000 would be amply sufficient, while a fourth member has argued that
P7,500 would be none too much.

In consonance with the foregoing rulings, the judgment appealed from will be modified, and the
plaintiff will have judgment in his favor against the defendants Manuel Gutierrez, Abelardo Velasco,
and Saturnino Cortez, jointly and severally, for the sum of P5,000, and the costs of both instances.

Avanceña, C.J., Johnson, Street, Villamor, Ostrand, Romualdez, and Imperial, JJ., concur.
G.R. No. L-21438             September 28, 1966

AIR FRANCE, petitioner,
vs.
RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS, respondents.

Lichauco, Picazo and Agcaoili for petitioner.

Bengzon Villegas and Zarraga for respondent R. Carrascoso.

SANCHEZ, J.:

The Court of First Instance of Manila 1 sentenced petitioner to pay respondent Rafael Carrascoso
P25,000.00 by way of moral damages; P10,000.00 as exemplary damages; P393.20 representing
the difference in fare between first class and tourist class for the portion of the trip Bangkok-Rome,
these various amounts with interest at the legal rate, from the date of the filing of the complaint until
paid; plus P3,000.00 for attorneys' fees; and the costs of suit.

On appeal,2 the Court of Appeals slightly reduced the amount of refund on Carrascoso's plane ticket
from P393.20 to P383.10, and voted to affirm the appealed decision "in all other respects", with
costs against petitioner.

The case is now before us for review on certiorari.

The facts declared by the Court of Appeals as " fully supported by the evidence of record", are:

Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for
Lourdes on March 30, 1958.

On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air
Lines, Inc., issued to plaintiff a "first class" round trip airplane ticket from Manila to Rome.
From Manila to Bangkok, plaintiff travelled in "first class", but at Bangkok, the Manager of the
defendant airline forced plaintiff to vacate the "first class" seat that he was occupying
because, in the words of the witness Ernesto G. Cuento, there was a "white man", who, the
Manager alleged, had a "better right" to the seat. When asked to vacate his "first class" seat,
the plaintiff, as was to be expected, refused, and told defendant's Manager that his seat
would be taken over his dead body; a commotion ensued, and, according to said Ernesto G.
Cuento, "many of the Filipino passengers got nervous in the tourist class; when they found
out that Mr. Carrascoso was having a hot discussion with the white man [manager], they
came all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white
man" (Transcript, p. 12, Hearing of May 26, 1959); and plaintiff reluctantly gave his "first
class" seat in the plane.3

1. The trust of the relief petitioner now seeks is that we review "all the findings"  4 of respondent Court
of Appeals. Petitioner charges that respondent court failed to make complete findings of fact on all
the issues properly laid before it. We are asked to consider facts favorable to petitioner, and then, to
overturn the appellate court's decision.
Coming into focus is the constitutional mandate that "No decision shall be rendered by any court of
record without expressing therein clearly and distinctly the facts and the law on which it is
based". 5 This is echoed in the statutory demand that a judgment determining the merits of the case
shall state "clearly and distinctly the facts and the law on which it is based";  6 and that "Every
decision of the Court of Appeals shall contain complete findings of fact on all issues properly raised
before it". 7

A decision with absolutely nothing to support it is a nullity. It is open to direct attack.  8 The law,
however, solely insists that a decision state the "essential ultimate facts" upon which the court's
conclusion is drawn. 9 A court of justice is not hidebound to write in its decision every bit and piece of
evidence 10 presented by one party and the other upon the issues raised. Neither is it to be burdened
with the obligation "to specify in the sentence the facts" which a party "considered as proved". 11 This
is but a part of the mental process from which the Court draws the essential ultimate facts. A
decision is not to be so clogged with details such that prolixity, if not confusion, may result. So long
as the decision of the Court of Appeals contains the necessary facts to warrant its conclusions, it is
no error for said court to withhold therefrom "any specific finding of facts with respect to the evidence
for the defense". Because as this Court well observed, "There is no law that so requires". 12 Indeed,
"the mere failure to specify (in the decision) the contentions of the appellant and the reasons for
refusing to believe them is not sufficient to hold the same contrary to the requirements of the
provisions of law and the Constitution". It is in this setting that in Manigque, it was held that the mere
fact that the findings "were based entirely on the evidence for the prosecution without taking into
consideration or even mentioning the appellant's side in the controversy as shown by his own
testimony", would not vitiate the judgment. 13 If the court did not recite in the decision the testimony of
each witness for, or each item of evidence presented by, the defeated party, it does not mean that
the court has overlooked such testimony or such item of evidence. 14 At any rate, the legal
presumptions are that official duty has been regularly performed, and that all the matters within an
issue in a case were laid before the court and passed upon by it. 15

