SUPREME TRANSPORTATION LINER, INC. AND FELIX Q. RUZ, PETITIONERS, V.

ANTONIO SAN ANDRES, RESPONDENT.

DECISION
BERSAMIN, J.:
The requirement for the reservation of the civil action does not anymore apply to the
independent civil actions under Articles 32, 33, 34 and 2176 of the Civil Code. Such actions
may be filed at anytime, provided the plaintiff does not recover twice upon the same act or
omission.
The Case
Petitioners Supreme Transportation Liner Inc. and Felix Q. Ruz hereby assail the decision
promulgated on January 27, 2011,[1] whereby the Court of Appeals (CA) affirmed the
judgment rendered in Civil Case No. T- 2240 on November 24, 2008 by the Regional Trial
Court in Tabaco City dismissing their counterclaim on the ground that to allow their
counterclaim was tantamount to double recovery of damages, considering that the same
was not prosecuted in the criminal action against the respondent's driver. [2]
Antecedents
The relevant factual background was summarized by the CA thusly:
On November 5, 2002, at around 5:00 in the morning, Ernesto Belchez was driving a
passenger bus, Mabel Tours Bus with body number 1896-C and plate Number TB EBJ
(old)/TB EVL-648 (new), owned by [respondent] Antonio San Andres, along Maharlika
Highway in Barangay Malabanban Norte, Candelaria, Quezon, going towards the direction
of Manila. While traversing Maharlika Highway, the Mabel Tours Bus sideswiped a Toyota
Revo it was overtaking. The Mabel Tours Bus immediately swerved to the left lane but in
the process, it hit head-on the Supreme Bus owned and registered in the name of
[petitioner] Supreme Bus Transportation Line, Inc., and driven by [petitioner] Felix G. Ruz,
that was negotiating in the opposite lane. Because of the strong impact of the incident, the
Supreme Bus was pushed to the side of the road and the Mabel Tour Bus continuously
moved until it hit a passenger jeepney that was parked on the side of the road which later
on fell on the canal. Nobody died but all the vehicles were damaged.
Investigation of the incident and photographs of the damaged buses as well as the other
two (2) vehicles were conducted and undertaken by SPO1 Rafael Ausa of Candelaria,
Municipal Police Station.
[Respondent] then brought the Mabel Tours Bus to the RMB Assembler and Body Builder
to have it repaired. The cost of repair was estimated in the amount of One Hundred Forty
Four Thousand and Five Hundred Pesos (Php144,500.00).
On December 12, 2002, a complaint for damages before the Court a quo was instituted by
[respondent] Antonio San Andres against [petitioners] alleging actual damage to Mabel
Tours Bus and unrealized profits for the non-use of the Mabel Tours Bus at the time it
underwent repairs in the amount of P144,500.00 and P150,000.00, respectively. Claims for
attorney's fees of P30,000.00, appearance fee of P1,000.00, litigation expenses of
P20,000.00 and cost of the suit were also lodged in the complaint.
xxxx
Subsequently, [petitioners] filed their Answer with Counterclaim. They alleged among
others that plaintiff has no cause of action against them; the proximate cause of the
vehicular accident is the reckless imprudence of the [respondent's] driver, Ernesto Belchez
1
operated the Mabel Tours Bus recklessly and in violation of traffic laws and regulations in
negotiating the overtaking of another vehicle without regard to the rightful vehicle
occupying the right lane coming from the opposite direction resulting to head on collision
on the lane of defendant Supreme Bus and, at the time of the accident, [respondent]
operated the Mabel Tours Bus outside his franchise and without a registered plate.
By way of counterclaim, [petitioner] Supreme Transportation Liner, Inc. alleged that it
suffered damages in the aggregate amount of P500,000.00 and another P100,000.00 for the
medical expenses of its employees and passengers. The unwarranted filing of the case
forced them to secure the services of a counsel for P50,000.00 plus appearance fee of
P5,000.00 and litigation expenses in the amount of P3,000.00 including traveling expenses.
xxxx
After all the issues have been joined, the case was set for pre-trial conference wherein the
parties, in an effort to amicably settle the case, referred the case to conciliation. The
parties, however, failed to hammer out an amicable settlement. Hence, trial on the merits
ensued.
[The parties] presented oral and documentary evidence to support their claims and
contentions. [Respondent] presented himself and Ernesto Belchez who later became a
hostile witness. On the part of [petitioner and Ruz], Felix Ruz, SPO1 Rafael B. Ausa and
Assistant for Operations of [petitioner] Supreme Transportation Liner, Inc., Jessi Alvarez,
were presented.
In the course of trial, Jessi Alvarez stated that he filed a criminal complaint for reckless
imprudence resulting to damage to property against Ernesto Belchez before the Court in
Candelaria, Quezon. The case is now terminated and the accused was convicted because of
his admission of the crime charged. In the said criminal complaint, he did not reserve their
civil claim or asked (sic) the fiscal to reserve it, which, if itemized, would also be the amount
of their counterclaim in the present civil action filed by [respondent]. He added that they
did not receive any compensation for the civil aspect of the criminal case, and although the
Supreme Bus was covered by insurance, they did not claim for any reimbursement in
connection with the subject incident.[3]
Judgment of the RTC
On November 24, 2008, the RTC rendered judgment dismissing the respondent's complaint
as well as the petitioners' counterclaim,[4] decreeing:
From the foregoing, the instant complaint for damages filed by the plaintiff is hereby
dismissed for having failed to prove liability on the part of the defendant. The counterclaim
that was filed by the defendants hereof is also dismissed for failure to adhere to procedural
requirements.
SO ORDERED.[5]
The RTC opined that the respondent was not able to prove the petitioners' liability; [6] and
that the petitioners' counterclaim should also be dismissed pursuant to Section 1, Rule 111
of the Rules of Court,[7] whose pertinent portions the RTC quoted in its judgment as follows:
Section 1. Institution of criminal and civil actions. – When a criminal action is instituted,
the civil action for the recovery of civil liability is impliedly instituted with the criminal
action, unless the offended party waives the civil action, reserves his right to institute it
separately, or institute the civil action prior to the criminal action.

2
Such civil action includes recovery of indemnity under the Revised Penal Code, and
damages under Article 32, 33, 34 and 2176 of the Civil Code of the Philippines arising from
the same act or omission of the accused.
xxxx
The reservation of the right to institute the separate civil actions shall be made before the
prosecution starts to present its evidence and under circumstances affording the offended
party a reasonable opportunity to make such reservation. [8]
The RTC indicated that the petitioners' failure to reserve the right to institute a separate
civil action precluded their right to recover damages from the respondent through their
counterclaim.[9]
Aggrieved, the petitioners appealed, submitting that:
I.
THE TRIAL COURT ERRED IN NOT GRANTING THE COUNTERCLAIM
II.
THE TRIAL COURT ERRED IN DENYING THE COUNTERCLAIM BECAUSE NO
RESERVATION WAS MADE IN CRIMINAL CASE NO. 02-253 FILED AGAINST PLAINTIFF-
APPELLEE'S DRIVER ERNESTO BELCHEZ.[10]
Decision of the CA
In the assailed decision promulgated on January 27, 2011, [11] the CA dismissed the
petitioners' appeal, stating that the RTC had correctly ruled that the counterclaim could
not prosper because their recourse was limited to the enforcement of the respondent's
subsidiary liability under Article 103 of the Revised Penal Code;[12] that "to allow the
counterclaim of [petitioners] is tantamount to double recovery of damages, a prohibition
under Article 2177 of the New Civil Code and Sec. 3, Rule 111 of the Rules;" [13] and that
their failure to reserve the separate civil action meant that their right to recover under
Article 2176 of the Civil Code was deemed instituted with the criminal action.[14]
The CA denied the petitioners' motion for reconsideration through the resolution
promulgated on January 26, 2012.[15]
Hence, this appeal.
Issue
The Court is called upon to decide whether or not the petitioners' counterclaim was
correctly denied by the RTC.
Ruling of the Court
The appeal is meritorious.
The petitioners' counterclaim is allowed and should not have been dismissed by the RTC
and the CA despite their failure to reserve the right to file a separate civil action in the
criminal case they had brought against respondent's driver. However, whether or not they
could recover damages upon their counterclaim presents a different story, as they should
first show that they will not recover damages twice for the same incident.
1.
Petitioners' counterclaim, being in the
nature of an independent civil action,
required no prior reservation
As we see it, the CA concluded that the petitioners' cause of action should be limited to the
recovery of civil liability  ex delicto by virtue of their having initiated against the
respondent's driver the criminal complaint for criminal negligence under Article 365 of
3
the Revised Penal Code. The CA was seemingly of the opinion that the petitioners' recourse
against the respondent was limited to recovering from him, as the driver's employer, his
subsidiary liability under and pursuant to Article 103 [16] of the Revised Penal Code.
Moreover, the CA pointed out that the petitioners' failure to reserve the civil aspect of the
criminal case proscribed them from instituting a separate civil action based on Article 2176
of the Civil Code, to wit:
Corollary, appellants should have reserved the civil aspect of the criminal case they have
filed. Without so doing, they were deemed to have elected to recover damages from the bus
driver on the basis of the crime. Therefore, the right of appellants to institute a separate
civil case to recover liability from appellee based under Article 2176 of the Civil Code is
deemed instituted with the criminal action. Evidently, appellant's cause of action against
appellee will be limited to the recovery of the latter's subsidiary liability under Art. 103 of
the Revised Penal Code. x x x[17]
The CA thereby erred. It incorrectly appreciated the nature of the petitioners' cause of
action as presented in their counterclaim.
We only need to look at the facts alleged in the petitioners' counterclaim to determine the
correct nature of their cause of action. [18] The purpose of an action or suit and the law to
govern the suit are to be determined not by the claim of the party filing the action, made in
his argument or brief, but rather by the complaint itself, its allegations and prayer for relief.
[19]

The counterclaim relevantly reads:

xxxx
5. That the proximate cause of the subject vehicular accident is the reckless imprudence of
the plaintiffs driver, one ERNESTO BELCHEZ, by operating said Mabel Tours bus
recklessly and in violation of traffic laws and regulations in negotiating the overtaking of
another vehicle without regards (sic) to the rightful vehicle occupying the right lane coming
from the opposite direction resulting to head on collission (sic) on the lane of defendant's
SUPREME bus;
6. That at the time of the accident, plaintiff operated the subject Mabel Tour bus outside
his franchise, hence, in violation of his franchise and allied rules and regulations; operated
the same without registered plate and using the route of another franchise holder; and
COUNTERCLAIM
7. Defendants replead the precedings (sic) paragraphs as they may be relevant;
8. That as a result of plaintiff's violation of his franchise and gross negligence of his driver,
the defendant's SUPREME bus suffered damage in the aggregate amount of P500,000.00;
medical expenses for its employee and passengers in the amount of P100,000.00; [20]
xxxx
Contrary to the conclusion thereon by the CA, the petitioners' cause of action was upon a
quasi-delict. As such, their counterclaim against the respondent was based on Article 2184,
[21]
 in relation to Article 2180 [22] and Article 2176,[23] all of the Civil Code. It is relevant to
state that even the RTC itself acknowledged that the counterclaim was upon a quasi-delict,
as its ratiocination bears out, to wit:
The question is whether despite the absence of such reservation, private respondent may
nonetheless bring an action for damages against the plaintiff under the pertinent provisions
of the Civil Code, to wit:

4
Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.
Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own
acts or omissions, but also for those of persons for whom one is responsible.
xxxx
Employers shall be liable for the damages caused by their employees and household
helpers acting within the scope of their assigned task, even though the former are not
engaged in any business or industry.
Art. 2177 states that responsibility for fault or negligence under the above-quoted
provisions is entirely separate and distinct from the civil liability arising from negligence
under the Revised Penal Code.
However, Rule 111 of the Revised Rules of Criminal Procedure, while reiterating that a civil
action under the above quoted provisions of the New Civil Code may be brought separately
from the criminal action, provides that the right to bring it must be reserved. [24]
Yet, the RTC likewise erred on its outcome because its ratiocination was founded on the
obsolete version of the Rules of Court. By the time when the RTC rendered judgment on
November 24, 2008, the revised relevant rule of procedure had already been promulgated
and taken effect,[25] and it had specifically deleted the erstwhile reservation requirement vis-
a-vis the independent civil actions, as follows:
Section 1.  Institution of Criminal and Civil Actions. — (a) When a criminal action is
instituted, the civil action for the recovery of civil liability arising from the offense charged
shall be deemed instituted with the criminal action unless the offended party waives the
civil action, reserves the right to institute it separately or institutes the civil action prior to
the criminal action.
The reservation of the right to institute separately the civil action shall be made before the
prosecution starts presenting its evidence and under circumstances affording the offended
party a reasonable opportunity to make such reservation.
When the offended party seeks to enforce civil liability against the accused by way of moral,
nominal, temperate, or exemplary dan1ages without specifying the amount thereof in the
complaint or information, the filing fees therefor shall constitute a first lien on the
judgment awarding such damages.
Where the amount of damages, other than actual, is specified in the complaint or
information, the corresponding filing fees shall be paid by the offended party upon the filing
thereof in court.
Except as otherwise provided in these Rules, no filing fees shall be required for actual
damages.
No counterclaim, cross-claim or third-party complaint may be filed by the accused in the
criminal case, but any cause of action which could have been the subject thereof may be
litigated in a separate civil action. (1a)
(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include
the corresponding civil action. No reservation to file such civil action separately shall be
allowed.
Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in
full the filing fees based on the amount of the check involved, which shall be considered as
5
the actual damages claimed. Where the complaint or information also seeks to recover
liquidated, moral, nominal, temperate or exemplary damages, the offended party shall pay
additional filing fees based on the amounts alleged therein. If the amounts are not so
alleged but any of these damages are subsequently awarded by the court, the filing fees
based on the amount awarded shall constitute a first lien on the judgment.
Where the civil action has been filed separately and trial thereof has not yet commenced, it
may be consolidated with the criminal action upon application with the court trying the
latter case. If the application is granted, the trial of both actions shall proceed in
accordance with section 2 of this Rule governing consolidation of the civil and criminal
actions.
The en-or committed by the CA emanated from its failure to take into consideration that
the omission of the driver in violation of Article 365 of the  Revised Penal Code could give
rise not only to the obligation  ex delicto,[26] but also to the obligation based on  culpa
aquiliana under Article 2176 of the Civil Code. Under the factual antecedents herein, both
obligations rested on the common element of negligence. Article 2177 [27] of the Civil
Code and Section 3,[28] Rule 111 of the Rules of Court allow the injured party to prosecute
both criminal and civil actions simultaneously. As clarified in Casupanan v. Laroya:[29]
Under Section 1 of the present Rule 111, what is "deemed instituted" with the criminal
action is only the action to recover civil liability arising from the crime or  ex-delicto. All the
other civil actions under Articles 32, 33, 34 and 2176 of the Civil Code are no longer
"deemed instituted," and may be filed separately and prosecuted independently even
without any reservation in the criminal action. The failure to make a reservation in
the criminal action is not a waiver of the right to file a separate and independent
civil action based on these articles of the Civil Code. The prescriptive period on the civil
actions based on these articles of the Civil Code continues to run even with the filing of the
criminal action. Verily, the civil actions based on these articles of the Civil Code are
separate, distinct and independent of the civil action "deemed instituted" in the criminal
action. (Bold emphasis supplied)
The foregoing notwithstanding, the petitioners as the injured parties have to choose the
remedy by which to enforce their claim in the event of favorable decisions in both actions.
This is because Article 2177 of the Civil Code bars them from recovering damages twice
upon the same act or omission. As ruled in Safeguard Security Agency, Inc. v. Tangco:[30]
An act or omission causing damage to another may give rise to two separate civil liabilities
on the part of the offender, i.e., (1) civil liability ex delicto, under Article 100 of the Revised
Penal Code; and (2) independent civil liabilities, such as those (a) not arising from an act or
omission complained of as a felony,  e.g., culpa contractual or obligations arising from law
under Article 31 of the Civil Code, intentional torts under Articles 32 and 34, and  culpa
aquiliana under Article 2176 of the Civil Code; or (b) where the injured party is granted a
right to file an action independent and distinct from the criminal action under Article 33 of
the Civil Code. Either of these liabilities may be enforced against the offender subject to the
caveat under Article 2177 of the Civil Code that the offended party cannot recover damages
twice for the same act or omission or under both causes.
As can be seen, the latest iteration of Rule 111, unlike the predecessor, no longer includes
the independent civil actions under Articles 32, 33, 34, and 2176 of the Civil Code as
requiring prior reservation to be made in a previously instituted criminal action. Had it
been cautious and circumspect, the RTC could have avoided the error.
6
2.
Petitioners should first show that
they would not recover damages
twice from the same act or omission.
Nonetheless, we are constrained not to award outright the damages prayed for by the
petitioners in their counterclaim.
Article 2177 of the Civil Code and the present version of Section 3, Rule 111 of the Rules of
Court, which is the applicable rule of procedure, expressly prohibit double recovery of
damages arising from the same act or omission. The petitioners' allegation that they had
not yet recovered damages from the respondent was not controlling considering that the
criminal case against the respondent's driver had already been concluded. It remains for
the petitioners to still demonstrate that the RTC as the trial court did not award civil
damages in the criminal case. Consequently, Civil Case No. T-2240 should be remanded to
the RTC for further proceedings, if only to afford to the petitioners the opportunity to
present evidence on their counterclaim subject to the prohibition against double recovery of
damages.
WHEREFORE, the Court GRANTS the appeal; REVERSES and SETS ASIDE the decision
promulgated on January 27, 2011; and REMANDS Civil Case No. T-2240 to the Regional
Trial Court in Tabaco City for further proceedings to allow the petitioners to present
evidence on their counterclaim, subject to the foregoing clarifications.
No pronouncement on costs of suit.
SO ORDERED.

G.R. No. L-11318             October 26, 1918

THE MANILA RAILROAD CO., plaintiff-appellant,
vs.
LA COMPAÑIA TRANSATLANTICA, defendant-appellee. and
THE ATLANTIC GULF & PACIFIC CO., defendant-appellant.
William A. Kincaid & Thomas L. Hartigan for plaintiff-appellant.
Lawrence, Ross & Block for defendant-appellant Atlantic, Gulf & Pacific Co.
Gilbert, Cohn & Fisher for defendant-appellee Compañia Transatlantica.

STREET, J.:
In March 1914, the steamship Alicante, belonging to the Compañia Transatlantica de
Barcelona, arrived at Manila with two locomotive boilers aboard, the property of The Manila
Railroad Company. The equipment of the ship for discharging heavy cargo was not
sufficiently strong to handle these boilers, and it was therefore necessary for the Steamship
Company to procure assistance in the port of Manila.
The Atlantic, Gulf and Pacific Company (hereafter called the Atlantic Company) was
accordingly employed by the Steamship Company, as having probably the best equipment
for this purpose of any contracting company in the city. The service to be performed by the
Atlantic Company consisted in bringing it s floating crane alongside the Alicante, lifting the
boilers our of the ship's hold, and transferring them to a barge which would be placed
ready to receive them.
7
Upon the arrival of the Alicante, the Atlantic company sent out its crane in charge of one
Leyden. In preparing to hoist the first boiler the sling was unfortunately adjusted near the
middle of the boiler, and it was thus raised nearly in an horizontal position. The boiler was
too long to clear the hatch in this position, and after one end of the boiler had emerged on
one side of the hatch, the other still remained below on the other side. When the boiler had
been gotten into this position and was being hoisted still further, a river near the head of
the boiler was caught under the edge of the hatch. The weight on the crane was thus
increased by a strain estimated at fifteen tons with the result that the cable of the sling
parted and the boiler fell to the bottom of the ship's hold. The sling was again adjusted to
the boiler but instead of being placed near the middle it was now slung nearer one of the
ends, as should have been done at first. The boiler was gain lifted; but as it was being
brought up, the bolt at the end of the derrick book broke, and again the boiler fell.
The crane was repaired and the boiler discharged, but it was found to be so badly damaged
that it had to be reshipped to England where it was rebuilt, and afterwards was returned to
Manila. The Railroad Company's damage by reason of the cost of repairs, expenses and loss
of the use of the boiler proved to be P23,343.29; and as to the amount of the damage so
resulting there is practically no dispute. To recover these damages the present action was
instituted by the Railroad Company against the Steamship Company. the latter caused the
Atlantic Company to be brought in as a codefendant, and insisted that whatever liability
existed should be fixed upon the Atlantic Company as an independent contractor who had
undertaken to discharge the boilers and had become responsible for such damage as had
been done.
The judge of the Court of First Instance gave judgment in favor of the plaintiff against the
Atlantic Company, but the absolved the Steamship Company from the complaint. The
plaintiff has appealed from the action of the court in failing to give judgment against the
Steamship company, while the Atlantic company has appealed from the judgment against
it.
The mishap was undoubtedly due, as the lower court found, to the negligence of one
Leyden, the foreman in charge; and we may add that the evidence tends to show that his
negligence was of a type which may without exaggeration be denominated gross. The sling
was in the first place improperly adjusted, and the attention of Leyden was at once called to
this by the man in charge of the stevedores. Nevertheless he proceeded and, instead of
lowering the boiler when it was seen that it could not readily pass through the hatch, he
attempted to force it through; and the ship's tackle was brought into use to assist in this
maneuver. The second fall was, it appears, caused by the weakening of the bolt at the head
of the derrick boom, due to the shock incident to the first accident. This defect was possibly
such as not to be patent to external observation but we are of the opinion that a person of
sufficient skill to be trusted with the operation of machinery of this character should be
trusted with the operation of machinery of this character should have known that the crane
had possibly been weakened by the jar received in the first accident. The foreman was
therefore guilty of negligence in attempting to hoist the boiler the second time under the
conditions that had thus developed. It should be noted that the operation was at all its
states entirely under Leyden's control; and, although in the first lift he utilized the ship's
tackle to aid in hoisting the boiler, everything was done under his immediate supervision.
There is no evidence tending to show that the first fall of the boiler might have been due to
any hidden defect in the lifting apparatus; and if it had not been for the additional strain
8
caused by one end of the boiler catching under the hatch, the operation would doubtless
have been accomplished without difficulty. The accident is therefore to be attributed to the
failure of Leyden to exercise the degree of care which an ordinarily competent and prudent
person would have exhibited under the circumstances which then confronted him. This
conclusion of fact cannot be refuted; and, indeed, no attempt is here made by the appellant
to reverse this finding of the trial court.
Three questions are involved in the case, namely: (1) Is the steamship company liable to the
plaintiff by reason of having delivered the boiler in question in a damaged condition? (2) Is
the atlantic company liable to be made to respond to the steamship company for the
amount the latter may be required to pay to the plaintiff for the damage done? Is the
Atlantic company directly liable to the plaintiff, as the trial court held?
It will be observed that the contractual relation existed between the railroad company and
the steamship company; and the duties of the latter with respect to the carrying and
delivery of the boilers are to be discovered by considering the terms and legal effect of that
contract. A contractual relation also existed between the Steamship company and the
atlantic company; and the duties owing by the latter to the former with respect to the lifting
and the transferring of the boiler are likewise to be discovered by considering the terms and
legal effect of the contract between these parties. On the other hand, no contractual
relation existed directly between the Railroad Company and the Atlantic Company.
We are all agreed, that, under the contract for transportation from England to Manila, the
Steamship company is liable to the plaintiff for the injury done to the boiler while it was
being discharged from the ship. The obligation to transport the boiler necessarily involves
the duty to convey and deliver it in a proper condition according to its nature, and
conformably with good faith, custom, and the law (art. 1258, Civ. Code). The contract to
convey import the duty to convey and deliver safely and securely with reference to the
degree of care which, under the circumstances, are required by law and custom applicable
to the case. The duty to carry and to carry safely is all one.
Such being the contract of the Steamship Company, said company is necessarily liable,
under articles 1103 and 1104 of the Civil Code, for the consequences of the omission of the
care necessary to the proper performance of this obligation. The contact to transport and
deliver at the port of Manila a locomotive boiler, which was received by it in proper
condition, is not complied with the delivery at the port of destination of a mass of iron the
utility of which had been destroyed.
Nor does the Steamship Company escape liability by reason of the fact that it employed a
competent independent contractor to discharge the boilers. The law applicable to this
feature of the case will be more fully discussed further on in this opinion. At this point we
merely observe that in the performance of this service the Atlantic company, and it has
never yet been held that the failure to comply with a contractual obligation can be excused
by showing that such delinquency was due to the negligence of one to whom the
contracting party had committed the performance of the contract.
Coming to the question of the liability of the Atlantic Company to respond to the Steamship
Company for the damages which the latter will be compelled to pay to the plaintiff, we
observe that the defense of the Atlantic company comprises two contentions, to-wit, first,
that by the terms of the engagement in accordance with which the Atlantic company agreed
to render the service, all risk incident to the discharge of the boilers was assumed by the
steamship company, and secondly, that the atlantic company should be absolved under the
9
last paragraph of article 1903 of the civil code, inasmuch as it had used due care in the
selection of the employee whose negligent act caused the damage in question.
At the hearing in first instance the Atlantic Company introduced four witnesses to prove
that at the time said company agreed to lift the boilers out of the Alicante, as upon other
later occasions, the steamship company not be responsible for damage. The vice-president
of the atlantic company testified that hew as present upon the occasion when the agent of
the Steamship company made arrangements for the discharge of the boilers and he heard
the conversation between the president and said agent. According to this witness the
substance of the agreement was that, while the Atlantic Company would use all due care in
getting the boilers out, no responsibility was assumed for damage done either to ship or
cargo. The intermediary who acted as agent for the Steamship Company in arranging for
the performance of this service stoutly denied that any such terms were announced by the
officials or anybody else connected with the Atlantic Company at any time while the
arrangements were pending.
In the conflict of the evidence, we recognize that, by a preponderance of the evidence, some
reservation or other was made as to the responsibility of the Atlantic Company; was made
to the responsibility of the atlantic company and though the agent who acted on behalf of
the steamship company possibly never communicated this reservation to his principal, the
latter should nevertheless be held bound thereby. It thus becomes necessary to discover
what the exact terms of this supposed reservation were.
We think that we must put aside at once the words of studies precision with which the
president of the Atlantic company could exclude the possibility of any liability attaching to
his company, though we may accept his statement as showing that the excepted risk
contemplated breakage of the lifting equipment. There is undoubtedly a larger element of
truth in the more reasonable statement by the vice-president of the company. According to
this witness the contract combined two features, namely, an undertaking on the part of the
Atlantic Company to use all due care, combined with a reservation concerning the
company's liability for damage.
The Atlantic Company offered in evidence, a number of letters which had been written by it
at different times, extending over a period of years, in response to inquiries made by other
firms and person in Manila concerning the terms upon which the Atlantic Company was
not accustomed to assume the risk incident to such work and required the parties for
whom the service might be rendered either to carry the risk or insure against it. One such
letter, dated nearly four years prior to the occurrence such letter, dated nearly four years
prior to the occurrences which gave rise to this lawsuit, was addressed to the Compañia
Transatlantica de Barcelona one of the defendants in this case. It was stated in this
communication that the company's derrick would be subject to inspection prior to making
the lift but that the Atlantic Company would not assume responsibility for damage that
might occur either to ship or cargo from any whatsoever. The steamship company rejected
the services of the Atlantic company in that instance as being too onerous.
The letters directed to this parties, it may observed, would not, generally speaking, be
admissible as against the plaintiff for the purpose of proving that a similar reservation was
inserted in the contract with it on this occasion; but if knowledge of such custom is
brought home to the steamship company, the fact that such reservation was commonly
made is of some probative force. Reference to a number of these letters will show that no
particular formula was used by the Atlantic Company in defining its exemption, and the
10
tenor of these various communications differs materially. We think, however, that some of
the letters are of value as an aid in interpreting the reservation which the Atlantic Company
may have intended to make. We therefore quote from some of these letters as follows:
We will use our best endeavors to carry out the work successfully and will ask you to
inspect our plant but we wish it distinctly understood that we cannot assume
responsibility for damage which may occur . . . while the lift is being made. (To Rear
Admiral, U.S.N., Oct. 4, 1909.)
Our quotation is based on the understanding that we assume no responsibility from
any accident which may happen during our operations. We always insert this clause
as precautionary measure, but we have never had to avail ourselves of it as yet and
do not expect to now. (To "El Varadero de Manila," Nov. 1, 1913.)
As is customary in these cases, we will use all precaution as necessary to handle the
gun in a proper manner. Our equipment has been tested and will be again, before
making the lift, but we do not assume any responsibility for damage to the gun ship,
or cargo. (To Warner, Barnes & Co., June 7, 1909.)
The idea expressed in these letters is, we think entirely consonant with the interpretation
which the vice-president of the company placed upon the contract which was made with
the steamship company upon this occasion, that is, the company recognized its duty to
exercise due supervisory care; and the exemption from liability, whatever may have been its
precise words had reference to disasters which might result from some inherent hidden
defect in the lifting apparatus or other unforeseen occurrence not directly attributable to
negligence of the company in the lifting operations. Neither party could have supposed for a
moment that it was intended to absolve the Atlantic Company from its duty to use due care
in the work.
It is not pretended that negligence on the part of the Atlantic Company or its employees
was expressly included in the excepted risk, and we are of the opinion that the contract
should not be understood as covering such an exemption. It is a rudimentary principle that
the contractor is responsible for the work executed by persons whom he employees in its
performance, and this expressed in the Civil Code in the form of a positive rule of law (art.
1596). It is also expressly declared by law that liability arising from negligence is
demandable in the fulfillment of all kinds of obligations (art. 1103, Civil Code). Every
contract for the presentation of service therefore has annexed to it, as an inseparable
implicit obligation, the duty to exercise due care in the accomplishment of the work; and no
reservation whereby the person rendering the services seeks to escape from the
consequences of a violation of this obligations can viewed with favor.
Contracts against liability for negligence are not favored by law. In some instances,
such as common carriers, they are prohibited as against public policy. In all cases
such contracts should be construed strictly, with every intendment against the party
seeking its protection. (Crew vs. Bradstreet Company, 134 Pa. St., 161; 7 L. R. A.,
661; 19 Am. St. Rep., 681.)
The strictness with which contracts conferring such an unusual exemption are construed
is illustrated in Bryan vs. Eastern & Australian S. S. Co. (28 Phil. Rep., 310). The decision
in that case is not precisely applicable to the case at bar, since the court was there applying
the law of a foreign jurisdiction, and the question at issue involved a doctrine peculiar to
contracts of common carriers. Nevertheless the case is instructive as illustrating the
universal attitude of courts upon the right of a contracting party to stipulate against the
11
consequences of his own negligence. It there appeared that the plaintiff had purchased
from the defendant company a ticket for the transportation of himself and baggage from
Hongkong to Manila By the terms of the contract printed in legible type upon the back of
the ticket it was provided that the company could not hold itself responsible for any loss or
damage to luggage, under any circumstances whatsoever, unless it had been paid for as
freight. It was held that this limitation upon the liability of the defendant company did not
relieve it from liability of the defendant company for negligence of its servants by which the
baggage of the passenger was lost. Said the court: Ordinarily this language would seem to
be broad enough to cover every possible contingency, including the negligent act of the
defendant's servants. To so hold, however, would run counter to the established law of
England and the United States on that subject. The court then quoted the following
proposition from the decision of the King's Bench Division in Price & Co. vs. Union
Lighterage Co. ([1903], 1 K. B. D., 750, 754):
"An exemption in general words not expressly relating to negligence, even though the
words are wide enough to include loss by negligence or default of carriers' servants'
must be construed as limiting the liability of the carrier as assurer, and not as
relieving from the duty of the exercising reasonable skill and care."
Even admitting that, generally speaking, a person may stipulate against liability for the
consequences of negligence, at least in those cases where the negligence is not gross or
willful, the contract conferring such exemption must be so clear as to leave no room for the
operation of the ordinary rules of liability consecrated by experience and sanctioned by the
express provisions of law.
If the exemption should be understood in the scene that counsel for the Atlantic Company
now insists it should bear, that is, as an absolute exemption from all responsibility for
negligence, it is evident that the agreement was a most inequitable and unfair one, and
hence it is one that the steamship company can not be lightly assumed to have made.
Understood in that sense it is the equivalent of licensing the Atlantic Company to perform
its tasks in any manner and fashion that it might please, and to hold it harmless from the
consequences.
It is true that, in these days insurance can usually be obtained in the principal ports of
commerce by parties circumstanced as was the steamship company in the case now before
us. But the best insurance against disasters of this kind is found in the exercise of due
care; and the chief incentive to the exercise of care is a feeling of responsibility on the part
of him who undertakes the work. Naturally the courts are little inclined to aid tin the efforts
of contractors to evade this responsibility.
There may have been in the minds of the officials of the Atlantic Company an idea that the
promise to use due care in the lifting operations was not accompanied by a legal obligation,
such promise being intended merely for its moral effect as an assurance to the steamship
company that the latter might rely upon competence and diligence of the employees of the
Atlantic Company to accomplish the work in a proper way. The contract can not be
permitted to operate in this one-sided manner. The two features of the engagement,
namely, the promise to use due care and the exemption from liability for damage should be
so construed as to give some legal effect to both. The result is, as already indicated, that
the Atlantic Company was bound by its undertaking to use due care and that he exemption
was intended to cover accidents use to hidden defects in the apparatus or other

12
unforeseeable occurrences not having their origin in the immediate personal negligence of
the party in charge of the operations.
We now proceed to consider the contention that the Atlantic Company under the last
paragraph of article 1903 of the Civil Code, which declares that the liability there referred
to shall cease when the persons mentioned therein prove that they employed all the
diligence of a good father of a family to avoid the damage. In this connection the conclusion
of fact must be conceded in favor of the Atlantic Company that it had used proper care in
the selection of Leyden and that , so far as the company was aware, he was a person to
whom might properly be committed the task of discharging the boilers. The answer to the
contention, however is the obligation of the Atlantic Company was created by contract, and
article 1903 is not applicable to negligence arising in the course of the performance of a
contractual obligation. Article 1903 is exclusively concerned with cases where the
negligence arises in the absence of agreement.
In discussing the liability of the Steamship Company to the plaintiff Railroad Company we
have already shown that a party is bound to the full performance of his contractual
engagements under articles 1101 et seq. of the Civil Code, and other special provisions of
the Code relative to contractual obligations; and if he falls short of complete performance by
reason of his own negligence or that of any person to whom he may commit the work, he is
liable for the damages resulting therefrom. What was there said is also applicable with
reference to the liability of the Atlantic Company upon its contract with the Steamship
Company, and the same need not be here repeated. It is desirable, however, in this
connection, to bring out somewhat more fully the distinction between negligence in the
performance of a contractual obligation (culpa contractual) and neligence considered as an
independent source of obligation between parties not previously bound (culpa aquiliana).
This distinction is well established in legal jurisprudence and is fully recognized in the
provisions of the Civil Code. As illustrative of this, we quote the following passage from the
opinion of this Court in the well-known case of Rakes vs. Atlantic, Gulf & Pacific Co. (7
Phil. Rep., 359, 365), and in this quotation we reproduce the first paragraph of here
presenting a more correct English version of said passage.
The acts to which these articles are applicable are understood to be those not
growing out of preexisting duties of the parties to one another. But where relations
already formed give arise to duties, whether springing form contract or quasi-
contract, then breaches of those duties are subject to articles 1101, 1103, and 1104
of the same code. A typical application of this distinction may be found in the
consequences of a railway accident due to defective machinery supplied by the
employer. His liability to his employee would arise out of the contract for passage,
while that of the injured by-stander would originate in the negligent act itself. This
distinction is thus clearly set forth by Manresa in his commentary on article 1093:
"We see with reference to such obligations, that culpa, or negligence, may be
understood in two different senses, either
as culpa, substantive and independent, which of itself constitutes the source of
an obligation between two person not formerly bound by any other obligation;
or as an incident in the performance of an obligation which already existed,
and which increases the liability arising from the already existing obligation."
Justice Tracey, the author of the opinion from which we have quoted, proceeds to observe
that Manresa, in commenting on articles 1101 and 1104, has described these two species
13
of negligence as contractual and extra-contractual, the latter being the culpa aquiliana of
the Roman law. "This terminology is unreservedly accepted by Sanchez Roman (Derecho
Civil, fourth section, chapter XI, article II, No. 12), and the principle stated is supported by
decisions of the supreme court of Spain,. among them those of November 29, 11896
(80 Jurisprudencia Civil, No. 151), and June 27, 1894 (75 Jurisprudencia Civil, No. 182.)"
The principle that negligence in the performance of a contract is not governed by article of
the Civil Code but rather by article 1104 of the same Code was directly applied by this
court in the case of Baer Senior & Co.'s successors vs. Compañía Maritima (6 Phil. Rep.,
215); and the same idea has been impliedly if not expressly recognized in other cases (N. T.
Hashim & Co. vs. Rocha & Co., 18 Phil. Rep., 315; Tan Chiong Sian vs. Inchausti & Co., 22
Phil. Rep., 152).
What has been said suffices in our opinion to demonstrate that the Atlantic Company is
liable to the Steamship Company for the damages brought upon the latter by the failure of
the Atlantic company to use due care in discharging the boiler, regardless of the fact that
the damage was caused by the negligence of an employee who was qualified for the work
and who had been chosen by the Atlantic Company with due care.
This brings us to the last question here to be answered, which is, Can the Atlantic
Company be held directly liable to the Railroad Company? In other words, can the
judgement entered in the trial court directly in favor of the plaintiff against the Atlantic
Company be sustained? To answer this it is necessary to examine carefully the legal
relations existing between the Atlantic Company and the Railroad Company with reference
to this affair; and we shall for a moment ignore the existence of the contract between the
steamship company and the atlantic company, to which the railroad company was not a
party.
Having regard then to the bare fact that the Atlantic Company undertook to remove the
boiler from the ship's hold and for this purpose took the property into its power and
control, there arose a duty to the owner to use due care in the performance of that service
and to avoid damaging was obviously in existence before the negligent act may, if we still
ignore the existence of the express contract, be considered as an act done in violation of
this duty.
The duty thus to use due care is an implied obligation, of a quasi contractual nature, since
it is created by implication of liability with which we are here confronted is somewhat
similar to that which is revealed in the case of the depositary, or commodatary, whose legal
duty with respect to the property committed to their care is defined by law even in the
absence of express contract; and it can not be doubted that a person who takes possession
of the property of another for the purpose of moving or conveying it from one place to
another, or for the purpose of performing any other service in connection therewith (locatio
operis faciendi), owes to the owner a positive duty to refrain from damaging it, to the same
extent as if an agreement for the performance of such service had been expressly made with
the owner. The obligation as if an agreement made with the owner. The obligation here is
really a species of contract re, and it has its source and explanation in vital fact, that the
active party has taken upon himself to do something with or to the property and has taken
it into his power and control for the purpose of performing such service. (Compare art.
1889, Civil Code.)
In the passage which we have already from the decision in the Rakes case this Court
recognized the fact that the violation of a quasi-contractual duty is subject to articles 1101,
14
1103, 1104 of the Civil Code, and not within the purview of article 1903. Manresa also, in
the paragraph reproduced above is of the opinion that negligence, considered a substantive
and independent source of liability, does not include cases where the parties are previously
bound by any other obligation. Again, it is instructive in this connection to refer to the
contents of article 1103 of the Civil Code, where it is demandable in the fulfillment of all
kinds of obligations. These words evidently comprehend both forms of positive obligations,
whether arising from express contract or from implied contract (quasi contract).
In this connection it is instructive to recall celebrate case of Coggs vs. Bernard (2 Ld. Raym,
909), decided in the court of the King's Bench of England in the year of 1803. The action
was brought by the owner of certain casks of brandy to recover damages from a person who
had undertaken to transport them from one place to another. It was alleged that in so doing
the defendant so negligently and improvidently put then down that one of the casks was
staved and the brandy lost. The complaint did not allege that the defendant was a common
carrier or that he was to be paid for his services. It was therefore considered that the
compliant did not state facts sufficient to support an action for breach of any express
contract. This made it necessary for the court to go back to fundamental principles and to
place liability on the ground of a violation of the legal duty incident to the mere fact of
carriage. Said Powell, J.: "An action indeed will not lie for not doing the thing, for want of a
sufficient consideration; but yet if the bailee will take the goods into his custody, he shall
be answerable for them; for the taking of the goods into his custody is his own act." S9
Gould, J.: ". . . any man that undertakes to carry goods in liable to an action, be he a
common carrier or whatever he is, if through his neglect they are lost or come to any
damage: . . . . " Behind these expressions was an unbroken line of ancient English
precedents holding persons liable for damage inflicted by reason of a misfeasance in
carrying out an undertaking. The principle determined by the court in the case cited is
expressed in the syllabus in these words: 'If a man undertakes to carry goods safely and
securely, he is responsible for any damage they may sustain in the carriage through his
neglect, though he was not a common carrier and was to have nothing for the carriage."
Though not stated in so many words, this decision recognizes that from the mere fact that a
person takes the property of another into his possession and control there arises an
obligation in the nature of an assumpsit that he will use due care with respect thereto. This
must be considered a principle of universal jurisprudence, for it is consonant with justice
and common sense and as we have already seen harmonizes with the doctrine above
deduced from the provisions of the Civil Code.
The conclusion must therefore be that if there had been no contract of any sort between the
Atlantic company and the Steamship Company, an action could have been maintained by
the Railroad Company, as owner, against the Atlantic Company to recover the damages
sustained by the former. Such damages would have been demandable under article 1103 of
the Civil Code and the action would not have been subject to the qualification expressed in
the last paragraph of article 1903.
The circumstance that a contract was made between the Atlantic Company and the
Steamship company introduces, however, an important, and in our opinion controlling
factor into this branch of the case. It cannot be denied that the Steamship company has
possession of this boiler in the capacity of carrier and that as such it was authorized to
make a contract with Atlantic Company to discharge the same from the ship. Indeed, it
appears in evidence that even before the contract of affreightment was made the Railroad
15
Company was informed that it would necessary for steamship company to procure the
services of some contractor in the port of Manila to handle the discharge, as the ship's
tackle was inadequate to handle heavy cargo. It is therefore to be assumed that the
Railroad Company had in fact assented to the employment of a contractor to perform this
service.
Now, it cannot be admitted that a person who contract to do a service like that rendered by
the Atlantic company in this case incurs a double responsibility upon entering upon
performance, namely, a responsibility to the party with whom he contracted, and another
entirely different responsibility to the owner, based on an implied contract. The two
liabilities can not in our opinion coexist. It is a general rule that an implied conract never
arises where an express contract has been made.
If double responsibility existed in such case as this, it would result that a person who had
limited his liability by express stipulation might find himself liable to the owner without
regard to the limitation which he had seen fit to impose by contract. There appears to be no
possibility of reconciling the conflict that would be developed in attempting to give effect to
those inconsistent liabilities. The contract which was in fact made, in our opinion,
determine not only the character and extent of the liability of the Atlantic company but also
the person or entity by whom the obligation is eligible. It is of course quite clear that if the
Atlantic company had refused to carry out its agreement to discharge the cargo, the
plaintiff could have enforced specific performance and could not have recovered damages
for non-performance. (Art. 1257, Civil Code; Donaldson, Sim & Co. vs. Smith, Bell & Co., 2
Phil. Rep., 766; Uy Tam and Uy Yet vs. Leonard, 30 Phil. Rep., 471.) In view of the
preceding discussion it is equally obvious that, for lack of privity with the contract, the
Railroad Company can have no right of action to recover damages from the Atlantic
Company for the wrongful act which constituted the violation of said contract. The rights of
the plaintiff can only be made effective through the Compañia Trasatlantica de
Barcelona with whom the contract of affreightment was made.
The judgment entered in the Court of First Instance must, therefore be reversed not only
with respect to the judgment entered in favor of the plaintiff directly against the Atlantic
company but also with respect to the absolution of the steamship company and the further
failure of the court to enter judgment in favor of the latter against the Atlantic Company.
The Compañía Transatlantic de Barcelona should be and is hereby adjudged to pay to the
Manila Railroad Company the sum of twenty nine thousand three hundred forty three
pesos and twenty nine centavos (P23,343.29) with interest from May 11, 1914, until paid;
and when this judgment is satisfied, the Compañia Transatlantic de Barcelona is declared
to be entitled to recover the same amount from the Atlantic & Pacific Gulf Company,
against whom judgment is to this end hereby rendered in favor of the Compañia
Transatlantica de Barcelona. No express adjudication of costs of either instance will be
made. So ordered.
Arellano, C.J., Torres, Araullo and Avanceña, JJ., concur.
ORIENT FREIGHT INTERNATIONAL, INC., PETITIONER, V. KEIHIN-EVERETT
FORWARDING COMPANY, INC., RESPONDENT.