Findings of fact, which the Court of Appeals is required to make, maybe defined as "the written
statement of the ultimate facts as found by the court ... and essential to support the decision and
judgment rendered thereon". 16 They consist of the court's "conclusions" with respect to the
determinative facts in issue". 17 A question of law, upon the other hand, has been declared as "one
which does not call for an examination of the probative value of the evidence presented by the
parties." 18

2. By statute, "only questions of law may be raised" in an appeal by certiorari from a judgment of the
Court of Appeals. 19 That judgment is conclusive as to the facts. It is not appropriately the business of
this Court to alter the facts or to review the questions of fact. 20

With these guideposts, we now face the problem of whether the findings of fact of the Court of
Appeals support its judgment.

3. Was Carrascoso entitled to the first class seat he claims?

It is conceded in all quarters that on March 28, 1958 he paid to and received from petitioner a first
class ticket. But petitioner asserts that said ticket did not represent the true and complete intent and
agreement of the parties; that said respondent knew that he did not have confirmed reservations for
first class on any specific flight, although he had tourist class protection; that, accordingly, the
issuance of a first class ticket was no guarantee that he would have a first class ride, but that such
would depend upon the availability of first class seats.
These are matters which petitioner has thoroughly presented and discussed in its brief before the
Court of Appeals under its third assignment of error, which reads: "The trial court erred in finding that
plaintiff had confirmed reservations for, and a right to, first class seats on the "definite" segments of
his journey, particularly that from Saigon to Beirut". 21

And, the Court of Appeals disposed of this contention thus:

Defendant seems to capitalize on the argument that the issuance of a first-class ticket was
no guarantee that the passenger to whom the same had been issued, would be
accommodated in the first-class compartment, for as in the case of plaintiff he had yet to
make arrangements upon arrival at every station for the necessary first-class reservation.
We are not impressed by such a reasoning. We cannot understand how a reputable firm like
defendant airplane company could have the indiscretion to give out tickets it never meant to
honor at all. It received the corresponding amount in payment of first-class tickets and yet it
allowed the passenger to be at the mercy of its employees. It is more in keeping with the
ordinary course of business that the company should know whether or riot the tickets it
issues are to be honored or not.22

Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner's contention,
thus:

On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be no question.
Apart from his testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1," "B-2", "C" and "C-1", and
defendant's own witness, Rafael Altonaga, confirmed plaintiff's testimony and testified as follows:

Q. In these tickets there are marks "O.K." From what you know, what does this OK mean?

A. That the space is confirmed.

Q. Confirmed for first class?

A. Yes, "first class". (Transcript, p. 169)

xxx     xxx     xxx

Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and Rafael Altonaga that
although plaintiff paid for, and was issued a "first class" airplane ticket, the ticket was subject to
confirmation in Hongkong. The court cannot give credit to the testimony of said witnesses. Oral
evidence cannot prevail over written evidence, and plaintiff's Exhibits "A", "A-l", "B", "B-l", "C" and "C-
1" belie the testimony of said witnesses, and clearly show that the plaintiff was issued, and paid for,
a first class ticket without any reservation whatever.

Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga testified that the
reservation for a "first class" accommodation for the plaintiff was confirmed. The court cannot believe
that after such confirmation defendant had a verbal understanding with plaintiff that the "first class"
ticket issued to him by defendant would be subject to confirmation in Hongkong. 23

We have heretofore adverted to the fact that except for a slight difference of a few pesos in the
amount refunded on Carrascoso's ticket, the decision of the Court of First Instance was affirmed by
the Court of Appeals in all other respects. We hold the view that such a judgment of affirmance has
merged the judgment of the lower court. 24 Implicit in that affirmance is a determination by the Court
of Appeals that the proceeding in the Court of First Instance was free from prejudicial error and "all
questions raised by the assignments of error and all questions that might have been raised are to be
regarded as finally adjudicated against the appellant". So also, the judgment affirmed "must be
regarded as free from all error". 25 We reached this policy construction because nothing in the
decision of the Court of Appeals on this point would suggest that its findings of fact are in any way at
war with those of the trial court. Nor was said affirmance by the Court of Appeals upon a ground or
grounds different from those which were made the basis of the conclusions of the trial court. 26

If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class seat,
notwithstanding the fact that seat availability in specific flights is therein confirmed, then an air
passenger is placed in the hollow of the hands of an airline. What security then can a passenger
have? It will always be an easy matter for an airline aided by its employees, to strike out the very
stipulations in the ticket, and say that there was a verbal agreement to the contrary. What if the
passenger had a schedule to fulfill? We have long learned that, as a rule, a written document speaks
a uniform language; that spoken word could be notoriously unreliable. If only to achieve stability in
the relations between passenger and air carrier, adherence to the ticket so issued is desirable. Such
is the case here. The lower courts refused to believe the oral evidence intended to defeat the
covenants in the ticket.

The foregoing are the considerations which point to the conclusion that there are facts upon which
the Court of Appeals predicated the finding that respondent Carrascoso had a first class ticket and
was entitled to a first class seat at Bangkok, which is a stopover in the Saigon to Beirut leg of the
flight. 27 We perceive no "welter of distortions by the Court of Appeals of petitioner's statement of its
position", as charged by petitioner. 28 Nor do we subscribe to petitioner's accusation that respondent
Carrascoso "surreptitiously took a first class seat to provoke an issue". 29 And this because, as
petitioner states, Carrascoso went to see the Manager at his office in Bangkok "to confirm my seat
and because from Saigon I was told again to see the Manager". 30 Why, then, was he allowed to take
a first class seat in the plane at Bangkok, if he had no seat? Or, if another had a better right to the
seat?

4. Petitioner assails respondent court's award of moral damages. Petitioner's trenchant claim is that
Carrascoso's action is planted upon breach of contract; that to authorize an award for moral
damages there must be an averment of fraud or bad faith; 31 and that the decision of the Court of
Appeals fails to make a finding of bad faith. The pivotal allegations in the complaint bearing on this
issue are:

3. That ... plaintiff entered into a contract of air carriage with the Philippine Air Lines for a
valuable consideration, the latter acting as general agents for and in behalf of the defendant,
under which said contract, plaintiff was entitled to, as defendant agreed to furnish plaintiff,
First Class passage on defendant's plane during the entire duration of plaintiff's tour of
Europe with Hongkong as starting point up to and until plaintiff's return trip to Manila, ... .

4. That, during the first two legs of the trip from Hongkong to Saigon and from Saigon to
Bangkok, defendant furnished to the plaintiff First Class accommodation but only after
protestations, arguments and/or insistence were made by the plaintiff with defendant's
employees.