DECISION
LEONEN, J.:

16
Article 2176 of the Civil Code does not apply when the party's negligence occurs in the
performance of an obligation. The negligent act would give rise to a quasi-delict only when
it may be the basis for an independent action were the parties not otherwise bound by a
contract.
This resolves a Petition for Review [1] on Certiorari under Rule 45 of the Rules of Court,
assailing the January 21, 2010 Decision [2] and April 21, 2010 Resolution [3] of the Court of
Appeals, which affirmed the Regional Trial Court February 27, 2008 Decision. [4] The
Regional Trial Court found that petitioner Orient Freight International, Inc.'s (Orient
Freight) negligence caused the cancellation of Keihin-Everett Forwarding Company, Inc.'s
(Keihin-Everett) contract with Matsushita Communication Industrial Corporation of the
Philippines (Matsushita).[5]
On October 16, 2001, Keihin-Everett entered into a Trucking Service Agreement with
Matsushita. Under the Trucking Service Agreement, Keihin-Everett would provide services
for Matsushita's trucking requirements. These services were subcontracted by Keihin-
Everett to Orient Freight, through their own Trucking Service Agreement executed on the
same day.[6]
When the Trucking Service Agreement between Keihin-Everett and Matsushita expired on
December 31, 2001, Keihin-Everett executed an In-House Brokerage Service Agreement for
Matsushita's Philippine Economic Zone Authority export operations. Keihin-Everett
continued to retain the services of Orient Freight, which sub-contracted its work to Schmitz
Transport and Brokerage Corporation.[7]
In April 2002, Matsushita called Keihin-Everett's Sales Manager, Salud Rizada, about a
column in the April 19, 2002 issue of the tabloid newspaper Tempo. This news narrated the
April 17, 2002 interception by Caloocan City police of a stolen truck filled with shipment of
video monitors and CCTV systems owned by Matsushita.[8]
When contacted by Keihin-Everett about this news, Orient Freight stated that the tabloid
report had blown the incident out of proportion. They claimed that the incident simply
involved the breakdown and towing of the truck, which was driven by Ricky Cudas (Cudas),
with truck helper, Rubelito Aquino[9] (Aquino). The truck was promptly released and did not
miss the closing time of the vessel intended for the shipment.[10]
Keihin-Everett directed Orient Freight to investigate the matter. During its April 20, 2002
meeting with Keihin-Everett and Matsushita, as well as in its April 22, 2002 letter
addressed to Matsushita, Orient Freight reiterated that the truck merely broke down and
had to be towed.[11]
However, when the shipment arrived in Yokohama, Japan on May 8, 2002, it was
discovered that 10 pallets of the shipment's 218 cartons, worth US$34,226.14, were
missing.[12]
Keihin-Everett independently investigated the incident. During its investigation, it obtained
a police report from the Caloocan City Police Station. The report stated, among others, that
at around 2:00 p.m. on April 17, 2002, somewhere in Plaza Dilao, Paco Street, Manila,
Cudas told Aquino to report engine trouble to Orient Freight. After Aquino made the phone
call, he informed Orient Freight that the truck had gone missing. When the truck was
intercepted by the police along C3 Road near the corner of Dagat-Dagatan Avenue in
Caloocan City, Cudas escaped and became the subject of a manhunt.[13]
When confronted with Keihin-Everett's findings, Orient Freight wrote back on May 15, 2002
to admit that its previous report was erroneous and that pilferage was apparently proven. [14]
17
In its June 6, 2002 letter, Matsushita terminated its In-House Brokerage Service Agreement
with Keihin-Everett, effective July 1, 2002. Matsushita cited loss of confidence for
terminating the contract, stating that Keihin-Everett's way of handling the April 17, 2002
incident and its nondisclosure of this incident's relevant facts "amounted to fraud and
signified an utter disregard of the rule of law."[15]
Keihin-Everett, by counsel, sent a letter dated September 16, 2002 to Orient Freight,
demanding P2,500,000.00 as indemnity for lost income. It argued that Orient Freight's
mishandling of the situation caused the termination of Keihin-Everett's contract with
Matsushita.[16]
When Orient Freight refused to pay, Keihin-Everett filed a complaint dated October 24,
2002 for damages with Branch 10, Regional Trial Court, Manila. The case was docketed as
Civil Case No. 02-105018. [17] In its complaint, Keihin-Everett alleged that Orient Freight's
"misrepresentation, malice, negligence and fraud" caused the termination of its In-House
Brokerage Service Agreement with Matsushita. Keihin-Everett prayed for compensation for
lost income, with legal interest, exemplary damages, attorney's fees, litigation expenses,
and the costs of the suit.[18]
In its December 20, 2002 Answer, Orient Freight claimed, among others, that its initial
ruling of pilferage was in good faith as manifested by the information from its employees
and the good condition and the timely shipment of the cargo. It also alleged that the
contractual termination was a prerogative of Matsushita. Further, by its own Audited
Financial Statements on file with the Securities and Exchange Commission, Keihin-Everett
derived income substantially less than what it sued for. Along with the dismissal of the
complaint, Orient Freight also asserted counterclaims for compensatory and exemplary
damages, attorney's fees, litigation expenses, and the costs of the suit. [19]
The Regional Trial Court rendered its February 27, 2008 Decision, [20] in favor of Keihin-
Everett. It found that Orient Freight was "negligent in failing to investigate properly the
incident and make a factual report to Keihin[-Everett] and Matsushita," despite having
enough time to properly investigate the incident.[21]
The trial court also ruled that Orient Freight's failure to exercise due diligence in disclosing
the true facts of the incident to Keihin-Everett and Matsushita caused Keihin-Everett to
suffer income losses due to Matsushita's cancellation of their contract. [22] The trial court
ordered Orient Freight "to pay [Keihin-Everett] the amount of [P] 1,666,667.00 as actual
damages representing net profit loss incurred" and P50,000.00 in attorney's fees.
[23]
 However, it denied respondent's prayer for exemplary damages, finding that petitioner
did not act with gross negligence.[24]
Orient Freight appealed the Regional Trial Court Decision to the Court of Appeals. On
January 21, 2010, the Court of Appeals issued its Decision [25] affirming the trial court's
decision. It ruled that Orient Freight "not only had knowledge of the foiled hijacking of the
truck carrying the . . . shipment but, more importantly, withheld [this] information from
[Keihin-Everett]."[26]
The Court of Appeals ruled that the oral and documentary evidence has established both
the damage suffered by Keihin-Everett and Orient Freight's fault or negligence. Orient
Freight was negligent in not reporting and not thoroughly investigating the April 17, 2002
incident despite Keihin-Everett's instruction to do so. [27] It further ruled that while Keihin-
Everett sought to establish its claim for lost income of P2,500,000.00 by submitting its
January 2002 to June 2002 net income statement, [28] this was refuted by Orient Freight by
18
presenting Keihin-Everett's own audited financial statements. The Court of Appeals held
that the trial court correctly arrived at the amount of P1,666,667.00 as the award of lost
income.[29]
The Court of Appeals denied Orient Freight's Motion for Reconsideration in its April 21,
2010 Resolution.[30]
On June 9, 2010, Orient Freight filed this Petition for Review on Certiorari under Rule 45
with this Court, arguing that the Court of Appeals incorrectly found it negligent under
Article 2176 of the Civil Code. [31] As there was a subsisting Trucking Service Agreement
between Orient Freight itself and Keihin-Everett, petitioner avers that there was a pre-
existing contractual relation between them, which would preclude the application of the
laws on quasi-delicts.[32]
Applying the test in Far East Bank and Trust Company v. Court of Appeals,[33] petitioner
claims that its failure to inform respondent Keihin-Everett about the hijacking incident
could not give rise to a quasi-delict since the Trucking Service Agreement between the
parties did not include this obligation. It argues that there being no obligation under the
Trucking Service Agreement to inform Keihin-Everett of the hijacking incident, its report to
Keihin-Everett was done in good faith and did not constitute negligence. Its representations
regarding the hijacking incident were a sound business judgment and not a negligent act.
[34]
 Finally, it claims that the Court of Appeals incorrectly upheld the award of damages, as
the trial court had based its computation on, among others, Keihin-Everett's profit and loss
statement.[35]
On August 2, 2010, Keihin-Everett filed its Comment, [36] arguing that the petition does not
contain the names of the parties in violation of Rule 45, Section 4 of the Rules of Court. It
contends that the issues and the arguments raised in this petition are the same issues it
raised in the Regional Trial Court and the Court of Appeals. [37] It claims that the findings of
fact and law of the Court of Appeals are in accord with this Court's decisions. [38]
On October 7, 2010, Orient Freight filed its Reply. [39] It notes that a cursory reading of the
petition would readily show the parties to the case. It claims that what is being contested
and appealed is the application of the law on negligence by lower courts and, while the
findings of fact by the lower courts are entitled to great weight, the exceptions granted by
jurisprudence apply to this case. It reiterates that the pre-existing contractual relation
between the parties should bar the application of the principles of quasi-delict. Because of
this, the terms and conditions of the contract between the parties must be applied. It also
claimed that the Regional Trial Court's computation of the award included figures from
respondent's Profit and Loss Statement, which the trial court had allegedly rejected. It
rendered the computation unreliable.[40]
This Court issued a Resolution[41] dated February 16, 2011, requiring petitioner to submit a
certified true copy of the Regional Trial Court February 27, 2008 Decision.
On March 31, 2011, petitioner filed its Compliance, [42] submitting a certified true copy of
the Regional Trial Court Decision.
The issues for this Court's resolution are:
First, whether the failure to state the names of the parties in this Petition for Review, in
accordance with Rule 45, Section 4 of the Rules of Court, is a fatal defect;
Second, whether the Court of Appeals, considering the existing contracts in this case, erred
in applying Article 2176 of the Civil Code;

19
Third, whether Orient Freight, Inc. was negligent for failing to disclose the facts
surrounding the hijacking incident on April 17, 2002, which led to the termination of the
Trucking Service Agreement between Keihin-Everett Forwarding Co., Inc. and Matsushita
Communication Industrial Corporation of the Philippines; and
Finally, whether the trial court erred in the computation of the awarded actual and
pecuniary loss by basing it on, among others, the Profit and Loss Statement submitted by
Keihin-Everett Forwarding Co., Inc.
The petition is denied.
I
The petition does not violate Rule 45, Section 4 of the Rules of Court [43] for failing to state
the names of the parties in the body. The names of the parties are readily discernable from
the caption of the petition, clearly showing the appealing party as the petitioner and the
adverse party as the respondent. The Court of Appeals had also been erroneously
impleaded in the petition. However, this Court in Aguilar v. Court of Appeals, et al.[44] ruled
that inappropriately impleading the lower court as respondent does not automatically mean
the dismissal of the appeal. This is a mere formal defect. [45]
II
Negligence may either result in culpa aquiliana or culpa contractual.[46] Culpa aquiliana is
the "the wrongful or negligent act or omission which creates a vinculum juris and gives rise
to an obligation between two persons not formally bound by any other obligation," [47] and is
governed by Article 2176 of the Civil Code:
Article 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.
Negligence in culpa contractual, on the other hand, is "the fault or negligence incident in the
performance of an obligation which already-existed, and which increases the liability from
such already existing obligation." [48] This is governed by Articles 1170 to 1174 of the Civil
Code:[49]
Article 1170. Those who in the performance of their obligations are guilty of fraud,
negligence, or delay, and those who in any manner contravene the tenor thereof, are liable
for damages.
Article 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver
of an action for future fraud is void.
Article 1172. Responsibility arising from negligence in the performance of every kind of
obligation is also demandable, but such liability may be regulated by the courts, according
to the circumstances.
Article 1173. The fault or negligence of the obligor consists in the omission of that diligence
which is required by the nature of the obligation and corresponds with the circumstances
of the persons, of the time and of the place. When negligence shows bad faith, the
provisions of articles 1171 and 2201, paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed in the
performance, that which is expected of a good father of a family shall be required.
Article 1174. Except in cases expressly specified by the law, or when it is otherwise
declared by stipulation, or when the nature of the obligation requires the assumption of

20
risk, no person shall be responsible for those events which could not be foreseen, or which,
though foreseen, were inevitable.
Actions based on contractual negligence and actions based on quasi-delicts differ in terms
of conditions, defenses, and proof. They generally cannot co-exist. [50] Once a breach of
contract is proved, the defendant is presumed negligent and must prove not being at fault.
In a quasi-delict, however, the complaining party has the burden of proving the other
party's negligence.[51] In Huang v. Phil. Hoteliers, Inc.:[52]
[T]his Court finds it significant to take note of the following differences between quasi-delict
(culpa aquilina) and breach of contract (culpa contractual). In quasi-delict, negligence is
direct, substantive and independent, while in breach of contract, negligence is merely
incidental to the performance of the contractual obligation; there is a pre-existing contract
or obligation, In quasi-delict, the defense of "good father of a family" is a complete and
proper defense insofar as parents, guardians and employers are concerned, while in breach
of contract, such is not a complete and proper defense in the selection and supervision of
employees. In  quasi-delict, there is no presumption of negligence and it is incumbent upon
the injured party to prove the negligence of the defendant, otherwise, the former's
complaint will be dismissed, while in breach of contract, negligence is presumed so long as
it can be proved that there was breach of the contract and the burden is on the defendant
to prove that there was no negligence in the carrying out of the terms of the contract; the
rule of respondeat superior is followed.[53] (Emphasis in the original, citations omitted)
In Government Service Insurance System v. Spouses Labung-Deang,[54] since the petitioner's
obligation arose from a contract, this Court applied the Civil Code provisions on contracts,
instead of those of Article 2176:
The trial court and the Court of Appeals treated the obligation of GSIS as one springing
from quasi-delict. We do not agree. Article 2176 of the Civil Code defines quasi-delict as
follows:
"Whoever by act or omission causes damages to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter (italics ours)."
Under the facts, there was a pre-existing contract between the parties. GSIS and the
spouses Deang had a loan agreement secured by a real estate mortgage. The duty to return
the owner's duplicate copy of title arose as soon as the mortgage was released. GSIS insists
that it was under no obligation to return the owner's duplicate copy of the title immediately.
This insistence is not warranted. Negligence is obvious as the owners' duplicate copy could
not be returned to the owners. Thus, the more applicable provisions of the Civil Code are:
"Article 1170. Those who in the performance of their obligations are guilty of fraud,
negligence, or delay and those who in any manner contravene the tenor thereof are liable
for damages."
"Article 2201. In contracts and quasi-contracts, the damages for which the obligor who
acted in good faith is liable shall be those that are the natural and probable consequences
of the breach of the obligation, and which the parties have foreseen or could have
reasonably foreseen at the time the obligation was constituted . .."
Since good faith is presumed and bad faith is a matter of fact which should be proved, we
shall treat GSIS as a party who defaulted in its obligation to return the owners' duplicate
copy of the title. As an obligor in good faith, GSIS is liable for all the "natural and probable
21
consequences of the breach of the obligation." The inability of the spouses Deang to secure
another loan and the damages they suffered thereby has its roots in the failure of the GSIS
to return the owners' duplicate copy of the title.[55] (Citations omitted)
Similarly, in Syquia v. Court of Appeals,[56] this Court ruled that private respondent would
have been held liable for a breach of its contract with the petitioners, and not for quasi-
delict, had it been found negligent:
With respect to herein petitioners' averment that private respondent has committed culpa
aquiliana, the Court of Appeals found no negligent act on the part of private respondent to
justify an award of damages against it. Although a pre-existing contractual relation
between the parties does not preclude the existence of a culpa aquiliana, We find no reason
to disregard the respondent's Court finding that there was no negligence.
....
In this case, it has been established that the Syquias and the Manila Memorial Park
Cemetery, Inc., entered into a contract entitled "Deed of Sale and Certificate of Perpetual
Care" on August 27, 1969. That agreement governed the relations of the parties and defined
their respective rights and obligations. Hence, had there been actual negligence on the part
of the Manila Memorial Park Cemetery, Inc., it would be held liable not for a quasi-
delict or culpa aquiliana, but for culpa contractual as provided by Article 1170 of the Civil
Code[.][57]
However, there are instances when Article 2176 may apply even when there is a pre-
existing contractual relation. A party may still commit a tort or quasi-delict against
another, despite the existence of a contract between them. [58]
In Cangco v. Manila Railroad,[59] this Court explained why a party may be held liable for
either a breach of contract or an extra-contractual obligation for a negligent act:
It is evident, therefore, that in its decision in the 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 aquilina or culpa
contractual. As Manresa points out . . . whether negligence occurs as an incident in the
course of the performance of a contractual undertaking or is itself (he source of an extra-
contractual 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 . . ,
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 [sic] than that of contractual obligation, 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
22
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 a breach of the contract would have constituted the source of an extra-contractual
obligation had no contract existed between the parties.[60] (Emphasis supplied, citation
omitted)
If a contracting party's act that breaches the contract would have given rise to an extra-
contractual liability had there been no contract, the contract would be deemed breached by
a tort,[61] and the party may be held liable under Article 2176 and its related provisions. [62]
In Singson v. Bank of the Philippine Islands,[63] this Court upheld the petitioners' claim for
damages based on a quasi-delict, despite the parties' relationship being contractual in
nature:
After appropriate proceedings, the Court of First Instance of Manila rendered judgment
dismissing the complaint upon the ground that plaintiffs cannot recover from the
defendants upon the basis of a quasi-delict, because the relation between the parties is
contractual in nature; because this case does not fall under Article 2219 of our Civil Code,
upon which plaintiffs rely; and because plaintiffs have not established the amount of
damages allegedly sustained by them.
The lower court held that plaintiffs' claim for damages cannot be based upon a tort or
quasi-delict, their relation with the defendants being contractual in nature. We have
repeatedly held, however, that the existence of a contract between the parties does not bar
the commission of a tort by the one against the order and the consequent recovery of
damages therefor. Indeed, this view has been in effect, reiterated in a comparatively recent
case. Thus, in Air France vs. Carrascoso, involving an airplane passenger who, despite his
first-class ticket, had been illegally ousted from his first-class accommodation, and
compelled to take a seat in the tourist compartment, was held entitled to recover damages
from the air-carrier, upon the ground of tort on the latter's part, for, although the relation
between a passenger and the carrier is "contractual both in origin and nature . . . the act
that breaks the contract may also be a tort".[64] (Citations omitted)
However, if the act complained of would not give rise to a cause of action for a quasi-delict
independent of the contract, then the provisions on quasi-delict or tort would be
inapplicable.[65]
In Philippine School of Business Administration v. Court of Appeals,[66] petitioner's obligation
to maintain peace and order on campus was based on a contract with its students. Without
this contract, the obligation does not exist. Therefore, the private respondents' cause of
action must be founded on the breach of contract and cannot be based on Article 2176:
Because the circumstances of the present case evince a contractual relation between the
PSBA and Carlitos Bautista, the rules on quasi-delict do not really govern. A perusal of
Article 2176 shows that obligations arising from quasi-delicts or tort, also known as extra-
contractual obligations, arise only between parties not otherwise bound by contract,
whether express or implied. However, this impression has not prevented this Court from
determining the existence of a tort even when there obtains a contract. In Air France vs.
Carroscoso (124 Phil. 722), the private respondent was awarded damages for his
unwarranted expulsion from a first-class seat aboard the petitioner airline. It is noted,
however, that the Court referred to the petitioner-airline's liability as one arising from tort,
not one arising from a contract of carriage. In effect, Air France is authority for the view

23
that liability from tort may exist even if there is a contract, for the act that breaks the
contract may be also a tort. (Austro-America S.S. Co. vs. Thomas, 248 Fed. 231).
This view was not all that revolutionary, for even as early as 1918, this Court was already
of a similar mind. In Cangco vs. Manila Railroad (38 Phil. 780), Mr. Justice Fisher
elucidated thus:
"The field of non-contractual obligation is much more broader [sic] than that of contractual
obligation, 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 a breach of the contract would have
constituted the source of an extra-contractual obligation had no contract existed between the
parties."
Immediately what comes to mind is the chapter of the Civil Code on Human Relations,
particularly Article 21, which provides:
"Any person who wilfully 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." (Italics
supplied)
Air France penalized the racist policy of the airline which emboldened the petitioner's
employee to forcibly oust the private respondent to cater to the comfort of a white man who
allegedly "had a better right to the seat." In Austro-American, supra, the public
embarrassment caused to the passenger was the justification for the Circuit Court of
Appeals, (Second Circuit), to award damages to the latter. From the foregoing, it can be
concluded that should the act which breaches a contract be done in bad faith and be
violative of Article 21, then there is a cause to view the act as constituting a quasi-delict.
In the circumstances obtaining in the case at bar, however, there is, as yet, no finding that
the contract between the school and Bautista had been breached thru the former's
negligence in providing proper security measures. This would be for the trial court to
determine. And, even if there be a finding of negligence, the same could give rise generally
to a breach of contractual obligation only. Using the test of Cangco, supra, the negligence of
the school would not be relevant absent a contract. In fact, that negligence becomes
material only because of the contractual relation between PSBA and Bautista. In other
words, a contractual relation is a condition sine qua non to the school's liability. The
negligence of the school cannot exist independently on the contract, unless the negligence
occurs under the circumstances set out in Article 21 of the Civil Code. [67] (Citations omitted)
In situations where the contractual relation is indispensable to hold a party liable, there
must be a finding that the act or omission complained of was done in bad faith and in
violation of Article 21 of the Civil Code to give rise to an action based on tort. [68]
In Far East Bank and Trust Company v. Court of Appeals,[69] as the party's claim for
damages was based on a contractual relationship, the provisions on quasi-delict generally
did not apply. In this case, this Court did not award moral damages to the private
respondent because the applicable Civil Code provision was Article 2220, [70] not Article 21,
and neither fraud nor bad faith was proved:
We are not unaware of the previous rulings of this Court, such as in American Express
International, Inc. vs. Intermediate Appellate Court (167 SCRA 209) and Bank of [the]
Philippine Islands vs. Intermediate Appellate Court (206 SCRA 408), sanctioning the
24
application of Article 21, in relation to Article 2217 and Article 2219 of the Civil Code to a
contractual breach similar to the case at bench. Article 21 states:
"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."
Article 21 of the Code, it should be observed, contemplates a conscious act to cause harm.
Thus, even if we are to assume that the provision could properly relate to a breach of
contract, its application can be warranted only when the defendant's disregard of his
contractual obligation is so deliberate as to approximate a degree of misconduct certainly
no less worse [sic] than fraud or bad faith. Most importantly, Article 21 is a mere
declaration of a general principle in human relations that clearly must, in any case, give
way to the specific provision of Article 2220 of the Civil Code authorizing the grant of moral
damages in culpa contractual solely when the breach is due to fraud or bad faith.
....
The Court has not in the process overlooked another rule that a quasi-delict can be the
cause for breaching a contract that might thereby permit the application of applicable
principles on tort even where there is a pre-existing contract between the plaintiff and the
defendant (Phil. Airlines vs. Court of Appeals, 106 SCRA 143; Singson vs. Bank of the Phil.
Islands, 23 SCRA 1117; and Air France vs. Carrascoso, 18 SCRA 155). This doctrine,
unfortunately, cannot improve private respondents' case for it can aptly govern only where
the act or omission complained of would constitute an actionable tort independently of the
contract. The test (whether a quasi-delict can be deemed to underlie the breach of a
contract) can be stated thusly: Where, without a pre-existing contract between two parties,
an act or omission can nonetheless amount to an actionable tort by itself, the fact that the
parties are contractually bound is no bar to the application of quasi-delict provisions to the
case. Here, private respondents' damage claim is predicated solely on their contractual
relationship; without such agreement, the act or omission complained of cannot by itself be
held to stand as a separate cause of action or as an independent actionable tort.
[71]
 (Citations omitted)
Here, petitioner denies that it was obliged to disclose the facts regarding the hijacking
incident since this was not among the provisions of its Trucking Service Agreement with
respondent. There being no contractual obligation, respondent had no cause of action
against petitioner:
Applying said test, assuming for the sake of argument that petitioner indeed failed to
inform respondent of the incident where the truck was later found at the Caloocan Police
station, would an independent action prosper based on such omission? Assuming that
there is no contractual relation between the parties herein, would petitioner's omission of
not informing respondent that the truck was impounded gives [sic] rise to a quasi-delict?
Obviously not, because the obligation, if there is any in the contract, that is to inform
plaintiff of said incident, could have been spelled out in the very contract itself duly
executed by the parties herein specifically in the Trucking Service Agreement. It is a fact
that no such obligation or provision existed in the contract. Absent said terms and
obligations, applying the principles on tort as a cause for breaching a contract would
therefore miserably fail as the lower Court erroneously did in this case. [72]
The obligation to report what happened during the hijacking incident, admittedly, does not
appear on the plain text of the Trucking Service Agreement. Petitioner argues that it is
25
nowhere in the agreement. Respondent does not dispute this claim. Neither the Regional
Trial Court nor the Court of Appeals relied on the provisions of the Trucking Service
Agreement to arrive at their respective conclusions. Breach of the Trucking Service
Agreement was neither alleged nor proved.
While petitioner and respondent were contractually bound under the Trucking Service
Agreement and the events at the crux of this controversy occurred during the performance
of this contract, it is apparent that the duty to investigate and report arose subsequent to
the Trucking Service Agreement. When respondent discovered the news report on the
hijacking incident, it contacted petitioner, requesting information on the incident.
[73]
 Respondent then requested petitioner to investigate and report on the veracity of the
news report. Pursuant to respondent's request, petitioner met with respondent and
Matsushita on April 20, 2002 and issued a letter dated April 22, 2002, addressed to
Matsushita.[74] Respondent's claim was based on petitioner's negligent conduct when it was
required to investigate and report on the incident:
The defendant claimed that it should not be held liable for damages suffered by the plaintiff
considering that the proximate cause of the damage done to plaintiff is the negligence by
employees of Schmitz trucking. This argument is untenable because the defendant is being
sued in this case not for the negligence of the employees of Schmitz trucking but based on
defendant's own negligence in failing to disclose the true facts of the hijacking incident to
plaintiff Keihin and Matsushita.[75]
Both the Regional Trial Court and Court of Appeals erred in finding petitioner's negligence
of its obligation to report to be an action based on a quasi-delict Petitioner's negligence did
not create the vinculum juris or legal relationship with the respondent, which would have
otherwise given rise to a quasi-delict. Petitioner's duty to respondent existed prior to its
negligent act. When respondent contacted petitioner regarding the news report and asked it
to investigate the incident, petitioner's obligation was created. Thereafter, petitioner was
alleged to have performed its obligation negligently, causing damage to respondent.
The doctrine "the act that breaks the contract may also be a tort," on which the lower
courts relied, is inapplicable here. Petitioner's negligence, arising as it does from its
performance of its obligation to respondent, is dependent on this obligation. Neither do the
facts show that Article 21 of the Civil Code applies, there being no finding that petitioner's
act was a conscious one to cause harm, or be of such a degree as to approximate fraud or
bad faith:
To be sure, there was inaction on the part of the defendant which caused damage to the
plaintiff, but there is nothing to show that the defendant intended to conceal the truth or to
avoid liability. When the facts became apparent to defendant, the latter readily apologized
to Keihin and Matsushita for their mistake. [76]
Consequently, Articles 1170, 1172, and 1173 of the Civil Code on negligence in the
performance of an obligation should apply.
III
Under Article 1170 of the Civil Code, liability for damages arises when those in the
performance of their obligations are guilty of negligence, among others. Negligence here has
been defined as "the failure to observe that degree of care, precaution and vigilance that the
circumstances just demand, whereby that other person suffers injury." [77] If the law or
contract does not provide for the degree of diligence to be exercised, then the required
diligence is that of a good father of a family. [78] The test to determine a party's negligence is
26
if the party used "the reasonable care and caution which an ordinarily prudent person
would have used in the same situation" [79] when it performed the negligent act. If the party
did not exercise reasonable care and caution, then it is guilty of negligence.
In this case, both the Regional Trial Court and the Court of Appeals found that petitioner
was negligent in failing to adequately report the April 17, 2002 hijacking incident to
respondent and not conducting a thorough investigation despite being directed to do so.
The trial court's factual findings, when affirmed by the Court of Appeals, are binding on
this Court and are generally conclusive.[80]
The Regional Trial Court found that petitioner's conduct showed its negligent handling of
the investigation and its failure to timely disclose the facts of the incident to respondent
and Matsushita:
[Orient Freight] was clearly negligent in failing to investigate properly the incident and
make a factual report to Keihin and Matsushita. [Orient Freight] claimed that it was
pressed for time considering that they were given only about one hour and a half to
investigate the incident before making the initial report. They claimed that their employees
had no reason to suspect that the robbery occurred considering that the seal of the van
remained intact. Moreover, the priority they had at that time was to load the cargo to the
carrying vessel on time for shipment on April 19, 200[2]. They claimed that they made
arrangement with the Caloocan Police Station for the release of the truck and the cargo and
they were able to do that and the objective was achieved. This may be true but the Court
thinks that [Orient Freight] had enough time to investigate properly the incident. The
hijacking incident happened on April 17, 200[2] and the tabloid Tempo published the
hijacking incident only on April 19, 200[2]. This means that [Orient Freight] had about two
(2) days to conduct a diligent inquiry about the incident. It took them until May 15, 200[2]
to discover that a robbery indeed occurred resulting in the loss of ten pallets or 218 cartons
valued at US $34,226.14. They even denied that there was no police report only to find out
that on May 15, 200[2] that there was such a report. It was [Orient Freight] 's duty to
inquire from the Caloocan Police Station and to find out if they issued a police report, Yet,
it was plaintiff Keihin which furnished them a copy of the police report. The failure of
[Orient Freight] to investigate properly the incident and make a timely report constitutes
negligence. Evidently, [Orient Freight] failed to exercise due diligence in disclosing the true
facts of the incident to plaintiff Keihin and Matsushita. As a result, plaintiff Keihin suffered
income losses by reason of Matsushita's cancellation of their contract which primarily was
caused by the negligence of [Orient Freight].[81]
The Court of Appeals affirmed the trial court's finding of negligence:
From the foregoing account, it is evident that [Orient Freight] not only had knowledge of the
foiled hijacking of the truck carrying the subject shipment but, more importantly, withheld
said information from [Keihin-Everett], Confronted with the April 19, 2002 tabloid account
thereof, [Orient Freight] appears to have further compounded its omission by misleading
[Keihin-Everett] and Matsu[s]hita into believing that the subject incident was irresponsibly
reported and merely involved a stalled vehicle which was towed to avoid obstruction of
traffic. Given that the police report subsequently obtained by [Keihin-Everett] was also
dated April 17, 2002, [Orient Freight's insistence on its good faith on the strength of the
information it gathered from its employees as well as the timely shipment and supposed
good condition of the cargo clearly deserve scant consideration. [82]

27
Petitioner's argument that its acts were a "sound business judgment which the court
cannot supplant or question nor can it declare as a negligent act" [83] lacks merit. The
Regional Trial Court found that the circumstances should have alerted petitioner to
investigate the incident in a more circumspect and careful manner:
On this score, [Orient Freight] itself presented the circumstances which should have alerted
[Orient Freight] that there was more to the incident than simply a case of mechanical
breakdown or towing of the container truck to the police station. [Orient Freight] pointed to
specific facts that would naturally arouse suspicion that something was wrong when the
container was found in the premises of the Caloocan Police Station and that driver Ricky
Cudas was nowhere to be found. The police does [sic] not ordinarily impound a motor
vehicle if the problem is merely a traffic violation. More important, driver Ricky Cudas
disappeared and was reported missing. When the Caloocan Police chanced upon the
container van, it was found straying at C-3 which is outside its usual route. All these
circumstances should have been enough for [Orient Freight] to inquire deeper on the real
circumstances of the incident.
....
[Orient Freight] talked to Rubelito Aquino and apparently failed to listen closely to the
statement given by their truck helper to the Caloocan Police. The truck helper recounted
how the engine of the truck stalled and the driver was able to start the engine but
thereafter, he was nowhere to be seen. By this circumstance alone, it should have become
apparent to [Orient Freight] that the truck driver gypped the truck helper into calling the
company and had a different intention which was to run away with the container van. It
readily shows that Ricky Cudas intended to hijack the vehicle by feigning or giving the false
appearance of an engine breakdown. Yet, [Orient Freight] dismissed the incident as a
simple case of a unit breakdown and towing of vehicle allegedly due to traffic violation.
Under the circumstances, therefore, the defendant failed to exercise the degree of care,
precaution and vigilance which the situation demands. [84]
Despite the circumstances which would have cautioned petitioner to act with care while
investigating and reporting the hijacking incident, petitioner failed to do so. Petitioner is
responsible for the damages that respondent incurred due to the former's negligent
performance of its obligation.
IV
Articles 2200 and 2201 of the Civil Code provide for the liability for damages in contractual
obligations:
Article 2200. Indemnification for damages shall comprehend not only the value of the loss
suffered, but also that of the profits which the obligee failed to obtain.
Article 2201. In contracts and quasi-contracts, the damages for which the obligor who
acted in good faith is liable shall be those that are the natural and probable consequences
of the breach of the obligation, and which the parties have foreseen or could have
reasonably foreseen at the time the obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all
damages which may be reasonably attributed to the non-performance of the obligation.
In Central Bank of the Philippines v. Court of Appeals,[85] this Court explained the principles
underlying Articles 2200 and 2201:
Construing these provisions, the following is what this Court held in Cerrano vs. Tan
Chuco, 38 Phil. 392:
28
"... Article 1106 (now 2200) of the Civil Code establishes the rule that prospective profits
may be recovered as damages, while article 1107 (now 2201) of the same Code provides
that the damages recoverable for the breach of obligations not originating in fraud (dolo) are
those which were or might have been foreseen at the time the contract was entered into.
Applying these principles to the facts in this case, we think that it is unquestionable that
defendant must be deemed to have foreseen at the time he made the contract that in the
event of his failure to perform it, the plaintiff would be damaged by the loss of the profit he
might reasonably have expected to derive from its use.
"When the existence of a loss is established, absolute certainty as to its amount is not
required. The benefit to be derived from a contract which one of the parties has absolutely
failed to perform is of necessity to some extent, a matter of speculation, but the injured
party is not to be denied all remedy for that reason alone. He must produce the best
evidence of which his case is susceptible and if that evidence warrants the inference that he
has been damaged by the loss of profits which he might with reasonable certainty have
anticipated but for the defendant's wrongful act, he is entitled to recover. As stated in
Sedgwick on Damages (Ninth Ed., par. 177):
'The general rule is, then, that a plaintiff may recover compensation for any gain which he
can make it appear with reasonable certainty the defendant's wrongful act prevented him
from acquiring, . . .' (See also Algarra vs. Sandejas, 27 Phil. Rep., 284, 289; Hicks vs.
Manila Hotel Co., 28 Phil, Rep., 325.)" (At pp. 398-399.)[86]
The lower courts established that petitioner's negligence resulted in Matsushita's
cancellation of its contract with respondent. The Regional Trial Court found:
In the letter dated June 6, 2002, Matsushita pre-terminated its In-House Brokerage Service
Agreement with plaintiff Keihin for violation of the terms of said contract. Its President,
KenGo Toda, stated that because of the incident that happened on April 17, 2002 involving
properties which the plaintiff failed to inform them, Matsushita has lost confidence in
plaintiff's capability to handle its brokerage and forwarding requirements. There was clearly
a breach of trust as manifested by plaintiff's failure to disclose facts when it had the duty to
reveal them and it constitutes fraud. Moreover, the negligence of plaintiff personnel cannot
be tolerated as Matsushita is bound to protect the integrity of the company. [87]
It could be reasonably foreseen that the failure to disclose the true facts of an incident,
especially when it turned out that a crime might have been committed, would lead to a loss
of trust and confidence in the party which was bound to disclose these facts. Petitioner
caused the loss of trust and confidence when it misled respondent and Matsushita into
believing that the incident had been irresponsibly reported and merely involved a stalled
truck.[88] Thus, petitioner is liable to respondent for the loss of profit sustained due to
Matsushita's termination of the In-House Brokerage Service Agreement.
As regards the amount of damages, this Court cannot rule on whether the Regional Trial
Court erred in using the Profit and Loss Statement submitted by respondent for its
computation. The amount of the award of damages is a factual matter generally not
reviewable in a Rule 45 petition,[89] The damages awarded by the Regional Trial Court, as
affirmed by the Court of Appeals, were supported by documentary evidence such as
respondent's audited financial statement. The trial court clearly explained how it reduced
the respondent's claimed loss of profit and arrived at the damages to be awarded:
The difference between the total gross revenue of plaintiff for 2002 as reported in the
monthly profit and loss statement of [P]14,801,744.00 and the audited profit and loss
29
statement of the amount of [P]10,434,144.00 represents 1/3 of the total gross revenues of
the plaintiff for the six months period. Accordingly, the net profit loss of [P]2.5 million pesos
as reported in the monthly profit and loss statement of the plaintiff should be reduced by
1/3 or the amount of [P]833,333.33. Therefore, the net profit loss of the plaintiff for the
remaining period of six months should only be the amount of [P] 1,666,667.70 and not
[P]2.5 million as claimed.[90]
Petitioner has not sufficiently shown why the computation made by the trial court should
be disturbed.
WHEREFORE, the petition is DENIED. The January 21, 2010 Decision and April 21, 2010
Resolution of the Court of Appeals in CA-G.R. CV No. 91889 are AFFIRMED.
SO ORDERED.
Carpio (Chairperson), Peralta, Mendoza, and Martires, JJ., concur.

G.R. No. 122039 May 31, 2000

VICENTE CALALAS, petitioner,
vs.
COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and FRANCISCO
SALVA, respondents.

MENDOZA, J.:
This is a petition for review on certiorari of the decision1 of the Court of Appeals, dated
March 31, 1991, reversing the contrary decision of the Regional Trial Court, Branch 36,
Dumaguete City, and awarding damages instead to private respondent Eliza Jujeurche
Sunga as plaintiff in an action for breach of contract of carriage.
The facts, as found by the Court of Appeals, are as follows:
At 10 o'clock in the morning of August 23, 1989, private respondent Eliza Jujeurche G.
Sunga, then a college freshman majoring in Physical Education at the Siliman University,
took a passenger jeepney owned and operated by petitioner Vicente Calalas. As the jeepney
was filled to capacity of about 24 passengers, Sunga was given by the conductor an
"extension seat," a wooden stool at the back of the door at the rear end of the vehicle.
On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a passenger
off. As she was seated at the rear of the vehicle, Sunga gave way to the outgoing passenger.
Just as she was doing so, an Isuzu truck driven by Iglecerio Verena and owned by
Francisco Salva bumped the left rear portion of the jeepney. As a result, Sunga was injured.
She sustained a fracture of the "distal third of the left tibia-fibula with severe necrosis of
the underlying skin." Closed reduction of the fracture, long leg circular casting, and case
wedging were done under sedation. Her confinement in the hospital lasted from August 23
to September 7, 1989. Her attending physician, Dr. Danilo V. Oligario, an orthopedic
surgeon, certified she would remain on a cast for a period of three months and would have
to ambulate in crutches during said period.
On October 9, 1989, Sunga filed a complaint for damages against Calalas, alleging violation
of the contract of carriage by the former in failing to exercise the diligence required of him
as a common carrier. Calalas, on the other hand, filed a third-party complaint against
Francisco Salva, the owner of the Isuzu truck.
30
The lower court rendered judgment against Salva as third-party defendant and absolved
Calalas of liability, holding that it was the driver of the Isuzu truck who was responsible for
the accident. It took cognizance of another case (Civil Case No. 3490), filed by Calalas
against Salva and Verena, for quasi-delict, in which Branch 37 of the same court held Salva
and his driver Verena jointly liable to Calalas for the damage to his jeepney.
On appeal to the Court of Appeals, the ruling of the lower court was reversed on the ground
that Sunga's cause of action was based on a contract of carriage, not quasi-delict, and that
the common carrier failed to exercise the diligence required under the Civil Code. The
appellate court dismissed the third-party complaint against Salva and adjudged Calalas
liable for damages to Sunga. The dispositive portion of its decision reads:
WHEREFORE, the decision appealed from is hereby REVERSED and SET
ASIDE, and another one is entered ordering defendant-appellee Vicente Calalas
to pay plaintiff-appellant:
(1) P50,000.00 as actual and compensatory damages;
(2) P50,000.00 as moral damages;
(3) P10,000.00 as attorney's fees; and
(4) P1,000.00 as expenses of litigation; and
(5) to pay the costs.
SO ORDERED.
Hence, this petition. Petitioner contends that the ruling in Civil Case No. 3490 that the
negligence of Verena was the proximate cause of the accident negates his liability and that
to rule otherwise would be to make the common carrier an insurer of the safety of its
passengers. He contends that the bumping of the jeepney by the truck owned by Salva was
a caso fortuito. Petitioner further assails the award of moral damages to Sunga on the
ground that it is not supported by evidence.
The petition has no merit.
The argument that Sunga is bound by the ruling in Civil Case No. 3490 finding the driver
and the owner of the truck liable for quasi-delict ignores the fact that she was never a party
to that case and, therefore, the principle of res judicata does not apply.
Nor are the issues in Civil Case No. 3490 and in the present case the same. The issue in
Civil Case No. 3490 was whether Salva and his driver Verena were liable for quasi-delict for
the damage caused to petitioner's jeepney. On the other hand, the issue in this case is
whether petitioner is liable on his contract of carriage. The first, quasi-delict, also known
as culpa aquiliana or culpa extra contractual, has as its source the negligence of the
tortfeasor. The second, breach of contract or culpa contractual, is premised upon the
negligence in the performance of a contractual obligation.
Consequently, in quasi-delict, the negligence or fault should be clearly established because
it is the basis of the action, whereas in breach of contract, the action can be prosecuted
merely by proving the existence of the contract and the fact that the obligor, in this case the
common carrier, failed to transport his passenger safely to his destination. 2 In case of death
or injuries to passengers, Art. 1756 of the Civil Code provides that common carriers are
presumed to have been at fault or to have acted negligently unless they prove that they
observed extraordinary diligence as defined in Arts. 1733 and 1755 of the Code. This
provision necessarily shifts to the common carrier the burden of proof.
There is, thus, no basis for the contention that the ruling in Civil Case No. 3490, finding
Salva and his driver Verena liable for the damage to petitioner's jeepney, should be binding
31
on Sunga. It is immaterial that the proximate cause of the collision between the jeepney
and the truck was the negligence of the truck driver. The doctrine of proximate cause is
applicable only in actions for quasi-delict, not in actions involving breach of contract. The
doctrine is a device for imputing liability to a person where there is no relation between him
and another party. In such a case, the obligation is created by law itself. But, where there
is a pre-existing contractual relation between the parties, it is the parties themselves who
create the obligation, and the function of the law is merely to regulate the relation thus
created. Insofar as contracts of carriage are concerned, some aspects regulated by the Civil
Code are those respecting the diligence required of common carriers with regard to the
safety of passengers as well as the presumption of negligence in cases of death or injury to
passengers. It provides:
Art. 1733. Common carriers, from the nature of their business and for reasons
of public policy, are bound to observe extraordinary diligence in the vigilance
over the goods and for the safety of the passengers transported by them,
according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further
expressed in articles 1734, 1735, and 1746, Nos. 5, 6, and 7, while the
extraordinary diligence for the safety of the passengers is further set forth in
articles 1755 and 1756.
Art. 1755. A common carrier is bound to carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence of very
cautious persons, with due regard for all the circumstances.
Art. 1756. In case of death of or injuries to passengers, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove
that they observed extraordinary diligence as prescribed by articles 1733 and
1755.
In the case at bar, upon the happening of the accident, the presumption of negligence at
once arose, and it became the duty of petitioner to prove that he had to observe
extraordinary diligence in the care of his passengers.
Now, did the driver of jeepney carry Sunga "safely as far as human care and foresight could
provide, using the utmost diligence of very cautious persons, with due regard for all the
circumstances" as required by Art. 1755? We do not think so. Several factors militate
against petitioner's contention.
First, as found by the Court of Appeals, the jeepney was not properly parked, its rear
portion being exposed about two meters from the broad shoulders of the highway, and
facing the middle of the highway in a diagonal angle. This is a violation of the R.A. No.
4136, as amended, or the Land Transportation and Traffic Code, which provides:
Sec. 54. Obstruction of Traffic. — No person shall drive his motor vehicle in
such a manner as to obstruct or impede the passage of any vehicle, nor, while
discharging or taking on passengers or loading or unloading freight, obstruct
the free passage of other vehicles on the highway.
Second, it is undisputed that petitioner's driver took in more passengers than the allowed
seating capacity of the jeepney, a violation of §32(a) of the same law. It provides:
Exceeding registered capacity. — No person operating any motor vehicle shall
allow more passengers or more freight or cargo in his vehicle than its registered
capacity.
32
The fact that Sunga was seated in an "extension seat" placed her in a peril greater than
that to which the other passengers were exposed. Therefore, not only was petitioner unable
to overcome the presumption of negligence imposed on him for the injury sustained by
Sunga, but also, the evidence shows he was actually negligent in transporting passengers.
We find it hard to give serious thought to petitioner's contention that Sunga's taking an
"extension seat" amounted to an implied assumption of risk. It is akin to arguing that the
injuries to the many victims of the tragedies in our seas should not be compensated merely
because those passengers assumed a greater risk of drowning by boarding an overloaded
ferry. This is also true of petitioner's contention that the jeepney being bumped while it was
improperly parked constitutes caso fortuito. A caso fortuito is an event which could not be
foreseen, or which, though foreseen, was inevitable. 3 This requires that the following
requirements be present: (a) the cause of the breach is independent of the debtor's will; (b)
the event is unforeseeable or unavoidable; (c) the event is such as to render it impossible
for the debtor to fulfill his obligation in a normal manner, and (d) the debtor did not take
part in causing the injury to the
creditor.4 Petitioner should have foreseen the danger of parking his jeepney with its body
protruding two meters into the highway.
Finally, petitioner challenges the award of moral damages alleging that it is excessive and
without basis in law. We find this contention well taken.
In awarding moral damages, the Court of Appeals stated:
Plaintiff-appellant at the time of the accident was a first-year college student in
that school year 1989-1990 at the Silliman University, majoring in Physical
Education. Because of the injury, she was not able to enroll in the second
semester of that school year. She testified that she had no more intention of
continuing with her schooling, because she could not walk and decided not to
pursue her degree, major in Physical Education "because of my leg which has a
defect already."
Plaintiff-appellant likewise testified that even while she was under confinement,
she cried in pain because of her injured left foot. As a result of her injury, the
Orthopedic Surgeon also certified that she has "residual bowing of the fracture
side." She likewise decided not to further pursue Physical Education as her
major subject, because "my left leg . . . has a defect already."
Those are her physical pains and moral sufferings, the inevitable bedfellows of
the injuries that she suffered. Under Article 2219 of the Civil Code, she is
entitled to recover moral damages in the sum of P50,000.00, which is fair, just
and reasonable.
As a general rule, moral damages are not recoverable in actions for damages predicated on
a breach of contract for it is not one of the items enumerated under Art. 2219 of the Civil
Code.5 As an exception, such damages are recoverable: (1) in cases in which the mishap
results in the death of a passenger, as provided in Art. 1764, in relation to Art. 2206(3) of
the Civil Code; and (2) in the cases in which the carrier is guilty of fraud or bad faith, as
provided in Art. 2220.6
In this case, there is no legal basis for awarding moral damages since there was no factual
finding by the appellate court that petitioner acted in bad faith in the performance of the
contract of carriage. Sunga's contention that petitioner's admission in open court that the
driver of the jeepney failed to assist her in going to a nearby hospital cannot be construed
33
as an admission of bad faith. The fact that it was the driver of the Isuzu truck who took her
to the hospital does not imply that petitioner was utterly indifferent to the plight of his
injured passenger. If at all, it is merely implied recognition by Verena that he was the one
at fault for the accident.
WHEREFORE, the decision of the Court of Appeals, dated March 31, 1995, and its
resolution, dated September 11, 1995, are AFFIRMED, with the MODIFICATION that the
award of moral damages is DELETED.
SO ORDERED.

G.R. No. 156109             November 18, 2004

KHRISTINE REA M. REGINO, Assisted and Represented by ARMANDO
REGINO, petitioner,
vs.
PANGASINAN COLLEGES OF SCIENCE AND TECHNOLOGY, RACHELLE A. GAMUROT
and ELISSA BALADAD, respondents.

DECISION

PANGANIBAN, J.:
Upon enrolment, students and their school enter upon a reciprocal contract. The students
agree to abide by the standards of academic performance and codes of conduct, issued
usually in the form of manuals that are distributed to the enrollees at the start of the
school term. Further, the school informs them of the itemized fees they are expected to pay.
Consequently, it cannot, after the enrolment of a student, vary the terms of the contract. It
cannot require fees other than those it specified upon enrolment.
The Case
Before the Court is a Petition for Review under Rule 45, 1 seeking to nullify the July 12,
20022 and the November 22, 2002 3 Orders of the Regional Trial Court (RTC) of Urdaneta
City, Pangasinan (Branch 48) in Civil Case No. U-7541. The decretal portion of the first
assailed Order reads:
"WHEREFORE, the Court GRANTS the instant motion to dismiss for lack of cause of
action."4
The second challenged Order denied petitioner's Motion for Reconsideration.
The Facts
Petitioner Khristine Rea M. Regino was a first year computer science student at Respondent
Pangasinan Colleges of Science and Technology (PCST). Reared in a poor family, Regino
went to college mainly through the financial support of her relatives. During the second
semester of school year 2001-2002, she enrolled in logic and statistics subjects under
Respondents Rachelle A. Gamurot and Elissa Baladad, respectively, as teachers.
In February 2002, PCST held a fund raising campaign dubbed the "Rave Party and Dance
Revolution," the proceeds of which were to go to the construction of the school's tennis and
volleyball courts. Each student was required to pay for two tickets at the price of P100
each. The project was allegedly implemented by recompensing students who purchased
34
tickets with additional points in their test scores; those who refused to pay were denied the
opportunity to take the final examinations.
Financially strapped and prohibited by her religion from attending dance parties and
celebrations, Regino refused to pay for the tickets. On March 14 and March 15, 2002, the
scheduled dates of the final examinations in logic and statistics, her teachers --
Respondents Rachelle A. Gamurot and Elissa Baladad -- allegedly disallowed her from
taking the tests. According to petitioner, Gamurot made her sit out her logic class while her
classmates were taking their examinations. The next day, Baladad, after announcing to the
entire class that she was not permitting petitioner and another student to take their
statistics examinations for failing to pay for their tickets, allegedly ejected them from the
classroom. Petitioner's pleas ostensibly went unheeded by Gamurot and Baladad, who
unrelentingly defended their positions as compliance with PCST's policy.
On April 25, 2002, petitioner filed, as a pauper litigant, a Complaint 5 for damages against
PCST, Gamurot and Baladad. In her Complaint, she prayed for P500,000 as nominal
damages; P500,000 as moral damages; at least P1,000,000 as exemplary damages;
P250,000 as actual damages; plus the costs of litigation and attorney's fees.
On May 30, 2002, respondents filed a Motion to Dismiss 6 on the ground of petitioner's
failure to exhaust administrative remedies. According to respondents, the question raised
involved the determination of the wisdom of an administrative policy of the PCST; hence,
the case should have been initiated before the proper administrative body, the Commission
of Higher Education (CHED).
In her Comment to respondents' Motion, petitioner argued that prior exhaustion of
administrative remedies was unnecessary, because her action was not administrative in
nature, but one purely for damages arising from respondents' breach of the laws on human
relations. As such, jurisdiction lay with the courts.
On July 12, 2002, the RTC dismissed the Complaint for lack of cause of action.
Ruling of the Regional Trial Court
In granting respondents' Motion to Dismiss, the trial court noted that the instant
controversy involved a higher institution of learning, two of its faculty members and one of
its students. It added that Section 54 of the Education Act of 1982 vested in the
Commission on Higher Education (CHED) the supervision and regulation of tertiary
schools. Thus, it ruled that the CHED, not the courts, had jurisdiction over the
controversy.7
In its dispositive portion, the assailed Order dismissed the Complaint for "lack of cause of
action" without, however, explaining this ground.
Aggrieved, petitioner filed the present Petition on pure questions of law. 8
Issues
In her Memorandum, petitioner raises the following issues for our consideration:
"Whether or not the principle of exhaustion of administrative remedies applies in a
civil action exclusively for damages based on violation of the human relation
provisions of the Civil Code, filed by a student against her former school.
"Whether or not there is a need for prior declaration of invalidity of a certain school
administrative policy by the Commission on Higher Education (CHED) before a
former student can successfully maintain an action exclusively for damages in
regular courts.

35
 "Whether or not the Commission on Higher Education (CHED) has exclusive original
jurisdiction over actions for damages based upon violation of the Civil Code
provisions on human relations filed by a student against the school." 9
All of the foregoing point to one issue -- whether the doctrine of exhaustion of
administrative remedies is applicable. The Court, however, sees a second issue which,
though not expressly raised by petitioner, was impliedly contained in her Petition: whether
the Complaint stated sufficient cause(s) of action.
The Court's Ruling
The Petition is meritorious.
First Issue:
Exhaustion of Administrative Remedies
Respondents anchored their Motion to Dismiss on petitioner's alleged failure to exhaust
administrative remedies before resorting to the RTC. According to them, the determination
of the controversy hinge on the validity, the wisdom and the propriety of PCST's academic
policy. Thus, the Complaint should have been lodged in the CHED, the administrative body
tasked under Republic Act No. 7722 to implement the state policy to "protect, foster and
promote the right of all citizens to affordable quality education at all levels and to take
appropriate steps to ensure that education is accessible to all." 10
Petitioner counters that the doctrine finds no relevance to the present case since she is
praying for damages, a remedy beyond the domain of the CHED and well within the
jurisdiction of the courts.11
Petitioner is correct. First, the doctrine of exhaustion of administrative remedies has no
bearing on the present case. In Factoran Jr. v. CA, 12 the Court had occasion to elucidate on
the rationale behind this doctrine:
"The doctrine of exhaustion of administrative remedies is basic. Courts, for reasons of
law, comity, and convenience, should not entertain suits unless the available
administrative remedies have first been resorted to and the proper authorities have
been given the appropriate opportunity to act and correct their alleged errors, if any,
committed in the administrative forum. x x x.13 "
Petitioner is not asking for the reversal of the policies of PCST. Neither is she demanding it
to allow her to take her final examinations; she was already enrolled in another educational
institution. A reversal of the acts complained of would not adequately redress her
grievances; under the circumstances, the consequences of respondents' acts could no
longer be undone or rectified.
Second, exhaustion of administrative remedies is applicable when there is competence on
the part of the administrative body to act upon the matter complained of. 14 Administrative
agencies are not courts; they are neither part of the judicial system, nor are they deemed
judicial tribunals.15 Specifically, the CHED does not have the power to award
damages.16 Hence, petitioner could not have commenced her case before the Commission.
Third, the exhaustion doctrine admits of exceptions, one of which arises when the issue is
purely legal and well within the jurisdiction of the trial court. 17 Petitioner's action for
damages inevitably calls for the application and the interpretation of the Civil Code, a
function that falls within the jurisdiction of the courts. 18
Second Issue:
Cause of Action
Sufficient Causes of Action Stated in the Allegations in the Complaint
36
As a rule, every complaint must sufficiently allege a cause of action; failure to do so
warrants its dismissal.19 A complaint is said to assert a sufficient cause of action if,
admitting what appears solely on its face to be correct, the plaintiff would be entitled to the
relief prayed for. Assuming the facts that are alleged to be true, the court should be able to
render a valid judgment in accordance with the prayer in the complaint.20
A motion to dismiss based on lack of cause of action hypothetically admits the truth of the
alleged facts. In their Motion to Dismiss, respondents did not dispute any of petitioner's
allegations, and they admitted that "x x x the crux of plaintiff's cause of action is the
determination of whether or not the assessment of P100 per ticket is excessive or
oppressive."21 They thereby premised their prayer for dismissal on the Complaint's alleged
failure to state a cause of action. Thus, a reexamination of the Complaint is in order.
The Complaint contains the following factual allegations:
"10. In the second week of February 2002, defendant Rachelle A. Gamurot, in
connivance with PCST, forced plaintiff and her classmates to buy or take two tickets
each, x x x;
"11. Plaintiff and many of her classmates objected to the forced distribution and
selling of tickets to them but the said defendant warned them that if they refused [to]
take or pay the price of the two tickets they would not be allowed at all to take the
final examinations;
"12. As if to add insult to injury, defendant Rachelle A. Gamurot bribed students with
additional fifty points or so in their test score in her subject just to unjustly influence
and compel them into taking the tickets;
"13. Despite the students' refusal, they were forced to take the tickets because [of]
defendant Rachelle A. Gamurot's coercion and act of intimidation, but still many of
them including the plaintiff did not attend the dance party imposed upon them by
defendants PCST and Rachelle A. Gamurot;
"14. Plaintiff was not able to pay the price of her own two tickets because aside form
the fact that she could not afford to pay them it is also against her religious practice
as a member of a certain religious congregation to be attending dance parties and
celebrations;
"15. On March 14, 2002, before defendant Rachelle A. Gamurot gave her class its
final examination in the subject 'Logic' she warned that students who had not paid
the tickets would not be allowed to participate in the examination, for which threat
and intimidation many students were eventually forced to make payments:
"16. Because plaintiff could not afford to pay, defendant Rachelle A. Gamurot
inhumanly made plaintiff sit out the class but the defendant did not allow her to take
her final examination in 'Logic;'
"17. On March 15, 2002 just before the giving of the final examination in the subject
'Statistics,' defendant Elissa Baladad, in connivance with defendants Rachelle A.
Gamurot and PCST, announced in the classroom that she was not allowing plaintiff
and another student to take the examination for their failure and refusal to pay the
price of the tickets, and thenceforth she ejected plaintiff and the other student from
the classroom;
"18. Plaintiff pleaded for a chance to take the examination but all defendants could
say was that the prohibition to give the examinations to non-paying students was an
administrative decision;
37
 "19. Plaintiff has already paid her tuition fees and other obligations in the school;
"20. That the above-cited incident was not a first since PCST also did another forced
distribution of tickets to its students in the first semester of school year 2001-2002; x
x x " 22
The foregoing allegations show two causes of action; first, breach of contract; and second,
liability for tort.
Reciprocity of the
School-Student Contract
In Alcuaz v. PSBA,23 the Court characterized the relationship between the school and the
student as a contract, in which "a student, once admitted by the school is considered
enrolled for one semester."24 Two years later, in Non v. Dames II, 25 the Court modified the
"termination of contract theory" in Alcuaz by holding that the contractual relationship
between the school and the student is not only semestral in duration, but for the entire
period the latter are expected to complete it." 26 Except for the variance in the period during
which the contractual relationship is considered to subsist, both Alcuaz and Non were
unanimous in characterizing the school-student relationship as contractual in nature.
The school-student relationship is also reciprocal. Thus, it has consequences appurtenant
to and inherent in all contracts of such kind -- it gives rise to bilateral or reciprocal rights
and obligations. The school undertakes to provide students with education sufficient to
enable them to pursue higher education or a profession. On the other hand, the students
agree to abide by the academic requirements of the school and to observe its rules and
regulations.27
The terms of the school-student contract are defined at the moment of its inception -- upon
enrolment of the student. Standards of academic performance and the code of behavior and
discipline are usually set forth in manuals distributed to new students at the start of every
school year. Further, schools inform prospective enrollees the amount of fees and the terms
of payment.
In practice, students are normally required to make a down payment upon enrollment, with
the balance to be paid before every preliminary, midterm and final examination. Their
failure to pay their financial obligation is regarded as a valid ground for the school to deny
them the opportunity to take these examinations.
The foregoing practice does not merely ensure compliance with financial obligations; it also
underlines the importance of major examinations. Failure to take a major examination is
usually fatal to the students' promotion to the next grade or to graduation. Examination
results form a significant basis for their final grades. These tests are usually a primary and
an indispensable requisite to their elevation to the next educational level and, ultimately, to
their completion of a course.
Education is not a measurable commodity. It is not possible to determine who is "better
educated" than another. Nevertheless, a student's grades are an accepted approximation of
what would otherwise be an intangible product of countless hours of study. The importance
of grades cannot be discounted in a setting where education is generally the gate pass to
employment opportunities and better life; such grades are often the means by which a
prospective employer measures whether a job applicant has acquired the necessary tools or
skills for a particular profession or trade.
Thus, students expect that upon their payment of tuition fees, satisfaction of the set
academic standards, completion of academic requirements and observance of school rules
38
and regulations, the school would reward them by recognizing their "completion" of the
course enrolled in.
The obligation on the part of the school has been established in Magtibay v. Garcia, 28 Licup
v. University of San Carlos29 and Ateneo de Manila University v. Garcia, 30 in which the Court
held that, barring any violation of the rules on the part of the students, an institution of
higher learning has a contractual obligation to afford its students a fair opportunity to
complete the course they seek to pursue.
We recognize the need of a school to fund its facilities and to meet astronomical operating
costs; this is a reality in running it. Crystal v. Cebu International School 31 upheld the
imposition by respondent school of a "land purchase deposit" in the amount of P50,000 per
student to be used for the "purchase of a piece of land and for the construction of new
buildings and other facilities x x x which the school would transfer [to] and occupy after the
expiration of its lease contract over its present site."
The amount was refundable after the student graduated or left the school. After noting that
the imposition of the fee was made only after prior consultation and approval by the
parents of the students, the Court held that the school committed no actionable wrong in
refusing to admit the children of the petitioners therein for their failure to pay the "land
purchase deposit" and the 2.5 percent monthly surcharge thereon.
In the present case, PCST imposed the assailed revenue-raising measure belatedly, in the
middle of the semester. It exacted the dance party fee as a condition for the students'
taking the final examinations, and ultimately for its recognition of their ability to finish a
course. The fee, however, was not part of the school-student contract entered into at the
start of the school year. Hence, it could not be unilaterally imposed to the prejudice of the
enrollees.
Such contract is by no means an ordinary one. In Non, we stressed that the school-student
contract "is imbued with public interest, considering the high priority given by the
Constitution to education and the grant to the State of supervisory and regulatory powers
over all educational institutions." 32 Sections 5 (1) and (3) of Article XIV of the 1987
Constitution provide:
"The State shall protect and promote the right of all citizens to quality education at
all levels and shall take appropriate steps to make such declaration accessible to all.
"Every student has a right to select a profession or course of study, subject to fair,
reasonable and equitable admission and academic requirements."
The same state policy resonates in Section 9(2) of BP 232, otherwise known as the
Education Act of 1982:
"Section 9. Rights of Students in School. – In addition to other rights, and subject to
the limitations prescribed by law and regulations, students and pupils in all schools
shall enjoy the following rights:
xxx    xxx    xxx
(2) The right to freely choose their field of study subject to existing curricula
and to continue their course therein up to graduation, except in cases of
academic deficiency, or violation of disciplinary regulations."
Liability for Tort
In her Complaint, petitioner also charged that private respondents "inhumanly punish
students x x x by reason only of their poverty, religious practice or lowly station in life,
which inculcated upon [petitioner] the feelings of guilt, disgrace and unworthiness;" 33 as a
39
result of such punishment, she was allegedly unable to finish any of her subjects for the
second semester of that school year and had to lag behind in her studies by a full year. The
acts of respondents supposedly caused her extreme humiliation, mental agony and
"demoralization of unimaginable proportions" in violation of Articles 19, 21 and 26 of the
Civil Code. These provisions of the law state thus:
"Article 19. Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good
faith."
"Article 21. Any person who wilfully 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."
"Article 26. Every person shall respect the dignity, personality, privacy and peace of
mind of his neighbors and other persons. The following and similar acts, though they
may not constitute a criminal offense, shall produce a cause of action for damages,
prevention and other relief:
(1) Prying into the privacy of another's residence;
(2) Meddling with or disturbing the private life or family relations of another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his beliefs, lowly station in life,
place of birth, physical defect, or other personal condition."
Generally, liability for tort arises only between parties not otherwise bound by a contract.
An academic institution, however, may be held liable for tort even if it has an existing
contract with its students, since the act that violated the contract may also be a tort. We
ruled thus in PSBA vs. CA,34 from which we quote:
"x x x A perusal of Article 2176 [of the Civil Code] shows that obligations arising from
quasi-delicts or tort, also known as extra-contractual obligations, arise only between
parties not otherwise bound by contract, whether express or implied. However, this
impression has not prevented this Court from determining the existence of a tort
even when there obtains a contract. In Air France v. Carrascoso (124 Phil. 722), the
private respondent was awarded damages for his unwarranted expulsion from a first-
class seat aboard the petitioner airline. It is noted, however, that the Court referred
to the petitioner-airline's liability as one arising from tort, not one arising form a
contract of carriage. In effect, Air France is authority for the view that liability from
tort may exist even if there is a contract, for the act that breaks the contract may be
also a tort. x x x This view was not all that revolutionary, for even as early as 1918,
this Court was already of a similar mind. In Cangco v. Manila Railroad (38 Phil. 780),
Mr. Justice Fisher elucidated thus: 'x x x. When such a contractual relation exists
the obligor may break the contract under such conditions that the same act which
constitutes a breach of the contract would have constituted the source of an extra-
contractual obligation had no contract existed between the parties.'
"Immediately what comes to mind is the chapter of the Civil Code on Human
Relations, particularly Article 21 x x x."35
Academic Freedom
In their Memorandum, respondents harp on their right to "academic freedom." We are not
impressed. According to present jurisprudence, academic freedom encompasses the
independence of an academic institution to determine for itself (1) who may teach, (2) what
40
may be taught, (3) how it shall teach, and (4) who may be admitted to study. 36 In Garcia v.
the Faculty Admission Committee, Loyola School of Theology, 37 the Court upheld the
respondent therein when it denied a female student's admission to theological studies in a
seminary for prospective priests. The Court defined the freedom of an academic institution
thus: "to decide for itself aims and objectives and how best to attain them x x x free from
outside coercion or interference save possibly when overriding public welfare calls for some
restraint."38
In Tangonan v. Paño,39 the Court upheld, in the name of academic freedom, the right of the
school to refuse readmission of a nursing student who had been enrolled on probation, and
who had failed her nursing subjects. These instances notwithstanding, the Court has
emphasized that once a school has, in the name of academic freedom, set its standards,
these should be meticulously observed and should not be used to discriminate against
certain students.40 After accepting them upon enrollment, the school cannot renege on its
contractual obligation on grounds other than those made known to, and accepted by,
students at the start of the school year.
In sum, the Court holds that the Complaint alleges sufficient causes of action against
respondents, and that it should not have been summarily dismissed. Needless to say, the
Court is not holding respondents liable for the acts complained of. That will have to be
ruled upon in due course by the court a quo.
WHEREFORE, the Petition is hereby GRANTED, and the assailed Orders REVERSED. The
trial court is DIRECTED to reinstate the Complaint and, with all deliberate speed, to
continue the proceedings in Civil Case No. U-7541. No costs.
SO ORDERED.
Sandoval-Gutierrez, Carpio-Morales, and Garcia, JJ., concur.
Corona, J., on leave.
G.R. No. 194403
SPOUSES HIPOLITO DALEN, SR. AND FE G. DALEN, EVERLISTA LARIBA AND THE
MINOR BEVERLY T. LARIBA, MAGDALENA F. MARPAGA AND THE MINORS MIKE
ANTHONY AND THOMIE MAE, BOTH SURNAMED MARPAGA, AGNES C. MOLINA AND
THE MINORS SHEILA, SIMOUN, STEPHEN JOHN AND SHARON ANN, ALL SURNAMED
MOLINA, EMMA C. NAVARRO AND THE MINORS RAYMOND, MARAH, AND RYAN ALL
SURNAMED NAVARRO, RUTH T. SULAM AND THE MINOR JEINAR REECE T.
SULAM, Petitioners
vs.
MITSUI O.S.K. LINES DIAMOND CAMELLA, S.A., Respondent
DECISION
CARANDANG, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court,
assailing the Decision2 dated July 20, 2010 and Resolution 3 dated October 26, 2010 of the
Court of Appeals (CA) in CA-G.R. SP No. 112551 filed by Sps. Hipolito Dalen, Sr. and Fe G.
Dalen; Everlista Lariba and the minor Beverly T. Lariba; Magdalena F. Marpaga and the
minors Mike Anthony and Thomie Mae, both surnamed Marpaga; Agnes C. Molina and the
minors Sheila, Simoun, Stephen John and Sharon Ann, all surnamed Molina; Emma C.
Navarro and the minors Raymond, Marah, and Ryan all surnamed Navarro; Ruth T. Sulam
and the minor Jeinar Reece T. Sulam (Petitioners).
FACTS OF THE CASE
41
This case arose from a complaint for damages, plus attorney's fees filed by petitioners
together with Teresa Derder and the minors Vinna Marie Derder, Bon Erik Derder, and
Frances Karen Derder; Lolita Tolentino, minors Ann Brigette Tolentino, Fe Clarin Tolentino,
Elvido Tolentino, Jr., Sarah Mae Tolentino, and Farah Jane Tolentino; and Luz Marina
Reyes and the minors Carolina Marie Rose Reyes and Rossmark Reyes who, however, did
not join as parties in this petition for review, against Mitsui O.S.K. Lines and Diamond
Camellia, S.A. (collectively, Respondents).4
Based on the records of the case, it was found that Mitsui O.S.K. Lines, a non-resident
corporation, not doing business in the Philippines, was the charterer of MV Sea Prospect
while Diamond Camellia, S.A., another non-resident corporation, not doing business in the
Philippines, and of Panamian registry is the registered owner of the said vessel. 5
On January 1, 1998, Magsaysay Maritime Corporation (Magsaysay), the manning agent of
the respondents in the Philippines, hired the following, among others, as crew members:
Name Position
1. Rosadel Reyes Captain
2. Simplicia Molina Chief Engineer
3. Antonio Marpaga First Engineer
4. Ramon Navarro Second Engineer
5. Fonillo Derder Second Engineer
6. Hipolito Dalen, Jr. Oiler
7. Vicente Lariba, Jr. Oiler
8. Elvido Tolentino Oiler
9. Joey Sulam Wiper
10. Donato Cabungcag Chief Cook
11. Felix Makiling Deck Chief
12. Tito Robillos 2nd Officer
13. Ernesto Gambalan 3rd Officer
14. Marlon Marasigan Sailor
15. Eduardo Camacho Radio Operator
16. Frederick Llanes M/M6
On or about August 15, 1998, MV Sea Prospect was making a regular traffic between Japan
and Indonesia and arrived at the Port of Sebe, Indonesia in order to perform loading
operations of nickle-ore. Prior to its arrival therein, it had been raining, hence, the nickle-
ore was wet when loaded onboard MV Sea Prospect.7
On or about August 22, 1998, MV Sea Prospect headed to Japan. While there, or on August
26, 1998, weather was inclement and the vessel developed a list between 10 and 15 degrees
to starboard. Upon inspection, it was found that the cargo was very wet so the Captain
42
ordered to fill the ballast tanks, thus achieving the vessel's stability. He then ordered a
change in the course of the vessel to the Island of Okinawa to seek refuge. While nearing
the Island of Okinawa, the vessel listed again 3 to 5 degrees then to 90 degrees, taking
water in the bridge, the engine stopping and the electric power being cut. After 30 minutes,
MV Sea Prospect sunk, drowning 10 crew members, namely: (1) Rosadel Reyes; (2)
Simplicio Molina; (3) Antonio Marpaga; (4) Ramon Navarro; (5) Fonillo Derder; (6) Hipolito
Dalen, Jr.; (7) Vicente Lariba, Jr.; (8) Elvido Tolentino; (9) Joey Sulam; and (10) Donato
Cabungcag. Eleven other crew members were saved and were brought to the Japanese
ports including (1) Felix Makiling; (2) Tito Robillos; (3) Emesto Gambalan; (4) Marlon
Marasigan; (5) Eduardo Camacho; and (6) Frederick Llanes.8
Respondents alleged that on November 4, 1998, November 5, 1998 and December 10,
1998, petitioners who are heirs and beneficiaries of the missing seafarers received full
payment of death benefits based on the employment contract as well as the International
Transport Workers' Federation-Japan Seaman Union Associated Marine Officers and
Seafarers Union of the Philippines Collective Bargaining Agreement (CBA) governing the
employment of the seafarers. Petitioners were accompanied by their counsel, Atty.
Emmanuel Partido in signing the settlement agreements, affidavits of heirship and receipts
of payment before the Overseas Workers Welfare Administration (OWWA).9
According to respondents, the contents of said documents were explained to petitioners, the
pertinent provisions include:
(a) The release of respondents from ALL liabilities, including those based from torts, arising
from the death/disappearance of the crew members as a result of sinking of the vessel;
(b) The Settlement Agreement may be pleaded as an ABSOLUTE and FINAL bar to any suit
which may be filed by petitioners; and
(c) The commitment by the petitioners that they will not file any claim or suit against
respondents in ANY jurisdiction.10
Petitioners allegedly demanded in writing further compensation in connection with the
sinking of the vessel and threatened that an action arising from tort would be commenced
in Panama should their demand be unheeded. Hence, on February 26, 1999, respondents
filed before the Regional Trial Court (RTC) of Manila, Branch 46, a Petition for Declaratory
Relief and Approval of the Compromise/Settlement Agreement against petitioners. On July
9, 1999, petitioners filed the complaint for damages against respondents before the
Admiralty Court of Panama. On September 28, 2000, respondent converted the petition for
declaratory relief into an ordinary civil action for breach of contract and damages and
prayed for the approval of the settlement agreement. 11
On August 23, 2004, the trial court issued an order confirming the validity of the
settlement agreement, declaring that the petitioners breached the material provisions of the
settlement agreement, and approved such settlement agreement. The Supreme Court of
Panama, meanwhile, dismissed petitioners' case for lack of jurisdiction based on forum non
conveniens.12
On July 18, 2002, the Labor Arbiter (LA) dismissed the complaint on the grounds of lack of
jurisdiction over the persons of the respondents and prescription of action. According to the
LA, summonses cannot be validly served upon the respondents being foreign corporations
and not having transacted business in the Philippines. 13 In this case, the action for
damages is an action in personam, wherein jurisdiction over their person is necessary for
the LA to validly try and decide their case. However, since they are non-residents, personal
43
service of summonses within the Philippines is essential for the acquisition of jurisdiction
over their persons.
Moreover, the LA found that the action filed by petitioners has already prescribed. The
Labor Code provides that all money claims arising from employer employee relationship
accruing during the effectivity of this Code shall be filed within three years from the time
the cause of action accrued. Here, the sinking of MV Sea Prospect occurred on August 26,
1998, they have three years to file their claim from such date. They filed their complaint on
April 17, 2002 or more than three years therefrom.
However, the LA referred the case back to the Maritime Court of Panama where trial on the
merits could be had and where any judgment in favor of petitioners could be sufficiently
satisfied from the letter of guarantee issued by respondents. It held that contrary to the
decision of the Supreme Court of Panama, the Maritime Court of Panama is the forum in
which the action may be most appropriately brought, considering the best interest of the
parties.
The petitioners appealed to the National Labor Relations Commission (NLRC) but it was
dismissed through a Resolution14 dated February 4, 2004.
Upon the filing of the Motion for Reconsideration, the NLRC issued a Resolution 15 dated
December 28, 2004 setting aside the earlier Resolution and directing the LA to serve
summons to Magsaysay at its business address given to the Philippine Overseas
Employment Administration (POEA) so that jurisdiction may be acquired over the persons
of the respondents and proper proceedings can be held. The records were then remanded to
the LA of origin for immediate action.16
Pursuant to this, the LA issued another Decision 17 dated September 30, 2008 dismissing
the complaint due to the execution of individual compromise agreements by petitioners
waiving their rights against respondents. The LA had been aware of the fact that the trial
court as well as the CA had affirmed the validity of the compromise agreements. Moreover,
the petitioners received their full compensation under the contract and it was not found
that the amount received were unconscionable and grossly disproportionate. It also did not
appear that petitioners were defrauded or tricked into signing the same. 18
Lastly, the LA found that the claim had already prescribed. 19
Aggrieved, petitioners filed their appeal to the NLRC.
In a Decision20 dated June 30, 2009, the NLRC dismissed the appeal saying that the claim,
even if based on tort was already included in the quitclaims executed in favor of the
respondents. It also held that prescription has already set in.21
Still aggrieved, petitioners filed a Petition for Certiorari to the CA which was dismissed in a
Decision22 dated July 20, 2010 reiterating the ruling of the LA and NLRC that the complaint
for damages was filed out of time and that the claim filed with the Admiralty Court of
Panama did not toll the prescriptive period for filing a claim here in the Philippines. 23
Moreover, it was decided that the Settlement Agreement, Receipt and General Receipt and
Release of Rights as well as the affidavits and certifications signed by the petitioners
released the respondents from all liabilities, including those based on tort, arising from the
death/disappearance of the crew members as a result of the sinking of the vessel. The
settlement agreement may be pleaded as an absolute and final bar to any suit. Also,
petitioners committed themselves not to file any claim against respondents in any
jurisdiction.24

44
Undaunted, petitioners filed a Motion for Reconsideration which was denied via a
Resolution25 dated October 26, 2010.
Hence, this petition.
ISSUES
The issues raised by petitioners are the following:
1. Whether petitioners' cause of action has prescribed; and
2. Whether the settlement agreement, receipt and general receipt and release of rights
barred petitioners from filing the complaint.
OUR RULING
The Labor Arbiter has no jurisdiction
over tort cases
Before going into the issues raised by the parties, it is necessary to first settle whether the
claim for damages based on tort filed by petitioners before the LA was proper.
The Labor Code provides that:
Art. 224. [217] Jurisdiction of Labor Arbiters and the Commission. – x x x
xxxx
4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
xxxx
Similarly, Section 10 of Republic Act No. 8042 or the Migrant Workers and Overseas
Filipinos Act of 1995 provides:
Sec. 10. MONEY CLAIMS. - Notwithstanding any provision of law to the contrary, the Labor
Arbiters of the National Labor Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90) calendar days after filing of the
complaint, the claims arising out of an employer-employee relationship or by virtue of any
law or contract involving Filipino workers for overseas deployment including claims for
actual, moral, exemplary and other forms of damages.
In deciding whether a case arises out of employer-employee relations, the Court formulated
the "reasonable causal connection rule", wherein if there is a reasonable connection
between the claim asserted and the employer-employee relations, then the case is within
the jurisdiction of the labor courts.26
In this case, petitioners' claim for damages is grounded on respondents' gross negligence
which caused the sinking of the vessel and the untimely demise of their loved ones. 27 Based
on this, the subject matter of the complaint is one of claim for damages arising from quasi-
delict, which is within the ambit of the regular court's jurisdiction.
According to Article 2176 of the New Civil Code, "Whoever by act or omission causes
damage to another, there being fault or negligence, is obliged to pay for the damage done.
Such fault or negligence, if there is no pre-existing contractual relation between the parties,
is called quasi-delict."
Thus, to sustain a claim liability under quasi-delict, the following requisites must concur:
(a) damages suffered by the plaintiff; (b) fault or negligence of the defendant, or some other
person for whose acts he must respond; and (c) the connection of cause and effect between
the fault or negligence of the defendant and the damages incurred by the plaintiff. 28
Here, petitioners argue that respondents are duty bound to exercise due diligence required
by law in order to ensure the safety of the crew and all the passengers therein. It was
further averred that the negligence on the part of the respondents is quite apparent when
45
they allowed the vessel to load and transport wet cargo. For failure therefore to exercise
extra ordinary diligence required of them, the respondents must be held liable for damages
to the surviving heirs of the deceased crew members. 29 Notwithstanding the contractual
relation between the parties, the act of respondents is a quasi-delict and not a mere breach
of contract.
Where the resolution of the dispute requires expertise, not in labor management relations
nor in wage structures and other terms and conditions of employment, but rather in the
application of the general civil law, such claim falls outside the area of competence or
expertise ordinarily ascribed to the LA and the NLRC.30
Therefore, the LA has no jurisdiction over the case in the first place; it should have been
filed to the proper trial court.
The Settlement Agreements signed
by petitioners were valid.
Notwithstanding the lack of jurisdiction of the LA to take cognizance of the case, petitioners
still cannot file the complaint with the trial court because the Settlement Agreement signed
by them was valid.
It is true that quitclaims and waivers are oftentimes frowned upon and are considered as
ineffective in barring recovery for the full measure of the worker's rights and that
acceptance of the benefits therefrom does not amount to estoppel. 31 The reason is plain.
The employer and employee, obviously, do not stand on the same footing. 32 However, not all
waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily
entered into and represents a reasonable settlement, it is binding on the parties and may
not later be disowned simply because of change of mind. It is only where there is clear proof
that the waiver was wangled from an unsuspecting or gullible person, or the terms of the
settlement are unconscionable on its face, that the law will step in to annul the
questionable transaction. But where it is shown that the person making the waiver did so
voluntarily, with full understanding of what he was doing, and the consideration for the
quitclaim is credible and reasonable, the transaction must be recognized as a valid and
binding undertaking.33
In this case, it should be noted that when petitioners signed the Settlement Agreements,
they did it with their counsel of choice. It could be said that they brought their counsel
along to make sure that they would understand the contents of the agreements and that
they are not tricked into signing the same. A lawyer would know whether the agreement is
unreasonable and one-sided on its face.
Second, the agreement provides for the "release of respondents from all liabilities including
those based from torts, arising from the death/disappearance of the crewmembers as a
result of the sinking of the vessel." 34 Hence, even claims arising from quasi-delict would be
barred as shown in the blanket waiver of right to sue.
Moreover, petitioners failed to substantiate their claim that they received less of what they
are really entitled to based on said Settlement Agreements. They wanted the Court to
believe that since their cause of action is for damages and what they received in accordance
with the Settlement Agreement was only those under the POEA Standard Employment
Contract and the overriding CBA, then they are not barred from filing the instant
complaint. Petitioners are misled. As discussed above, the Settlement Agreement signed by
petitioners are comprehensive enough to include even causes of action arising from quasi-
delict.
46
Having settled that petitioners may no longer pursue their claim for quasi delict based on
the grounds discussed above, it is not necessary to consider herein the issue on
prescription of action.
WHEREFORE, the instant petition is DENIED. The Decision dated July 20, 2010 and
Resolution dated October 26, 2010 of the Court of Appeals in CA G.R. SP No. 112551
are AFFIRMED.
SO ORDERED.
Bersamin, C.J., (Chairperson), Jardeleza,* and Gesmundo, JJ., concur.
Del Castillo, J., on official leave.

G.R. No. 97336 February 19, 1993

GASHEM SHOOKAT BAKSH, petitioner,
vs.
HON. COURT OF APPEALS and MARILOU T. GONZALES, respondents.
Public Attorney's Office for petitioner.
Corleto R. Castro for private respondent.

DAVIDE, JR., J.:
This is an appeal by certiorari under Rule 45 of the Rules of Court seeking to review and
set aside the Decision 1 of the respondent Court of Appeals in CA-G.R. CV No. 24256 which
affirmed in toto the 16 October 1939 Decision of Branch 38 (Lingayen) of the Regional Trial
Court (RTC) of Pangasinan in Civil Case No. 16503. Presented is the issue of whether or not
damages may be recovered for a breach of promise to marry on the basis of Article 21 of the
Civil Code of the Philippines.
The antecedents of this case are not complicated:
On 27 October 1987, private respondent, without the assistance of counsel, filed with the
aforesaid trial court a complaint2 for damages against the petitioner for the alleged violation
of their agreement to get married. She alleges in said complaint that: she is twenty-two (22)
years old, single, Filipino and a pretty lass of good moral character and reputation duly
respected in her community; petitioner, on the other hand, is an Iranian citizen residing at
the Lozano Apartments, Guilig, Dagupan City, and is an exchange student taking a medical
course at the Lyceum Northwestern Colleges in Dagupan City; before 20 August 1987, the
latter courted and proposed to marry her; she accepted his love on the condition that they
would get married; they therefore agreed to get married after the end of the school
semester, which was in October of that year; petitioner then visited the private respondent's
parents in Bañaga, Bugallon, Pangasinan to secure their approval to the marriage;
sometime in 20 August 1987, the petitioner forced her to live with him in the Lozano
Apartments; she was a virgin before she began living with him; a week before the filing of
the complaint, petitioner's attitude towards her started to change; he maltreated and
threatened to kill her; as a result of such maltreatment, she sustained injuries; during a
confrontation with a representative of the barangay captain of Guilig a day before the filing
of the complaint, petitioner repudiated their marriage agreement and asked her not to live
with him anymore and; the petitioner is already married to someone living in Bacolod City.
Private respondent then prayed for judgment ordering the petitioner to pay her damages in
the amount of not less than P45,000.00, reimbursement for actual expenses amounting to
47
P600.00, attorney's fees and costs, and granting her such other relief and remedies as may
be just and equitable. The complaint was docketed as Civil Case No. 16503.
In his Answer with Counterclaim,3 petitioner admitted only the personal circumstances of
the parties as averred in the complaint and denied the rest of the allegations either for lack
of knowledge or information sufficient to form a belief as to the truth thereof or because the
true facts are those alleged as his Special and Affirmative Defenses. He thus claimed that
he never proposed marriage to or agreed to be married with the private respondent; he
neither sought the consent and approval of her parents nor forced her to live in his
apartment; he did not maltreat her, but only told her to stop coming to his place because
he discovered that she had deceived him by stealing his money and passport; and finally,
no confrontation took place with a representative of the barangay captain. Insisting, in his
Counterclaim, that the complaint is baseless and unfounded and that as a result thereof,
he was unnecessarily dragged into court and compelled to incur expenses, and has suffered
mental anxiety and a besmirched reputation, he prayed for an award of P5,000.00 for
miscellaneous expenses and P25,000.00 as moral damages.
After conducting a pre-trial on 25 January 1988, the trial court issued a Pre-Trial
Order4 embodying the stipulated facts which the parties had agreed upon, to wit:
1. That the plaintiff is single and resident (sic) of Bañaga, Bugallon,
Pangasinan, while the defendant is single, Iranian citizen and resident (sic) of
Lozano Apartment, Guilig, Dagupan City since September 1, 1987 up to the
present;
2. That the defendant is presently studying at Lyceum Northwestern, Dagupan
City, College of Medicine, second year medicine proper;
3. That the plaintiff is (sic) an employee at Mabuhay Luncheonette , Fernandez
Avenue, Dagupan City since July, 1986 up to the present and a (sic) high
school graduate;
4. That the parties happened to know each other when the manager of the
Mabuhay Luncheonette, Johhny Rabino introduced the defendant to the
plaintiff on August 3, 1986.
After trial on the merits, the lower court, applying Article 21 of the Civil Code, rendered on
16 October 1989 a decision 5 favoring the private respondent. The petitioner was thus
ordered to pay the latter damages and attorney's fees; the dispositive portion of the decision
reads:
IN THE LIGHT of the foregoing consideration, judgment is hereby rendered in
favor of the plaintiff and against the defendant.
1. Condemning (sic) the defendant to pay the plaintiff the sum of twenty
thousand (P20,000.00) pesos as moral damages.
2. Condemning further the defendant to play the plaintiff the sum of three
thousand (P3,000.00) pesos as atty's fees and two thousand (P2,000.00) pesos
at (sic) litigation expenses and to pay the costs.
3. All other claims are denied.6
The decision is anchored on the trial court's findings and conclusions that (a) petitioner
and private respondent were lovers, (b) private respondent is not a woman of loose morals
or questionable virtue who readily submits to sexual advances, (c) petitioner, through
machinations, deceit and false pretenses, promised to marry private respondent, d) because
of his persuasive promise to marry her, she allowed herself to be deflowered by him, (e) by
48
reason of that deceitful promise, private respondent and her parents — in accordance with
Filipino customs and traditions — made some preparations for the wedding that was to be
held at the end of October 1987 by looking for pigs and chickens, inviting friends and
relatives and contracting sponsors, (f) petitioner did not fulfill his promise to marry her and
(g) such acts of the petitioner, who is a foreigner and who has abused Philippine hospitality,
have offended our sense of morality, good customs, culture and traditions. The trial court
gave full credit to the private respondent's testimony because, inter alia, she would not
have had the temerity and courage to come to court and expose her honor and reputation
to public scrutiny and ridicule if her claim was false. 7
The above findings and conclusions were culled from the detailed summary of the evidence
for the private respondent in the foregoing decision, digested by the respondent Court as
follows:
According to plaintiff, who claimed that she was a virgin at the time and that
she never had a boyfriend before, defendant started courting her just a few
days after they first met. He later proposed marriage to her several times and
she accepted his love as well as his proposal of marriage on August 20, 1987,
on which same day he went with her to her hometown of Bañaga, Bugallon,
Pangasinan, as he wanted to meet her parents and inform them of their
relationship and their intention to get married. The photographs Exhs. "A" to
"E" (and their submarkings) of defendant with members of plaintiff's family or
with plaintiff, were taken that day. Also on that occasion, defendant told
plaintiffs parents and brothers and sisters that he intended to marry her
during the semestral break in October, 1987, and because plaintiff's parents
thought he was good and trusted him, they agreed to his proposal for him to
marry their daughter, and they likewise allowed him to stay in their house and
sleep with plaintiff during the few days that they were in Bugallon. When
plaintiff and defendant later returned to Dagupan City, they continued to live
together in defendant's apartment. However, in the early days of October, 1987,
defendant would tie plaintiff's hands and feet while he went to school, and he
even gave her medicine at 4 o'clock in the morning that made her sleep the
whole day and night until the following day. As a result of this live-in
relationship, plaintiff became pregnant, but defendant gave her some medicine
to abort the fetus. Still plaintiff continued to live with defendant and kept
reminding him of his promise to marry her until he told her that he could not
do so because he was already married to a girl in Bacolod City. That was the
time plaintiff left defendant, went home to her parents, and thereafter
consulted a lawyer who accompanied her to the barangay captain in Dagupan
City. Plaintiff, her lawyer, her godmother, and a barangay tanod sent by the
barangay captain went to talk to defendant to still convince him to marry
plaintiff, but defendant insisted that he could not do so because he was already
married to a girl in Bacolod City, although the truth, as stipulated by the
parties at the pre-trial, is that defendant is still single.
Plaintiff's father, a tricycle driver, also claimed that after defendant had
informed them of his desire to marry Marilou, he already looked for sponsors
for the wedding, started preparing for the reception by looking for pigs and

49
 chickens, and even already invited many relatives and friends to the
forthcoming wedding. 8
Petitioner appealed the trial court's decision to the respondent Court of Appeals which
docketed the case as CA-G.R. CV No. 24256. In his Brief, 9 he contended that the trial court
erred (a) in not dismissing the case for lack of factual and legal basis and (b) in ordering
him to pay moral damages, attorney's fees, litigation expenses and costs.
On 18 February 1991, respondent Court promulgated the challenged
decision   affirming in toto the trial court's ruling of 16 October 1989. In sustaining the
10

trial court's findings of fact, respondent Court made the following analysis:
First of all, plaintiff, then only 21 years old when she met defendant who was
already 29 years old at the time, does not appear to be a girl of loose morals. It
is uncontradicted that she was a virgin prior to her unfortunate experience
with defendant and never had boyfriend. She is, as described by the lower
court, a barrio lass "not used and accustomed to trend of modern urban life",
and certainly would (sic) not have allowed
"herself to be deflowered by the defendant if there was no persuasive promise
made by the defendant to marry her." In fact, we agree with the lower court
that plaintiff and defendant must have been sweethearts or so the plaintiff
must have thought because of the deception of defendant, for otherwise, she
would not have allowed herself to be photographed with defendant in public in
so (sic) loving and tender poses as those depicted in the pictures Exhs. "D" and
"E". We cannot believe, therefore, defendant's pretense that plaintiff was a
nobody to him except a waitress at the restaurant where he usually ate.
Defendant in fact admitted that he went to plaintiff's hometown of Bañaga,
Bugallon, Pangasinan, at least thrice; at (sic) the town fiesta on February 27,
1987 (p. 54, tsn May 18, 1988), at (sic) a beach party together with the
manager and employees of the Mabuhay Luncheonette on March 3, 1987 (p.
50, tsn id.), and on April 1, 1987 when he allegedly talked to plaintiff's mother
who told him to marry her daughter (pp. 55-56, tsn id.). Would defendant have
left Dagupan City where he was involved in the serious study of medicine to go
to plaintiff's hometown in Bañaga, Bugallon, unless there was (sic) some kind
of special relationship between them? And this special relationship must
indeed have led to defendant's insincere proposal of marriage to plaintiff,
communicated not only to her but also to her parents, and (sic) Marites
Rabino, the owner of the restaurant where plaintiff was working and where
defendant first proposed marriage to her, also knew of this love affair and
defendant's proposal of marriage to plaintiff, which she declared was the
reason why plaintiff resigned from her job at the restaurant after she had
accepted defendant's proposal (pp. 6-7, tsn March 7, 1988).
Upon the other hand, appellant does not appear to be a man of good moral
character and must think so low and have so little respect and regard for
Filipino women that he openly admitted that when he studied in Bacolod City
for several years where he finished his B.S. Biology before he came to Dagupan
City to study medicine, he had a common-law wife in Bacolod City. In other
words, he also lived with another woman in Bacolod City but did not marry
that woman, just like what he did to plaintiff. It is not surprising, then, that he
50
 felt so little compunction or remorse in pretending to love and promising to
marry plaintiff, a young, innocent, trustful country girl, in order to satisfy his
lust on her. 11
and then concluded:
In sum, we are strongly convinced and so hold that it was defendant-
appellant's fraudulent and deceptive protestations of love for and promise to
marry plaintiff that made her surrender her virtue and womanhood to him and
to live with him on the honest and sincere belief that he would keep said
promise, and it was likewise these (sic) fraud and deception on appellant's part
that made plaintiff's parents agree to their daughter's living-in with him
preparatory to their supposed marriage. And as these acts of appellant are
palpably and undoubtedly against morals, good customs, and public policy,
and are even gravely and deeply derogatory and insulting to our women,
coming as they do from a foreigner who has been enjoying the hospitality of our
people and taking advantage of the opportunity to study in one of our
institutions of learning, defendant-appellant should indeed be made, under
Art. 21 of the Civil Code of the Philippines, to compensate for the moral
damages and injury that he had caused plaintiff, as the lower court ordered
him to do in its decision in this case. 12
Unfazed by his second defeat, petitioner filed the instant petition on 26 March 1991; he
raises therein the single issue of whether or not Article 21 of the Civil Code applies to the
case at bar. 13
It is petitioner's thesis that said Article 21 is not applicable because he had not committed
any moral wrong or injury or violated any good custom or public policy; he has not
professed love or proposed marriage to the private respondent; and he has never maltreated
her. He criticizes the trial court for liberally invoking Filipino customs, traditions and
culture, and ignoring the fact that since he is a foreigner, he is not conversant with such
Filipino customs, traditions and culture. As an Iranian Moslem, he is not familiar with
Catholic and Christian ways. He stresses that even if he had made a promise to marry, the
subsequent failure to fulfill the same is excusable or tolerable because of his Moslem
upbringing; he then alludes to the Muslim Code which purportedly allows a Muslim to take
four (4) wives and concludes that on the basis thereof, the trial court erred in ruling that he
does not posses good moral character. Moreover, his controversial "common law life" is now
his legal wife as their marriage had been solemnized in civil ceremonies in the Iranian
Embassy. As to his unlawful cohabitation with the private respondent, petitioner claims
that even if responsibility could be pinned on him for the live-in relationship, the private
respondent should also be faulted for consenting to an illicit arrangement. Finally,
petitioner asseverates that even if it was to be assumed arguendo that he had professed
his love to the private respondent and had also promised to marry her, such acts would not
be actionable in view of the special circumstances of the case. The mere breach of promise
is not actionable. 14
On 26 August 1991, after the private respondent had filed her Comment to the petition and
the petitioner had filed his Reply thereto, this Court gave due course to the petition and
required the parties to submit their respective Memoranda, which they subsequently
complied with.