5. That finally, defendant failed to provide First Class passage, but instead furnished plaintiff
only Tourist Class accommodations from Bangkok to Teheran and/or Casablanca, ... the
plaintiff has been compelled by defendant's employees to leave the First Class
accommodation berths at Bangkok after he was already seated.
 6. That consequently, the plaintiff, desiring no repetition of the inconvenience and
embarrassments brought by defendant's breach of contract was forced to take a Pan
American World Airways plane on his return trip from Madrid to Manila. 32

xxx     xxx     xxx

2. That likewise, as a result of defendant's failure to furnish First Class accommodations aforesaid,
plaintiff suffered inconveniences, embarrassments, and humiliations, thereby causing plaintiff mental
anguish, serious anxiety, wounded feelings, social humiliation, and the like injury, resulting in moral
damages in the amount of P30,000.00. 33

xxx     xxx     xxx

The foregoing, in our opinion, substantially aver: First, That there was a contract to furnish plaintiff a
first class passage covering, amongst others, the Bangkok-Teheran leg; Second, That said contract
was breached when petitioner failed to furnish first class transportation at Bangkok; and Third, that
there was bad faith when petitioner's employee compelled Carrascoso to leave his first class
accommodation berth "after he was already, seated" and to take a seat in the tourist class, by
reason of which he suffered inconvenience, embarrassments and humiliations, thereby causing him
mental anguish, serious anxiety, wounded feelings and social humiliation, resulting in moral
damages. It is true that there is no specific mention of the term bad faith in the complaint. But, the
inference of bad faith is there, it may be drawn from the facts and circumstances set forth
therein. 34 The contract was averred to establish the relation between the parties. But the stress of
the action is put on wrongful expulsion.

Quite apart from the foregoing is that (a) right the start of the trial, respondent's counsel placed
petitioner on guard on what Carrascoso intended to prove: That while sitting in the plane in Bangkok,
Carrascoso was ousted by petitioner's manager who gave his seat to a white man; 35 and (b)
evidence of bad faith in the fulfillment of the contract was presented without objection on the part of
the petitioner. It is, therefore, unnecessary to inquire as to whether or not there is sufficient averment
in the complaint to justify an award for moral damages. Deficiency in the complaint, if any, was cured
by the evidence. An amendment thereof to conform to the evidence is not even required. 36 On the
question of bad faith, the Court of Appeals declared:

That the plaintiff was forced out of his seat in the first class compartment of the plane
belonging to the defendant Air France while at Bangkok, and was transferred to the tourist
class not only without his consent but against his will, has been sufficiently established by
plaintiff in his testimony before the court, corroborated by the corresponding entry made by
the purser of the plane in his notebook which notation reads as follows:

"First-class passenger was forced to go to the tourist class against his will, and that
the captain refused to intervene",

and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-passenger. The
captain of the plane who was asked by the manager of defendant company at Bangkok to
intervene even refused to do so. It is noteworthy that no one on behalf of defendant ever
contradicted or denied this evidence for the plaintiff. It could have been easy for defendant to
present its manager at Bangkok to testify at the trial of the case, or yet to secure his
disposition; but defendant did neither. 37

The Court of appeals further stated —

Neither is there evidence as to whether or not a prior reservation was made by the white
man. Hence, if the employees of the defendant at Bangkok sold a first-class ticket to him
when all the seats had already been taken, surely the plaintiff should not have been picked
out as the one to suffer the consequences and to be subjected to the humiliation and
indignity of being ejected from his seat in the presence of others. Instead of explaining to the
white man the improvidence committed by defendant's employees, the manager adopted the
more drastic step of ousting the plaintiff who was then safely ensconsced in his rightful seat.
We are strengthened in our belief that this probably was what happened there, by the
testimony of defendant's witness Rafael Altonaga who, when asked to explain the meaning
of the letters "O.K." appearing on the tickets of plaintiff, said "that the space is confirmed for
first class. Likewise, Zenaida Faustino, another witness for defendant, who was the chief of
the Reservation Office of defendant, testified as follows:

"Q How does the person in the ticket-issuing office know what reservation the
passenger has arranged with you?

A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19,
1959)

In this connection, we quote with approval what the trial Judge has said on this point:

Why did the, using the words of witness Ernesto G. Cuento, "white man" have a
"better right" to the seat occupied by Mr. Carrascoso? The record is silent. The
defendant airline did not prove "any better", nay, any right on the part of the "white
man" to the "First class" seat that the plaintiff was occupying and for which he paid
and was issued a corresponding "first class" ticket.