51
As may be gleaned from the foregoing summation of the petitioner's arguments in support
of his thesis, it is clear that questions of fact, which boil down to the issue of the credibility
of witnesses, are also raised. It is the rule in this jurisdiction that appellate courts will not
disturb the trial court's findings as to the credibility of witnesses, the latter court having
heard the witnesses and having had the opportunity to observe closely their deportment
and manner of testifying, unless the trial court had plainly overlooked facts of substance or
value which, if considered, might affect the result of the case. 15
Petitioner has miserably failed to convince Us that both the appellate and trial courts had
overlooked any fact of substance or values which could alter the result of the case.
Equally settled is the rule that only questions of law may be raised in a petition for review
on certiorari under Rule 45 of the Rules of Court. It is not the function of this Court to
analyze or weigh all over again the evidence introduced by the parties before the lower
court. There are, however, recognized exceptions to this rule. Thus, in Medina
vs. Asistio, Jr.,  16 this Court took the time, again, to enumerate these exceptions:
xxx xxx xxx
(1) When the conclusion is a finding grounded entirely on speculation,
surmises or conjectures (Joaquin v. Navarro, 93 Phil. 257 [1953]); (2) When the
inference made is manifestly mistaken, absurb or impossible (Luna v. Linatok,
74 Phil. 15 [1942]); (3) Where there is a grave abuse of discretion (Buyco v.
People, 95 Phil. 453 [1955]); (4) When the judgment is based on a
misapprehension of facts (Cruz v. Sosing,
L-4875, Nov. 27, 1953); (5) When the findings of fact are conflicting (Casica v.
Villaseca, L-9590 Ap. 30, 1957; unrep.) (6) When the Court of Appeals, in
making its findings, went beyond the issues of the case and the same is
contrary to the admissions of both appellate and appellee (Evangelista v. Alto
Surety and Insurance Co., 103 Phil. 401 [1958]);
(7) The findings of the Court of Appeals are contrary to those of the trial court
(Garcia v. Court of Appeals, 33 SCRA 622 [1970]; Sacay v. Sandiganbayan, 142
SCRA 593 [1986]); (8) When the findings of fact are conclusions without
citation of specific evidence on which they are based (Ibid.,); (9) When the facts
set forth in the petition as well as in the petitioners main and reply briefs are
not disputed by the respondents (Ibid.,); and (10) The finding of fact of the
Court of Appeals is premised on the supposed absence of evidence and is
contradicted by the evidence on record (Salazar v. Gutierrez, 33 SCRA 242
[1970]).
Petitioner has not endeavored to joint out to Us the existence of any of the above quoted
exceptions in this case. Consequently, the factual findings of the trial and appellate courts
must be respected.
And now to the legal issue.
The existing rule is that a breach of promise to marry per se is not an actionable
wrong. 17 Congress deliberately eliminated from the draft of the New Civil Code the
provisions that would have made it so. The reason therefor is set forth in the report of the
Senate Committees on the Proposed Civil Code, from which We quote:
The elimination of this chapter is proposed. That breach of promise to marry is
not actionable has been definitely decided in the case of De Jesus vs.
Syquia. 18 The history of breach of promise suits in the United States and in
52
 England has shown that no other action lends itself more readily to abuse by
designing women and unscrupulous men. It is this experience which has led to
the abolition of rights of action in the so-called Heart Balm suits in many of the
American states. . . . 19
This notwithstanding, the said Code contains a provision, Article 21, which is designed to
expand the concept of torts or quasi-delict in this jurisdiction by granting adequate legal
remedy for the untold number of moral wrongs which is impossible for human foresight to
specifically enumerate and punish in the statute books. 20
As the Code Commission itself stated in its Report:
But the Code Commission had gone farther than the sphere of wrongs defined
or determined by positive law. Fully sensible that there are countless gaps in
the statutes, which leave so many victims of moral wrongs helpless, even
though they have actually suffered material and moral injury, the Commission
has deemed it necessary, in the interest of justice, to incorporate in the
proposed Civil Code the following rule:
Art. 23. Any person who wilfully 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.
An example will illustrate the purview of the foregoing norm: "A" seduces the
nineteen-year old daughter of "X". A promise of marriage either has not been
made, or can not be proved. The girl becomes pregnant. Under the present
laws, there is no crime, as the girl is above nineteen years of age. Neither can
any civil action for breach of promise of marriage be filed. Therefore, though
the grievous moral wrong has been committed, and though the girl and family
have suffered incalculable moral damage, she and her parents cannot bring
action for damages. But under the proposed article, she and her parents would
have such a right of action.
Thus at one stroke, the legislator, if the forgoing rule is approved, would
vouchsafe adequate legal remedy for that untold number of moral wrongs
which it is impossible for human foresight to provide for specifically in the
statutes. 21
Article 2176 of the Civil Code, which defines a quasi-delict thus:
Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if
there is no pre-existing contractual relation between the parties, is called
a quasi-delict and is governed by the provisions of this Chapter.
is limited to negligent acts or omissions and excludes the notion of willfulness or
intent. Quasi-delict, known in Spanish legal treatises as culpa aquiliana, is a civil law
concept while torts is an Anglo-American or common law concept. Torts is much
broader than culpa aquiliana because it includes not only negligence, but
international criminal acts as well such as assault and battery, false imprisonment
and deceit. In the general scheme of the Philippine legal system envisioned by the
Commission responsible for drafting the New Civil Code, intentional and malicious
acts, with certain exceptions, are to be governed by the Revised Penal Code while
negligent acts or omissions are to be covered by Article 2176 of the Civil Code. 22 In
between these opposite spectrums are injurious acts which, in the absence of Article
53
 21, would have been beyond redress. Thus, Article 21 fills that vacuum. It is even
postulated that together with Articles 19 and 20 of the Civil Code, Article 21 has
greatly broadened the scope of the law on civil wrongs; it has become much more
supple and adaptable than the Anglo-American law on torts. 23
In the light of the above laudable purpose of Article 21, We are of the opinion, and so hold,
that where a man's promise to marry is in fact the proximate cause of the acceptance of his
love by a woman and his representation to fulfill that promise thereafter becomes the
proximate cause of the giving of herself unto him in a sexual congress, proof that he had, in
reality, no intention of marrying her and that the promise was only a subtle scheme or
deceptive device to entice or inveigle her to accept him and to obtain her consent to the
sexual act, could justify the award of damages pursuant to Article 21 not because of such
promise to marry but because of the fraud and deceit behind it and the willful injury to her
honor and reputation which followed thereafter. It is essential, however, that such injury
should have been committed in a manner contrary to morals, good customs or public
policy.
In the instant case, respondent Court found that it was the petitioner's "fraudulent and
deceptive protestations of love for and promise to marry plaintiff that made her surrender
her virtue and womanhood to him and to live with him on the honest and sincere belief that
he would keep said promise, and it was likewise these fraud and deception on appellant's
part that made plaintiff's parents agree to their daughter's living-in with him preparatory to
their supposed marriage." 24 In short, the private respondent surrendered her virginity, the
cherished possession of every single Filipina, not because of lust but because of moral
seduction — the kind illustrated by the Code Commission in its example earlier adverted to.
The petitioner could not be held liable for criminal seduction punished under either Article
337 or Article 338 of the Revised Penal Code because the private respondent was above
eighteen (18) years of age at the time of the seduction.
Prior decisions of this Court clearly suggest that Article 21 may be applied in a breach of
promise to marry where the woman is a victim of moral seduction. Thus, in Hermosisima
vs. Court of Appeals,25 this Court denied recovery of damages to the woman because:
. . . we find ourselves unable to say that petitioner is morally guilty of
seduction, not only because he is approximately ten (10) years younger than
the complainant — who was around thirty-six (36) years of age, and as highly
enlightened as a former high school teacher and a life insurance agent are
supposed to be — when she became intimate with petitioner, then a mere
apprentice pilot, but, also, because the court of first instance found that,
complainant "surrendered herself" to petitioner because, "overwhelmed by her
love" for him, she "wanted to bind" him by having a fruit of their engagement
even before they had the benefit of clergy.
In Tanjanco vs. Court of Appeals, 26 while this Court likewise hinted at possible recovery if
there had been moral seduction, recovery was eventually denied because We were not
convinced that such seduction existed. The following enlightening disquisition and
conclusion were made in the said case:
The Court of Appeals seem to have overlooked that the example set forth in the
Code Commission's memorandum refers to a tort upon a minor who had
been seduced. The essential feature is seduction, that in law is more than mere
sexual intercourse, or a breach of a promise of marriage; it connotes essentially
54
 the idea of deceit, enticement, superior power or abuse of confidence on the
part of the seducer to which the woman has yielded (U.S. vs. Buenaventura, 27
Phil. 121; U.S. vs. Arlante, 9 Phil. 595).
It has been ruled in the Buenaventura case (supra) that —
To constitute seduction there must in all cases be some sufficient
promise or inducement and the woman must yield because of the
promise or other inducement. If she consents merely from carnal
lust and the intercourse is from mutual desire, there is no
seduction (43 Cent. Dig. tit. Seduction, par. 56) She must be
induced to depart from the path of virtue by the use of some
species of arts, persuasions and wiles, which are calculated to
have and do have that effect, and which result in her person to
ultimately submitting her person to the sexual embraces of her
seducer (27 Phil. 123).
And in American Jurisprudence we find:
On the other hand, in an action by the woman, the enticement,
persuasion or deception is the essence of the injury; and a mere
proof of intercourse is insufficient to warrant a recovery.
Accordingly it is not seduction where the willingness arises out of
sexual desire of curiosity of the female, and the defendant merely
affords her the needed opportunity for the commission of the act. It
has been emphasized that to allow a recovery in all such cases
would tend to the demoralization of the female sex, and would be a
reward for unchastity by which a class of adventuresses would be
swift to profit. (47 Am. Jur. 662)
xxx xxx xxx
Over and above the partisan allegations, the fact stand out that for one whole
year, from 1958 to 1959, the plaintiff-appellee, a woman of adult age, maintain
intimate sexual relations with appellant, with repeated acts of intercourse.
Such conduct is incompatible with the idea of seduction. Plainly there is here
voluntariness and mutual passion; for had the appellant been deceived, had
she surrendered exclusively because of the deceit, artful persuasions and wiles
of the defendant, she would not have again yielded to his embraces, much less
for one year, without exacting early fulfillment of the alleged promises of
marriage, and would have cut short all sexual relations upon finding that
defendant did not intend to fulfill his defendant did not intend to fulfill his
promise. Hence, we conclude that no case is made under article 21 of the Civil
Code, and no other cause of action being alleged, no error was committed by
the Court of First Instance in dismissing the complaint. 27
In his annotations on the Civil Code, 28 Associate Justice Edgardo L. Paras, who recently
retired from this Court, opined that in a breach of promise to marry where there had been
carnal knowledge, moral damages may be recovered:
. . . if there be criminal or moral seduction, but not if the intercourse was due to
mutual lust. (Hermosisima vs. Court of Appeals,
L-14628, Sept. 30, 1960; Estopa vs. Piansay, Jr., L-14733, Sept. 30, 1960;
Batarra vs. Marcos, 7 Phil. 56 (sic); Beatriz Galang vs. Court of Appeals, et al.,
55
 L-17248, Jan. 29, 1962). (In other words, if the CAUSE be the promise to
marry, and the EFFECT be the carnal knowledge, there is a chance that there
was criminal or moral seduction, hence recovery of moral damages will prosper.
If it be the other way around, there can be no recovery of moral damages,
because here mutual lust has intervened). . . .
together with "ACTUAL damages, should there be any, such as the expenses for the
wedding presentations (See Domalagon v. Bolifer, 33 Phil. 471).
Senator Arturo M. Tolentino 29 is also of the same persuasion:
It is submitted that the rule in Batarra vs. Marcos,  30 still subsists,
notwithstanding the incorporation of the present article 31 in the Code. The
example given by the Code Commission is correct, if there was seduction, not
necessarily in the legal sense, but in the vulgar sense of deception. But when
the sexual act is accomplished without any deceit or qualifying circumstance of
abuse of authority or influence, but the woman, already of age, has knowingly
given herself to a man, it cannot be said that there is an injury which can be
the basis for indemnity.
But so long as there is fraud, which is characterized by willfulness (sic), the
action lies. The court, however, must weigh the degree of fraud, if it is sufficient
to deceive the woman under the circumstances, because an act which would
deceive a girl sixteen years of age may not constitute deceit as to an
experienced woman thirty years of age. But so long as there is a wrongful act
and a resulting injury, there should be civil liability, even if the act is not
punishable under the criminal law and there should have been an acquittal or
dismissal of the criminal case for that reason.
We are unable to agree with the petitioner's alternative proposition to the effect that
granting, for argument's sake, that he did promise to marry the private respondent, the
latter is nevertheless also at fault. According to him, both parties are in pari delicto; hence,
pursuant to Article 1412(1) of the Civil Code and the doctrine laid down in Batarra
vs. Marcos, 32 the private respondent cannot recover damages from the petitioner. The
latter even goes as far as stating that if the private respondent had "sustained any injury or
damage in their relationship, it is primarily because of her own doing, 33 for:
. . . She is also interested in the petitioner as the latter will become a doctor
sooner or later. Take notice that she is a plain high school graduate and a mere
employee . . . (Annex "C") or a waitress (TSN, p. 51, January 25, 1988) in a
luncheonette and without doubt, is in need of a man who can give her
economic security. Her family is in dire need of financial assistance. (TSN, pp.
51-53, May 18, 1988). And this predicament prompted her to accept a
proposition that may have been offered by the petitioner. 34
These statements reveal the true character and motive of the petitioner. It is clear that he
harbors a condescending, if not sarcastic, regard for the private respondent on account of
the latter's ignoble birth, inferior educational background, poverty and, as perceived by
him, dishonorable employment. Obviously then, from the very beginning, he was not at all
moved by good faith and an honest motive. Marrying with a woman so circumstances could
not have even remotely occurred to him. Thus, his profession of love and promise to marry
were empty words directly intended to fool, dupe, entice, beguile and deceive the poor
woman into believing that indeed, he loved her and would want her to be his life's partner.
56
His was nothing but pure lust which he wanted satisfied by a Filipina who honestly
believed that by accepting his proffer of love and proposal of marriage, she would be able to
enjoy a life of ease and security. Petitioner clearly violated the Filipino's concept of morality
and brazenly defied the traditional respect Filipinos have for their women. It can even be
said that the petitioner committed such deplorable acts in blatant disregard of Article 19 of
the Civil Code which directs every person to act with justice, give everyone his due and
observe honesty and good faith in the exercise of his rights and in the performance of his
obligations.
No foreigner must be allowed to make a mockery of our laws, customs and traditions.
The pari delicto rule does not apply in this case for while indeed, the private respondent
may not have been impelled by the purest of intentions, she eventually submitted to the
petitioner in sexual congress not out of lust, but because of moral seduction. In fact, it is
apparent that she had qualms of conscience about the entire episode for as soon as she
found out that the petitioner was not going to marry her after all, she left him. She is not,
therefore, in pari delicto with the petitioner. Pari delicto means "in equal fault; in a
similar offense or crime; equal in guilt or in legal fault." 35 At most, it could be conceded
that she is merely in delicto.
Equity often interferes for the relief of the less guilty of the parties, where his
transgression has been brought about by the imposition of undue influence of
the party on whom the burden of the original wrong principally rests, or where
his consent to the transaction was itself procured by
fraud. 36
In Mangayao vs. Lasud, 37 We declared:
Appellants likewise stress that both parties being at fault, there should be no
action by one against the other (Art. 1412, New Civil Code). This rule, however,
has been interpreted as applicable only where the fault on both sides is, more
or less, equivalent. It does not apply where one party is literate or intelligent
and the other one is not. (c.f. Bough vs. Cantiveros, 40 Phil. 209).
We should stress, however, that while We find for the private respondent, let it not be said
that this Court condones the deplorable behavior of her parents in letting her and the
petitioner stay together in the same room in their house after giving approval to their
marriage. It is the solemn duty of parents to protect the honor of their daughters and infuse
upon them the higher values of morality and dignity.
WHEREFORE, finding no reversible error in the challenged decision, the instant petition is
hereby DENIED, with costs against the petitioner.
SO ORDERED.
Feliciano, Bidin, Romero and Melo, JJ., concur.
Gutierrez, Jr., J., is on leave.

G.R. No. L-12219            March 15, 1918

AMADO PICART, plaintiff-appellant,
vs.
FRANK SMITH, JR., defendant-appellee.
Alejo Mabanag for appellant.
G. E. Campbell for appellee.
57
STREET, J.:
In this action the plaintiff, Amado Picart, seeks to recover of the defendant, Frank Smith,
jr., the sum of P31,000, as damages alleged to have been caused by an automobile driven
by the defendant. From a judgment of the Court of First Instance of the Province of La
Union absolving the defendant from liability the plaintiff has appealed.
The occurrence which gave rise to the institution of this action took place on December 12,
1912, on the Carlatan Bridge, at San Fernando, La Union. It appears that upon the
occasion in question the plaintiff was riding on his pony over said bridge. Before he had
gotten half way across, the defendant approached from the opposite direction in an
automobile, going at the rate of about ten or twelve miles per hour. As the defendant
neared the bridge he saw a horseman on it and blew his horn to give warning of his
approach. He continued his course and after he had taken the bridge he gave two more
successive blasts, as it appeared to him that the man on horseback before him was not
observing the rule of the road.
The plaintiff, it appears, saw the automobile coming and heard the warning signals.
However, being perturbed by the novelty of the apparition or the rapidity of the approach,
he pulled the pony closely up against the railing on the right side of the bridge instead of
going to the left. He says that the reason he did this was that he thought he did not have
sufficient time to get over to the other side. The bridge is shown to have a length of about
75 meters and a width of 4.80 meters. As the automobile approached, the defendant guided
it toward his left, that being the proper side of the road for the machine. In so doing the
defendant assumed that the horseman would move to the other side. The pony had not as
yet exhibited fright, and the rider had made no sign for the automobile to stop. Seeing that
the pony was apparently quiet, the defendant, instead of veering to the right while yet some
distance away or slowing down, continued to approach directly toward the horse without
diminution of speed. When he had gotten quite near, there being then no possibility of the
horse getting across to the other side, the defendant quickly turned his car sufficiently to
the right to escape hitting the horse alongside of the railing where it as then standing; but
in so doing the automobile passed in such close proximity to the animal that it became
frightened and turned its body across the bridge with its head toward the railing. In so
doing, it as struck on the hock of the left hind leg by the flange of the car and the limb was
broken. The horse fell and its rider was thrown off with some violence. From the evidence
adduced in the case we believe that when the accident occurred the free space where the
pony stood between the automobile and the railing of the bridge was probably less than one
and one half meters. As a result of its injuries the horse died. The plaintiff received
contusions which caused temporary unconsciousness and required medical attention for
several days.
The question presented for decision is whether or not the defendant in maneuvering his car
in the manner above described was guilty of negligence such as gives rise to a civil
obligation to repair the damage done; and we are of the opinion that he is so liable. As the
defendant started across the bridge, he had the right to assume that the horse and the
rider would pass over to the proper side; but as he moved toward the center of the bridge it
was demonstrated to his eyes that this would not be done; and he must in a moment have
perceived that it was too late for the horse to cross with safety in front of the moving
vehicle. In the nature of things this change of situation occurred while the automobile was
yet some distance away; and from this moment it was not longer within the power of the
58
plaintiff to escape being run down by going to a place of greater safety. The control of the
situation had then passed entirely to the defendant; and it was his duty either to bring his
car to an immediate stop or, seeing that there were no other persons on the bridge, to take
the other side and pass sufficiently far away from the horse to avoid the danger of collision.
Instead of doing this, the defendant ran straight on until he was almost upon the horse. He
was, we think, deceived into doing this by the fact that the horse had not yet exhibited
fright. But in view of the known nature of horses, there was an appreciable risk that, if the
animal in question was unacquainted with automobiles, he might get exited and jump
under the conditions which here confronted him. When the defendant exposed the horse
and rider to this danger he was, in our opinion, negligent in the eye of the law.
The test by which to determine the existence of negligence in a particular case may be
stated as follows: Did the defendant in doing the alleged negligent act use that person
would have used in the same situation? If not, then he is guilty of negligence. The law here
in effect adopts the standard supposed to be supplied by the imaginary conduct of the
discreet paterfamilias of the Roman law. The existence of negligence in a given case is not
determined by reference to the personal judgment of the actor in the situation before him.
The law considers what would be reckless, blameworthy, or negligent in the man of
ordinary intelligence and prudence and determines liability by that.
The question as to what would constitute the conduct of a prudent man in a given situation
must of course be always determined in the light of human experience and in view of the
facts involved in the particular case. Abstract speculations cannot here be of much value
but this much can be profitably said: Reasonable men govern their conduct by the
circumstances which are before them or known to them. They are not, and are not
supposed to be, omniscient of the future. Hence they can be expected to take care only
when there is something before them to suggest or warn of danger. Could a prudent man,
in the case under consideration, foresee harm as a result of the course actually pursued? If
so, it was the duty of the actor to take precautions to guard against that harm. Reasonable
foresight of harm, followed by ignoring of the suggestion born of this prevision, is always
necessary before negligence can be held to exist. Stated in these terms, the proper criterion
for determining the existence of negligence in a given case is this: Conduct is said to be
negligent when a prudent man in the position of the tortfeasor would have foreseen that an
effect harmful to another was sufficiently probable to warrant his foregoing conduct or
guarding against its consequences.
Applying this test to the conduct of the defendant in the present case we think that
negligence is clearly established. A prudent man, placed in the position of the defendant,
would in our opinion, have recognized that the course which he was pursuing was fraught
with risk, and would therefore have foreseen harm to the horse and the rider as reasonable
consequence of that course. Under these circumstances the law imposed on the defendant
the duty to guard against the threatened harm.
It goes without saying that the plaintiff himself was not free from fault, for he was guilty of
antecedent negligence in planting himself on the wrong side of the road. But as we have
already stated, the defendant was also negligent; and in such case the problem always is to
discover which agent is immediately and directly responsible. It will be noted that the
negligent acts of the two parties were not contemporaneous, since the negligence of the
defendant succeeded the negligence of the plaintiff by an appreciable interval. Under these
circumstances the law is that the person who has the last fair chance to avoid the
59
impending harm and fails to do so is chargeable with the consequences, without reference
to the prior negligence of the other party.
The decision in the case of Rkes vs. Atlantic, Gulf and Pacific Co. (7 Phil. Rep., 359) should
perhaps be mentioned in this connection. This Court there held that while contributory
negligence on the part of the person injured did not constitute a bar to recovery, it could be
received in evidence to reduce the damages which would otherwise have been assessed
wholly against the other party. The defendant company had there employed the plaintiff, as
a laborer, to assist in transporting iron rails from a barge in Manila harbor to the
company's yards located not far away. The rails were conveyed upon cars which were
hauled along a narrow track. At certain spot near the water's edge the track gave way by
reason of the combined effect of the weight of the car and the insecurity of the road bed.
The car was in consequence upset; the rails slid off; and the plaintiff's leg was caught and
broken. It appeared in evidence that the accident was due to the effects of the typhoon
which had dislodged one of the supports of the track. The court found that the defendant
company was negligent in having failed to repair the bed of the track and also that the
plaintiff was, at the moment of the accident, guilty of contributory negligence in walking at
the side of the car instead of being in front or behind. It was held that while the defendant
was liable to the plaintiff by reason of its negligence in having failed to keep the track in
proper repair nevertheless the amount of the damages should be reduced on account of the
contributory negligence in the plaintiff. As will be seen the defendant's negligence in that
case consisted in an omission only. The liability of the company arose from its
responsibility for the dangerous condition of its track. In a case like the one now before us,
where the defendant was actually present and operating the automobile which caused the
damage, we do not feel constrained to attempt to weigh the negligence of the respective
parties in order to apportion the damage according to the degree of their relative fault. It is
enough to say that the negligence of the defendant was in this case the immediate and
determining cause of the accident and that the antecedent negligence of the plaintiff was a
more remote factor in the case.
A point of minor importance in the case is indicated in the special defense pleaded in the
defendant's answer, to the effect that the subject matter of the action had been previously
adjudicated in the court of a justice of the peace. In this connection it appears that soon
after the accident in question occurred, the plaintiff caused criminal proceedings to be
instituted before a justice of the peace charging the defendant with the infliction of serious
injuries (lesiones graves). At the preliminary investigation the defendant was discharged by
the magistrate and the proceedings were dismissed. Conceding that the acquittal of the
defendant at the trial upon the merits in a criminal prosecution for the offense mentioned
would be res adjudicata upon the question of his civil liability arising from negligence -- a
point upon which it is unnecessary to express an opinion -- the action of the justice of the
peace in dismissing the criminal proceeding upon the preliminary hearing can have no
effect. (See U. S. vs. Banzuela and Banzuela, 31 Phil. Rep., 564.)
From what has been said it results that the judgment of the lower court must be reversed,
and judgment is her rendered that the plaintiff recover of the defendant the sum of two
hundred pesos (P200), with costs of other instances. The sum here awarded is estimated to
include the value of the horse, medical expenses of the plaintiff, the loss or damage
occasioned to articles of his apparel, and lawful interest on the whole to the date of this

60
recovery. The other damages claimed by the plaintiff are remote or otherwise of such
character as not to be recoverable. So ordered.
Arellano, C.J., Torres, Carson, Araullo, Avanceña, and Fisher, JJ., concur.
Johnson, J., reserves his vote.

G.R. No. L-33722 July 29, 1988

FEDERICO YLARDE and ADELAIDA DORONIO petitioners,
vs.
EDGARDO AQUINO, MAURO SORIANO and COURT OF APPEALS, respondents.
Buenaventura C. Evangelista for petitioners.
Modesto V. Cabanela for respondent Edgardo Aquino.
Manuel P. Pastor for respondent Mauro Soriano.

GANCAYCO, J.:
In this petition for review on certiorari seeking the reversal of the decision of the Court of
Appeals in CA-G.R. No. 36390-R entitled "Federico Ylarde, et al. vs. Edgardo Aquino, et al.,"
a case which originated from the Court of First Instance of Pangasinan, We are again caned
upon determine the responsibility of the principals and teachers towards their students or
pupils.
In 1963, private respondent Mariano Soriano was the principal of the Gabaldon Primary
School, a public educational institution located in Tayug, Pangasinan-Private respondent
Edgardo Aquino was a teacher therein. At that time, the school was fittered with several
concrete blocks which were remnants of the old school shop that was destroyed in World
War II. Realizing that the huge stones were serious hazards to the schoolchildren, another
teacher by the name of Sergio Banez started burying them one by one as early as 1962. In
fact, he was able to bury ten of these blocks all by himself.
Deciding to help his colleague, private respondent Edgardo Aquino gathered eighteen of his
male pupils, aged ten to eleven, after class dismissal on October 7, 1963. Being their
teacher-in-charge, he ordered them to dig beside a one-ton concrete block in order to make
a hole wherein the stone can be buried. The work was left unfinished. The following day,
also after classes, private respondent Aquino called four of the original eighteen pupils to
continue the digging. These four pupils — Reynaldo Alonso, Francisco Alcantara, Ismael
Abaga and Novelito Ylarde, dug until the excavation was one meter and forty centimeters
deep. At this point, private respondent Aquino alone continued digging while the pupils
remained inside the pit throwing out the loose soil that was brought about by the digging.
When the depth was right enough to accommodate the concrete block, private respondent
Aquino and his four pupils got out of the hole. Then, said private respondent left the
children to level the loose soil around the open hole while he went to see Banez who was
about thirty meters away. Private respondent wanted to borrow from Banez the key to the
school workroom where he could get some rope. Before leaving. , private respondent Aquino
allegedly told the children "not to touch the stone."
A few minutes after private respondent Aquino left, three of the four kids, Alonso, Alcantara
and Ylarde, playfully jumped into the pit. Then, without any warning at all, the remaining
Abaga jumped on top of the concrete block causing it to slide down towards the opening.
Alonso and Alcantara were able to scramble out of the excavation on time but unfortunately
61
fo Ylarde, the concrete block caught him before he could get out, pinning him to the wall in
a standing position. As a result thereof, Ylarde sustained the following injuries:
1. Contusion with hematoma, left inguinal region and suprapubic region.
2. Contusion with ecchymosis entire scrotal region.
3. Lacerated wound, left lateral aspect of penile skin with phimosis
4. Abrasion, gluteal region, bilateral.
5. Intraperitoneal and extrapertitoneal extravasation of blood and urine about
2 liters.
6. Fracture, simple, symphesis pubis
7. Ruptured (macerated) urinary bladder with body of bladder almost entirely
separated from its neck.
REMARKS:
1. Above were incurred by crushing injury.
2. Prognosis very poor.
(Sgd.) MELQUIADES A.
BRAVO
Physician on
Duty. 1
Three days later, Novelito Ylarde died.
Ylarde's parents, petitioners in this case, filed a suit for damages against both private
respondents Aquino and Soriano. The lower court dismissed the complaint on the following
grounds: (1) that the digging done by the pupils is in line with their course called Work
Education; (2) that Aquino exercised the utmost diligence of a very cautious person; and (3)
that the demise of Ylarde was due to his own reckless imprudence. 2
On appeal, the Court of Appeals affirmed the Decision of the lower court.
Petitioners base their action against private respondent Aquino on Article 2176 of the Civil
Code for his alleged negligence that caused their son's death while the complaint against
respondent Soriano as the head of school is founded on Article 2180 of the same Code.
Article 2176 of the Civil Code provides:
Art. 2176. Whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre- existing contractual relation between the parties,
is called a quasi-delict and is governed by the provisions of this Chapter.
On the other hand, the applicable provision of Article 2180 states:
Art. 2180. x x x
xxx xxx xxx
Lastly, teachers or heads of establishments of arts and trades shall be liable for
damages caused by their pupils and students or apprentices, so long as they
remain in their custody. 3
The issue to be resolved is whether or not under the cited provisions, both private
respondents can be held liable for damages.
As regards the principal, We hold that he cannot be made responsible for the death of the
child Ylarde, he being the head of an academic school and not a school of arts and trades.
This is in line with Our ruling in Amadora vs. Court of Appeals, 4 wherein this Court
thoroughly discussed the doctrine that under Article 2180 of the Civil Code, it is only the
teacher and not the head of an academic school who should be answerable for torts
62
committed by their students. This Court went on to say that in a school of arts and trades,
it is only the head of the school who can be held liable. In the same case, We explained:
After an exhaustive examination of the problem, the Court has come to the
conclusion that the provision in question should apply to all schools,
academic as well as non-academic. Where the school is academic rather than
technical or vocational in nature, responsibility for the tort committed by the
student will attach to the teacher in charge of such student, following the first
part of the provision. This is the general rule. In the case of establishments of
arts and trades, it is the head thereof, and only he, who shall be held liable as
an exception to the general rule. In other words, teachers in general shall be
liable for the acts of their students except where the school is technical in
nature, in which case it is the head thereof who shall be answerable. Following
the canon of reddendo singula sinquilis 'teachers' should apply to the words
"pupils and students' and 'heads of establishments of arts and trades to the
word "apprentices."
Hence, applying the said doctrine to this case, We rule that private respondent Soriano, as
principal, cannot be held liable for the reason that the school he heads is an academic
school and not a school of arts and trades. Besides, as clearly admitted by private
respondent Aquino, private respondent Soriano did not give any instruction regarding the
digging.
From the foregoing, it can be easily seen that private respondent Aquino can be held liable
under Article 2180 of the Civil Code as the teacher-in-charge of the children for being
negligent in his supervision over them and his failure to take the necessary precautions to
prevent any injury on their persons. However, as earlier pointed out, petitioners base the
alleged liability of private respondent Aquino on Article 2176 which is separate and distinct
from that provided for in Article 2180.
With this in mind, the question We need to answer is this: Were there acts and omissions
on the part of private respondent Aquino amounting to fault or negligence which have
direct causal relation to the death of his pupil Ylarde? Our answer is in the affirmative. He
is liable for damages.
From a review of the record of this case, it is very clear that private respondent Aquino
acted with fault and gross negligence when he: (1) failed to avail himself of services of adult
manual laborers and instead utilized his pupils aged ten to eleven to make an excavation
near the one-ton concrete stone which he knew to be a very hazardous task; (2) required
the children to remain inside the pit even after they had finished digging, knowing that the
huge block was lying nearby and could be easily pushed or kicked aside by any pupil who
by chance may go to the perilous area; (3) ordered them to level the soil around the
excavation when it was so apparent that the huge stone was at the brink of falling; (4) went
to a place where he would not be able to check on the children's safety; and (5) left the
children close to the excavation, an obviously attractive nuisance.
The negligent act of private respondent Aquino in leaving his pupils in such a dangerous
site has a direct causal connection to the death of the child Ylarde. Left by themselves, it
was but natural for the children to play around. Tired from the strenuous digging, they just
had to amuse themselves with whatever they found. Driven by their playful and
adventurous instincts and not knowing the risk they were facing three of them jumped into
the hole while the other one jumped on the stone. Since the stone was so heavy and the soil
63
was loose from the digging, it was also a natural consequence that the stone would fall into
the hole beside it, causing injury on the unfortunate child caught by its heavy weight.
Everything that occurred was the natural and probable effect of the negligent acts of private
respondent Aquino. Needless to say, the child Ylarde would not have died were it not for the
unsafe situation created by private respondent Aquino which exposed the lives of all the
pupils concerned to real danger.
We cannot agree with the finding of the lower court that the injuries which resulted in the
death of the child Ylarde were caused by his own reckless imprudence, It should be
remembered that he was only ten years old at the time of the incident, As such, he is
expected to be playful and daring. His actuations were natural to a boy his age. Going back
to the facts, it was not only him but the three of them who jumped into the hole while the
remaining boy jumped on the block. From this, it is clear that he only did what any other
ten-year old child would do in the same situation.
In ruling that the child Ylarde was imprudent, it is evident that the lower court did not
consider his age and maturity. This should not be the case. The degree of care required to
be exercised must vary with the capacity of the person endangered to care for himself. A
minor should not be held to the same degree of care as an adult, but his conduct should be
judged according to the average conduct of persons of his age and experience. 5 The
standard of conduct to which a child must conform for his own protection is that degree of
care ordinarily exercised by children of the same age, capacity, discretion, knowledge and
experience under the same or similar circumstances. 6 Bearing this in mind, We cannot
charge the child Ylarde with reckless imprudence.
The court is not persuaded that the digging done by the pupils can pass as part of their
Work Education. A single glance at the picture showing the excavation and the huge
concrete block 7 would reveal a dangerous site requiring the attendance of strong, mature
laborers and not ten-year old grade-four pupils. We cannot comprehend why the lower
court saw it otherwise when private respondent Aquino himself admitted that there were no
instructions from the principal requiring what the pupils were told to do. Nor was there any
showing that it was included in the lesson plan for their Work Education. Even the Court of
Appeals made mention of the fact that respondent Aquino decided all by himself to help his
co-teacher Banez bury the concrete remnants of the old school shop. 8 Furthermore, the
excavation should not be placed in the category of school gardening, planting trees, and the
like as these undertakings do not expose the children to any risk that could result in death
or physical injuries.
The contention that private respondent Aquino exercised the utmost diligence of a very
cautious person is certainly without cogent basis. A reasonably prudent person would have
foreseen that bringing children to an excavation site, and more so, leaving them there all by
themselves, may result in an accident. An ordinarily careful human being would not
assume that a simple warning "not to touch the stone" is sufficient to cast away all the
serious danger that a huge concrete block adjacent to an excavation would present to the
children. Moreover, a teacher who stands in loco parentis to his pupils would have made
sure that the children are protected from all harm in his company.
We close by categorically stating that a truly careful and cautious person would have acted
in all contrast to the way private respondent Aquino did. Were it not for his gross
negligence, the unfortunate incident would not have occurred and the child Ylarde would

64
probably be alive today, a grown- man of thirty-five. Due to his failure to take the necessary
precautions to avoid the hazard, Ylarde's parents suffered great anguish all these years.
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED and the questioned
judgment of the respondent court is REVERSED and SET ASIDE and another judgment is
hereby rendered ordering private respondent Edagardo Aquino to pay petitioners the
following:
(1) Indemnity for the death of Child Ylarde P30,000.00
(2) Exemplary damages 10,000.00
(3) Moral damages 20,000.00
SO ORDERED.
Narvasa Cruz, Griño-Aquino and Medialdea, JJ., concu

G.R. No. 169467               February 25, 2010

ALFREDO P. PACIS and CLEOPATRA D. PACIS, Petitioners,
vs.
JEROME JOVANNE MORALES, Respondent.
DECISION
CARPIO, J.:
The Case
This petition for review 1 assails the 11 May 2005 Decision 2 and the 19 August 2005
Resolution of the Court of Appeals in CA-G.R. CV No. 60669.
The Facts
On 17 January 1995, petitioners Alfredo P. Pacis and Cleopatra D. Pacis (petitioners) filed
with the trial court a civil case for damages against respondent Jerome Jovanne Morales
(respondent). Petitioners are the parents of Alfred Dennis Pacis, Jr. (Alfred), a 17-year old
student who died in a shooting incident inside the Top Gun Firearms and Ammunitions
Store (gun store) in Baguio City. Respondent is the owner of the gun store.
The facts as found by the trial court are as follows:
On January 19, 1991, Alfred Dennis Pacis, then 17 years old and a first year student at the
Baguio Colleges Foundation taking up BS Computer Science, died due to a gunshot wound
in the head which he sustained while he was at the Top Gun Firearm[s] and Ammunition[s]
Store located at Upper Mabini Street, Baguio City. The gun store was owned and operated
by defendant Jerome Jovanne Morales.
With Alfred Pacis at the time of the shooting were Aristedes Matibag and Jason Herbolario.
They were sales agents of the defendant, and at that particular time, the caretakers of the
gun store.
The bullet which killed Alfred Dennis Pacis was fired from a gun brought in by a customer
of the gun store for repair.
The gun, an AMT Automag II Cal. 22 Rimfire Magnum with Serial No. SN-H34194 (Exhibit
"Q"), was left by defendant Morales in a drawer of a table located inside the gun store.
Defendant Morales was in Manila at the time. His employee Armando Jarnague, who was
the regular caretaker of the gun store was also not around. He left earlier and requested
sales agents Matibag and Herbolario to look after the gun store while he and defendant
Morales were away. Jarnague entrusted to Matibag and Herbolario a bunch of keys used in
the gun store which included the key to the drawer where the fatal gun was kept.
65
It appears that Matibag and Herbolario later brought out the gun from the drawer and
placed it on top of the table. Attracted by the sight of the gun, the young Alfred Dennis
Pacis got hold of the same. Matibag asked Alfred Dennis Pacis to return the gun. The latter
followed and handed the gun to Matibag. It went off, the bullet hitting the young Alfred in
the head.
A criminal case for homicide was filed against Matibag before branch VII of this Court.
Matibag, however, was acquitted of the charge against him because of the exempting
circumstance of "accident" under Art. 12, par. 4 of the Revised Penal Code.
By agreement of the parties, the evidence adduced in the criminal case for homicide against
Matibag was reproduced and adopted by them as part of their evidence in the instant case. 3
On 8 April 1998, the trial court rendered its decision in favor of petitioners. The dispositive
portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs
[Spouses Alfredo P. Pacis and Cleopatra D. Pacis] and against the defendant [Jerome
Jovanne Morales] ordering the defendant to pay plaintiffs —
(1) ₱30,000.00 as indemnity for the death of Alfred Pacis;
(2) ₱29,437.65 as actual damages for the hospitalization and burial expenses
incurred by the plaintiffs;
(3) ₱100,000.00 as compensatory damages;
(4) ₱100,000.00 as moral damages;
(5) ₱50,000.00 as attorney’s fees.
SO ORDERED.4
Respondent appealed to the Court of Appeals. In its Decision 5 dated 11 May 2005, the
Court of Appeals reversed the trial court’s Decision and absolved respondent from civil
liability under Article 2180 of the Civil Code.6
Petitioners filed a motion for reconsideration, which the Court of Appeals denied in its
Resolution dated 19 August 2005.
Hence, this petition.
The Trial Court’s Ruling
The trial court held respondent civilly liable for the death of Alfred under Article 2180 in
relation to Article 2176 of the Civil Code. 7 The trial court held that the accidental shooting
of Alfred which caused his death was partly due to the negligence of respondent’s employee
Aristedes Matibag (Matibag). Matibag and Jason Herbolario (Herbolario) were employees of
respondent even if they were only paid on a commission basis. Under the Civil Code,
respondent is liable for the damages caused by Matibag on the occasion of the performance
of his duties, unless respondent proved that he observed the diligence of a good father of a
family to prevent the damage. The trial court held that respondent failed to observe the
required diligence when he left the key to the drawer containing the loaded defective gun
without instructing his employees to be careful in handling the loaded gun.
The Court of Appeals’ Ruling
The Court of Appeals held that respondent cannot be held civilly liable since there was no
employer-employee relationship between respondent and Matibag. The Court of Appeals
found that Matibag was not under the control of respondent with respect to the means and
methods in the performance of his work. There can be no employer-employee relationship
where the element of control is absent. Thus, Article 2180 of the Civil Code does not apply
in this case and respondent cannot be held liable.
66
Furthermore, the Court of Appeals ruled that even if respondent is considered an employer
of Matibag, still respondent cannot be held liable since no negligence can be attributed to
him. As explained by the Court of Appeals:
Granting arguendo that an employer-employee relationship existed between Aristedes
Matibag and the defendant-appellant, we find that no negligence can be attributed to him.
Negligence is best exemplified in the case of Picart vs. Smith (37 Phil. 809). The test of
negligence is this:
"x x x. Could a prudent man, in the position of the person to whom negligence is attributed,
foresee harm to the person injured as a reasonable consequence of the course about to be
pursued? If so, the law imposes a duty on the actor to refrain from that course or take
precaution against its mischievous results, and the failure to do so constitutes negligence.
x x x."
Defendant-appellant maintains that he is not guilty of negligence and lack of due care as he
did not fail to observe the diligence of a good father of a family. He submits that he kept the
firearm in one of his table drawers, which he locked and such is already an indication that
he took the necessary diligence and care that the said gun would not be accessible to
anyone. He puts [sic] that his store is engaged in selling firearms and ammunitions. Such
items which are per se dangerous are kept in a place which is properly secured in order
that the persons coming into the gun store would not be able to take hold of it unless it is
done intentionally, such as when a customer is interested to purchase any of the firearms,
ammunitions and other related items, in which case, he may be allowed to handle the
same.
We agree. Much as We sympathize with the family of the deceased, defendant-appellant is
not to be blamed. He exercised due diligence in keeping his loaded gun while he was on a
business trip in Manila. He placed it inside the drawer and locked it. It was taken away
without his knowledge and authority. Whatever happened to the deceased was purely
accidental.8
The Issues
Petitioners raise the following issues:
I. THE APPELLATE COURT COMMITTED SERIOUS ERROR IN RENDERING THE
DECISION AND RESOLUTION IN QUESTION IN DISREGARD OF LAW AND
JURISPRUDENCE BY REVERSING THE ORDER OF THE REGIONAL TRIAL COURT
(BRANCH 59) OF BAGUIO CITY NOTWITHSTANDING CLEAR, AUTHENTIC RECORDS AND
TESTIMONIES PRESENTED DURING THE TRIAL WHICH NEGATE AND CONTRADICT ITS
FINDINGS.
II. THE APPELLATE COURT COMMITTED GRAVE, REVERSIBLE ERROR IN RENDERING
THE DECISION AND RESOLUTION IN QUESTION BY DEPARTING FROM THE ACCEPTED
AND USUAL COURSE OF JUDICIAL PROCEEDINGS THEREBY IGNORING THE FACTUAL
FINDINGS OF THE REGIONAL TRIAL COURT (BRANCH 59) OF BAGUIO CITY SHOWING
PETITIONER’S CLEAR RIGHTS TO THE AWARD OF DAMAGES.9
The Ruling of the Court
We find the petition meritorious.
This case for damages arose out of the accidental shooting of petitioners’ son. Under Article
116110 of the Civil Code, petitioners may enforce their claim for damages based on the civil
liability arising from the crime under Article 100 11 of the Revised Penal Code or they may
opt to file an independent civil action for damages under the Civil Code. In this case,
67
instead of enforcing their claim for damages in the homicide case filed against Matibag,
petitioners opted to file an independent civil action for damages against respondent whom
they alleged was Matibag’s employer. Petitioners based their claim for damages under
Articles 2176 and 2180 of the Civil Code.
Unlike the subsidiary liability of the employer under Article 103 12 of the Revised Penal
Code,13 the liability of the employer, or any person for that matter, under Article 2176 of the
Civil Code is primary and direct, based on a person’s own negligence. Article 2176 states:
Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is called quasi-delict and is governed
by the provisions of this Chapter.
This case involves the accidental discharge of a firearm inside a gun store.1avvphi1 Under
PNP Circular No. 9, entitled the "Policy on Firearms and Ammunition Dealership/Repair," a
person who is in the business of purchasing and selling of firearms and ammunition must
maintain basic security and safety requirements of a gun dealer, otherwise his License to
Operate Dealership will be suspended or canceled. 14
Indeed, a higher degree of care is required of someone who has in his possession or under
his control an instrumentality extremely dangerous in character, such as dangerous
weapons or substances. Such person in possession or control of dangerous
instrumentalities has the duty to take exceptional precautions to prevent any injury being
done thereby.15 Unlike the ordinary affairs of life or business which involve little or no risk,
a business dealing with dangerous weapons requires the exercise of a higher degree of care.
As a gun store owner, respondent is presumed to be knowledgeable about firearms safety
and should have known never to keep a loaded weapon in his store to avoid unreasonable
risk of harm or injury to others. Respondent has the duty to ensure that all the guns in his
store are not loaded. Firearms should be stored unloaded and separate from ammunition
when the firearms are not needed for ready-access defensive use. 16 With more reason, guns
accepted by the store for repair should not be loaded precisely because they are defective
and may cause an accidental discharge such as what happened in this case. Respondent
was clearly negligent when he accepted the gun for repair and placed it inside the drawer
without ensuring first that it was not loaded. In the first place, the defective gun should
have been stored in a vault. Before accepting the defective gun for repair, respondent
should have made sure that it was not loaded to prevent any untoward accident. Indeed,
respondent should never accept a firearm from another person, until the cylinder or action
is open and he has personally checked that the weapon is completely unloaded. 17 For
failing to insure that the gun was not loaded, respondent himself was negligent.
Furthermore, it was not shown in this case whether respondent had a License to Repair
which authorizes him to repair defective firearms to restore its original composition or
enhance or upgrade firearms.18
Clearly, respondent did not exercise the degree of care and diligence required of a good
father of a family, much less the degree of care required of someone dealing with dangerous
weapons, as would exempt him from liability in this case.
WHEREFORE, we GRANT the petition. We SET ASIDE the 11 May 2005 Decision and the
19 August 2005 Resolution of the Court of Appeals in CA-G.R. CV No. 60669. We
REINSTATE the trial court’s Decision dated 8 April 1998.
SO ORDERED.
68
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:

G.R. No. 156940             December 14, 2004

ASSOCIATED BANK (Now WESTMONT BANK), petitioner,
vs.
VICENTE HENRY TAN, respondent.