If there was a justified reason for the action of the defendant's Manager in Bangkok,
the defendant could have easily proven it by having taken the testimony of the said
Manager by deposition, but defendant did not do so; the presumption is that
evidence willfully suppressed would be adverse if produced [Sec. 69, par (e), Rules
of Court]; and, under the circumstances, the Court is constrained to find, as it does
find, that the Manager of the defendant airline in Bangkok not merely asked but
threatened the plaintiff to throw him out of the plane if he did not give up his "first
class" seat because the said Manager wanted to accommodate, using the words of
the witness Ernesto G. Cuento, the "white man".38

It is really correct to say that the Court of Appeals in the quoted portion first transcribed did
not use the term "bad faith". But can it be doubted that the recital of facts therein points to
bad faith? The manager not only prevented Carrascoso from enjoying his right to a first class
seat; worse, he imposed his arbitrary will; he forcibly ejected him from his seat, made him
suffer the humiliation of having to go to the tourist class compartment - just to give way to
another passenger whose right thereto has not been established. Certainly, this is bad faith.
Unless, of course, bad faith has assumed a meaning different from what is understood in
law. For, "bad faith" contemplates a "state of mind affirmatively operating with furtive design
or with some motive of self-interest or will or for ulterior purpose." 39

And if the foregoing were not yet sufficient, there is the express finding of bad faith in the
judgment of the Court of First Instance, thus:

The evidence shows that the defendant violated its contract of transportation with
plaintiff in bad faith, with the aggravating circumstances that defendant's Manager in
 Bangkok went to the extent of threatening the plaintiff in the presence of many
passengers to have him thrown out of the airplane to give the "first class" seat that
he was occupying to, again using the words of the witness Ernesto G. Cuento, a
"white man" whom he (defendant's Manager) wished to accommodate, and the
defendant has not proven that this "white man" had any "better right" to occupy the
"first class" seat that the plaintiff was occupying, duly paid for, and for which the
corresponding "first class" ticket was issued by the defendant to him. 40

5. The responsibility of an employer for the tortious act of its employees need not be essayed. It is
well settled in law. 41 For the willful malevolent act of petitioner's manager, petitioner, his employer,
must answer. Article 21 of the Civil Code says:

ART. 21. Any person who willfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the
damage.

In parallel circumstances, we applied the foregoing legal precept; and, we held that upon the
provisions of Article 2219 (10), Civil Code, moral damages are recoverable. 42

6. A contract to transport passengers is quite different in kind and degree from any other contractual
relation. 43 And this, because of the relation which an air-carrier sustains with the public. Its business
is mainly with the travelling public. It invites people to avail of the comforts and advantages it offers.
The contract of air carriage, therefore, generates a relation attended with a public duty. Neglect or
malfeasance of the carrier's employees, naturally, could give ground for an action for damages.

Passengers do not contract merely for transportation. They have a right to be treated by the carrier's
employees with kindness, respect, courtesy and due consideration. They are entitled to be protected
against personal misconduct, injurious language, indignities and abuses from such employees. So it
is, that any rule or discourteous conduct on the part of employees towards a passenger gives the
latter an action for damages against the carrier. 44

Thus, "Where a steamship company 45 had accepted a passenger's check, it was a breach of

contract and a tort, giving a right of action for its agent in the presence of third persons to falsely
notify her that the check was worthless and demand payment under threat of ejection, though the
language used was not insulting and she was not ejected." 46 And this, because, although the
relation of passenger and carrier is "contractual both in origin and nature" nevertheless "the act that
breaks the contract may be also a tort". 47 And in another case, "Where a passenger on a railroad
train, when the conductor came to collect his fare tendered him the cash fare to a point where the
train was scheduled not to stop, and told him that as soon as the train reached such point he would
pay the cash fare from that point to destination, there was nothing in the conduct of the passenger
which justified the conductor in using insulting language to him, as by calling him a lunatic," 48 and
the Supreme Court of South Carolina there held the carrier liable for the mental suffering of said
passenger. 1awphîl.nèt

Petitioner's contract with Carrascoso is one attended with public duty. The stress of Carrascoso's
action as we have said, is placed upon his wrongful expulsion. This is a violation of public duty by
the petitioner air carrier — a case of quasi-delict. Damages are proper.