DECISION

PANGANIBAN, J.:
While banks are granted by law the right to debit the value of a dishonored check from a
depositor’s account, they must do so with the highest degree of care, so as not to prejudice
the depositor unduly.
The Case
Before us is a Petition for Review 1 under Rule 45 of the Rules of Court, assailing the
January 27, 2003 Decision2 of the Court of Appeals (CA) in CA-GR CV No. 56292. The CA
disposed as follows:
"WHEREFORE, premises considered, the Decision dated December 3, 1996, of the
Regional Trial Court of Cabanatuan City, Third Judicial Region, Branch 26, in Civil
Case No. 892-AF is hereby AFFIRMED. Costs against the [petitioner]." 3
The Facts
The CA narrated the antecedents as follows:
"Vicente Henry Tan (hereafter TAN) is a businessman and a regular depositor-creditor
of the Associated Bank (hereinafter referred to as the BANK). Sometime in September
1990, he deposited a postdated UCPB check with the said BANK in the amount
of P101,000.00 issued to him by a certain Willy Cheng from Tarlac. The check was
duly entered in his bank record thereby making his balance in the amount
of P297,000.00, as of October 1, 1990, from his original deposit of P196,000.00.
Allegedly, upon advice and instruction of the BANK that the P101,000.00 check was
already cleared and backed up by sufficient funds, TAN, on the same date, withdrew
the sum of P240,000.00, leaving a balance of P57,793.45. A day after, TAN deposited
the amount of P50,000.00 making his existing balance in the amount
of P107,793.45, because he has issued several checks to his business partners, to
wit:
CHECK DATE AMOUNT
NUMBERS
a. 138814 Sept. 29, P9,000.00
1990
b. 138804 Oct. 8, 1990 9,350.00
c. 138787 Sept. 30, 6,360.00

69
 1990
d. 138847 Sept. 29, 21,850.00
1990
e. 167054 Sept. 29, 4,093.40
1990
f. 138792 ` Sept. 29, 3,546.00
1990
g. 138774 Oct. 2, 1990 6,600.00
h. 167072 Oct. 10, 9,908.00
1990
i. 168802 Oct. 10, 3,650.00
1990
"However, his suppliers and business partners went back to him alleging that the
checks he issued bounced for insufficiency of funds. Thereafter, TAN, thru his
lawyer, informed the BANK to take positive steps regarding the matter for he has
adequate and sufficient funds to pay the amount of the subject checks. Nonetheless,
the BANK did not bother nor offer any apology regarding the incident. Consequently,
TAN, as plaintiff, filed a Complaint for Damages on December 19, 1990, with the
Regional Trial Court of Cabanatuan City, Third Judicial Region, docketed as Civil
Case No. 892-AF, against the BANK, as defendant.
"In his [C]omplaint, [respondent] maintained that he ha[d] sufficient funds to pay the
subject checks and alleged that his suppliers decreased in number for lack of trust.
As he has been in the business community for quite a time and has established a
good record of reputation and probity, plaintiff claimed that he suffered
embarrassment, humiliation, besmirched reputation, mental anxieties and sleepless
nights because of the said unfortunate incident. [Respondent] further averred that he
continuously lost profits in the amount of P250,000.00. [Respondent] therefore
prayed for exemplary damages and that [petitioner] be ordered to pay him the sum
of P1,000,000.00 by way of moral damages, P250,000.00 as lost profits, P50,000.00
as attorney’s fees plus 25% of the amount claimed including P1,000.00 per court
appearance.
"Meanwhile, [petitioner] filed a Motion to Dismiss on February 7, 1991, but the same
was denied for lack of merit in an Order dated March 7, 1991. Thereafter, [petitioner]
BANK on March 20, 1991 filed its Answer denying, among others, the allegations of
[respondent] and alleged that no banking institution would give an assurance to any
of its client/depositor that the check deposited by him had already been cleared and
backed up by sufficient funds but it could only presume that the same has been
honored by the drawee bank in view of the lapse of time that ordinarily takes for a
check to be cleared. For its part, [petitioner] alleged that on October 2, 1990, it gave
notice to the [respondent] as to the return of his UCPB check deposit in the amount
of P101,000.00, hence, on even date, [respondent] deposited the amount
of P50,000.00 to cover the returned check.
"By way of affirmative defense, [petitioner] averred that [respondent] had no cause of
action against it and argued that it has all the right to debit the account of the
[respondent] by reason of the dishonor of the check deposited by the [respondent]
70
 which was withdrawn by him prior to its clearing. [Petitioner] further averred that it
has no liability with respect to the clearing of deposited checks as the clearing is
being undertaken by the Central Bank and in accepting [the] check deposit, it merely
obligates itself as depositor’s collecting agent subject to actual payment by the
drawee bank. [Petitioner] therefore prayed that [respondent] be ordered to pay it the
amount of P1,000,000.00 by way of loss of goodwill, P7,000.00 as acceptance fee
plus P500.00 per appearance and by way of attorney’s fees.
"Considering that Westmont Bank has taken over the management of the
affairs/properties of the BANK, [respondent] on October 10, 1996, filed an Amended
Complaint reiterating substantially his allegations in the original complaint, except
that the name of the previous defendant ASSOCIATED BANK is now WESTMONT
BANK.
"Trial ensured and thereafter, the court rendered its Decision dated December 3, 1996 in
favor of the [respondent] and against the [petitioner], ordering the latter to pay the
[respondent] the sum of P100,000.00 by way of moral damages, P75,000.00 as exemplary
damages, P25,000.00 as attorney’s fees, plus the costs of this suit. In making said ruling, it
was shown that [respondent] was not officially informed about the debiting of
the P101,000.00 [from] his existing balance and that the BANK merely allowed the
[respondent] to use the fund prior to clearing merely for accommodation because the BANK
considered him as one of its valued clients. The trial court ruled that the bank manager
was negligent in handling the particular checking account of the [respondent] stating that
such lapses caused all the inconveniences to the [respondent]. The trial court also took into
consideration that [respondent’s] mother was originally maintaining with the x x x BANK [a]
current account as well as [a] time deposit, but [o]n one occasion, although his mother
made a deposit, the same was not credited in her favor but in the name of another." 4
Petitioner appealed to the CA on the issues of whether it was within its rights, as collecting
bank, to debit the account of its client for a dishonored check; and whether it had informed
respondent about the dishonor prior to debiting his account.
Ruling of the Court of Appeals
Affirming the trial court, the CA ruled that the bank should not have authorized the
withdrawal of the value of the deposited check prior to its clearing. Having done so,
contrary to its obligation to treat respondent’s account with meticulous care, the bank
violated its own policy. It thereby took upon itself the obligation to officially inform
respondent of the status of his account before unilaterally debiting the amount
of P101,000. Without such notice, it is estopped from blaming him for failing to fund his
account.
The CA opined that, had the P101,000 not been debited, respondent would have had
sufficient funds for the postdated checks he had issued. Thus, the supposed
accommodation accorded by petitioner to him is the proximate cause of his business woes
and shame, for which it is liable for damages.
Because of the bank’s negligence, the CA awarded respondent moral damages of P100,000.
It also granted him exemplary damages of P75,000 and attorney’s fees of P25,000.
Hence this Petition.5
Issue

71
In its Memorandum, petitioner raises the sole issue of "whether or not the petitioner, which
is acting as a collecting bank, has the right to debit the account of its client for a check
deposit which was dishonored by the drawee bank."6
The Court’s Ruling
The Petition has no merit.
Sole Issue:
Debit of Depositor’s Account
Petitioner-bank contends that its rights and obligations under the present set of facts were
misappreciated by the CA. It insists that its right to debit the amount of the dishonored
check from the account of respondent is clear and unmistakable. Even assuming that it did
not give him notice that the check had been dishonored, such right remains immediately
enforceable.
In particular, petitioner argues that the check deposit slip accomplished by respondent on
September 17, 1990, expressly stipulated that the bank was obligating itself merely as the
depositor’s collecting agent and -- until such time as actual payment would be made to it --
it was reserving the right to charge against the depositor’s account any amount previously
credited. Respondent was allowed to withdraw the amount of the check prior to clearing,
merely as an act of accommodation, it added.
At the outset, we stress that the trial court’s factual findings that were affirmed by the CA
are not subject to review by this Court. 7 As petitioner itself takes no issue with those
findings, we need only to determine the legal consequence, based on the established facts.
Right of Setoff
A bank generally has a right of setoff over the deposits therein for the payment of any
withdrawals on the part of a depositor. 8 The right of a collecting bank to debit a client’s
account for the value of a dishonored check that has previously been credited has fairly
been established by jurisprudence. To begin with, Article 1980 of the Civil Code provides
that "[f]ixed, savings, and current deposits of money in banks and similar institutions shall
be governed by the provisions concerning simple loan."
Hence, the relationship between banks and depositors has been held to be that of creditor
and debtor.9 Thus, legal compensation under Article 1278 10 of the Civil Code may take place
"when all the requisites mentioned in Article 1279 are present," 11 as follows:
"(1) That each one of the obligors be bound principally, and that he be at the same
time a principal creditor of the other;
(2) That both debts consist in a sum of money, or if the things due are consumable,
they be of the same kind, and also of the same quality if the latter has been stated;
(3) That the two debts be due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention or controversy, commenced by
third persons and communicated in due time to the debtor." 12
Nonetheless, the real issue here is not so much the right of petitioner to debit respondent’s
account but, rather, the manner in which it exercised such right. The Court has held that
even while the right of setoff is conceded, separate is the question of whether that remedy
has properly been exercised.13
The liability of petitioner in this case ultimately revolves around the issue of whether it
properly exercised its right of setoff. The determination thereof hinges, in turn, on the

72
bank’s role and obligations, first, as respondent’s depositary bank; and second, as
collecting agent for the check in question.
Obligation as
Depositary Bank
In BPI v. Casa Montessori,14 the Court has emphasized that the banking business is
impressed with public interest. "Consequently, the highest degree of diligence is expected,
and high standards of integrity and performance are even required of it. By the nature of its
functions, a bank is under obligation to treat the accounts of its depositors with meticulous
care."15
Also affirming this long standing doctrine, Philippine Bank of Commerce v. Court of
Appeals16 has held that "the degree of diligence required of banks is more than that of a
good father of a family where the fiduciary nature of their relationship with their depositors
is concerned."17 Indeed, the banking business is vested with the trust and confidence of the
public; hence the "appropriate standard of diligence must be very high, if not the highest,
degree of diligence."18 The standard applies, regardless of whether the account consists of
only a few hundred pesos or of millions.19
The fiduciary nature of banking, previously imposed by case law, 20 is now enshrined in
Republic Act No. 8791 or the General Banking Law of 2000. Section 2 of the law specifically
says that the State recognizes the "fiduciary nature of banking that requires high standards
of integrity and performance."
Did petitioner treat respondent’s account with the highest degree of care? From all
indications, it did not.
It is undisputed -- nay, even admitted -- that purportedly as an act of accommodation to a
valued client, petitioner allowed the withdrawal of the face value of the deposited check
prior to its clearing. That act certainly disregarded the clearance requirement of the
banking system. Such a practice is unusual, because a check is not legal tender or
money;21 and its value can properly be transferred to a depositor’s account only after the
check has been cleared by the drawee bank.22
Under ordinary banking practice, after receiving a check deposit, a bank either immediately
credit the amount to a depositor’s account; or infuse value to that account only after the
drawee bank shall have paid such amount. 23 Before the check shall have been cleared for
deposit, the collecting bank can only "assume" at its own risk -- as herein petitioner did --
that the check would be cleared and paid out.
Reasonable business practice and prudence, moreover, dictated that petitioner should not
have authorized the withdrawal by respondent of P240,000 on October 1, 1990, as this
amount was over and above his outstanding cleared balance of P196,793.45.24 Hence, the
lower courts correctly appreciated the evidence in his favor.
Obligation as
Collecting Agent
Indeed, the bank deposit slip expressed this reservation:
"In receiving items on deposit, this Bank obligates itself only as the Depositor’s
Collecting agent, assuming no responsibility beyond carefulness in selecting
correspondents, and until such time as actual payments shall have come to its
possession, this Bank reserves the right to charge back to the Depositor’s account
any amounts previously credited whether or not the deposited item is returned. x x
x."25
73
However, this reservation is not enough to insulate the bank from any liability. In the past,
we have expressed doubt about the binding force of such conditions unilaterally imposed
by a bank without the consent of the depositor. 26 It is indeed arguable that "in signing the
deposit slip, the depositor does so only to identify himself and not to agree to the conditions
set forth at the back of the deposit slip."27
Further, by the express terms of the stipulation, petitioner took upon itself certain
obligations as respondent’s agent, consonant with the well-settled rule that the relationship
between the payee or holder of a commercial paper and the collecting bank is that of
principal and agent.28 Under Article 190929 of the Civil Code, such bank could be held liable
not only for fraud, but also for negligence.
As a general rule, a bank is liable for the wrongful or tortuous acts and declarations of its
officers or agents within the course and scope of their employment. 30 Due to the very nature
of their business, banks are expected to exercise the highest degree of diligence in the
selection and supervision of their employees. 31 Jurisprudence has established that the lack
of diligence of a servant is imputed to the negligence of the employer, when the negligent or
wrongful act of the former proximately results in an injury to a third person; 32 in this case,
the depositor.
The manager of the bank’s Cabanatuan branch, Consorcia Santiago, categorically admitted
that she and the employees under her control had breached bank policies. They admittedly
breached those policies when, without clearance from the drawee bank in Baguio, they
allowed respondent to withdraw on October 1, 1990, the amount of the check deposited.
Santiago testified that respondent "was not officially informed about the debiting of
the P101,000 from his existing balance of P170,000 on October 2, 1990 x x x."33
Being the branch manager, Santiago clearly acted within the scope of her authority in
authorizing the withdrawal and the subsequent debiting without notice. Accordingly, what
remains to be determined is whether her actions proximately caused respondent’s injury.
Proximate cause is that which -- in a natural and continuous sequence, unbroken by any
efficient intervening cause --produces the injury, and without which the result would not
have occurred.34
Let us go back to the facts as they unfolded. It is undeniable that the bank’s premature
authorization of the withdrawal by respondent on October 1, 1990, triggered -- in rapid
succession and in a natural sequence -- the debiting of his account, the fall of his account
balance to insufficient levels, and the subsequent dishonor of his own checks for lack of
funds. The CA correctly noted thus:
"x x x [T]he depositor x x x withdrew his money upon the advice by [petitioner] that
his money was already cleared. Without such advice, [respondent] would not have
withdrawn the sum of P240,000.00. Therefore, it cannot be denied that it was
[petitioner’s] fault which allowed [respondent] to withdraw a huge sum which he
believed was already his.
"To emphasize, it is beyond cavil that [respondent] had sufficient funds for the check.
Had the P101,000.00 not [been] debited, the subject checks would not have been
dishonored. Hence, we can say that [respondent’s] injury arose from the dishonor of
his well-funded checks. x x x."35
Aggravating matters, petitioner failed to show that it had immediately and duly informed
respondent of the debiting of his account. Nonetheless, it argues that the giving of notice

74
was discernible from his act of depositing P50,000 on October 2, 1990, to augment his
account and allow the debiting. This argument deserves short shrift.
First, notice was proper and ought to be expected. By the bank manager’s account,
respondent was considered a "valued client" whose checks had always been sufficiently
funded from 1987 to 1990,36 until the October imbroglio. Thus, he deserved nothing less
than an official notice of the precarious condition of his account.
Second, under the provisions of the Negotiable Instruments Law regarding the liability of a
general indorser37 and the procedure for a notice of dishonor, 38 it was incumbent on the
bank to give proper notice to respondent. In Gullas v. National Bank,39 the Court
emphasized:
"x x x [A] general indorser of a negotiable instrument engages that if the instrument –
the check in this case – is dishonored and the necessary proceedings for its dishonor
are duly taken, he will pay the amount thereof to the holder (Sec. 66) It has been held
by a long line of authorities that notice of dishonor is necessary to charge an indorser
and that the right of action against him does not accrue until the notice is given.
"x x x. The fact we believe is undeniable that prior to the mailing of notice of
dishonor, and without waiting for any action by Gullas, the bank made use of the
money standing in his account to make good for the treasury warrant. At this point
recall that Gullas was merely an indorser and had issued checks in good faith. As to a
depositor who has funds sufficient to meet payment of a check drawn by him in favor
of a third party, it has been held that he has a right of action against the bank for its
refusal to pay such a check in the absence of notice to him that the bank has applied
the funds so deposited in extinguishment of past due claims held against him.
(Callahan vs. Bank of Anderson [1904], 2 Ann. Cas., 203.) However this may be, as to
an indorser the situation is different, and notice should actually have been given him in
order that he might protect his interests."40
Third, regarding the deposit of P50,000 made by respondent on October 2, 1990, we fully
subscribe to the CA’s observations that it was not unusual for a well-reputed businessman
like him, who "ordinarily takes note of the amount of money he takes and releases," to
immediately deposit money in his current account to answer for the postdated checks he
had issued.41
Damages
Inasmuch as petitioner does not contest the basis for the award of damages and attorney’s
fees, we will no longer address these matters.
WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against
petitioner.
SO ORDERED.
Sandoval-Gutierrez, Carpio-Morales, and Garcia, JJ., concur.
Corona, J., on leave.
G.R. No. 193577               September 7, 2011
ANTONIO FRANCISCO, substituted by his heirs: NELIA E.S. FRANCISCO, EMILIA F.
BERTIZ, REBECCA E.S. FRANCISCO, ANTONIO E.S. FRANCISCO, JR., SOCORRO F.
FONTANILLA, and JOVITO E.S. FRANCISCO, Petitioners,
vs.
CHEMICAL BULK CARRIERS, INCORPORATED, Respondent.
DECISION
75
CARPIO, J.:
The Case
This is a petition for review 1 of the 31 May 2010 Decision 2 and 31 August 2010
Resolution3 of the Court of Appeals in CA G.R. CV No. 63591. In its 31 May 2010 Decision,
the Court of Appeals set aside the 21 August 1998 Decision 4 of the Regional Trial of Pasig
City, Branch 71 (trial court), and ordered petitioner Antonio Francisco (Francisco) to pay
respondent Chemical Bulk Carriers, Incorporated (CBCI) ₱1,119,905 as actual damages. In
its 31 August 2010 Resolution, the Court of Appeals denied Francisco’s motion for
reconsideration.
The Facts
Since 1965, Francisco was the owner and manager of a Caltex station in Teresa, Rizal.
Sometime in March 1993, four persons, including Gregorio Bacsa (Bacsa), came to
Francisco’s Caltex station and introduced themselves as employees of CBCI. Bacsa offered
to sell to Francisco a certain quantity of CBCI’s diesel fuel.
After checking Bacsa’s identification card, Francisco agreed to purchase CBCI’s diesel fuel.
Francisco imposed the following conditions for the purchase: (1) that Petron Corporation
(Petron) should deliver the diesel fuel to Francisco at his business address which should be
properly indicated in Petron’s invoice; (2) that the delivery tank is sealed; and (3) that Bacsa
should issue a separate receipt to Francisco.
The deliveries started on 5 April 1993 and lasted for ten months, or up to 25 January
1994.5 There were 17 deliveries to Francisco and all his conditions were complied with.
In February 1996, CBCI sent a demand letter to Francisco regarding the diesel fuel
delivered to him but which had been paid for by CBCI.6 CBCI demanded that Francisco pay
CBCI ₱1,053,527 for the diesel fuel or CBCI would file a complaint against him in court.
Francisco rejected CBCI’s demand.
On 16 April 1996, CBCI filed a complaint for sum of money and damages against Francisco
and other unnamed defendants.7 According to CBCI, Petron, on various dates, sold diesel
fuel to CBCI but these were delivered to and received by Francisco. Francisco then sold the
diesel fuel to third persons from whom he received payment. CBCI alleged that Francisco
acquired possession of the diesel fuel without authority from CBCI and deprived CBCI of
the use of the diesel fuel it had paid for. CBCI demanded payment from Francisco but he
refused to pay. CBCI argued that Francisco should have known that since only Petron,
Shell and Caltex are authorized to sell and distribute petroleum products in the
Philippines, the diesel fuel came from illegitimate, if not illegal or criminal, acts. CBCI
asserted that Francisco violated Articles 19, 8 20,9 21,10 and 2211 of the Civil Code and that
he should be held liable. In the alternative, CBCI claimed that Francisco, in receiving
CBCI’s diesel fuel, entered into an innominate contract of do ut des (I give and you give)
with CBCI for which Francisco is obligated to pay CBCI ₱1,119,905, the value of the diesel
fuel. CBCI also prayed for exemplary damages, attorney’s fees and other expenses of
litigation.
On 20 May 1996, Francisco filed a Motion to Dismiss on the ground of forum
shopping.12 CBCI filed its Opposition.13 In an Order dated 15 November 1996, the trial
court denied Francisco’s motion.14
Thereafter, Francisco filed his Answer.15 Francisco explained that he operates the Caltex
station with the help of his family because, in February 1978, he completely lost his
eyesight due to sickness. Francisco claimed that he asked Jovito, his son, to look into and
76
verify the identity of Bacsa, who introduced himself as a radio operator and confidential
secretary of a certain Mr. Inawat (Inawat), CBCI’s manager for operations. Francisco said
he was satisfied with the proof presented by Bacsa. When asked to explain why CBCI was
selling its fuel, Bacsa allegedly replied that CBCI was in immediate need of cash for the
salary of its daily paid workers and for petty cash. Francisco maintained that Bacsa
assured him that the diesel fuel was not stolen property and that CBCI enjoyed a big credit
line with Petron. Francisco agreed to purchase the diesel fuel offered by Bacsa on the
following conditions:
1) Defendant [Francisco] will not accept any delivery if it is not company (Petron)
delivered, with his name and address as shipping point properly printed and
indicated in the invoice of Petron, and that the product on the delivery tank is sealed;
[and]
2) Although the original invoice is sufficient evidence of delivery and payment, under
ordinary course of business, defendant still required Mr. Bacsa to issue a separate
receipt duly signed by him acknowledging receipt of the amount stated in the invoice,
for and in behalf of CBCI.16
During the first delivery on 5 April 1993, Francisco asked one of his sons to verify whether
the delivery truck’s tank was properly sealed and whether Petron issued the invoice.
Francisco said all his conditions were complied with. There were 17 deliveries made from 5
April 1993 to 25 January 1994 and each delivery was for 10,000 liters of diesel fuel at
₱65,865.17 Francisco maintained that he acquired the diesel fuel in good faith and for value.
Francisco also filed a counterclaim for exemplary damages, moral damages and attorney’s
fees.
In its 21 August 1998 Decision, the trial court ruled in Francisco’s favor and dismissed
CBCI’s complaint. The dispositive portion of the trial court’s 21 August 1998 Decision
reads:
WHEREFORE, Judgment is hereby rendered:
1. Dismissing the complaint dated March 13, 1996 with costs.
2. Ordering plaintiff (CBCI), on the counterclaim, to pay defendant the amount of
₱100,000.00 as moral damages and ₱50,000.00 as and by way of attorney’s fees.
SO ORDERED.18
CBCI appealed to the Court of Appeals. 19 CBCI argued that Francisco acquired the diesel
fuel from Petron without legal ground because Bacsa was not authorized to deliver and sell
CBCI’s diesel fuel. CBCI added that Francisco acted in bad faith because he should have
inquired further whether Bacsa’s sale of CBCI’s diesel fuel was legitimate.
In its 31 May 2010 Decision, the Court of Appeals set aside the trial court’s 21 August
1998 Decision and ruled in CBCI’s favor. The dispositive portion of the Court of Appeals’ 31
May 2010 Decision reads:
IN VIEW OF THE FOREGOING, the assailed decision is hereby REVERSED and SET ASIDE.
Antonio Francisco is ordered to pay Chemical Bulk Carriers, Incorporated the amount of
₱1,119,905.00 as actual damages.
SO ORDERED.20
On 15 January 2001, Francisco died.21 Francisco’s heirs, namely: Nelia E.S. Francisco,
Emilia F. Bertiz, Rebecca E.S. Francisco, Antonio E.S. Francisco, Jr., Socorro F. Fontanilla,
and Jovito E.S. Francisco (heirs of Francisco) filed a motion for substitution. 22 The heirs of
Francisco also filed a motion for reconsideration. 23 In its 31 August 2010 Resolution, the
77
Court of Appeals granted the motion for substitution but denied the motion for
reconsideration.
Hence, this petition.
The Ruling of the Trial Court
The trial court ruled that Francisco was not liable for damages in favor of CBCI because the
17 deliveries were covered by original and genuine invoices. The trial court declared that
Bacsa, as confidential secretary of Inawat, was CBCI’s authorized representative who
received Francisco’s full payment for the diesel fuel. The trial court stated that if Bacsa was
not authorized, CBCI should have sued Bacsa and not Francisco. The trial court also
considered Francisco a buyer in good faith who paid in full for the merchandise without
notice that some other person had a right to or interest in such diesel fuel. The trial court
pointed out that good faith affords protection to a purchaser for value. Finally, since CBCI
was bound by the acts of Bacsa, the trial court ruled that CBCI is liable to pay damages to
Francisco.
The Ruling of the Court of Appeals
The Court of Appeals set aside the trial court’s 21 August 1998 Decision and ruled that
Bacsa’s act of selling the diesel fuel to Francisco was his personal act and, even if Bacsa
connived with Inawat, the sale does not bind CBCI.
The Court of Appeals declared that since Francisco had been in the business of selling
petroleum products for a considerable number of years, his blindness was not a hindrance
for him to transact business with other people. With his condition and experience,
Francisco should have verified whether CBCI was indeed selling diesel fuel and if it had
given Bacsa authority to do so. Moreover, the Court of Appeals stated that Francisco cannot
feign good faith since he had doubts as to the authority of Bacsa yet he did not seek
confirmation from CBCI and contented himself with an improvised receipt. Francisco’s
failure to verify Bacsa’s authority showed that he had an ulterior motive. The receipts
issued by Bacsa also showed his lack of authority because it was on a plain sheet of bond
paper with no letterhead or any indication that it came from CBCI. The Court of Appeals
ruled that Francisco cannot invoke estoppel because he was at fault for choosing to ignore
the tell-tale signs of petroleum diversion and for not exercising prudence.
The Court of Appeals also ruled that CBCI was unlawfully deprived of the diesel fuel which,
as indicated in the invoices, CBCI had already paid for. Therefore, CBCI had the right to
recover the diesel fuel or its value from Francisco. Since the diesel fuel can no longer be
returned, the Court of Appeals ordered Francisco to give back the actual amount paid by
CBCI for the diesel fuel.
The Issues
The heirs of Francisco raise the following issues:
I. WHETHER THE COURT OF APPEALS ERRED IN NOT FINDING THAT DEFENDANT
ANTONIO FRANCISCO EXERCISED THE REQUIRED DILIGENCE OF A BLIND
PERSON IN THE CONDUCT OF HIS BUSINESS; and
II. WHETHER ON THE BASIS OF THE FACTUAL FINDINGS OF THE COURT OF
APPEALS AND THE TRIAL COURT AND ADMITTED FACTS, IT CAN BE CONCLUDED
THAT THE PLAINTIFF APPROVED EXPRESSLY OR TACITLY THE TRANSACTIONS.24
The Ruling of the Court
The petition has no merit.
Required Diligence of a Blind Person
78
The heirs of Francisco argue that the Court of Appeals erred when it ruled that Francisco
was liable to CBCI because he failed to exercise the diligence of a good father of a family
when he bought the diesel fuel. They argue that since Francisco was blind, the standard of
conduct that was required of him was that of a reasonable person under like disability.
Moreover, they insist that Francisco exercised due care in purchasing the diesel fuel by
doing the following: (1) Francisco asked his son to check the identity of Bacsa; (2) Francisco
required direct delivery from Petron; (3) Francisco required that he be named as the
consignee in the invoice; and (4) Francisco required separate receipts from Bacsa to
evidence actual payment.
Standard of conduct is the level of expected conduct that is required by the nature of the
obligation and corresponding to the circumstances of the person, time and place. 25 The
most common standard of conduct is that of a good father of a family or that of a
reasonably prudent person.26 To determine the diligence which must be required of all
persons, we use as basis the abstract average standard corresponding to a normal orderly
person.27
However, one who is physically disabled is required to use the same degree of care that a
reasonably careful person who has the same physical disability would use. 28 Physical
handicaps and infirmities, such as blindness or deafness, are treated as part of the
circumstances under which a reasonable person must act. Thus, the standard of conduct
for a blind person becomes that of a reasonable person who is blind.
We note that Francisco, despite being blind, had been managing and operating the Caltex
station for 15 years and this was not a hindrance for him to transact business until this
time. In this instance, however, we rule that Francisco failed to exercise the standard of
conduct expected of a reasonable person who is blind. First, Francisco merely relied on the
identification card of Bacsa to determine if he was authorized by CBCI. Francisco did not
do any other background check on the identity and authority of Bacsa. Second, Francisco
already expressed his misgivings about the diesel fuel, fearing that they might be stolen
property,29 yet he did not verify with CBCI the authority of Bacsa to sell the diesel fuel.
Third, Francisco relied on the receipts issued by Bacsa which were typewritten on a half
sheet of plain bond paper.30 If Francisco exercised reasonable diligence, he should have
asked for an official receipt issued by CBCI. Fourth, the delivery to Francisco, as indicated
in Petron’s invoice, does not show that CBCI authorized Bacsa to sell the diesel fuel to
Francisco. Clearly, Francisco failed to exercise the standard of conduct expected of a
reasonable person who is blind.
Express or Tacit Approval of the Transaction
The heirs of Francisco argue that CBCI approved expressly or tacitly the transactions.
According to them, there was apparent authority for Bacsa to enter into the transactions.
They argue that even if the agent has exceeded his authority, the principal is solidarily
liable with the agent if the former allowed the later to act as though he had full
powers.31 They insist CBCI was not unlawfully deprived of its property because Inawat gave
Bacsa the authority to sell the diesel fuel and that CBCI is bound by such action. Lastly,
they argue that CBCI should be considered in estoppel for failure to act during the ten
month period that deliveries were being made to Francisco.
The general principle is that a seller without title cannot transfer a better title than he
has.32 Only the owner of the goods or one authorized by the owner to sell can transfer title
to the buyer.33 Therefore, a person can sell only what he owns or is authorized to sell and
79
the buyer can, as a consequence, acquire no more than what the seller can legally
transfer.34
Moreover, the owner of the goods who has been unlawfully deprived of it may recover it
even from a purchaser in good faith. 35 Thus, the purchaser of property which has been
stolen from the owner has been held to acquire no title to it even though he purchased for
value and in good faith.
The exception from the general principle is the doctrine of estoppel where the owner of the
goods is precluded from denying the seller’s authority to sell. 36 But in order that there may
be estoppel, the owner must, by word or conduct, have caused or allowed it to appear that
title or authority to sell is with the seller and the buyer must have been misled to his
damage.37 1avvphi1
In this case, it is clear that Bacsa was not the owner of the diesel fuel.1âwphi1 Francisco
was aware of this but he claimed that Bacsa was authorized by CBCI to sell the diesel fuel.
However, Francisco’s claim that Bacsa was authorized is not supported by any evidence
except his self-serving testimony. First, Francisco did not even confirm with CBCI if it was
indeed selling its diesel fuel since it is not one of the oil companies known in the market to
be selling petroleum products. This fact alone should have put Francisco on guard. Second,
it does not appear that CBCI, by some direct and equivocal act, has clothed Bacsa with the
indicia of ownership or apparent authority to sell CBCI’s diesel fuel. Francisco did not state
if the identification card presented by Bacsa indicated that he was CBCI’s agent or a mere
employee. Third, the receipt issued by Bacsa was typewritten on a half sheet of plain bond
paper. There was no letterhead or any indication that it came from CBCI. We agree with the
Court of Appeals that this was a personal receipt issued by Bacsa and not an official receipt
issued by CBCI. Consequently, CBCI is not precluded by its conduct from denying Bacsa’s
authority to sell. CBCI did not hold out Bacsa or allow Bacsa to appear as the owner or one
with apparent authority to dispose of the diesel fuel.
Clearly, Bacsa cannot transfer title to Francisco as Bacsa was not the owner of the diesel
fuel nor was he authorized by CBCI to sell its diesel fuel. CBCI did not commit any act to
clothe Bacsa with apparent authority to sell the diesel fuel that would have misled
Francisco. Francisco, therefore, did not acquire any title over the diesel fuel. Since CBCI
was unlawfully deprived of its property, it may recover from Francisco, even if Francisco
pleads good faith.
WHEREFORE, we DENY the petition. We AFFIRM the 31 May 2010 Decision and 31
August 2010 Resolution of the Court of Appeals.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:

MANILA ELECTRIC COMPANY, VICENTE MONTERO, MR. BONDOC, AND MR. BAYONA,
PETITIONERS, VS. NORDEC PHILIPPINES AND/OR MARVEX INDUSTRIAL CORP.
REPRESENTED BY ITS PRESIDENT, DR. POTENCIANO R. MALVAR, RESPONDENT.

[G.R. No. 196116]

80
NORDEC PHILIPPINES REPRESENTED BY ITS PRESIDENT, DR. POTENCIANO R.
MALVAR, PETITIONER, VS. MANILA ELECTRIC COMPANY, VICENTE MONTERO, MR.
BONDOC, AND MR. BAYONA, RESPONDENTS.

DECISION
LEONEN, J.:
A distribution utility is mandated to strictly comply with the legal requisites before
disconnecting an electric supply due to the serious consequences this disconnection may
have on the consumer.

These are two (2) Petitions for Review on Certiorari [1] under Rule 45 of the Rules of Court,
both assailing the January 21, 2011 Decision [2] and March 9, 2011 Resolution[3] of Court of
Appeals in CA-G.R. CV No. 85564. The Court of Appeals reversed and set aside the June
15, 2005 Decision[4] of Branch 85, Regional Trial Court, Quezon City in Civil Case No. Q-
49651. It ordered Manila Electric Company (Meralco) to pay Nordec Philippines (Nordec) the
amounts of P5,625.00, representing overbilling for November 23, 1987; P200,000.00 as
exemplary damages; P100,000.00 as attorney's fees; and costs of suit.

Meralco was contracted to supply electricity to Marvex Industrial Corporation (Marvex)

under an Agreement for Sale of Electric Energy, with Service Account No. 9396-3422-15.
[5]
 It installed metering devices at Marvex's premises on January 18, 1985. Marvex was
billed according to the monthly electric consumption recorded in its meter. [6]

On May 29, 1985, Meralco service inspectors inspected Marvex's electric metering facilities
and found that the main meter terminal and cover seals had been tampered with. During a
second inspection on September 18, 1985, Meralco found that the metering devices were
tampered with again. Subsequently, Meralco assessed Marvex a differential billing of
P371,919.58 for January 18, 1985 to May 29, 1985, and P124,466.71 for June 17, 1985 to
September 18, 1985, in the total amount of P496,386.29. Meralco sent demand letters
dated August 7, 1985 and November 29, 1985, and disconnected Marvex's electric service
when it did not pay.[7]

On December 23, 1986, Nordec, the new owner of Marvex, [8] sued Meralco for damages with
prayer for preliminary mandatory injunction with Branch 85, Regional Trial Court, Quezon
City.[9] Likewise, impleaded as defendants were Meralco's legal officer, Vicente Montero, and
two (2) Meralco employees, Mr. Bondoc and Mr. Bayona. [10] It alleged that Meralco's service
inspectors conducted the 1985 inspections without its consent or approval. Following the
inspections, Meralco's inspectors gave an unnamed Nordec employee a Power Field Order
that did not mention the alleged defects in the metering devices. Nordec further claimed
that the parties exchanged letters on the alleged unregistered electric bill, and that it
requested a recomputation, which Meralco denied in its April 25, 1986 letter. However, in
May 1986, Meralco asked Nordec to show the basis for its recomputation request, to which
Nordec complied in its June 10, 1986 letter. On August 14, 1986, Meralco required Nordec
to pay P371,919.58 for the unregistered electricity bill. Nordec then informed Meralco of the
pending resolution of the recomputation. Nordec claimed that Meralco then disconnected
its service without prior notice on December 18, 1986, resulting to loss of income and
81
cancellation of other business opportunities. [11]

In its defense, Meralco claimed that the 1985 inspections had been conducted in the
presence of Nordec's representatives. Further, Meralco had repeatedly warned Nordec of
service disconnection in case of failure to pay the differential bill. Finally, it averred that
there was no contractual relation between Nordec and Marvex, and that Nordec and its
president, Dr. Potenciano Malvar (Dr. Malvar), failed to show proof that they were
authorized to sue on Marvex's behalf. [12]

On January 22, 1987, the Regional Trial Court issued a writ of preliminary injunction
directing Meralco to restore Nordec's electric supply. [13]

On November 23, 1987, Meralco conducted another inspection of Nordec's premises in the
presence of Nordec's president, Dr. Malvar. The inspecting group observed that there were
irregularities in Nordec's metering devices, as they continued to register power
consumption even though its entire power supply equipment was turned off. Meralco
offered to reimburse Nordec's excess bill of P5,625.10, but Nordec rejected this offer. [14]

Nordec filed a second supplemental complaint on January 4, 1991, praying that Meralco be
declared guilty of tampering, and be made to refund its excess bill of not less than
P5,625.10.[15]

In its June 15, 2005 Decision, [16] the Regional Trial Court dismissed Nordec's original
complaint and second supplemental complaint. The trial court found that there was
sufficient evidence to prove that the electric meter and metering installation at Marvex
premises had been tampered with.[17] It found that Nordec did not dispute that the
inspections of its premises were conducted with the consent and in the presence of its
representatives. Moreover, Nordec failed to prove that Meralco's inspectors had ill motives
to falsify their findings regarding the tampered meter, or that the inspectors were
responsible for the tampering.[18]

The trial court further found that Ridjo Tape & Chemical Corporation v. Court of
Appeals was inapplicable to this case, since that case did not involve tampering of meters.
It held Nordec liable for violating its Terms and Conditions of Service with Meralco, such
that Meralco was justified in disconnecting its electric service. [19] Because it was Nordec
which committed the tampering, it was not entitled to the reliefs prayed for because it did
not come to court with clean hands. [20]

There was also no contractual relationship between Nordec and Meralco, since the service
contract was between Meralco and Marvex. Thus, Nordec had no cause of action against
Meralco.[21]

The dispositive portion of the Regional Trial Court June 15, 2005 Decision stated:
WHEREFORE, the original complaint as well as the second supplemental complaint are
hereby DISMISSED.

82
Anent the second supplemental complaint, the same is found to be without merit, for
failure of plaintiff to substantiate with clear and convincing evidence.

And, finding defendant's counterclaim to be with merit, the same is GRANTED. Accordingly,
plaintiffs are hereby ordered to pay, jointly and severally, defendants the total amount of
FOUR HUNDRED NINETY[]SIX THOUSAND THREE HUNDRED EIGHTY-SIX PESOS &
29/100 (Php 496,386.29), representing the value of used but unregistered electric current;
the sum of TEN THOUSAND PESOS (Php 10,000.00) as exemplary damages; and the sum
of TWENTY THOUSAND PESOS (Php 20,000.00) as and for attorney's fees plus costs.

SO ORDERED.[22]
Nordec appealed to the Court of Appeals, which docketed the case as CA-G.R. CV No.
85564. On January 21, 2011, the Court of Appeals issued its Decision, [23] reversing and
setting aside the Regional Trial Court June 15, 2005 Decision.

First, it held that there was a contractual relationship between Nordec and Meralco. It
found that after the service contract between Meralco and Marvex, Nordec bought Marvex
from the Development Bank of the Philippines. Thus, Nordec stepped into Marvex's shoes
and assumed its rights and obligations as its assignee or successor-in-interest. As Marvex's
right to receive electricity is not intransmissible, it was deemed to have been transmitted to
Nordec. Moreover, Meralco's continued supply of electricity to Nordec and Nordec's payment
for this supply indicate that there was an implied contract existing between these two (2)
parties.[24]

Second, the Court of Appeals found that Meralco was negligent in discovering the alleged
tampering only on May 29, 1985, or four (4) months after it first found irregularities in the
metering devices, despite the monthly meter readings. There was no evidence that Nordec
was responsible for tampering with its own metering devices. The Court of Appeals found
that it was unlikely that a company previously charged with tampering and had been
demanded payment for differential billing would again tamper with a newly installed meter.
On the other hand, there was proof that the new metering devices were defective, since they
continued to run despite a complete power shutdown. Meralco even offered to refund
P5,625.10 due to the defect in the new meter. [25]

Third, Meralco did not deny that there was a pending communication on Nordec's request
for recomputation. Citing Spouses Quisumbing v. Manila Electric Company, the Court of
Appeals found that Meralco failed to give the' required 48-hour written notice of
disconnection before disconnecting Nordec's power supply. [26]

Finally, the Court of Appeals awarded Nordec exemplary damages and attorney's fees, but
not actual damages. As to actual damages, Nordec failed to prove that it actually sustained
pecuniary losses due to Meralco's disconnection. But Nordec was entitled to exemplary
damages as an example or correction for the public good, and to attorney's fees since
Nordec was forced to litigate to protect its rights. [27] The Court of Appeals granted only the
P5,625.00 refund since there was no proof presented beyond this amount. [28]

83
The dispositive portion of the Court of Appeals January 21, 2011 Decision stated:
Accordingly, the appeal is GRANTED. The Decision dated June 15, 2005 of the Regional
Trial Court (RTC), Quezon City, Branch 85 is REVERSED and SET ASIDE and a new one
rendered ordering [Meralco] to pay [Nordec]:
1.) P5,625.00, representing overbilling for November 23, 1987[;]

2.) P200,000.00 as exemplary damages;

3.) P100,000.00 as attorney's fees; and

4.) Costs of suit.

SO ORDERED.[29]
The Court of Appeals denied Meralco's Motion for Reconsideration [30] and Nordec's Motion
for Partial Reconsideration[31] in its March 9, 2011 Resolution.[32]

On March 29, 2011, Meralco filed a motion for extension of time, praying for additional 30
days within which to file its petition for review. [33]

This was docketed as G.R. No. 196020. On April 4, 2011, Nordec filed its motion for
extension of time, likewise praying for additional 30 days within which to file its petition for
review, which was docketed as G.R. No. 196116. [34]

This Court consolidated G.R. Nos. 196020 and 196116 in its April 11, 2011 Resolution. [35]

On May 3, 2011, Meralco filed its Petition for Review in G.R. No. 196020, assailing the
Court of Appeals January 21, 2011 Decision and March 9, 2011 Resolution. [36]

Meralco argues that the Court of Appeals erred in making its findings, which were contrary
to the findings of the Regional Trial Court. It claims that the Court of Appeals relied on
Nordec's unsubstantiated arguments; first, in finding that Nordec was Marvex's assignee or
successor-in-interest, and second, that Meralco was inexcusably negligent in the late
discovery of the tampered metering devices. [37]

Meralco claims that at the time of the inspections, the applicable law was Commonwealth
Act No. 349, which provided that distribution utilities were required to discover tampered
meters during the prescribed inspections, which were only once every two (2) years. In
contrast, the four (4)-month period as found by the Court of Appeals was unreasonable,
and even contrary to the rules laid down by the Energy Regulatory Commission on the
conduct of meter testing.[38] Meralco argues that distribution utilities' meter readers are not
required to discover any defect or tampering in the meters installed in their customers'
premises, and are only required to test their customers' meters only once every two (2)
years, unless the customer requests otherwise. It avers that cases of meter tampering
should not be equated with cases involving defective meters, since the former prejudices
public utilities like Meralco, due to consumers' unlawful acts. [39]

84
Further, Meralco claims that the inspections conducted on Marvex's metering facilities were
valid and in accordance with Presidential Decree No. 401, as amended. [40] It argues that this
law did not require the presence of the customer during inspections. Nonetheless, the two
(2) inspections in 1985 were conducted with the consent and in the presence of Nordec's
representatives.[41]

Meralco also claims that it exercised due diligence in maintaining its electric meters, which
was the standard set by law. By applying Ridjo Tape v. Court of Appeals,[42] the Court of
Appeals imposed a degree of diligence beyond what Commonwealth Act No. 349 provided.
[43]
 Meralco asserts that the imposition of .a degree of diligence beyond what the law
provides its judicial legislation.[44]

Moreover, Meralco holds that the demand letter on the assessed value of the differential
billing contained a notice that Marvex's electric service would be disconnected if the billing
was not paid, and that this was sufficient notice. Thus, Marvex, as the registered customer,
was aware that the non-payment of the differential billing would result in the disconnection
of the electric service.[45]

Meralco argues that Nordec was not Marvex's assignee or successor-in-interest. It

maintains that the service contract was never transferred in Nordec's name. As such, at the
time Nordec filed its complaint against Meralco, it had no authority to act on Marvex's
behalf. Meralco pointed out that the Deed of Absolute Sale between Nordec and the
Development Bank of the Philippines was executed only three (3) years after the 1985
inspections, or on August 16, 1988. There was also no implied contract between Meralco
and Nordec, since there was no act or conduct on Meralco's part to be bound to this
contract.[46]

Finally, Meralco contests the awards of refund, exemplary damages, and attorney's fees to
Nordec. It claims that Nordec was not entitled to the refund since it already refused without
just cause to accept it, and thus, had waived its right to accept the payment. [47] It argues
that since the Court of Appeals itself found that Nordec was not entitled to actual damages,
it could not award exemplary damages or attorney's fees to Nordec. [48]

In its Comment,[49] Nordec argues that Meralco's reliance on Commonwealth Act No. 349
was misplaced, since the two (2)-year period stated in it referred to testing conducted by the
Standardizing Meter Laboratory, and nut by the distribution utilities themselves.
[50]
 Further, Nordec claims that what Meralco failed to comply with was the 48-hour written
notice of disconnection rule, and its previous demand letters did not constitute this notice.
[51]

In its Reply,[52] Meralco reiterated its claims that Ridjo Tape v. Court of Appeals was

inapplicable[53] and that it gave Nordec due notice of the disconnection. [54]

On May 5, 2011, Nordec filed its Petition for Review in G.R. No. 196116, assailing the Court
of Appeals March 9, 2011 Resolution, denying its Motion for Partial Reconsideration and
praying for the modification of the Court of Appeals January 21, 2011 Decision. [55]
85
Nordec claims that it should be awarded at least P500,000.00 in temperate damages,
P150,000.00 in moral damages, and legal interest by the Court of Appeals. It argues that
temperate damages are warranted since Meralco's unceremonious and unreasonable
disconnection led to Nordec's inability to fulfill its contractual obligations and was even
forced to cancel its clients' purchase orders. [56]

Further, Nordec claims that the Court of Appeals erred in finding that it was entitled to only
P5,625.00 as a refund. It argues that it proved overbilling in excess of P5,625.00, through a
letter showing that Nordec had been charged P103,412.48 by Meralco, when a past billing
was only for P78,860.58, which Meralco did not refute. While Nordec admits that it failed to
adduce proof of the accurate amount of damages that it sustained, it holds that it estimates
Meralco's acts to cause at least P1,000,000.00 worth of damage due to Meralco's electricity
disconnection, fraud in downgrading the overbilling, and installation of defective meters. [57]

It its Comment,[58] Meralco argues that Nordec's petition should be denied outright for
failing to raise questions of law, but merely prayed for a modification of the Court of
Appeals January 21, 2011 Decision. [59] It claims that the Court of Appeals correctly denied
the award of actual and temperate or moderate damages. [60] Further, it asserts that Nordec,
as a corporation, was not entitled to moral damages. [61] Finally, it reiterates that Nordec was
not entitled to any award, since Meralco acted in accordance with the standard set by law.
[62]

In its Reply,[63] Nordec claims that this Court may take cognizance of its petition since there
was no longer any need to examine the probative value of the evidence presented. [64] It
argues that corporations may be entitled to damages if their reputations have been
besmirched, such as in this case. [65] Nordec reiterates its entitlement to the damages it
prayed for.[66]

The issues for this Court's resolution are:

First, whether or not the Court of Appeals erred in making findings of fact contrary to those
of the Regional Trial Court;

Second, whether or not Nordec Philippines has a cause of action against Manila Electric
Company;

Third, whether or not Manila Electric Company was inexcusably negligent when it
disconnected Nordec Philippines' electric supply; and

Finally, whether or not Nordec Philippines is entitled to actual, temperate, moral or

exemplary damages, attorney's fees, and legal interest.
I

In its petition for review, Meralco faults the Court of Appeals for making findings of fact
contrary to those of the Regional Trial Court. It claims that the trial court's findings of fact
86
should be accorded the highest degree of respect and that the Court of Appeals failed to
find that the trial court's findings were based on mere conjecture, and not evidence. Thus,
Meralco claims that this Court must review the facts and evidence of this case

Meralco is mistaken in arguing that this Court is duty-bound to review the factual findings
in this case due to the contrary findings of the Regional Trial Court and of the Court of
Appeals. The Court of Appeals has the jurisdiction to review, and even reverse, the factual
findings of the trial court. For the Court of Appeals' factual findings to be reviewed by this
Court, it must be shown that it gravely abused its discretion in appreciating the parties'
respective evidence. In Pascual v. Burgos:[67]
The Court of Appeals must have gravely abused its discretion in its appreciation of the
evidence presented by the parties and in its factual findings to warrant a review of factual
issues by this court. Grave abuse of discretion is defined, thus:
By grave abuse of discretion is meant such capricious and whimsical exercise of judgment
as is equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the
power is exercised in an arbitrary or despotic manner by reason of passion or personal
hostility and must be so patent and gross as to amount to an evasion of positive duty or to
a virtual refusal to perform the duty enjoined by or to act at all in contemplation of law.

Grave abuse of discretion refers not merely to palpable errors of jurisdiction; or to violations
of the Constitution, the law and jurisprudence. It refers also to cases which, for various
reasons, there has been a gross misapprehension of facts. (Citations omitted)
This exception was first laid down in Buyco v. People, et al.:
In the case at bar, the Tenth Amnesty Commission, the court of first instance and the
Court of Appeals found, in effect, that the evidence did not suffice to show that appellant
had acted in the manner contemplated in the amnesty proclamation. Moreover, unlike the
Barrioquinto cases, which were appealed directly to this Court, which, accordingly, had
authority to pass upon the validity of the findings of fact of the court of first instance and of
its conclusions on the veracity of the witnesses, the case at bar is before us on appeal by
certiorari from a decision of the Court of Appeals, the findings and conclusions of which, on
the aforementioned subjects, are not subject to our review, except in cases of grave abuse
of discretion, which has not been shown to exist.[68] (Citations omitted)
Meralco has failed to show how the Court of Appeals acted with grave abuse of discretion in
arriving at its factual findings and conclusions, or how it grossly misapprehended the
evidence presented as to warrant a finding that its review and reversal of the trial court's
findings of fact had been in error.
II

A cause of action "is the act or omission by which a party violates a right of another." [69] For
a cause of action to exist, there must be, first, a plaintiff's legal right; second, defendant's
correlative obligation; and third, an injury to the plaintiff as a result of the defendant's
violation of plaintiff's right.[70] Here, the Regional Trial Court found that Nordec had no
cause of action against Meralco since they had no contractual relationship, as Meralco's
service contract was with Marvex.

The beneficial users of an electric service have a cause of action against this distribution
87
utility. In Manila Electric Company v. Spouses Chua,[71] it was the beneficial users who were
awarded damages due to the unjust disconnection of the electric supply, even though the
service contract with Meralco was registered in the name of another person.

Further, Meralco is deemed to have knowledge of the fact that Nordec was the beneficial
user of Marvex's service contract with Meralco. It admits that the inspections of the
metering devices were conducted in the presence of Nordec's maintenance personnel and
with the consent of its manager. [72] It further admits that it corresponded with Nordec
regarding the differential billing, and entertained Nordec's demand for an explanation on
the finding of tampering and the recomputation of the amount to be paid by Nordec.
[73]
 Clearly, Meralco knew that it was dealing with Nordec as the beneficial user of the
electricity supply.
III

It is well-settled that electricity distribution utilities, which rely on mechanical devices and
equipment for the orderly undertaking of their business, are duty-bound to make
reasonable and proper periodic inspections of their equipment. If they are remiss in
carrying out this duty due to their own negligence, they risk forfeiting the amounts owed by
the customers affected.

In Ridjo Tape & Chemical Corporation v. Court of Appeals:[74]

At this juncture, we hasten to point out that the production and distribution of electricity is
a highly technical business undertaking, and in conducting its operation, it is only logical
for public utilities, such as MERALCO, to employ mechanical devices and equipment for the
orderly pursuit of its business.

It is to be expected that the parties were consciously aware that these devices or equipment
are susceptible to defects and mechanical failure. Hence, we are not prepared to believe
that petitioners were ignorant of the fact that stoppages in electric meters can also result
from inherent defects or flaws and not only from tampering or intentional mishandling....

....

Corollarily, it must be underscored that MERALCO has the imperative duty to make a
reasonable and proper inspection of its apparatus and equipment to ensure that they do
not malfunction, and the due diligence to discover and repair defects therein. Failure to
perform such duties constitutes negligence.

A review of the records, however, discloses that the unpaid charges covered the periods
from November 7, 1990 to February 13, 1991 for Civil Case No. Q-92-13045 and from July
15, 1991 to April 13, 1992 for Civil Case No. 13879, approximately three months and nine
months, respectively. On such basis, we take judicial notice that during those periods,
personnel representing MERALCO inspected and examined the electric meters of petitioners
regularly for the purpose of determining the monthly dues payable. So, why were these
defects not detected and reported on time?

88
It has been held that notice of a defect need not be direct and express; it is enough that the
same had existed for such a length of time that it is reasonable to presume that it had been
detected, and the presence of a conspicuous defect which has existed for a considerable
length of time will create a presumption of constructive notice thereof. Hence, MERALCO's
failure to discover the defect, if any, considering the length of time, amounts to inexcusable
negligence. Furthermore, we need not belabor the point that as a public utility, MERALCO
has the obligation to discharge its functions with utmost care and diligence. [75] (Citations
omitted)
Moreover, the duty of inspecting for defects is not limited to inherent mechanical defects of
the distribution utilities' devices, but extends to intentional and unintentional ones, such
as those, which are due to tampering and mistakes in computation. [76] In Manila Electric Co.
v. Wilcon Builders Supply, Inc.:[77]
The Ridjo doctrine simply states that the public utility has the imperative duty to make a
reasonable and proper inspection of its apparatus and equipment to ensure that they do
not malfunction. Its failure to discover the defect, if any, considering the length of time,
amounts to inexcusable negligence; its failure to make the necessary repairs and replace
the defective electric meter installed within the consumer's premises limits the latter's
liability. The use of the words "defect" and "defective" in the above-cited case does not
restrict the application of the doctrine to cases of "mechanical defects" in the installed
electric meters. A more plausible interpretation is to apply the rule on negligence whether
the defect is inherent, intentional or unintentional, which therefore covers tampering,
mechanical defects and mistakes in the computation of the consumers' billing. [78] (Citation
omitted)
Meralco argues that the degree of diligence imposed upon it was beyond the prevailing law
at the time, namely, Commonwealth Act No. 349. It claims that under this law, it is only
required to test metering devices once every two (2) years. Thus, for it to be penalized for
taking four (4) months to rectify and repair the defective meter, was tantamount to judicial
legislation.

However, as pointed out by Nordec, the two (2)-year period prescribed under
Commonwealth Act No. 349[79] is for the testing required of meters and appliances for
measurements used by all public services by a standardized meter laboratory under the
control of the then Public Service Commission. It does not pertain to distribution utilities
inspections of the metering devices installed in their consumers' premises.

Further, contrary to Meralco's claim, the duty imposed upon it pursuant to Ridjo is not
beyond the standard of care imposed by law. Distribution utilities are public utilities vested
with public interest, and thus, are held to a higher degree of diligence. In Ridjo:
The rationale behind this ruling is that public utilities should be put on notice, as a
deterrent, that if they completely disregard their duty of keeping their electric meters in
serviceable condition, they run the risk of forfeiting, by reason of their negligence, amounts
originally due from their customers. Certainly, we cannot sanction a situation wherein the
defects in the electric meter are allowed to continue indefinitely until suddenly the public
utilities concerned demand payment for the unrecorded electricity utilized when, in the first
place, they should have remedied the situation immediately. If we turn a blind eye on
MERALCO's omission, it may encourage negligence on the part of public utilities, to the
89
detriment of the consuming public.

....

To summarize, it is worth emphasizing that it is not our intention to impede or diminish the
business viability of MERALCO, or any public utility company for that matter. On the
contrary, we would like to stress that, being a public utility vested with vital public interest,
MERALCO is impressed with certain obligations towards its customers and any omission
on its part to perform such duties would be prejudicial to its interest. For in the final
analysis, the bottom line is that those who do not exercise such prudence in the discharge
of their duties shall be made to bear the consequences of such oversight. [80]
Should a distribution utility not exercise the standard of care required of it due to its
negligence in the inspection and repair of its apparatus, then it can no longer recover the
amounts of allegedly used but uncharged electricity.

The distribution utility's negligence is all the more apparent when it had made prior
findings of tampering, and yet still failed to correct these defects. In Manila Electric
Company v. T.E.A.M. Electronics Corp.,[81] Meralco conducted an inspection on September
28, 1987 and found that the meters therein were tampered, and then conducted a second
inspection on June 7, 1988, which yielded similar evidence of tampering. Likewise, the
respondent in that case was in the midst of a differential billing dispute with Meralco, and
had previously been assessed P7,000,000.00 due to alleged tampering. There, this Court
found that Meralco was negligent for failing to repair the defects in respondent's meters
after the first inspection:
Petitioner likewise claimed that when the subject meters were again inspected on June 7,
1988, they were found to have been tampered anew. The Court notes that prior to the
inspection, [T.E.A.M. Electronics Corporation] was informed about it; and months before
the inspection, there was an unsettled controversy between [T.E.A.M. Electronics
Corporation] and petitioner, brought about by the disconnection of electric power and the
non-payment of differential billing. We are more disposed to accept the trial court's
conclusion that it is hard to believe that a customer previously apprehended for tampered
meters and assessed P7 million would further jeopardize itself in the eyes of petitioner. If it
is true that there was evidence of tampering found on September 28, 1987 and again on
June 7, 1988, the better view would be that the defective meters were not actually corrected
after the first inspection. If so, then Manila Electric Company v. Macro Textile Mills
Corporation would apply, where we said that we cannot sanction a situation wherein the
defects in the electric meter are allowed to continue indefinitely until suddenly, the public
utilities demand payment for the unrecorded electricity utilized when they could have
remedied the situation immediately. Petitioner's failure to do so may encourage neglect of
public utilities to the detriment of the consuming public. Corollarily, it must he
underscored that petitioner has the imperative duty to make a reasonable and proper
inspection of its apparatus and equipment to ensure that they do not malfunction, and the
due diligence to discover and repair defects therein. Failure to perform such duties
constitutes negligence. By reason of said negligence, public utilities run the risk of
forfeiting amounts originally due from their customers. [82] (Citations omitted)

90
Here, as observed by the Court of Appeals, Meralco itself claimed that the irregularities in
the electricity consumption recorded in Nordec's metering devices started on January 18,
1985, as evidenced by their August 7, 1985 demand letter, covering January 18, 1985 to
May 29, 1985. However, the alleged tampering was only discovered during the May 29,
1985 inspection. Considering that Nordec's meters were read monthly, Meralco's belated
discovery of the cause of the alleged irregularities, or four (4) months after they purportedly
started, can only lead to a conclusion of negligence. Notice of a defect may be constructive
when it has conspicuously existed for a considerable length of time. [83] It is also worth
noting that during a third inspection on November 23, 1987, further irregularities in
Nordec's metering devices were observed, showing electricity consumption even when
Nordec's entire power supply equipment was switched off. Clearly, Meralco had been remiss
in its duty as required by law and jurisprudence of a public utility.

Meralco is also duty-bound to explain the basis for its billings, especially when these are for
unregistered consumption, to prevent consumers from being solely at its mercy.[84] Here, the
Power Field Orders given to Nordec following the inspections did not mention the alleged
defects that were discovered. Nordec's request for recomputation of the alleged unregistered
electric bill was still pending when its electric supply was disconnected on December 18,
1986.

Finally, as found by the Court of Appeals, Meralco failed to comply with the 48-hour
disconnection notice rule. Meralco claims that the statements in its demand letters, that
failure to pay would result in disconnection, were sufficient notice. However, pursuant to
Section 97 of Revised General Order No. 1, the governing rule when the disconnection
occurred, disconnection due to non-payment of bills requires that a 48-hour written notice
be given to the customer.[85]

It must be emphasized that electricity is "a basic necessity whose generation and
distribution is imbued with public interest, and its provider is a public utility subject to
strict regulation by the State in the exercise of police power." [86] The serious consequences
on a consumer, whose electric supply has been cut off, behoove a distribution utility to
strictly comply with the legal requisites before disconnection may be done. [87] This is all the
more true considering Meralco's dominant position in the market compared to its
customers' weak bargaining position. [88]
IV

At the outset, a party's entitlement to damages is a question of fact not generally cognizable
in a petition for review.[89] However, in this case, the Court of Appeals' failure to apply the
applicable law and jurisprudence by awarding damages to Nordec prompts this Court's
review.

The Court of Appeals declined to award actual damages to Nordec as it failed to prove its
pecuniary losses due to Meralco's disconnection:
We concede that MERALCO's service disconnection bore a domino effect on NORDEC's
business but in the absence of actual proof of losses, We cannot award actual damages to

91
NORDEC. For one is only entitled to adequate compensation for pecuniary loss that he has
duly proven.[90]
The Court of Appeals then proceeded to award exemplary damages to Nordec by way of
example or correction for the public good. This is contrary to the requirement in Article
2234 of the Civil Code, which requires proof of entitlement to moral, temperate or
compensatory damages before exemplary damages may be awarded:
Article 2234. While the amount of the exemplary damages need not be proved, the plaintiff
must show that he is entitled to moral, temperate or compensatory damages before the
court may consider the question of whether or not exemplary damages should be awarded.
In case liquidated damages have been agreed upon, although no proof of loss is necessary
in order that such liquidated damages may be recovered, nevertheless, before the court
may consider the question of granting exemplary in addition to the liquidated damages, the
plaintiff must show that he would be entitled to moral, temperate or compensatory
damages were it not for the stipulation for liquidated damages.
Exemplary damages, which cannot be recovered as a matter of right, may not be awarded if
no moral, temperate, or compensatory damages have been granted. [91] Since exemplary
damages cannot be awarded, the award of attorney's fees should likewise be deleted.

Moral damages are also not proper, in line with Manila Electric Company v.
TE.A.M Electronics Corporation:[92]
We, however, deem it proper to delete the award of moral damages. [T.E.A.M. Electronics
Corporation] claim was premised allegedly on the damage to its goodwill and reputation. As
a rule, a corporation is not entitled to moral damages because, not being a natural person,
it cannot experience physical suffering or sentiments like wounded feelings, serious
anxiety, mental anguish and moral shock. The only exception to this rule is when the
corporation has a reputation that is debased, resulting in its humiliation in the business
realm. But in such a case, it is imperative for the claimant to present proof to justify the
award. It is essential to prove the existence of the factual basis of the damage and its
causal relation to petitioner's acts. In the present case, the records are bereft of any
evidence that the name or reputation of [T.E.A.M. Electronics Corporation/Technology
Electronics Assembly and Management Pacific Corporation] has been debased as a result of
petitioner's acts. Besides, the trial court simply awarded moral damages in the dispositive
portion of its decision without stating the basis thereof. [93] (Citations omitted)
Here, the records are bereft of evidence that would show that Nordec's name or reputation
suffered due to the disconnection of its electric supply.

Moreover, contrary to Nordec's claim, it cannot be awarded temperate or moderate

damages. Under Article 2224 of the Civil Code:
Article 2224. Temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds that some pecuniary loss
has been suffered but its amount can not, from the nature of the case, be proved with
certainty.
When the court finds that a party fails to prove the fact of pecuniary loss, and not just the
amount of this loss, then Article 2224 does not apply. In Seven Brothers Shipping
Corporation v. DMC-Construction Resources, Inc.:[94]

92
In contrast, under Article 2224, temperate or moderate damages may be recovered when
the court finds that some pecuniary loss has been suffered but its amount cannot, from the
nature of the case, be provided with certainty. This principle was thoroughly explained
in Araneta v. Bank of America, which cited the Code Commission, to wit:
The Code Commission, in explaining the concept of temperate damages under Article 2224,
makes the following comment:
In some States of the American Union, temperate damages are allowed. There are cases
where from the nature of the case, definite proof of pecuniary loss cannot be offered,
although the court is convinced that there has been such loss. For instance, injury to
one's commercial credit or to the goodwill of a business firm is often hard to show with
certainty in terms of money. Should damages be denied for that reason? The judge should
be empowered to calculate moderate damages in such cases, rather than that the plaintiff
should suffer, without redress from the defendant's wrongful act. (Emphasis ours)
Thus, in Tan v. OMC Carriers, Inc., temperate damages were rightly awarded because
plaintiff suffered a loss, although definitive proof of its amount cannot be presented as the
photographs produced as evidence were deemed insufficient. Established in that case,
however, was the fact that respondent's truck was responsible for the damage to
petitioner's property and that petitioner suffered some form of pecuniary loss. In Canada v.
All Commodities Marketing Corporation, temperate damages were also awarded wherein
respondent's goods did not reach the Pepsi Cola Plant at Muntinlupa City as a result of the
negligence of petitioner in conducting its trucking and hauling services, even if the amount
of the pecuniary loss had not been proven. In Philtranco Services Enterprises, Inc. v. Paras,
the respondent was likewise awarded temperate damages in an action for breach of
contract of carriage, even if his medical expenses had not been established with certainty.
In People v. Briones, in which the accused was found guilty of murder, temperate damages
were given even if the funeral expenses for the victim had not been sufficiently proven.

Given these findings, we are of the belief that temperate and not nominal damages should
have been awarded, considering that it has been established that respondent herein
suffered a loss, even if the amount thereof cannot be proven with certainty. [95] (Citations
omitted)
Here, the Court of Appeals found that Meralco's disconnection had a "domino effect" [96] on
Nordec's business, but that Nordec did not offer actual proof of its losses. Nordec even
admitted in its petition for review that there was an "oversight" on its part in "adducing
proof of the accurate amount of damages it sustained" due to Meralco's acts. [97] No
pecuniary loss has been established in this case, apart from the claim in Nordec's
complaint that the "serious anxiety" of the disconnection had caused Nordec's president to
cancel business appointments, purchase orders, and fail to fulfill contractual obligations,
among others.[98]

In this instance, nominal damages may be awarded. In Philippine Telegraph & Telephone
Corporation v. Court of Appeals:[99]
Temperate or moderate damages may only be given if the "court finds that some pecuniary
loss has been suffered but that its amount cannot, from the nature of the case, be proved
with certainty." The factual findings of the appellate court that respondent has failed to
establish such pecuniary loss or, if proved, cannot from their nature be precisely quantified
93
precludes the application of the rule on temperate or moderate damages. The result comes
down to only a possible award of nominal damages. Nominal damages are adjudicated in
order that a right of the plaintiff, which has been violated or invaded by the defendant, may
be vindicated or recognized and not for the purpose of indemnifying the plaintiff for any
loss suffered by him. The court may award nominal damages in every obligation arising
from any source enumerated in article 1157 of the Civil Code or, generally, in every case
where property right is invaded.[100] (Citations omitted)
Nominal damages are awarded to vindicate the violation of a right suffered by a party, in an
amount considered by the courts reasonable under the circumstances. [101] Meralco's
negligence in not providing Nordec sufficient notice of disconnection of its electric supply,
especially when there was an ongoing dispute between them concerning the recomputation
of the electricity bill to be paid, violated Nordec's rights. Because of this, Nordec is entitled
to nominal damages in the amount of P30,000.00.

WHEREFORE, the Petitions for Review on Certiorari in G.R. Nos. 196020 and 196116
are DENIED. The Court of Appeals January 21, 2011 Decision and March 9, 2011
Resolution in CA-G.R. CV No. 85564 are AFFIRMED with MODIFICATION. Manila Electric
Company is ordered to pay Nordec Philippines P5,625.00, representing overbilling for
November 23, 1987; P30,000.00 in nominal damages; and costs of suit. The awards for
exemplary damages and attorney's fees are deleted.

SO ORDERED.

G.R. No. 161151

BJDC CONSTRUCTION, REPRESENTED BY ITS MANAGER/PROPRIETOR JANET S.
DELA CRUZ, Petitioner,
vs.
NENA E. LANUZO, CLAUDETTE E. LANUZO, JANET E. LANUZO, JOAN BERNABE E.
LANUZO, and RYAN JOSEE. LANUZO, Respondent.
DECISION
BERSAMIN, J.:
The party alleging the negligence of the other as the cause of injury has the burden to
establish the allegation with competent evidence. If the action based on negligence is civil in
nature, the proof required is preponderance of evidence.
This case involves a claim for damages arising from the death of a motorcycle rider in a
nighttime accident due to the supposed negligence of a construction company then
undertaking re-blocking work on a national highway. The plaintiffs insisted that the
accident happened because the construction company did not provide adequate lighting on
the site, but the latter countered that the fatal accident was caused by the negligence of the
motorcycle rider himself. The trial court decided in favor of the construction company, but
the Court of Appeals (CA) reversed the decision and ruled for the plaintiffs.
Hence, this appeal.
Antecedents
On January 5, 1998, Nena E. Lanuzo (Nena) filed a complaint for damages 1 against BJDC
Construction (company), a single proprietorship engaged in the construction business
94
under its Manager/Proprietor Janet S. de la Cruz. The company was the contractor of the
re-blocking project to repair the damaged portion of one lane of the national highway at
San Agustin, Pili, Camarines Sur from September 1997to November 1997.
Nena alleged that she was the surviving spouse of the late Balbino Los Baños Lanuzo
(Balbino) who figured in the accident that transpired at the site of the re-blocking work at
about 6:30 p.m. on October 30, 1997; that Balbino’s Honda motorcycle sideswiped the road
barricade placed by the company in the right lane portion of the road, causing him to lose
control of his motorcycle and to crash on the newly cemented road, resulting in his instant
death; and that the company’s failure to place illuminated warning signs on the site of the
project, especially during night time, was the proximate cause of the death of Balbino. She
prayed that the company be held liable for damages, to wit: (a) P5,000.00 as the actual
damage to Balbino’s motorcycle; (b) P100,000.00 as funeral and burial expenses; (c)
P559,786.00 representing the "unearned income in expectancy" of Balbino; (d) P100,000.00
as moral damages; (e) P75,000.00 as attorney’s fees, plus P1,500.00 per court appearance;
and (f) P20,000.00 as litigation costs and other incidental expenses.
In its answer,2 the company denied Nena’s allegations of negligence, insisting that it had
installed warning signs and lights along the highway and on the barricades of the project;
that at the time of the incident, the lights were working and switched on; that its project
was duly inspected by the Department of Public Works and Highways (DPWH), the Office of
the Mayor of Pili, and the Pili Municipal Police Station; and that it was found to have
satisfactorily taken measures to ensure the safety of motorists.
The company further alleged that since the start of the project in September 1997, it
installed several warning signs, namely: (a) big overhead streamers containing the words
SLOW DOWN ROAD UNDER REPAIR AHEAD hung approximately 100 meters before the re-
blocking site, one facing the Pili-bound motorists and another facing the Naga-bound
motorists; (b) road signs containing the words SLOW DOWN ROAD UNDER REPAIR 100
METERS AHEAD placed on the road shoulders below the streamers; (c) road signs with the
words SLOW DOWN ROAD UNDER REPAIR 50 METERS AHEAD placed 50 meters before
the project site; (d) barricades surrounded the affected portion of the highway, and a series
of 50-watt light bulbs were installed and switched on daily from 6:00 p.m. until the
following morning; (e) big warning signs containing the words SLOW DOWN ROAD UNDER
REPAIR and SLOW DOWN MEN WORKING were displayed at both ends of the affected
portion of the highway with illumination from two 50-watt bulbs from 6:00 p.m. until the
following morning; and (f) the unaffected portion of the highway was temporarily widened in
the adjacent road shoulder to allow two-way vehicular traffic.
The company insisted that the death of Balbino was an accident brought about by his own
negligence, as confirmed by the police investigation report that stated, among others, that
Balbino was not wearing any helmet at that time, and the accident occurred while Balbino
was overtaking another motorcycle; and that the police report also stated that the road
sign/barricade installed on the road had a light. Thus, it sought the dismissal of the
complaint and prayed, by way of counterclaim, that the Nena be ordered to pay
P100,000.00 as attorney’s fees, as well as moral damages to be proven in the course of
trial.
The RTC subsequently directed the amendment of the complaint to include the children of
Nena and Balbino as co-plaintiffs, namely: Janet, Claudette, Joan Bernabe and Ryan Jose,

95
all surnamed Lanuzo. Hence, the plaintiffs are hereinafter be referred to as the Lanuzo
heirs.
Decision of the RTC
On October 8, 2001, the RTC rendered judgment in favor of the company, as follows:
Plaintiffs are the survivors of Balbino Los Baños Lanuzo who met a traumatic death on 30
October, 1997 at about 6:30 p.m., when he bumped his motorcycle on a barricade that was
lighted with an electric bulb, protecting from traffic the newly-reblocked cement road
between San Agustin and San Jose, Pili, Camarines Sur; they claim defendant’s OMISSION
in lighting up the barricaded portion of the reblocking project being undertaken by
defendant was the proximate cause of the accident, leaving them bereaved and causing
them actual and moral damages.
Defendant DENIED the claim of plaintiffs; both parties offered testimonial and
documentary evidence, from which this Court,
FINDS
that: plaintiff DID NOT present an eyewitness account of the death of their decedent; on the
contrary, the flagman of defendant was present when the accident occurred, which was
caused by the decedent having overtaken a motorcycle ahead of [him] and on swerving, to
avoid the barricade, hit it, instead, breaking the lighted electric bulb on top of the
barricade, resulting in the fall of the decedent about 18 paces from where his motorcycle
fell on the reblocked pavement; the police investigator, policeman Corporal, by Exh. 1,
confirmed the tale of the flagman, aside from confirming the presence of the warning
devices placed not only on the premises but at places calculated to warn motorists of the
ongoing reblocking project.
OPINION
From the foregoing findings, it is the opinion of this Court that the plaintiffs were unable to
make out a case for damages, with a preponderance of evidence.
WHEREFORE, Judgment is hereby rendered, DISMISSING the complaint. 3
Decision of the CA
The Lanuzo heirs appealed to the CA.
On August 11, 2003, the CA promulgated its decision declaring that the issue was whether
the company had installed adequate lighting in the project so that motorists could clearly
see the barricade placed on the newly cemented lane that was then still closed to vehicular
traffic,4 thereby reversing the judgment of the RTC, and holding thusly:
WHEREFORE, premises considered, the present appeal is hereby GRANTED and the
decision appealed from in Civil Case No. P-2117 is hereby REVERSED and SET ASIDE. A
new judgment is hereby entered ordering the defendant-appellee to pay the plaintiff-
appellants, heirs of the victim Balbino L. B. Lanuzo, the sums of P50,000.00 as death
indemnity, P20,000.00 by way of temperate damages and P939,736.50 as loss of earning
capacity of the deceased Balbino L. B. Lanuzo.
SO ORDERED.5
The CA ruled that the following elements for the application of the doctrine of res ipsa
loquitur were present, namely: (1) the accident was of such character as to warrant an
inference that it would not have happened except for the defendant’s negligence; (2) the
accident must have been caused by an agency or instrumentality within the exclusive
management or control of the person charged with the negligence complained of; and (3)

96
the accident must not have been due to any voluntary action or contribution on the part of
the person injured.
The CA regarded as self-serving the testimony of Eduardo Zamora, an employee of the
company who testified that there was an electric bulb placed on top of the barricade on the
area of the accident. It held that Zamora’s statement was negated by the statements of
Ernesto Alto and Asuncion Sandia to the effect that they had passed by the area
immediately before the accident and had seen the road to be dark and lit only by a gas
lamp. It noted that SPO1 Corporal, the police investigator, had noticed the presence of
lighted electric bulbs in the area, but the same had been installed on the other side of the
street opposite the barricade.
The CA ruled that the placing of road signs and streamers alone did not prove that the
electric bulbs were in fact switched on at the time of the accident as to sufficiently light up
the newly re-blocked portion of the highway. It opined that "[t]he trial court gave undue
weight to the self- serving statement of appellee’s employee, Eduardo Zamora, which was
supposedly corroborated by SPO1 Pedro Corporal. SPO1 Corporal arrived at the scene only
after the accident occurred, and thus the electric bulbs could have already been switched
on by Zamora who was at the area of the project." It concluded that the negligence of the
company was the proximate cause of Balbino’s death; hence, the company was liable for
damages.
The company filed a motion for reconsideration, 6 but the CA denied the motion in the
resolution promulgated on November 13, 2003.
Issues
In this appeal, the company submits the following issues, namely:
I. The application by the Honorable Court of Appeals of the doctrine of res ipsa loquitur to
the case at bar, despite and contrary to the finding, among others, by the trial court that
the proximate cause of the accident is the victim’s own negligence, is "not in accord with
the law or with the applicable decisions of the Supreme Court" [Sec. 6 (a), Rule 45, Rules of
Court].
II. The Honorable Court of Appeals, by substituting its own findings of fact and conclusion
with those of the trial court despite the lack of "strong or cogent reasons" therefor, "has so
far departed from the accepted and usual course of judicial proceedings ... as to call for an
exercise of the power of supervision" by this Honorable Supreme Court [Sec. 6 (b), Ibid.].
III. The findings by the Honorable Court of Appeals that respondents (appellants therein)
"had satisfactorily presented a prima facie case of negligence which the appellee (petitioner
herein) had not overcome with an adequate explanation" and which alleged negligence is
"the proximate cause of death of Lanuzo" are manifestations of grave abuse of discretion in
the appreciation of facts, and constitute a judgment based on a misinterpretation of facts,
which justify a review by this Honorable Supreme Court. 7
The company reiterates the categorical finding of the RTC that the proximate cause of the
accident was Balbino’s own negligence, and that such finding was based on the conclusion
stated by SPO1 Corporal in his investigation report to the effect that the incident was
"purely self accident," and on the unrebutted testimony of Zamora to the effect that Balbino
was driving his motorcycle at a fast speed trying to overtake another motorcycle rider before
hitting the barricade. On the other hand, it insists that its documentary and testimonial
evidence proved its exercise of due care and observance of the legally prescribed safety
requirements for contractors.
97
The company maintains that Balbino was familiar with the re- blocking project that had
been going on for months because he had been passing the area at least four times a day
during weekdays in going to and from his place of work in the morning and in the
afternoon; and that he could have avoided the accident had he exercised reasonable care
and prudence.
The company assails the application of the doctrine of res ipsa loquitur, positing that the
Lanuzo heirs did not establish all the requisites for the doctrine to apply.
Anent the first requisite, the company states that the Lanuzo heirs did not successfully
counter its documentary and testimonial evidence showing that Balbino’s own negligence
had caused the accident. It cites the fact that Balbino was familiar with the road conditions
and the re-blocking project because he had been passing there daily; and that Balbino had
been driving too fast and not wearing the required helmet for motorcycle drivers, which
were immediately evident because he had been thrown from his motorcycle and had landed
"18 paces away" from the barricade that he had hit.
On the second requisite, the company argues that Balbino’s driving and operation of his
motorcycle on the day of the accident indicated that the accident was not within its
exclusive management and control; and that as to the matters that were within its control,
it sufficiently showed its observance of due and reasonable care and its compliance with
the legally prescribed safety requirements.
Regarding the third requisite, the company reminds that Zamora and SPO1 Corporal
revealed that Balbino was overtaking another motorcycle rider before hitting the barricade.
The credibility of said witnesses was not challenged, and their testimonies not rebutted;
hence, the CA erred in relying on the recollections of Asuncion Sandia and Ernesto Alto
who were not present when the incident took place. Sandia and Alto’s testimonies could not
be accorded more weight than Zamora’s eyewitness account, considering that the latter was
believed by the trial judge who had the first-hand opportunity to observe the demeanor of
the witnesses.
Whose negligence was the proximate cause of the death of Balbino?
Ruling of the Court
Inasmuch as the RTC and the CA arrived at conflicting findings of fact on who was the
negligent party, the Court holds that an examination of the evidence of the parties needs to
be undertaken to properly determine the issue. 8 The Court must ascertain whose evidence
was preponderant, for Section 1, Rule 133 of the Rules of Court mandates that in civil
cases, like this one, the party having the burden of proof must establish his case by a
preponderance of evidence.9
Burden of proof is the duty of a party to present evidence on the facts in issue necessary to
establish his claim or defense by the amount of evidence required by law. 10 It is basic that
whoever alleges a fact has the burden of proving it because a mere allegation is not
evidence.11 Generally, the party who denies has no burden to prove. 12 In civil cases, the
burden of proof is on the party who would be defeated if no evidence is given on either
side.13 The burden of proof is on the plaintiff if the defendant denies the factual allegations
of the complaint in the manner required by the Rules of Court, but it may rest on the
defendant if he admits expressly or impliedly the essential allegations but raises affirmative
defense or defenses, which if proved, will exculpate him from liability. 14
By preponderance of evidence, according to Raymundo v. Lunaria:15