7. Petitioner draws our attention to respondent Carrascoso's testimony, thus —

Q You mentioned about an attendant. Who is that attendant and purser?

 A When we left already — that was already in the trip — I could not help it. So one of the
flight attendants approached me and requested from me my ticket and I said, What for? and
she said, "We will note that you transferred to the tourist class". I said, "Nothing of that kind.
That is tantamount to accepting my transfer." And I also said, "You are not going to note
anything there because I am protesting to this transfer".

Q Was she able to note it?

A No, because I did not give my ticket.

Q About that purser?

A Well, the seats there are so close that you feel uncomfortable and you don't have enough
leg room, I stood up and I went to the pantry that was next to me and the purser was there.
He told me, "I have recorded the incident in my notebook." He read it and translated it to me
— because it was recorded in French — "First class passenger was forced to go to the
tourist class against his will, and that the captain refused to intervene."

Mr. VALTE —

I move to strike out the last part of the testimony of the witness because the best evidence
would be the notes. Your Honor.

COURT —

I will allow that as part of his testimony. 49

Petitioner charges that the finding of the Court of Appeals that the purser made an entry in his
notebook reading "First class passenger was forced to go to the tourist class against his will, and
that the captain refused to intervene" is predicated upon evidence [Carrascoso's testimony above]
which is incompetent. We do not think so. The subject of inquiry is not the entry, but the ouster
incident. Testimony on the entry does not come within the proscription of the best evidence rule.
Such testimony is admissible. 49a

Besides, from a reading of the transcript just quoted, when the dialogue happened, the impact of the
startling occurrence was still fresh and continued to be felt. The excitement had not as yet died
down. Statements then, in this environment, are admissible as part of the res gestae. 50 For, they
grow "out of the nervous excitement and mental and physical condition of the declarant". 51 The
utterance of the purser regarding his entry in the notebook was spontaneous, and related to the
circumstances of the ouster incident. Its trustworthiness has been guaranteed. 52 It thus escapes the
operation of the hearsay rule. It forms part of the res gestae.

At all events, the entry was made outside the Philippines. And, by an employee of petitioner. It would
have been an easy matter for petitioner to have contradicted Carrascoso's testimony. If it were really
true that no such entry was made, the deposition of the purser could have cleared up the matter.

We, therefore, hold that the transcribed testimony of Carrascoso is admissible in evidence.

8. Exemplary damages are well awarded. The Civil Code gives the court ample power to grant
exemplary damages — in contracts and quasi- contracts. The only condition is that defendant should
have "acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner." 53 The manner of
ejectment of respondent Carrascoso from his first class seat fits into this legal precept. And this, in
addition to moral damages.54

9. The right to attorney's fees is fully established. The grant of exemplary damages justifies a similar
judgment for attorneys' fees. The least that can be said is that the courts below felt that it is but just
and equitable that attorneys' fees be given. 55 We do not intend to break faith with the tradition that
discretion well exercised — as it was here — should not be disturbed.

10. Questioned as excessive are the amounts decreed by both the trial court and the Court of
Appeals, thus: P25,000.00 as moral damages; P10,000.00, by way of exemplary damages, and
P3,000.00 as attorneys' fees. The task of fixing these amounts is primarily with the trial court.  56 The
Court of Appeals did not interfere with the same. The dictates of good sense suggest that we give
our imprimatur thereto. Because, the facts and circumstances point to the reasonableness thereof. 57

On balance, we say that the judgment of the Court of Appeals does not suffer from reversible error.
We accordingly vote to affirm the same. Costs against petitioner. So ordered.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Zaldivar and Castro, JJ.,
concur.
Bengzon, J.P., J., took no part.