98
x x x is meant that the evidence as a whole adduced by one side is superior to that of the
other. It refers to the weight, credit and value of the aggregate evidence on either side and is
usually considered to be synonymous with the term "greater weight of evidence" or "greater
weight of the credible evidence." It is evidence which is more convincing to the court as
worthy of belief than that which is offered in opposition thereto.
In addition, according to United Airlines, Inc. v. Court of Appeals, 16 the plaintiff must rely
on the strength of his own evidence and not upon the weakness of the defendant’s.
Upon a review of the records, the Court affirms the findings of the RTC, and rules that the
Lanuzo heirs, the parties carrying the burden of proof, did not establish by preponderance
of evidence that the negligence on the part of the company was the proximate cause of the
fatal accident of Balbino.
Negligence, the Court said in Layugan v. Intermediate Appellate Court, 17 is "the omission to
do something which a reasonable man, guided by those considerations which ordinarily
regulate the conduct of human affairs, would do, or the doing of something which a
prudent and reasonable man would not do, 18 or as Judge Cooley defines it, ‘(t)he failure to
observe for the protection of the interests of another person, that degree of care,
precaution, and vigilance which the circumstances justly demand, whereby such other
person suffers injury.’"19 In order that a party may be held liable for damages for any injury
brought about by the negligence of another, the claimant must prove that the negligence
was the immediate and proximate cause of the injury. Proximate cause is defined as "that
cause, which, in natural and continuous sequence, unbroken by any efficient intervening
cause, produces the injury and without which the result would not have occurred." 20
The test by which the existence of negligence in a particular case is determined is aptly
stated in the leading case of Picart v. Smith,21 as follows:
The test by which to determine the existence of negligence in a particular case may be
stated as follows: Did the defendant in doing the alleged negligent act use that reasonable
care and caution which an ordinarily prudent person would have used in the same
situation? If not, then he is guilty of negligence. The law here in effect adopts the standard
supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the
Roman law. The existence of negligence in a given case is not determined by reference to
the personal judgment of the actor in the situation before him. The law considers what
would be reckless, blameworthy, or negligent in the man of ordinary intelligence and
prudence and determines liability by that.
The question as to what would constitute the conduct of a prudent man in a given situation
must of course be always determined in the light of human experience and in view of the
facts involved in the particular case. Abstract speculation cannot here be of much value but
this much can be profitably said: Reasonable men govern their conduct by the
circumstances which are before them or known to them. They are not, and are not
supposed to be, omniscient of the future. Hence they can be expected to take care only
when there is something before them to suggest or warn of danger. Could a prudent man,
in the case under consideration, foresee harm as a result of the course actually pursued? If
so, it was the duty of the actor to take precautions to guard against that harm. Reasonable
foresight of harm, followed by the ignoring of the suggestion born of this prevision, is
always necessary before negligence can be held to exist. Stated in these terms, the proper
criterion for determining the existence of negligence in a given case is this: Conduct is said
to be negligent when a prudent man in the position of the tortfeasor would have foreseen
99
that an effect harmful to another was sufficiently probable to warrant his foregoing the
conduct or guarding against its consequences.
First of all, we note that the Lanuzo heirs argued in the trial and appellate courts that there
was a total omission on the part of the company to place illuminated warning signs on the
site of the project, especially during night time, in order to warn motorists of the project.
They claim that the omission was the proximate cause of the death of Balbino. 22 In this
appeal, however, they contend that the negligence of the company consisted in its omission
to put up adequate lighting and the required signs to warn motorists of the project,
abandoning their previous argument of a total omission to illuminate the project site.
During the trial, the Lanuzo heirs attempted to prove inadequacy of illumination instead of
the total omission of illumination. Their first witness was Cesar Palmero, who recalled that
lights had been actually installed in the site of the project. The next witness was Ernesto
Alto, who stated that he had seen three light bulbs installed in the site, placed at intervals
along the stretch of the road covered by the project. Alto further stated that he had passed
the site on board his tricycle on October 30, 1997 prior to the accident, and had seen only
a gas lamp, not light bulbs, on his approach. Another witness of the plaintiffs, Asuncion
Sandia, claimed that she had also passed the site on board a bus on the night just prior to
the accident, and had seen the site to be dark, with only one lane open to traffic, with no
light at all. Obviously, the witnesses of the plaintiffs were not consistent on their
recollections of the significant detail of the illumination of the site.
In contrast, the company credibly refuted the allegation of inadequate illumination.
Zamora, its flagman in the project, rendered an eyewitness account of the accident by
stating that the site had been illuminated by light bulbs and gas lamps, and that Balbino
had been in the process of overtaking another motorcycle rider at a fast speed when he hit
the barricade placed on the newly cemented road. On his part, SPO1 Corporal, the police
investigator who arrived at the scene of the accident on October 30, 1997, recalled that
there were light bulbs on the other side of the barricade on the lane coming from Naga City;
and that the light bulb on the lane where the accident had occurred was broken because it
had been hit by the victim’s motorcycle. Witnesses Gerry Alejo and Engr. Victorino del
Socorro remembered that light bulbs and gas lamps had been installed in the area of the
project.
Secondly, the company presented as its documentary evidence the investigation report
dated December 3, 1997 of SPO1 Corporal (Annex 1), the relevant portions of which
indicated the finding of the police investigator on the presence of illumination at the project
site, viz:
SUBJECT: Investigation Report Re: Homicide Thru Reckless Imprudence
(Self Accident)
xxxx
II.MATTERS INVESTIGATED:
1.To determine how the incident happened.
2.To determine the vehicle involved.
III. FACTS OF THE CASE:
3.At 6:45 P.M. October 30, 1997, Elements of Pili Municipal Police Station led by
SPO2 Melchor Estallo, SPO2 Cesar Pillarda, both members of the patrol section and
SPO1 Pedro D. Corporal, investigator reported having conducted an on the spot
investigation re: vehicular incident (Self Accident) that happened on or about 6:30
100
 o’clock in the evening of October 30, 1997 along national highway, San Agustin, Pili,
Camarines Sur, wherein one Balbino Lanuzo y Doe, of legal age, married, a public
school teacher, a resident of San Jose, Pili, Camarines Sur while driving his Honda
motorcycle 110 CC enroute to San Jose, Pili, Camarines Sur from Poblacion, this
municipality and upon reaching at road re: blocking portion of the national highway
at barangay San Agustin, Pili, Camarines Sur and while overtaking another
motorcycle ahead incidentally side-swiped a road sign/barricade installed at the lane
road re: blocking of the national highway, causing said motorcycle rider to swerved
his ridden motorcycle to the right and stumble down and fell to the concrete
cemented road. Victim was rushed to Bicol Medical Center, Naga City for treatment
but was pronounced dead on arrival.
4.That upon arrival at the scene of the incident it was noted that road sign/barricade
installed on the road has a light.
5.That said road was under repair for almost a month which one lane portion of the
national highway is possible of all passing vehicles from south and north bound.
6.That said motorcycle stumble down on the newly repair portion of the national
highway and the driver lying down beside the motorcycle.
xxxx
8.That one of the passerby revealed that the victim possibly be miscalculated the
road block that made him to tumble down when he applied sudden brake.
IV. FINDINGS/DISCUSSION:
9.The time of the incident was at about 6:30 o’clock in the evening a time wherein
dark of the night is approaching the vision of the driver is affected with the changing
condition and it is all the time when driver should lights his driven vehicle, as to this
case, the driver Balbino Lanuzo y Doe (victim has exercise all precautionary
measures to avoid accident but due to self accident he incidentally sideswiped the
road sign/barricade of the re: Blocking portion of the national highway resulting him
to stumble down his motorcycle and fell down to the concrete cement road.
10.The driver/victim met unexpectedly (sic) along that one lane potion of the re:
blocking and considering it was night time, confusion overthrew him and because of
sudden impulse, he lost control on the motorcycle he was driving.
11.That the driver/victim has no crush (sic) helmet at the time of the incident
considering that it should be a basic requirement as to prevent from any accident.
V. RECOMMENDATION:
12.Basing on the above discussion and facts surroundings the case was purely self
accident resulting to Homicide Thru Reckless Imprudence and the case must be
closed. (Emphasis ours.)23
Additionally, the company submitted the application for lighting permit covering the project
site (Annex 7) to prove the fact of installation of the electric light bulbs in the project site.
In our view, the RTC properly gave more weight to the testimonies of Zamora and SPO1
Corporal than to those of the witnesses for the Lanuzo heirs.1âwphi1 There was
justification for doing so, because the greater probability pertained to the former. Moreover,
the trial court’s assessment of the credibility of the witnesses and of their testimonies is
preferred to that of the appellate court’s because of the trial court’s unique first-hand
opportunity to observe the witnesses and their demeanor as such. The Court said in Cang
v. Cullen:24
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The findings of the trial court on the credibility of witnesses are accorded great weight and
respect - even considered as conclusive and binding on this Court - since the trial judge
had the unique opportunity to observe the witness firsthand and note his demeanor,
conduct and attitude under grueling examination. Only the trial judge can observe the
furtive glance, blush of conscious shame, hesitation, flippant or sneering tone, calmness,
sigh of a witness, or his scant or full realization of an oath - all of which are useful aids for
an accurate determination of a witness' honesty and sincerity. He can thus be expected to
determine with reasonable discretion which testimony is acceptable and which witness is
worthy of belief.
Absent any showing that the trial court's calibration of the credibility of the witnesses was
flawed, we are bound by its assessment. This Court will sustain such findings unless it can
be shown that the trial court ignored, overlooked, misunderstood, misappreciated, or
misapplied substantial facts and circumstances, which, if considered, would materially
affect the result of the case.25
The Court observes, too, that SPO1 Corporal, a veteran police officer detailed for more than
17 years at the Pili Police Station, enjoyed the presumption of regularity in the performance
of his official duties.26 The presumption, although rebuttable, stands because the Lanuzo
heirs did not adduce evidence to show any deficiency or irregularity in the performance of
his official duty as the police investigator of the accident. They also did not show that he
was impelled by any ill motive or bias to testify falsely.
Thirdly, the CA unreasonably branded the testimonies of Zamora and SPO1 Corporal as
"self-serving." They were not. Self-serving evidence refers to out-of-court statements that
favor the declarant’s interest; 27 it is disfavored mainly because the adverse party is given no
opportunity to dispute the statement and their admission would encourage fabrication of
testimony.28 But court declarations are not self-serving considering that the adverse party
is accorded the opportunity to test the veracity of the declarations by cross-examination
and other methods.
There is no question that Zamora and SPO1 Corporal were thoroughly cross-examined by
the counsel for the Lanuzo heirs. Their recollections remained unchallenged by superior
contrary evidence from the Lanuzo heirs.
Fourthly, the doctrine of res ipsa loquitur had no application here. In Tan v. JAM Transit,
Inc.,29 the Court has discussed the doctrine thusly:
Res ipsa loquitur is a Latin phrase that literally means "the thing or the transaction speaks
for itself." It is a maxim for the rule that the fact of the occurrence of an injury, taken with
the surrounding circumstances, may permit an inference or raise a presumption of
negligence, or make out a plaintiff's prima facie case, and present a question of fact for
defendant to meet with an explanation. Where the thing that caused the injury complained
of is shown to be under the management of the defendant or his servants; and the accident,
in the ordinary course of things, would not happen if those who had management or
control used proper care, it affords reasonable evidence — in the absence of a sufficient,
reasonable and logical explanation by defendant — that the accident arose from or was
caused by the defendant's want of care. This rule is grounded on the superior logic of
ordinary human experience, and it is on the basis of such experience or common
knowledge that negligence may be deduced from the mere occurrence of the accident itself.
Hence, the rule is applied in conjunction with the doctrine of common knowledge.

102
For the doctrine to apply, the following requirements must be shown to exist, namely: (a)
the accident is of a kind that ordinarily does not occur in the absence of someone’s
negligence; (b) it is caused by an instrumentality within the exclusive control of the
defendant or defendants; and (c) the possibility of contributing conduct that would make
the plaintiff responsible is eliminated.30
The Court has warned in Reyes v. Sisters of Mercy Hospital, 31 however, that "res ipsa
loquitur is not a rigid or ordinary doctrine to be perfunctorily used but a rule to be
cautiously applied, depending upon the circumstances of each case."
Based on the evidence adduced by the Lanuzo heirs, negligence cannot be fairly ascribed to
the company considering that it has shown its installation of the necessary warning signs
and lights in the project site. In that context, the fatal accident was not caused by any
instrumentality within the exclusive control of the company. In contrast, Balbino had the
exclusive control of how he operated and managed his motorcycle. The records disclose that
he himself did not take the necessary precautions. As Zamora declared, Balbino overtook
another motorcycle rider at a fast speed, and in the process could not avoid hitting a
barricade at the site, causing him to be thrown off his motorcycle onto the newly cemented
road. SPO1 Corporal’s investigation report corroborated Zamora’s declaration. This
causation of the fatal injury went uncontroverted by the Lanuzo heirs.
Moreover, by the time of the accident, the project, which had commenced in September
1997, had been going on for more than a month and was already in the completion stage.
Balbino, who had passed there on a daily basis in going to and from his residence and the
school where he then worked as the principal, was thus very familiar with the risks at the
project site. Nor could the Lanuzo heirs justly posit that the illumination was not adequate,
for it cannot be denied that Balbino’s motorcycle was equipped with headlights that would
have enabled him at dusk or night time to see the condition of the road ahead. That the
accident still occurred surely indicated that he himself did not exercise the degree of care
expected of him as a prudent motorist.
According to Dr. Abilay, the cause of death of Balbino was the fatal depressed fracture at
the back of his head, an injury that Dr. Abilay opined to be attributable to his head landing
on the cemented road after being thrown off his motorcycle. Considering that it was shown
that Balbino was not wearing any protective head gear or helmet at the time of the
accident, he was guilty of negligence in that respect. Had he worn the protective head gear
or helmet, his untimely death would not have occurred.
The RTC was correct on its conclusions and findings that the company was not negligent in
ensuring safety at the project site. All the established circumstances showed that the
proximate and immediate cause of the death of Balbino was his own negligence. Hence, the
Lanuzo heirs could not recover damages.32
WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and
SETS ASIDE the decision promulgated on August 11, 2003 by the Court of Appeals;
REINSTATES the decision rendered on October 8, 2001 by the Regional Trial Court, Branch
32, in Pili, Camarines Sur dismissing the complaint; and MAKES no pronouncements on
costs of suit.
SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice
WE CONCUR:
103
G.R. No. 161151
BJDC CONSTRUCTION, REPRESENTED BY ITS MANAGER/PROPRIETOR JANET S.
DELA CRUZ, Petitioner,
vs.
NENA E. LANUZO, CLAUDETTE E. LANUZO, JANET E. LANUZO, JOAN BERNABE E.
LANUZO, and RYAN JOSEE. LANUZO, Respondent.
DECISION
BERSAMIN, J.:
The party alleging the negligence of the other as the cause of injury has the burden to
establish the allegation with competent evidence. If the action based on negligence is civil in
nature, the proof required is preponderance of evidence.
This case involves a claim for damages arising from the death of a motorcycle rider in a
nighttime accident due to the supposed negligence of a construction company then
undertaking re-blocking work on a national highway. The plaintiffs insisted that the
accident happened because the construction company did not provide adequate lighting on
the site, but the latter countered that the fatal accident was caused by the negligence of the
motorcycle rider himself. The trial court decided in favor of the construction company, but
the Court of Appeals (CA) reversed the decision and ruled for the plaintiffs.
Hence, this appeal.
Antecedents
On January 5, 1998, Nena E. Lanuzo (Nena) filed a complaint for damages 1 against BJDC
Construction (company), a single proprietorship engaged in the construction business
under its Manager/Proprietor Janet S. de la Cruz. The company was the contractor of the
re-blocking project to repair the damaged portion of one lane of the national highway at
San Agustin, Pili, Camarines Sur from September 1997to November 1997.
Nena alleged that she was the surviving spouse of the late Balbino Los Baños Lanuzo
(Balbino) who figured in the accident that transpired at the site of the re-blocking work at
about 6:30 p.m. on October 30, 1997; that Balbino’s Honda motorcycle sideswiped the road
barricade placed by the company in the right lane portion of the road, causing him to lose
control of his motorcycle and to crash on the newly cemented road, resulting in his instant
death; and that the company’s failure to place illuminated warning signs on the site of the
project, especially during night time, was the proximate cause of the death of Balbino. She
prayed that the company be held liable for damages, to wit: (a) P5,000.00 as the actual
damage to Balbino’s motorcycle; (b) P100,000.00 as funeral and burial expenses; (c)
P559,786.00 representing the "unearned income in expectancy" of Balbino; (d) P100,000.00
as moral damages; (e) P75,000.00 as attorney’s fees, plus P1,500.00 per court appearance;
and (f) P20,000.00 as litigation costs and other incidental expenses.
In its answer,2 the company denied Nena’s allegations of negligence, insisting that it had
installed warning signs and lights along the highway and on the barricades of the project;
that at the time of the incident, the lights were working and switched on; that its project
was duly inspected by the Department of Public Works and Highways (DPWH), the Office of
the Mayor of Pili, and the Pili Municipal Police Station; and that it was found to have
satisfactorily taken measures to ensure the safety of motorists.

104
The company further alleged that since the start of the project in September 1997, it
installed several warning signs, namely: (a) big overhead streamers containing the words
SLOW DOWN ROAD UNDER REPAIR AHEAD hung approximately 100 meters before the re-
blocking site, one facing the Pili-bound motorists and another facing the Naga-bound
motorists; (b) road signs containing the words SLOW DOWN ROAD UNDER REPAIR 100
METERS AHEAD placed on the road shoulders below the streamers; (c) road signs with the
words SLOW DOWN ROAD UNDER REPAIR 50 METERS AHEAD placed 50 meters before
the project site; (d) barricades surrounded the affected portion of the highway, and a series
of 50-watt light bulbs were installed and switched on daily from 6:00 p.m. until the
following morning; (e) big warning signs containing the words SLOW DOWN ROAD UNDER
REPAIR and SLOW DOWN MEN WORKING were displayed at both ends of the affected
portion of the highway with illumination from two 50-watt bulbs from 6:00 p.m. until the
following morning; and (f) the unaffected portion of the highway was temporarily widened in
the adjacent road shoulder to allow two-way vehicular traffic.
The company insisted that the death of Balbino was an accident brought about by his own
negligence, as confirmed by the police investigation report that stated, among others, that
Balbino was not wearing any helmet at that time, and the accident occurred while Balbino
was overtaking another motorcycle; and that the police report also stated that the road
sign/barricade installed on the road had a light. Thus, it sought the dismissal of the
complaint and prayed, by way of counterclaim, that the Nena be ordered to pay
P100,000.00 as attorney’s fees, as well as moral damages to be proven in the course of
trial.
The RTC subsequently directed the amendment of the complaint to include the children of
Nena and Balbino as co-plaintiffs, namely: Janet, Claudette, Joan Bernabe and Ryan Jose,
all surnamed Lanuzo. Hence, the plaintiffs are hereinafter be referred to as the Lanuzo
heirs.
Decision of the RTC
On October 8, 2001, the RTC rendered judgment in favor of the company, as follows:
Plaintiffs are the survivors of Balbino Los Baños Lanuzo who met a traumatic death on 30
October, 1997 at about 6:30 p.m., when he bumped his motorcycle on a barricade that was
lighted with an electric bulb, protecting from traffic the newly-reblocked cement road
between San Agustin and San Jose, Pili, Camarines Sur; they claim defendant’s OMISSION
in lighting up the barricaded portion of the reblocking project being undertaken by
defendant was the proximate cause of the accident, leaving them bereaved and causing
them actual and moral damages.
Defendant DENIED the claim of plaintiffs; both parties offered testimonial and
documentary evidence, from which this Court,
FINDS
that: plaintiff DID NOT present an eyewitness account of the death of their decedent; on the
contrary, the flagman of defendant was present when the accident occurred, which was
caused by the decedent having overtaken a motorcycle ahead of [him] and on swerving, to
avoid the barricade, hit it, instead, breaking the lighted electric bulb on top of the
barricade, resulting in the fall of the decedent about 18 paces from where his motorcycle
fell on the reblocked pavement; the police investigator, policeman Corporal, by Exh. 1,
confirmed the tale of the flagman, aside from confirming the presence of the warning

105
devices placed not only on the premises but at places calculated to warn motorists of the
ongoing reblocking project.
OPINION
From the foregoing findings, it is the opinion of this Court that the plaintiffs were unable to
make out a case for damages, with a preponderance of evidence.
WHEREFORE, Judgment is hereby rendered, DISMISSING the complaint. 3
Decision of the CA
The Lanuzo heirs appealed to the CA.
On August 11, 2003, the CA promulgated its decision declaring that the issue was whether
the company had installed adequate lighting in the project so that motorists could clearly
see the barricade placed on the newly cemented lane that was then still closed to vehicular
traffic,4 thereby reversing the judgment of the RTC, and holding thusly:
WHEREFORE, premises considered, the present appeal is hereby GRANTED and the
decision appealed from in Civil Case No. P-2117 is hereby REVERSED and SET ASIDE. A
new judgment is hereby entered ordering the defendant-appellee to pay the plaintiff-
appellants, heirs of the victim Balbino L. B. Lanuzo, the sums of P50,000.00 as death
indemnity, P20,000.00 by way of temperate damages and P939,736.50 as loss of earning
capacity of the deceased Balbino L. B. Lanuzo.
SO ORDERED.5
The CA ruled that the following elements for the application of the doctrine of res ipsa
loquitur were present, namely: (1) the accident was of such character as to warrant an
inference that it would not have happened except for the defendant’s negligence; (2) the
accident must have been caused by an agency or instrumentality within the exclusive
management or control of the person charged with the negligence complained of; and (3)
the accident must not have been due to any voluntary action or contribution on the part of
the person injured.
The CA regarded as self-serving the testimony of Eduardo Zamora, an employee of the
company who testified that there was an electric bulb placed on top of the barricade on the
area of the accident. It held that Zamora’s statement was negated by the statements of
Ernesto Alto and Asuncion Sandia to the effect that they had passed by the area
immediately before the accident and had seen the road to be dark and lit only by a gas
lamp. It noted that SPO1 Corporal, the police investigator, had noticed the presence of
lighted electric bulbs in the area, but the same had been installed on the other side of the
street opposite the barricade.
The CA ruled that the placing of road signs and streamers alone did not prove that the
electric bulbs were in fact switched on at the time of the accident as to sufficiently light up
the newly re-blocked portion of the highway. It opined that "[t]he trial court gave undue
weight to the self- serving statement of appellee’s employee, Eduardo Zamora, which was
supposedly corroborated by SPO1 Pedro Corporal. SPO1 Corporal arrived at the scene only
after the accident occurred, and thus the electric bulbs could have already been switched
on by Zamora who was at the area of the project." It concluded that the negligence of the
company was the proximate cause of Balbino’s death; hence, the company was liable for
damages.
The company filed a motion for reconsideration, 6 but the CA denied the motion in the
resolution promulgated on November 13, 2003.
Issues
106
In this appeal, the company submits the following issues, namely:
I. The application by the Honorable Court of Appeals of the doctrine of res ipsa loquitur to
the case at bar, despite and contrary to the finding, among others, by the trial court that
the proximate cause of the accident is the victim’s own negligence, is "not in accord with
the law or with the applicable decisions of the Supreme Court" [Sec. 6 (a), Rule 45, Rules of
Court].
II. The Honorable Court of Appeals, by substituting its own findings of fact and conclusion
with those of the trial court despite the lack of "strong or cogent reasons" therefor, "has so
far departed from the accepted and usual course of judicial proceedings ... as to call for an
exercise of the power of supervision" by this Honorable Supreme Court [Sec. 6 (b), Ibid.].
III. The findings by the Honorable Court of Appeals that respondents (appellants therein)
"had satisfactorily presented a prima facie case of negligence which the appellee (petitioner
herein) had not overcome with an adequate explanation" and which alleged negligence is
"the proximate cause of death of Lanuzo" are manifestations of grave abuse of discretion in
the appreciation of facts, and constitute a judgment based on a misinterpretation of facts,
which justify a review by this Honorable Supreme Court. 7
The company reiterates the categorical finding of the RTC that the proximate cause of the
accident was Balbino’s own negligence, and that such finding was based on the conclusion
stated by SPO1 Corporal in his investigation report to the effect that the incident was
"purely self accident," and on the unrebutted testimony of Zamora to the effect that Balbino
was driving his motorcycle at a fast speed trying to overtake another motorcycle rider before
hitting the barricade. On the other hand, it insists that its documentary and testimonial
evidence proved its exercise of due care and observance of the legally prescribed safety
requirements for contractors.
The company maintains that Balbino was familiar with the re- blocking project that had
been going on for months because he had been passing the area at least four times a day
during weekdays in going to and from his place of work in the morning and in the
afternoon; and that he could have avoided the accident had he exercised reasonable care
and prudence.
The company assails the application of the doctrine of res ipsa loquitur, positing that the
Lanuzo heirs did not establish all the requisites for the doctrine to apply.
Anent the first requisite, the company states that the Lanuzo heirs did not successfully
counter its documentary and testimonial evidence showing that Balbino’s own negligence
had caused the accident. It cites the fact that Balbino was familiar with the road conditions
and the re-blocking project because he had been passing there daily; and that Balbino had
been driving too fast and not wearing the required helmet for motorcycle drivers, which
were immediately evident because he had been thrown from his motorcycle and had landed
"18 paces away" from the barricade that he had hit.
On the second requisite, the company argues that Balbino’s driving and operation of his
motorcycle on the day of the accident indicated that the accident was not within its
exclusive management and control; and that as to the matters that were within its control,
it sufficiently showed its observance of due and reasonable care and its compliance with
the legally prescribed safety requirements.
Regarding the third requisite, the company reminds that Zamora and SPO1 Corporal
revealed that Balbino was overtaking another motorcycle rider before hitting the barricade.
The credibility of said witnesses was not challenged, and their testimonies not rebutted;
107
hence, the CA erred in relying on the recollections of Asuncion Sandia and Ernesto Alto
who were not present when the incident took place. Sandia and Alto’s testimonies could not
be accorded more weight than Zamora’s eyewitness account, considering that the latter was
believed by the trial judge who had the first-hand opportunity to observe the demeanor of
the witnesses.
Whose negligence was the proximate cause of the death of Balbino?
Ruling of the Court
Inasmuch as the RTC and the CA arrived at conflicting findings of fact on who was the
negligent party, the Court holds that an examination of the evidence of the parties needs to
be undertaken to properly determine the issue. 8 The Court must ascertain whose evidence
was preponderant, for Section 1, Rule 133 of the Rules of Court mandates that in civil
cases, like this one, the party having the burden of proof must establish his case by a
preponderance of evidence.9
Burden of proof is the duty of a party to present evidence on the facts in issue necessary to
establish his claim or defense by the amount of evidence required by law. 10 It is basic that
whoever alleges a fact has the burden of proving it because a mere allegation is not
evidence.11 Generally, the party who denies has no burden to prove. 12 In civil cases, the
burden of proof is on the party who would be defeated if no evidence is given on either
side.13 The burden of proof is on the plaintiff if the defendant denies the factual allegations
of the complaint in the manner required by the Rules of Court, but it may rest on the
defendant if he admits expressly or impliedly the essential allegations but raises affirmative
defense or defenses, which if proved, will exculpate him from liability. 14
By preponderance of evidence, according to Raymundo v. Lunaria:15
x x x is meant that the evidence as a whole adduced by one side is superior to that of the
other. It refers to the weight, credit and value of the aggregate evidence on either side and is
usually considered to be synonymous with the term "greater weight of evidence" or "greater
weight of the credible evidence." It is evidence which is more convincing to the court as
worthy of belief than that which is offered in opposition thereto.
In addition, according to United Airlines, Inc. v. Court of Appeals, 16 the plaintiff must rely
on the strength of his own evidence and not upon the weakness of the defendant’s.
Upon a review of the records, the Court affirms the findings of the RTC, and rules that the
Lanuzo heirs, the parties carrying the burden of proof, did not establish by preponderance
of evidence that the negligence on the part of the company was the proximate cause of the
fatal accident of Balbino.
Negligence, the Court said in Layugan v. Intermediate Appellate Court, 17 is "the omission to
do something which a reasonable man, guided by those considerations which ordinarily
regulate the conduct of human affairs, would do, or the doing of something which a
prudent and reasonable man would not do, 18 or as Judge Cooley defines it, ‘(t)he failure to
observe for the protection of the interests of another person, that degree of care,
precaution, and vigilance which the circumstances justly demand, whereby such other
person suffers injury.’"19 In order that a party may be held liable for damages for any injury
brought about by the negligence of another, the claimant must prove that the negligence
was the immediate and proximate cause of the injury. Proximate cause is defined as "that
cause, which, in natural and continuous sequence, unbroken by any efficient intervening
cause, produces the injury and without which the result would not have occurred." 20

108
The test by which the existence of negligence in a particular case is determined is aptly
stated in the leading case of Picart v. Smith,21 as follows:
The test by which to determine the existence of negligence in a particular case may be
stated as follows: Did the defendant in doing the alleged negligent act use that reasonable
care and caution which an ordinarily prudent person would have used in the same
situation? If not, then he is guilty of negligence. The law here in effect adopts the standard
supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the
Roman law. The existence of negligence in a given case is not determined by reference to
the personal judgment of the actor in the situation before him. The law considers what
would be reckless, blameworthy, or negligent in the man of ordinary intelligence and
prudence and determines liability by that.
The question as to what would constitute the conduct of a prudent man in a given situation
must of course be always determined in the light of human experience and in view of the
facts involved in the particular case. Abstract speculation cannot here be of much value but
this much can be profitably said: Reasonable men govern their conduct by the
circumstances which are before them or known to them. They are not, and are not
supposed to be, omniscient of the future. Hence they can be expected to take care only
when there is something before them to suggest or warn of danger. Could a prudent man,
in the case under consideration, foresee harm as a result of the course actually pursued? If
so, it was the duty of the actor to take precautions to guard against that harm. Reasonable
foresight of harm, followed by the ignoring of the suggestion born of this prevision, is
always necessary before negligence can be held to exist. Stated in these terms, the proper
criterion for determining the existence of negligence in a given case is this: Conduct is said
to be negligent when a prudent man in the position of the tortfeasor would have foreseen
that an effect harmful to another was sufficiently probable to warrant his foregoing the
conduct or guarding against its consequences.
First of all, we note that the Lanuzo heirs argued in the trial and appellate courts that there
was a total omission on the part of the company to place illuminated warning signs on the
site of the project, especially during night time, in order to warn motorists of the project.
They claim that the omission was the proximate cause of the death of Balbino. 22 In this
appeal, however, they contend that the negligence of the company consisted in its omission
to put up adequate lighting and the required signs to warn motorists of the project,
abandoning their previous argument of a total omission to illuminate the project site.
During the trial, the Lanuzo heirs attempted to prove inadequacy of illumination instead of
the total omission of illumination. Their first witness was Cesar Palmero, who recalled that
lights had been actually installed in the site of the project. The next witness was Ernesto
Alto, who stated that he had seen three light bulbs installed in the site, placed at intervals
along the stretch of the road covered by the project. Alto further stated that he had passed
the site on board his tricycle on October 30, 1997 prior to the accident, and had seen only
a gas lamp, not light bulbs, on his approach. Another witness of the plaintiffs, Asuncion
Sandia, claimed that she had also passed the site on board a bus on the night just prior to
the accident, and had seen the site to be dark, with only one lane open to traffic, with no
light at all. Obviously, the witnesses of the plaintiffs were not consistent on their
recollections of the significant detail of the illumination of the site.
In contrast, the company credibly refuted the allegation of inadequate illumination.
Zamora, its flagman in the project, rendered an eyewitness account of the accident by
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stating that the site had been illuminated by light bulbs and gas lamps, and that Balbino
had been in the process of overtaking another motorcycle rider at a fast speed when he hit
the barricade placed on the newly cemented road. On his part, SPO1 Corporal, the police
investigator who arrived at the scene of the accident on October 30, 1997, recalled that
there were light bulbs on the other side of the barricade on the lane coming from Naga City;
and that the light bulb on the lane where the accident had occurred was broken because it
had been hit by the victim’s motorcycle. Witnesses Gerry Alejo and Engr. Victorino del
Socorro remembered that light bulbs and gas lamps had been installed in the area of the
project.
Secondly, the company presented as its documentary evidence the investigation report
dated December 3, 1997 of SPO1 Corporal (Annex 1), the relevant portions of which
indicated the finding of the police investigator on the presence of illumination at the project
site, viz:
SUBJECT: Investigation Report Re: Homicide Thru Reckless Imprudence
(Self Accident)
xxxx
II.MATTERS INVESTIGATED:
1.To determine how the incident happened.
2.To determine the vehicle involved.
III. FACTS OF THE CASE:
3.At 6:45 P.M. October 30, 1997, Elements of Pili Municipal Police Station led by
SPO2 Melchor Estallo, SPO2 Cesar Pillarda, both members of the patrol section and
SPO1 Pedro D. Corporal, investigator reported having conducted an on the spot
investigation re: vehicular incident (Self Accident) that happened on or about 6:30
o’clock in the evening of October 30, 1997 along national highway, San Agustin, Pili,
Camarines Sur, wherein one Balbino Lanuzo y Doe, of legal age, married, a public
school teacher, a resident of San Jose, Pili, Camarines Sur while driving his Honda
motorcycle 110 CC enroute to San Jose, Pili, Camarines Sur from Poblacion, this
municipality and upon reaching at road re: blocking portion of the national highway
at barangay San Agustin, Pili, Camarines Sur and while overtaking another
motorcycle ahead incidentally side-swiped a road sign/barricade installed at the lane
road re: blocking of the national highway, causing said motorcycle rider to swerved
his ridden motorcycle to the right and stumble down and fell to the concrete
cemented road. Victim was rushed to Bicol Medical Center, Naga City for treatment
but was pronounced dead on arrival.
4.That upon arrival at the scene of the incident it was noted that road sign/barricade
installed on the road has a light.
5.That said road was under repair for almost a month which one lane portion of the
national highway is possible of all passing vehicles from south and north bound.
6.That said motorcycle stumble down on the newly repair portion of the national
highway and the driver lying down beside the motorcycle.
xxxx
8.That one of the passerby revealed that the victim possibly be miscalculated the
road block that made him to tumble down when he applied sudden brake.
IV. FINDINGS/DISCUSSION:

110
 9.The time of the incident was at about 6:30 o’clock in the evening a time wherein
dark of the night is approaching the vision of the driver is affected with the changing
condition and it is all the time when driver should lights his driven vehicle, as to this
case, the driver Balbino Lanuzo y Doe (victim has exercise all precautionary
measures to avoid accident but due to self accident he incidentally sideswiped the
road sign/barricade of the re: Blocking portion of the national highway resulting him
to stumble down his motorcycle and fell down to the concrete cement road.
10.The driver/victim met unexpectedly (sic) along that one lane potion of the re:
blocking and considering it was night time, confusion overthrew him and because of
sudden impulse, he lost control on the motorcycle he was driving.
11.That the driver/victim has no crush (sic) helmet at the time of the incident
considering that it should be a basic requirement as to prevent from any accident.
V. RECOMMENDATION:
12.Basing on the above discussion and facts surroundings the case was purely self
accident resulting to Homicide Thru Reckless Imprudence and the case must be
closed. (Emphasis ours.)23
Additionally, the company submitted the application for lighting permit covering the project
site (Annex 7) to prove the fact of installation of the electric light bulbs in the project site.
In our view, the RTC properly gave more weight to the testimonies of Zamora and SPO1
Corporal than to those of the witnesses for the Lanuzo heirs.1âwphi1 There was
justification for doing so, because the greater probability pertained to the former. Moreover,
the trial court’s assessment of the credibility of the witnesses and of their testimonies is
preferred to that of the appellate court’s because of the trial court’s unique first-hand
opportunity to observe the witnesses and their demeanor as such. The Court said in Cang
v. Cullen:24
The findings of the trial court on the credibility of witnesses are accorded great weight and
respect - even considered as conclusive and binding on this Court - since the trial judge
had the unique opportunity to observe the witness firsthand and note his demeanor,
conduct and attitude under grueling examination. Only the trial judge can observe the
furtive glance, blush of conscious shame, hesitation, flippant or sneering tone, calmness,
sigh of a witness, or his scant or full realization of an oath - all of which are useful aids for
an accurate determination of a witness' honesty and sincerity. He can thus be expected to
determine with reasonable discretion which testimony is acceptable and which witness is
worthy of belief.
Absent any showing that the trial court's calibration of the credibility of the witnesses was
flawed, we are bound by its assessment. This Court will sustain such findings unless it can
be shown that the trial court ignored, overlooked, misunderstood, misappreciated, or
misapplied substantial facts and circumstances, which, if considered, would materially
affect the result of the case.25
The Court observes, too, that SPO1 Corporal, a veteran police officer detailed for more than
17 years at the Pili Police Station, enjoyed the presumption of regularity in the performance
of his official duties.26 The presumption, although rebuttable, stands because the Lanuzo
heirs did not adduce evidence to show any deficiency or irregularity in the performance of
his official duty as the police investigator of the accident. They also did not show that he
was impelled by any ill motive or bias to testify falsely.

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Thirdly, the CA unreasonably branded the testimonies of Zamora and SPO1 Corporal as
"self-serving." They were not. Self-serving evidence refers to out-of-court statements that
favor the declarant’s interest; 27 it is disfavored mainly because the adverse party is given no
opportunity to dispute the statement and their admission would encourage fabrication of
testimony.28 But court declarations are not self-serving considering that the adverse party
is accorded the opportunity to test the veracity of the declarations by cross-examination
and other methods.
There is no question that Zamora and SPO1 Corporal were thoroughly cross-examined by
the counsel for the Lanuzo heirs. Their recollections remained unchallenged by superior
contrary evidence from the Lanuzo heirs.
Fourthly, the doctrine of res ipsa loquitur had no application here. In Tan v. JAM Transit,
Inc.,29 the Court has discussed the doctrine thusly:
Res ipsa loquitur is a Latin phrase that literally means "the thing or the transaction speaks
for itself." It is a maxim for the rule that the fact of the occurrence of an injury, taken with
the surrounding circumstances, may permit an inference or raise a presumption of
negligence, or make out a plaintiff's prima facie case, and present a question of fact for
defendant to meet with an explanation. Where the thing that caused the injury complained
of is shown to be under the management of the defendant or his servants; and the accident,
in the ordinary course of things, would not happen if those who had management or
control used proper care, it affords reasonable evidence — in the absence of a sufficient,
reasonable and logical explanation by defendant — that the accident arose from or was
caused by the defendant's want of care. This rule is grounded on the superior logic of
ordinary human experience, and it is on the basis of such experience or common
knowledge that negligence may be deduced from the mere occurrence of the accident itself.
Hence, the rule is applied in conjunction with the doctrine of common knowledge.
For the doctrine to apply, the following requirements must be shown to exist, namely: (a)
the accident is of a kind that ordinarily does not occur in the absence of someone’s
negligence; (b) it is caused by an instrumentality within the exclusive control of the
defendant or defendants; and (c) the possibility of contributing conduct that would make
the plaintiff responsible is eliminated.30
The Court has warned in Reyes v. Sisters of Mercy Hospital, 31 however, that "res ipsa
loquitur is not a rigid or ordinary doctrine to be perfunctorily used but a rule to be
cautiously applied, depending upon the circumstances of each case."
Based on the evidence adduced by the Lanuzo heirs, negligence cannot be fairly ascribed to
the company considering that it has shown its installation of the necessary warning signs
and lights in the project site. In that context, the fatal accident was not caused by any
instrumentality within the exclusive control of the company. In contrast, Balbino had the
exclusive control of how he operated and managed his motorcycle. The records disclose that
he himself did not take the necessary precautions. As Zamora declared, Balbino overtook
another motorcycle rider at a fast speed, and in the process could not avoid hitting a
barricade at the site, causing him to be thrown off his motorcycle onto the newly cemented
road. SPO1 Corporal’s investigation report corroborated Zamora’s declaration. This
causation of the fatal injury went uncontroverted by the Lanuzo heirs.
Moreover, by the time of the accident, the project, which had commenced in September
1997, had been going on for more than a month and was already in the completion stage.
Balbino, who had passed there on a daily basis in going to and from his residence and the
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school where he then worked as the principal, was thus very familiar with the risks at the
project site. Nor could the Lanuzo heirs justly posit that the illumination was not adequate,
for it cannot be denied that Balbino’s motorcycle was equipped with headlights that would
have enabled him at dusk or night time to see the condition of the road ahead. That the
accident still occurred surely indicated that he himself did not exercise the degree of care
expected of him as a prudent motorist.
According to Dr. Abilay, the cause of death of Balbino was the fatal depressed fracture at
the back of his head, an injury that Dr. Abilay opined to be attributable to his head landing
on the cemented road after being thrown off his motorcycle. Considering that it was shown
that Balbino was not wearing any protective head gear or helmet at the time of the
accident, he was guilty of negligence in that respect. Had he worn the protective head gear
or helmet, his untimely death would not have occurred.
The RTC was correct on its conclusions and findings that the company was not negligent in
ensuring safety at the project site. All the established circumstances showed that the
proximate and immediate cause of the death of Balbino was his own negligence. Hence, the
Lanuzo heirs could not recover damages.32
WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and
SETS ASIDE the decision promulgated on August 11, 2003 by the Court of Appeals;
REINSTATES the decision rendered on October 8, 2001 by the Regional Trial Court, Branch
32, in Pili, Camarines Sur dismissing the complaint; and MAKES no pronouncements on
costs of suit.
SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice
WE CONCUR:

G.R. No. L-12986             March 31, 1966

THE SPOUSES BERNABE AFRICA and SOLEDAD C. AFRICA, and the HEIRS OF
DOMINGA ONG, petitioners-appellants,
vs.
CALTEX (PHIL.), INC., MATEO BOQUIREN and THE COURT OF APPEALS, respondents-
appellees.
Ross, Selph, Carrascoso and Janda for the respondents.
Bernabe Africa, etc. for the petitioners.
MAKALINTAL., J.:
This case is before us on a petition for review of the decision of the Court of Appeals, which
affirmed that of the Court of First Instance of Manila dismissing petitioners' second
amended complaint against respondents.
The action is for damages under Articles 1902 and 1903 of the old Civil Code. It appears
that in the afternoon of March 18, 1948 a fire broke out at the Caltex service station at the
corner of Antipolo street and Rizal Avenue, Manila. It started while gasoline was being
hosed from a tank truck into the underground storage, right at the opening of the receiving
tank where the nozzle of the hose was inserted. The fire spread to and burned several
neighboring houses, including the personal properties and effects inside them. Their
owners, among them petitioners here, sued respondents Caltex (Phil.), Inc. and Mateo
113
Boquiren, the first as alleged owner of the station and the second as its agent in charge of
operation. Negligence on the part of both of them was attributed as the cause of the fire.
The trial court and the Court of Appeals found that petitioners failed to prove negligence
and that respondents had exercised due care in the premises and with respect to the
supervision of their employees.
The first question before Us refers to the admissibility of certain reports on the fire
prepared by the Manila Police and Fire Departments and by a certain Captain Tinio of the
Armed Forces of the Philippines. Portions of the first two reports are as follows:
1. Police Department report: —
Investigation disclosed that at about 4:00 P.M. March 18, 1948, while Leandro
Flores was transferring gasoline from a tank truck, plate No. T-5292 into the
underground tank of the Caltex Gasoline Station located at the corner of Rizal
Avenue and Antipolo Street, this City, an unknown Filipino lighted a cigarette
and threw the burning match stick near the main valve of the said
underground tank. Due to the gasoline fumes, fire suddenly blazed. Quick
action of Leandro Flores in pulling off the gasoline hose connecting the truck
with the underground tank prevented a terrific explosion. However, the flames
scattered due to the hose from which the gasoline was spouting. It burned the
truck and the following accessorias and residences.
2. The Fire Department report: —
In connection with their allegation that the premises was (sic) subleased for the
installation of a coca-cola and cigarette stand, the complainants furnished this Office
a copy of a photograph taken during the fire and which is submitted herewith. it
appears in this picture that there are in the premises a coca-cola cooler and a rack
which according to information gathered in the neighborhood contained cigarettes
and matches, installed between the gasoline pumps and the underground tanks.
The report of Captain Tinio reproduced information given by a certain Benito Morales
regarding the history of the gasoline station and what the chief of the fire department had
told him on the same subject.
The foregoing reports were ruled out as "double hearsay" by the Court of Appeals and hence
inadmissible. This ruling is now assigned as error. It is contended: first, that said reports
were admitted by the trial court without objection on the part of respondents; secondly,
that with respect to the police report (Exhibit V-Africa) which appears signed by a Detective
Zapanta allegedly "for Salvador Capacillo," the latter was presented as witness but
respondents waived their right to cross-examine him although they had the opportunity to
do so; and thirdly, that in any event the said reports are admissible as an exception to the
hearsay rule under section 35 of Rule 123, now Rule 130.
The first contention is not borne out by the record. The transcript of the hearing of
September 17, 1953 (pp. 167-170) shows that the reports in question, when offered as
evidence, were objected to by counsel for each of respondents on the ground that they were
hearsay and that they were "irrelevant, immaterial and impertinent." Indeed, in the court's
resolution only Exhibits J, K, K-5 and X-6 were admitted without objection; the admission
of the others, including the disputed ones, carried no such explanation.
On the second point, although Detective Capacillo did take the witness stand, he was not
examined and he did not testify as to the facts mentioned in his alleged report (signed by
Detective Zapanta). All he said was that he was one of those who investigated "the location
114
of the fire and, if possible, gather witnesses as to the occurrence, and that he brought the
report with him. There was nothing, therefore, on which he need be cross-examined; and
the contents of the report, as to which he did not testify, did not thereby become competent
evidence. And even if he had testified, his testimony would still have been objectionable as
far as information gathered by him from third persons was concerned.
Petitioners maintain, however, that the reports in themselves, that is, without further
testimonial evidence on their contents, fall within the scope of section 35, Rule 123, which
provides that "entries in official records made in the performance of his duty by a public
officer of the Philippines, or by a person in the performance of a duty specially enjoined by
law, are prima facie evidence of the facts therein stated."
There are three requisites for admissibility under the rule just mentioned: (a) that the entry
was made by a public officer, or by another person specially enjoined by law to do so; (b)
that it was made by the public officer in the performance of his duties, or by such other
person in the performance of a duty specially enjoined by law; and (c) that the public officer
or other person had sufficient knowledge of the facts by him stated, which must have been
acquired by him personally or through official information (Moran, Comments on the Rules
of Court, Vol. 3 [1957] p. 398).
Of the three requisites just stated, only the last need be considered here. Obviously the
material facts recited in the reports as to the cause and circumstances of the fire were not
within the personal knowledge of the officers who conducted the investigation. Was
knowledge of such facts, however, acquired by them through official information? As to
some facts the sources thereof are not even identified. Others are attributed to Leopoldo
Medina, referred to as an employee at the gas station were the fire occurred; to Leandro
Flores, driver of the tank truck from which gasoline was being transferred at the time to the
underground tank of the station; and to respondent Mateo Boquiren, who could not,
according to Exhibit V-Africa, give any reason as to the origin of the fire. To qualify their
statements as "official information" acquired by the officers who prepared the reports, the
persons who made the statements not only must have personal knowledge of the facts
stated but must have the duty to give such statements for record. 1
The reports in question do not constitute an exception to the hearsay rule; the facts stated
therein were not acquired by the reporting officers through official information, not having
been given by the informants pursuant to any duty to do so.
The next question is whether or not, without proof as to the cause and origin of the fire, the
doctrine of res ipsa loquitur should apply so as to presume negligence on the part of
appellees. Both the trial court and the appellate court refused to apply the doctrine in the
instant case on the grounds that "as to (its) applicability ... in the Philippines, there seems
to he nothing definite," and that while the rules do not prohibit its adoption in appropriate
cases, "in the case at bar, however, we find no practical use for such doctrine." The
question deserves more than such summary dismissal. The doctrine has actually been
applied in this jurisdiction, in the case of Espiritu vs. Philippine Power and Development Co.
(CA-G.R. No. 3240-R, September 20, 1949), wherein the decision of the Court of Appeals
was penned by Mr. Justice J.B.L. Reyes now a member of the Supreme Court.
The facts of that case are stated in the decision as follows:
In the afternoon of May 5, 1946, while the plaintiff-appellee and other companions
were loading grass between the municipalities of Bay and Calauan, in the province of
Laguna, with clear weather and without any wind blowing, an electric transmission
115
 wire, installed and maintained by the defendant Philippine Power and Development
Co., Inc. alongside the road, suddenly parted, and one of the broken ends hit the
head of the plaintiff as he was about to board the truck. As a result, plaintiff received
the full shock of 4,400 volts carried by the wire and was knocked unconscious to the
ground. The electric charge coursed through his body and caused extensive and
serious multiple burns from skull to legs, leaving the bone exposed in some parts and
causing intense pain and wounds that were not completely healed when the case was
tried on June 18, 1947, over one year after the mishap.
The defendant therein disclaimed liability on the ground that the plaintiff had failed to
show any specific act of negligence, but the appellate court overruled the defense under the
doctrine of res ipsa loquitur. The court said:
The first point is directed against the sufficiency of plaintiff's evidence to place
appellant on its defense. While it is the rule, as contended by the appellant, that in
case of noncontractual negligence, or culpa aquiliana, the burden of proof is on the
plaintiff to establish that the proximate cause of his injury was the negligence of the
defendant, it is also a recognized principal that "where the thing which caused injury,
without fault of the injured person, is under the exclusive control of the defendant
and the injury is such as in the ordinary course of things does not occur if he having
such control use proper care, it affords reasonable evidence, in the absence of the
explanation, that the injury arose from defendant's want of care."
And the burden of evidence is shifted to him to establish that he has observed due
care and diligence. (San Juan Light & Transit Co. v. Requena, 244, U.S. 89, 56 L. ed.
680.) This rule is known by the name of res ipsa loquitur (the transaction speaks for
itself), and is peculiarly applicable to the case at bar, where it is unquestioned that
the plaintiff had every right to be on the highway, and the electric wire was under the
sole control of defendant company. In the ordinary course of events, electric wires do
not part suddenly in fair weather and injure people, unless they are subjected to
unusual strain and stress or there are defects in their installation, maintenance and
supervision; just as barrels do not ordinarily roll out of the warehouse windows to
injure passersby, unless some one was negligent. (Byrne v. Boadle, 2 H & Co. 722;
159 Eng. Reprint 299, the leading case that established that rule). Consequently, in
the absence of contributory negligence (which is admittedly not present), the fact that
the wire snapped suffices to raise a reasonable presumption of negligence in its
installation, care and maintenance. Thereafter, as observed by Chief Baron Pollock,
"if there are any facts inconsistent with negligence, it is for the defendant to prove."
It is true of course that decisions of the Court of Appeals do not lay down doctrines binding
on the Supreme Court, but we do not consider this a reason for not applying the particular
doctrine of res ipsa loquitur in the case at bar. Gasoline is a highly combustible material, in
the storage and sale of which extreme care must be taken. On the other hand, fire is not
considered a fortuitous event, as it arises almost invariably from some act of man. A case
strikingly similar to the one before Us is Jones vs. Shell Petroleum Corporation, et al., 171
So. 447:
Arthur O. Jones is the owner of a building in the city of Hammon which in the year
1934 was leased to the Shell Petroleum Corporation for a gasoline filling station. On
October 8, 1934, during the term of the lease, while gasoline was being transferred
from the tank wagon, also operated by the Shell Petroleum Corporation, to the
116
 underground tank of the station, a fire started with resulting damages to the building
owned by Jones. Alleging that the damages to his building amounted to $516.95,
Jones sued the Shell Petroleum Corporation for the recovery of that amount. The
judge of the district court, after hearing the testimony, concluded that plaintiff was
entitled to a recovery and rendered judgment in his favor for $427.82. The Court of
Appeals for the First Circuit reversed this judgment, on the ground the testimony
failed to show with reasonable certainty any negligence on the part of the Shell
Petroleum Corporation or any of its agents or employees. Plaintiff applied to this
Court for a Writ of Review which was granted, and the case is now before us for
decision.1äwphï1.ñët
In resolving the issue of negligence, the Supreme Court of Louisiana held:
Plaintiff's petition contains two distinct charges of negligence — one relating to the
cause of the fire and the other relating to the spreading of the gasoline about the
filling station.
Other than an expert to assess the damages caused plaintiff's building by the fire, no
witnesses were placed on the stand by the defendant.
Taking up plaintiff's charge of negligence relating to the cause of the fire, we find it
established by the record that the filling station and the tank truck were under the
control of the defendant and operated by its agents or employees. We further find
from the uncontradicted testimony of plaintiff's witnesses that fire started in the
underground tank attached to the filling station while it was being filled from the
tank truck and while both the tank and the truck were in charge of and being
operated by the agents or employees of the defendant, extended to the hose and tank
truck, and was communicated from the burning hose, tank truck, and escaping
gasoline to the building owned by the plaintiff.
Predicated on these circumstances and the further circumstance of defendant's
failure to explain the cause of the fire or to show its lack of knowledge of the cause,
plaintiff has evoked the doctrine of res ipsa loquitur. There are many cases in which
the doctrine may be successfully invoked and this, we think, is one of them.
Where the thing which caused the injury complained of is shown to be under the
management of defendant or his servants and the accident is such as in the ordinary
course of things does not happen if those who have its management or control use
proper care, it affords reasonable evidence, in absence of explanation by defendant,
that the accident arose from want of care. (45 C.J. #768, p. 1193).
This statement of the rule of res ipsa loquitur has been widely approved and adopted
by the courts of last resort. Some of the cases in this jurisdiction in which the
doctrine has been applied are the following, viz.: Maus v. Broderick, 51 La. Ann.
1153, 25 So. 977; Hebert v. Lake Charles Ice, etc., Co., 111 La. 522, 35 So. 731, 64
L.R.A. 101, 100 Am. St. Rep. 505; Willis v. Vicksburg, etc., R. Co., 115 La. 63, 38 So.
892; Bents v. Page, 115 La. 560, 39 So. 599.
The principle enunciated in the aforequoted case applies with equal force here. The gasoline
station, with all its appliances, equipment and employees, was under the control of
appellees. A fire occurred therein and spread to and burned the neighboring houses. The
persons who knew or could have known how the fire started were appellees and their
employees, but they gave no explanation thereof whatsoever. It is a fair and reasonable
inference that the incident happened because of want of care.
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In the report submitted by Captain Leoncio Mariano of the Manila Police Department (Exh.
X-1 Africa) the following appears:
Investigation of the basic complaint disclosed that the Caltex Gasoline Station
complained of occupies a lot approximately 10 m x 10 m at the southwest corner of
Rizal Avenue and Antipolo. The location is within a very busy business district near
the Obrero Market, a railroad crossing and very thickly populated neighborhood
where a great number of people mill around t
until
gasoline
tever be theWactjvities of these peopleor lighting a cigarette cannot be excluded and
this constitute a secondary hazard to its operation which in turn endangers the
entire neighborhood to conflagration.
Furthermore, aside from precautions already taken by its operator the concrete walls
south and west adjoining the neighborhood are only 2-1/2 meters high at most and
cannot avoid the flames from leaping over it in case of fire.
Records show that there have been two cases of fire which caused not only material
damages but desperation and also panic in the neighborhood.
Although the soft drinks stand had been eliminated, this gasoline service station is
also used by its operator as a garage and repair shop for his fleet of taxicabs
numbering ten or more, adding another risk to the possible outbreak of fire at this
already small but crowded gasoline station.
The foregoing report, having been submitted by a police officer in the performance of his
duties on the basis of his own personal observation of the facts reported, may properly be
considered as an exception to the hearsay rule. These facts, descriptive of the location and
objective circumstances surrounding the operation of the gasoline station in question,
strengthen the presumption of negligence under the doctrine of res ipsa loquitur, since on
their face they called for more stringent measures of caution than those which would
satisfy the standard of due diligence under ordinary circumstances. There is no more
eloquent demonstration of this than the statement of Leandro Flores before the police
investigator. Flores was the driver of the gasoline tank wagon who, alone and without
assistance, was transferring the contents thereof into the underground storage when the
fire broke out. He said: "Before loading the underground tank there were no people, but
while the loading was going on, there were people who went to drink coca-cola (at the coca-
cola stand) which is about a meter from the hole leading to the underground tank." He
added that when the tank was almost filled he went to the tank truck to close the valve,
and while he had his back turned to the "manhole" he, heard someone shout "fire."
Even then the fire possibly would not have spread to the neighboring houses were it not for
another negligent omission on the part of defendants, namely, their failure to provide a
concrete wall high enough to prevent the flames from leaping over it. As it was the concrete
wall was only 2-1/2 meters high, and beyond that height it consisted merely of galvanized
iron sheets, which would predictably crumple and melt when subjected to intense heat.
Defendants' negligence, therefore, was not only with respect to the cause of the fire but also
with respect to the spread thereof to the neighboring houses.
There is an admission on the part of Boquiren in his amended answer to the second
amended complaint that "the fire was caused through the acts of a stranger who, without
authority, or permission of answering defendant, passed through the gasoline station and
118
negligently threw a lighted match in the premises." No evidence on this point was adduced,
but assuming the allegation to be true — certainly any unfavorable inference from the
admission may be taken against Boquiren — it does not extenuate his negligence. A
decision of the Supreme Court of Texas, upon facts analogous to those of the present case,
states the rule which we find acceptable here. "It is the rule that those who distribute a
dangerous article or agent, owe a degree of protection to the public proportionate to and
commensurate with a danger involved ... we think it is the generally accepted rule as
applied to torts that 'if the effects of the actor's negligent conduct actively and continuously
operate to bring about harm to another, the fact that the active and substantially
simultaneous operation of the effects of a third person's innocent, tortious or criminal act is
also a substantial factor in bringing about the harm, does not protect the actor from
liability.' (Restatement of the Law of Torts, vol. 2, p. 1184, #439). Stated in another way,
"The intention of an unforeseen and unexpected cause, is not sufficient to relieve a
wrongdoer from consequences of negligence, if such negligence directly and proximately
cooperates with the independent cause in the resulting injury." (MacAfee, et al. vs. Traver's
Gas Corporation, 153 S.W. 2nd 442.)
The next issue is whether Caltex should be held liable for the damages caused to
appellants. This issue depends on whether Boquiren was an independent contractor, as
held by the Court of Appeals, or an agent of Caltex. This question, in the light of the facts
not controverted, is one of law and hence may be passed upon by this Court. These facts
are: (1) Boquiren made an admission that he was an agent of Caltex; (2) at the time of the
fire Caltex owned the gasoline station and all the equipment therein; (3) Caltex exercised
control over Boquiren in the management of the state; (4) the delivery truck used in
delivering gasoline to the station had the name of CALTEX painted on it; and (5) the license
to store gasoline at the station was in the name of Caltex, which paid the license fees.
(Exhibit T-Africa; Exhibit U-Africa; Exhibit X-5 Africa; Exhibit X-6 Africa; Exhibit Y-Africa).
In Boquiren's amended answer to the second amended complaint, he denied that he
directed one of his drivers to remove gasoline from the truck into the tank and alleged that
the "alleged driver, if one there was, was not in his employ, the driver being an employee of
the Caltex (Phil.) Inc. and/or the owners of the gasoline station." It is true that Boquiren
later on amended his answer, and that among the changes was one to the effect that he
was not acting as agent of Caltex. But then again, in his motion to dismiss appellants'
second amended complaint the ground alleged was that it stated no cause of action since
under the allegations thereof he was merely acting as agent of Caltex, such that he could
not have incurred personal liability. A motion to dismiss on this ground is deemed to be an
admission of the facts alleged in the complaint.
Caltex admits that it owned the gasoline station as well as the equipment therein, but
claims that the business conducted at the service station in question was owned and
operated by Boquiren. But Caltex did not present any contract with Boquiren that would
reveal the nature of their relationship at the time of the fire. There must have been one in
existence at that time. Instead, what was presented was a license agreement manifestly
tailored for purposes of this case, since it was entered into shortly before the expiration of
the one-year period it was intended to operate. This so-called license agreement (Exhibit 5-
Caltex) was executed on November 29, 1948, but made effective as of January 1, 1948 so
as to cover the date of the fire, namely, March 18, 1948. This retroactivity provision is quite
significant, and gives rise to the conclusion that it was designed precisely to free Caltex
119
from any responsibility with respect to the fire, as shown by the clause that Caltex "shall
not be liable for any injury to person or property while in the property herein licensed, it
being understood and agreed that LICENSEE (Boquiren) is not an employee, representative
or agent of LICENSOR (Caltex)."
But even if the license agreement were to govern, Boquiren can hardly be considered an
independent contractor. Under that agreement Boquiren would pay Caltex the purely
nominal sum of P1.00 for the use of the premises and all the equipment therein. He could
sell only Caltex Products. Maintenance of the station and its equipment was subject to the
approval, in other words control, of Caltex. Boquiren could not assign or transfer his rights
as licensee without the consent of Caltex. The license agreement was supposed to be from
January 1, 1948 to December 31, 1948, and thereafter until terminated by Caltex upon two
days prior written notice. Caltex could at any time cancel and terminate the agreement in
case Boquiren ceased to sell Caltex products, or did not conduct the business with due
diligence, in the judgment of Caltex. Termination of the contract was therefore a right
granted only to Caltex but not to Boquiren. These provisions of the contract show the
extent of the control of Caltex over Boquiren. The control was such that the latter was
virtually an employee of the former.
Taking into consideration the fact that the operator owed his position to the company
and the latter could remove him or terminate his services at will; that the service
station belonged to the company and bore its tradename and the operator sold only
the products of the company; that the equipment used by the operator belonged to
the company and were just loaned to the operator and the company took charge of
their repair and maintenance; that an employee of the company supervised the
operator and conducted periodic inspection of the company's gasoline and service
station; that the price of the products sold by the operator was fixed by the company
and not by the operator; and that the receipts signed by the operator indicated that
he was a mere agent, the finding of the Court of Appeals that the operator was an
agent of the company and not an independent contractor should not be disturbed.
To determine the nature of a contract courts do not have or are not bound to rely
upon the name or title given it by the contracting parties, should thereby a
controversy as to what they really had intended to enter into, but the way the
contracting parties do or perform their respective obligations stipulated or agreed
upon may be shown and inquired into, and should such performance conflict with
the name or title given the contract by the parties, the former must prevail over the
latter. (Shell Company of the Philippines, Ltd. vs. Firemens' Insurance Company of
Newark, New Jersey, 100 Phil. 757).
The written contract was apparently drawn for the purpose of creating the apparent
relationship of employer and independent contractor, and of avoiding liability for the
negligence of the employees about the station; but the company was not satisfied to
allow such relationship to exist. The evidence shows that it immediately assumed
control, and proceeded to direct the method by which the work contracted for should
be performed. By reserving the right to terminate the contract at will, it retained the
means of compelling submission to its orders. Having elected to assume control and
to direct the means and methods by which the work has to be performed, it must be
held liable for the negligence of those performing service under its direction. We think

120
 the evidence was sufficient to sustain the verdict of the jury. (Gulf Refining Company
v. Rogers, 57 S.W. 2d, 183).
Caltex further argues that the gasoline stored in the station belonged to Boquiren. But no
cash invoices were presented to show that Boquiren had bought said gasoline from Caltex.
Neither was there a sales contract to prove the same.
As found by the trial court the Africas sustained a loss of P9,005.80, after deducting the
amount of P2,000.00 collected by them on the insurance of the house. The deduction is
now challenged as erroneous on the ground that Article 2207 of the New Civil Code, which
provides for the subrogation of the insurer to the rights of the insured, was not yet in effect
when the loss took place. However, regardless of the silence of the law on this point at that
time, the amount that should be recovered be measured by the damages actually suffered,
otherwise the principle prohibiting unjust enrichment would be violated. With respect to
the claim of the heirs of Ong P7,500.00 was adjudged by the lower court on the basis of the
assessed value of the property destroyed, namely, P1,500.00, disregarding the testimony of
one of the Ong children that said property was worth P4,000.00. We agree that the court
erred, since it is of common knowledge that the assessment for taxation purposes is not an
accurate gauge of fair market value, and in this case should not prevail over positive
evidence of such value. The heirs of Ong are therefore entitled to P10,000.00.
Wherefore, the decision appealed from is reversed and respondents-appellees are held liable
solidarily to appellants, and ordered to pay them the aforesaid sum of P9,005.80 and
P10,000.00, respectively, with interest from the filing of the complaint, and costs.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Regala, Bengzon, J.P.,
Zaldivar and Sanchez, JJ., concur.
Dizon, J., took no part.
Footnotes
1
Thus, for instance, the record of a justice of the peace of marriage certificates
transmitted to him by the corresponding priest is admissible. The justice of the peace
has no personal knowledge of the marriage, but it was reported to him by a priest
whose duty it was, under the law, to make the report for record purposes. Similarly,
the tax records of a provincial assessor are admissible even if the assessments were
made by subordinates. So also are entries of marriages made by a municipal
treasurer in his official record, because he acquires knowledge thereof by virtue of a
statutory duty on the part of those authorized to solemnize marriages to send a copy
of each marriage contract solemnized by them to the local civil registrar. (See Moran,
Comments on the Rules of Court, Vol. 3 [1957] pp. 389-395.)

G.R. No. 147746 October 25, 2005

PERLA COMPANIA DE SEGUROS, INC. and BIENVENIDO S. PASCUAL, Petitioners,
vs.
SPS. GAUDENCIO SARANGAYA III and PRIMITIVA B. SARANGAYA, Respondents.
DECISION
CORONA, J.:
This is an appeal by certiorari under Rule 45 of the 1997 Rules of Civil Procedure seeking
to annul the decisions of the Court of Appeals (CA) dated June 29, 2000 and March 31,

121
2001, respectively, which affirmed the decision of the Regional Trial Court (RTC), Branch
21 of Santiago, Isabela.
In 1986, respondent spouses Gaudencio Sarangaya III and Primitiva Sarangaya erected a
semi-concrete, semi-narra, one-storey commercial building fronting the provincial road of
Santiago, Isabela. The building was known as "Super A Building" and was subdivided into
three doors, each of which was leased out. The two-storey residence of the Sarangayas was
behind the second and third doors of the building. On the left side of the commercial
building stood the office of the Matsushita Electric Philippine Corporation (Matsushita).
In 1988, petitioner Perla Compania de Seguros, Inc. (petitioner-corporation), through its
branch manager and co-petitioner Bienvenido Pascual, entered into a contract of lease of
the first door of the "Super A Building," abutting the office of Matsushita. Petitioner-
corporation renovated its rented space and divided it into two. The left side was converted
into an office while the right was used by Pascual as a garage for a 1981 model 4-door Ford
Cortina, a company-provided vehicle he used in covering the different towns within his area
of supervision.
On July 7, 1988, Pascual left for San Fernando, Pampanga but did not bring the car with
him. Three days later, he returned to Santiago and, after checking his appointments the
next day, decided to "warm up" the car. When he pulled up the handbrake and switched on
the ignition key, the engine made an "odd" sound and did not start. Thinking it was just the
gasoline percolating into the engine, he again stepped on the accelerator and started the
car. This revved the engine but petitioner again heard an unusual sound. He then saw a
small flame coming out of the engine. Startled, he turned it off, alighted from the vehicle
and started to push it out of the garage when suddenly, fire spewed out of its rear
compartment and engulfed the whole garage. Pascual was trapped inside and suffered
burns on his face, legs and arms.
Meanwhile, respondents were busy watching television when they heard two loud
explosions. The smell of gasoline permeated the air and, in no time, fire spread inside their
house, destroying all their belongings, furniture and appliances.
The city fire marshall conducted an investigation and thereafter submitted a report to the
provincial fire marshall. He concluded that the fire was "accidental." The report also
disclosed that petitioner-corporation had no fire permit as required by law.
Based on the same report, a criminal complaint for "Reckless Imprudence Resulting to (sic)
Damage in (sic) Property"1 was filed against petitioner Pascual. On the other hand,
petitioner-corporation was asked to pay the amount of ₱7,992,350, inclusive of the value of
the commercial building. At the prosecutor’s office, petitioner Pascual moved for the
withdrawal of the complaint, which was granted.
Respondents later on filed a civil complaint based on quasi-delict against petitioners for a
"sum of money and damages," alleging that Pascual acted with gross negligence while
petitioner-corporation lacked the required diligence in the selection and supervision of
Pascual as its employee. They prayed for payment of the following damages:
1. ₱2,070,000.00 - representing the value of the 2-storey residential building and the 3-
door apartment;
2. ₱5,922,350.00 - representing the value of the jewelries, appliances, [furniture], fixtures
and cash;
3. ₱8,300.00 – a month for [lost rental] income from July 1995 until such time that the
premises is restored to its former condition or payment for its value, whichever comes first;
122
4. ₱2,000,000.00 – for moral damages;
5. ₱1,000,000.00 – for exemplary damages, and
6. Attorney’s fees equivalent to 15% of the total amount to be awarded to the plaintiffs. 2
During the trial, respondents presented witnesses who testified that a few days before the
incident, Pascual was seen buying gasoline in a container from a nearby gas station. He
then placed the container in the rear compartment of the car.
In his answer, Pascual insisted that the fire was purely an accident, a caso fortuito, hence,
he was not liable for damages. He also denied putting a container of gasoline in the car’s
rear compartment. For its part, petitioner-corporation refused liability for the accident on
the ground that it exercised due diligence of a good father of a family in the selection and
supervision of Pascual as its branch manager.
After the trial, the court a quo ruled in favor of respondents. The decretal portion of the
decision read:
WHEREFORE, in the light of the foregoing considerations judgment is hereby rendered
ORDERING the defendants, Bienvenido Pascual and Perla Compania de Seguros, Inc. to
pay jointly and solidarily to the plaintiffs spouses Gaudencio and Primitiva Sarangaya the
total sum of Two Million Nine Hundred Four Thousand Eight Hundred and Eighty Pesos
([₱]2,904,880.00) as actual damages with legal interest thereon from December 12, 1995
until fully paid.3 (emphasis supplied)
The court a quo declared that, although the respondents failed to prove the precise cause of
the fire that engulfed the garage, Pascual was nevertheless negligent based on the doctrine
of res ipsa loquitur.4 It did not, however, categorically rule that the gasoline container
allegedly placed in the rear compartment of the car caused the fire. The trial court instead
declared that both petitioners failed to adduce sufficient evidence to prove that they
employed the necessary care and diligence in the upkeep of the car. 5 Contrary to the claims
of petitioner-corporation, the trial court also found that it failed to employ the diligence of a
good father of a family, as required by law, in the selection and supervision of Pascual.
With respect to the amount of damages, the trial court awarded to respondents no more
than their claim for actual damages covering the cost of the 2-storey residential building
and the commercial building, including their personal properties. It explained:
According to the plaintiff Gaudencio Sarangaya III, he made a list of what was lost. His list
includes the commercial building that was burned which he valued at ₱2,070,000.00. The
defendants take exception to the value given by the plaintiff and for this purpose they
submitted the tax declaration of the building which states that the market value is
₱183,770.00. The Court takes judicial notice that the valuation appearing on the tax
declaration of property is always lower [than] the correct value thereof. Considering that the
building that was burned was a two-storey residential house with a commercial building
annex with a total floor area of 241 square meters as stated in the tax declaration, mostly
concrete mixed with narra and other lumber materials, the value given by the plaintiffs of
₱2,070,000.00 is reasonable and credible and it shall be awarded to the plaintiffs.
The other items listed are assorted [furniture] and fixtures totaling ₱307,000.00 assorted
appliances worth ₱358,350.00; two filing cabinets worth ₱7,000.00 and clothing and other
personal effects costing ₱350,000.00, household utensils costing ₱15,000.00. The Court
finds them reasonable and credible considering the social and financial stature of the
plaintiffs who are businessmen. There could be no question that they were able to acquire
and own quite a lot of home furnishings and personal belongings. The costing however is
123
high considering that these belongings were already used for quite some time so a 20%
depreciation should be equitably deducted from the cost of acquisition submitted by
plaintiffs. Thus, the total amount recoverable would be ₱1,037,350.00 less 20% or a total of
₱829,880.00. The ₱5,000.00 representing foodstock can also be ordered paid to the
plaintiffs. x x x.6
On appeal to the Court of Appeals, the appellate court again ruled in favor of respondents
but modified the amount of damages awarded by the trial court. It held:
x x x the Decision of the Court a quo is AFFIRMED, with the modification that the
Appellants are hereby ordered to pay the Appellees, jointly and severally, the total amount
of ₱600,000.00 by way of nominal damages under Articles 2222 and 2223 of the New Civil
Code, with interest thereon, at the rate of 6% per annum from the date of the Decision of
this Court.7
The appellate court was in accord with the trial court’s findings that the doctrine of res ipsa
loquitur was correctly applied in determining the liability of Pascual and that petitioner-
corporation, as the employer, was vicariously liable to respondents. Nonetheless, for
respondents’ failure to substantiate their actual loss, the appellate court granted nominal
damages of ₱600,000 to them.
Petitioners and respondents filed their respective motions for reconsideration.
In their MR, petitioners contested the findings of fact of the appellate court. They denied
any liability whatsoever to respondents but this was rejected by the CA for lack of merit.
Thus, the present appeal.
Respondents, on the other hand, argued in their MR that the award of nominal damages
was erroneous. They prayed that, in lieu of the award of nominal damages, the case should
instead be remanded to the trial court for reception of additional evidence on their claim for
actual damages. The CA granted respondents’ MR. Hence they did not appeal the CA’s
decision to us. According to the CA:
Anent Plaintiffs-Appellees’ plea that, in lieu of the Court’s award of nominal damages, the
case be remanded to the Court a quo, in the interest of justice, to enable them to adduce
evidence to prove their claim for actual damages, we find the same meritorious.
Accordingly, the Decision of the Court is hereby amended to read as follows:
IN THE LIGHT OF ALL THE FOREGOING, the Decision of the Court a quo appealed from is
AFFIRMED. The award of nominal damages is set aside. Let the records be remanded
to the Court a quo for the reception of additional evidence by the Plaintiffs-Appellees
and the Defendants-Appellants anent Plaintiffs-Appellees’ claim for actual
damages.8 (emphasis supplied)
Via this petition, petitioners ascribe the following errors to the appellate court:
(a) THE COURT OF APPEALS ERRED IN APPLYING THE DOCTRINE OF ["RES IPSA
LOQUITUR"] IN THE PRESENT CASE;
(b) THE COURT OF APPEALS ERRED WHEN IT FOUND PERLA NEGLIGENT IN THE
SUPERVISION OF PASCUAL, AND CONSEQUENTLY, VICARIOUSLY LIABLE FOR THE FIRE
BECAUSE PERLA FAILED TO ADDUCE EVIDENCE OF SUPERVISION OF EMPLOYEE’S
CARE AND UPKEEP OF COMPANY VEHICLES REQUIRED BY THE SUPREME COURT ON
TRANSPORTATION COMPANIES; AND
(c) THE COURT OF APPEALS ERRED WHEN IT ORDERED THE REMAND OF THE CASE
TO RTC ISABELA FOR RECEPTION OF ADDITIONAL EVIDENCE BY THE SARANGAYA
SPOUSES ON THEIR CLAIM FOR ACTUAL DAMAGES.9
124
Res ipsa loquitur is a Latin phrase which literally means "the thing or the transaction
speaks for itself."10 It relates to the fact of an injury that sets out an inference to the cause
thereof or establishes the plaintiff’s prima facie case. 11 The doctrine rests on inference and
not on presumption.12 The facts of the occurrence warrant the supposition of negligence
and they furnish circumstantial evidence of negligence when direct evidence is lacking. 13
The doctrine is based on the theory that the defendant either knows the cause of the
accident or has the best opportunity of ascertaining it and the plaintiff, having no
knowledge thereof, is compelled to allege negligence in general terms. 14 In such instance,
the plaintiff relies on proof of the happening of the accident alone to establish negligence. 15
The doctrine provides a means by which a plaintiff can pin liability on a defendant who, if
innocent, should be able to explain the care he exercised to prevent the incident
complained of. Thus, it is the defendant’s responsibility to show that there was no
negligence on his part.16
To sustain the allegation of negligence based on the doctrine of res ipsa loquitur, the
following requisites must concur:
1) the accident is of a kind which does not ordinarily occur unless someone is negligent;
2) the cause of the injury was under the exclusive control of the person in charge and
3) the injury suffered must not have been due to any voluntary action or contribution on
the part of the person injured.17
Under the first requisite, the occurrence must be one that does not ordinarily occur unless
there is negligence. "Ordinary" refers to the usual course of events. 18 Flames spewing out of
a car engine, when it is switched on, is obviously not a normal event. Neither does an
explosion usually occur when a car engine is revved. Hence, in this case, without any direct
evidence as to the cause of the accident, the doctrine of res ipsa loquitur comes into play
and, from it, we draw the inference that based on the evidence at hand, someone was in
fact negligent and responsible for the accident.
The test to determine the existence of negligence in a particular case may be stated as
follows: did the defendant in committing the alleged negligent act, use reasonable care and
caution which an ordinarily prudent person in the same situation would have employed?
19
 If not, then he is guilty of negligence.
Here, the fact that Pascual, as the caretaker of the car, failed to submit any proof that he
had it periodically checked (as its year-model and condition required) revealed his
negligence. A prudent man should have known that a 14-year-old car, constantly used in
provincial trips, was definitely prone to damage and other defects. For failing to prove care
and diligence in the maintenance of the vehicle, the necessary inference was that Pascual
had been negligent in the upkeep of the car.
Pascual attempted to exculpate himself from liability by insisting that the incident was
a caso fortuito. We disagree.
The exempting circumstance of caso fortuito may be availed only when: (a) the cause of the
unforeseen and unexpected occurrence was independent of the human will; (b) it was
impossible to foresee the event which constituted the caso fortuito or, if it could be
foreseen, it was impossible to avoid; (c) the occurrence must be such as to render it
impossible to perform an obligation in a normal manner and (d) the person tasked to
perform the obligation must not have participated in any course of conduct that aggravated
the accident.20

125
In fine, human agency must be entirely excluded as the proximate cause or contributory
cause of the injury or loss. 21 In a vehicular accident, for example, a mechanical defect will
not release the defendant from liability if it is shown that the accident could have been
prevented had he properly maintained and taken good care of the vehicle. 22
The circumstances on record do not support the defense of Pascual. Clearly, there was
no caso fortuito because of his want of care and prudence in maintaining the car.
Under the second requisite, the instrumentality or agency that triggered the occurrence
must be one that falls under the exclusive control of the person in charge thereof. In this
case, the car where the fire originated was under the control of Pascual. Being its caretaker,
he alone had the responsibility to maintain it and ensure its proper functioning. No other
person, not even the respondents, was charged with that obligation except him.
Where the circumstances which caused the accident are shown to have been under the
management or control of a certain person and, in the normal course of events, the incident
would not have happened had that person used proper care, the inference is that it
occurred because of lack of such care. 23 The burden of evidence is thus shifted to defendant
to establish that he observed all that was necessary to prevent the accident from
happening. In this aspect, Pascual utterly failed.
Under the third requisite, there is nothing in the records to show that respondents
contributed to the incident. They had no access to the car and had no responsibility
regarding its maintenance even if it was parked in a building they owned.
On the second assigned error, we find no reason to reverse the decision of the Court of
Appeals. The relationship between the two petitioners was based on the principle of pater
familias according to which the employer becomes liable to the party aggrieved by its
employee if he fails to prove due diligence of a good father of a family in the selection and
supervision of his employees. 24 The burden of proof that such diligence was observed
devolves on the employer who formulated the rules and procedures for the selection and
hiring of his employees.
In the selection of prospective employees, employers are required to examine them as to
their qualifications, experience and service records. 25 While the petitioner-corporation does
not appear to have erred in considering Pascual for his position, its lack of supervision over
him made it jointly and solidarily liable for the fire.
In the supervision of employees, the employer must formulate standard operating
procedures, monitor their implementation and impose disciplinary measures for the breach
thereof.26 To fend off vicarious liability, employers must submit concrete proof, including
documentary evidence, that they complied with everything that was incumbent on
them.27 Here, petitioner-corporation’s evidence hardly included any rule or regulation that
Pascual should have observed in performing his functions. It also did not have any
guidelines for the maintenance and upkeep of company property like the vehicle that
caught fire. Petitioner-corporation did not require periodic reports on or inventories of its
properties either. Based on these circumstances, petitioner-corporation clearly did not exert
effort to be apprised of the condition of Pascual’s car or its serviceability.
Petitioner-corporation’s argument that the liability attached to employers only applies in
cases involving the supervision of employees in the transportation business is incorrect.
Article 2180 of the Civil Code states that employers shall be liable for the damage caused
by their employees. The liability is imposed on all those who by their industry, profession or

126
other enterprise have other persons in their service or supervision. 28 Nowhere does it state
that the liability is limited to employers in the transportation business.
WHEREFORE, the petition is hereby DENIED and the
decision29 of the Court of Appeals affirmed in toto.
Costs against petitioners.
SO ORDERED.

G.R. No. 73998 November 14, 1988

PEDRO T. LAYUGAN, petitioner,
vs.
INTERMEDIATE APPELLATE COURT, GODOFREDO ISIDRO, and TRAVELLERS MULTI-
INDEMNITY CORPORATION, respondents.
Edralin S. Mateo for petitioner.
Orlando L. Espinas for respondent Travellers Multi-Indemnity Corp.
Roberto T. Vallarta for respondent Godofredo Isidro.

SARMIENTO, J.:
Assailed in this petition for review on certiorari are 1) the decision 1 of the then
Intermediate Appellate Court 2 in AC-G.R. CV No. 01055, entitled "Pedro T. Layugan,
Plaintiff-Appellee, versus Godofredo Isidro, Defendant-Appellant and Third-Party Plaintiff-
Appellee, versus Travellers Multi-Indemnity Corporation, Third Party Defendant- Appellant,
"which reversed and set aside the decision 3 of the Regional Trial Court, Third Judicial
Region, Branch XXVI, Cabanatuan City, and also dismissed the complaint, third party
complaint, and the counter claims of the parties and 2) the resolution 4 denying the
plaintiff-appellee's (herein petitioner) motion for reconsideration, for lack of merit.
The findings of fact by the trial court which were adopted by the appellate court are as
follows: 5
xxx xxx xxx
Pedro T. Layugan filed an action for damages against Godofredo Isidro, alleging
that on May 15, 1979 while at Baretbet, Bagabag, Nueva Vizcaya, the Plaintiff
and a companion were repairing the tire of their cargo truck with Plate No. SU-
730 which was parked along the right side of the National Highway; that
defendant's truck bearing Plate No. PW-583, driven recklessly by Daniel
Serrano bumped the plaintiff, that as a result, plaintiff was injured and
hospitalized at Dr. Paulino J. Garcia Research and Medical Center and the Our
Lady of Lourdes Hospital; that he spent TEN THOUSAND PESOS (Pl0,000.00)
and will incur more expenses as he recuperates from said injuries; that
because of said injuries he would be deprived of a lifetime income in the sum of
SEVENTY THOUSAND PESOS (P70,000.00); and that he agreed to pay his
lawyer the sum of TEN THOUSAND PESOS (Pl0,000.00).
As prayed for by the plaintiffs counsel, the Court declared the defendant in
default on October 12, 1979, and plaintiff's evidence was received ex-parte on
January 11, 1978 and February 19, 1980. The decision on behalf of the
plaintiff was set aside to give a chance to the defendant to file his answer and
later on, a third-party complaint.
127
Defendant admitted his ownership of the vehicle involved in the accident driven
by Daniel Serrano. Defendant countered that the plaintiff was merely a
bystander, not a truck helper being a brother-in-law law of the driver of said
truck; that the truck allegedly being repaired was parked, occupying almost
half of the right lane towards Solano, Nueva Vizcaya, right after the curve; that
the proximate cause of the incident was the failure of the driver of the parked
truck in installing the early warning device, hence the driver of the parked car
should be liable for damages sustained by the truck of the herein defendant in
the amount of more than P20,000.00; that plaintiff being a mere bystander and
hitchhiker must suffer all the damages he incurred. By way of counterclaim
defendant alleged that due to plaintiffs baseless complaint he was constrained
to engage the services of counsel for P5,000.00 and P200.00 per court
appearance; that he suffered sleepless nights, humiliation, wounded feelings
which may be estimated at P30.000.00.
On May 29, 1981, a third-party complaint was filed by the defendant against
his insurer, the Travellers Multi Indemnity Corporation; that the third-party
plaintiff, without admitting his liability to the plaintiff, claimed that the third-
party defendant is liable to the former for contribution, indemnity and
subrogation by virtue of their contract under Insurance Policy No. 11723 which
covers the insurer's liability for damages arising from death, bodily injuries and
damage to property.
Third-party defendant answered that, even assuming that the subject matter of
the complaint is covered by a valid and existing insurance policy, its liability
shall in no case exceed the limit defined under the terms and conditions stated
therein; that the complaint is premature as no claim has been submitted to the
third party defendant as prescribed under the Insurance Code; that the
accident in question was approximately caused by the carelessness and gross
negligence of the plaintiff-, that by reason of the third-party complaint, third-
party defendant was constrained to engage the services of counsel for a fee of
P3,000.00.
Pedro Layugan declared that he is a married man with one (1) child. He was
employed as security guard in Mandaluyong, Metro Manila, with a salary of SIX
HUNDRED PESOS (600.00) a month. When he is off-duty, he worked as a
truck helper and while working as such, he sustained injuries as a result of the
bumping of the cargo truck they were repairing at Baretbet, Bagabag, Nueva
Vizcaya by the driver of the defendant. He used to earn TWO HUNDRED
PESOS (P200.00) to THREE HUNDRED PESOS (P300.00) monthly, at the rate
of ONE HUNDRED PESOS (Pl00.00) per trip. Due to said injuries, his left leg
was amputated so he had to use crutches to walk. Prior to the incident, he
supported his family sufficiently, but after getting injured, his family is now
being supported by his parents and brother.
GODOFREDO ISIDRO, defendant/third-party plaintiff, testified that his truck
involved in this vehicular accident is insured with the Travellers Multi
Indemnity Corporation covering own damage and third-party liability, under
vehicle policy No. 11723 (Exh. "1") dated May 30, 1978; that after he filed the

128
 insurance claim the insurance company paid him the sum of P18,000.00 for
the damages sustained by this truck but not the third party liability.
DANIEL SERRANO, defendant driver, declared that he gave a statement before
the municipal police of Bagabag, Nueva Vizcaya on May 16, 1979; that he knew
the responsibilities of a driver; that before leaving, he checked the truck. The
truck owner used to instruct him to be careful in driving. He bumped the truck
being repaired by Pedro Layugan, plaintiff, while the same was at a stop
position. From the evidence presented, it has been established clearly that the
injuries sustained by the plaintiff was caused by defendant's driver, Daniel
Serrano. The police report confirmed the allegation of the plaintiff and admitted
by Daniel Serrano on cross-examination. The collision dislodged the jack from
the parked truck and pinned the plaintiff to the ground. As a result thereof,
plaintiff sustained injuries on his left forearm and left foot. The left leg of the
plaintiff from below the knee was later on amputated (Exh. "C") when gangrene
had set in, thereby rendering him incapacitated for work depriving him of his
income. (pp. 118 to 120, Record on Appeal.)
xxx xxx xxx
Upon such findings, amply supported by the evidence on record, the trial court rendered its
decision, the dispositive part of which reads as follows: 6
WHEREFORE, premises considered, the defendant is hereby ordered:
a) To pay the plaintiff SEVENTY THOUSAND (P70,000.00) PESOS actual and
compensatory damages;
b) TWO THOUSAND (P2,000.00) PESOS for attorney's fees;
c) FIVE THOUSAND (P5,000.00) PESOS for moral damages; and
d) To pay the costs of this suit. On the third-party complaint, the third-party
defendant is ordered to indemnify the defendant/third party plaintiff-.
a) The sum of FIFTY THOUSAND (P50,000.00) PESOS for actual and
compensatory damages; and
b) The costs of this suit.
The Intermediate Appellate Court as earlier stated reversed the decision of the trial court
and dismissed the complaint, the third-party complaint, and the counter- claims of both
appellants. 7
Hence, this petition.
The petitioner alleges the following errors. 8
1. WHETHER UPON THE GIVEN FACTS, THE INTERMEDIATE APPELLATE
COURT ACTED CORRECTLY IN REVERSING AND SETTING ASIDE AND
DISMISSING THE PLAINTIFF-APPELLEE'S COMPLAINT.
2. WHETHER THE INTERMEDIATE APPELLATE COURT ACTED CORRECTLY
IN APPLYING THE DOCTRINE OF "RES IPSA LOQUITUR" WITH PROPER
JURIS- PRUDENTIAL (sic) BASIS.
The crux of the controversy lies in the correctness or error of the decision of the respondent
court finding the petitioner negligent under the doctrine of Res ipsa loquitur (The thing
speaks for itself).<äre||anº•1àw> Corollary thereto, is the question as to who is negligent,
if the doctrine is inapplicable.
The respondent corporation stresses that the issues raised in the petition being factual, the
same is not reviewable by this Court in a petition for review by certiorari. 9
129
Indeed, it is an elementary rule in the review of decisions of the Court of Appeals that its
findings of fact are entitled to great respect and will not ordinarily be disturbed by this
Court. 10 For if we have to review every question of fact elevated to us, we would hardly
have any more time left for the weightier issues compelling and deserving our preferential
attention.11 Be that as it may, this rule is not inflexible. Surely there are established
exceptions 12 —when the Court should review and rectify the findings of fact of the lower
court, such as:
1) when the conclusion is a finding grounded entirely on speculation, surmise, or
conjecture; 2) the inference made is manifestly mistaken; 3) there is grave abuse of
discretion; 4) the judgment is based on misapprehension of facts; 5) the Court of Appeals
went beyond the issues of the case if the findings are contrary to the admission of both the
appellant and the appellee; 6) the findings of the Court of Appeals are contrary to those of
the trial court; 7) the said findings of fact are conclusions without citation of specific
evidence on which they are based; 8) the facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the respondents; and 9) when the
findings of fact of the Court of Appeals are premised on the absence of evidence and are
contradicted on record.
Exceptions 1, 2, 4, 6, 7, and 9 obtain in the instant case to warrant a deviation from the
general rule.
From its finding that the parked truck was loaded with ten (10) big round logs 13 the Court
of Appeals inferred that because of its weight the truck could not have been driven to the
shoulder of the road and concluded that the same was parked on a portion of the road 14 at
the time of the accident. Consequently, the respondent court inferred that the mishap was
due to the negligence of the driver of the parked truck. 15 The inference or conclusion is
manifestly erroneous. In a large measure, it is grounded on speculation, surmise, or
conjecture. How the respondent court could have reversed the finding of the trial court that
a warning device was installed 16 escapes us because it is evident from the record that
really such a device, in the form of a lighted kerosene lamp, was installed by the driver of
the parked truck three to four meters from the rear of his parked truck. 17 We see this
negative finding of the respondent appellate court as a misreading of the facts and the
evidence on record and directly contravening the positive finding of the trial court that an
early warning device was in proper place when the accident happened and that the driver of
the private respondent was the one negligent. On the other hand, the respondent court, in
refusing to give its "imprimatur to the trial court's finding and conclusion that Daniel
Serrano (private respondent Isidro's driver) was negligent in driving the truck that bumped
the parked truck", did not cite specific evidence to support its conclusion. In cavalier
fashion, it simply and nebulously adverted to unspecified "scanty evidence on record." 18
On the technical aspect of the case, the respondent corporation would want us to dismiss
this petition on the ground that it was filed out of time. It must be noted that there was a
motion for extension, 19 albeit filed erroneously with the respondent court, dated March 19,
1986, requesting for 30 days from March 20, 1986, to file the necessary petition or pleading
before the Supreme Court". Also, on April 1, 1986, an appearance of a new lawyer for the
petitioner before the Supreme Court" with motion 20 was filed, again erroneously, with the
Court of Appeals, requesting for 20 days extension "to file the Petition for Review on
Certiorari." Likewise a similar motion 21 was filed with this Court also on April 1, 1986. On
the other hand, the instant petition for review was filed on April 17, 1986 22 but it was only
130
after three months, on August 1, 1986, in its comment 23 that the respondent corporation
raised the issue of tardiness. The respondent corporation should not have waited in
ambush before the comment was required and before due course was given. In any event,
to exact its "a pound of flesh", so to speak, at this very late stage, would cause a grave
miscarriage of justice. Parenthetically, it must be noted that private respondent Isidro did
not raise this issue of late filing.
We now come to the merits of this petition.
The question before us is who was negligent? Negligence is the omission to do something
which a reasonable man, guided by those considerations which ordinarily regulate the
conduct of human affairs, would do, or the doing of something which a prudent and
reasonable man would not do24 or as Judge Cooley defines it, "(T)he failure to observe for
the protection of the interests of another person, that degree of care, precaution, and
vigilance which the circumstances justly demand, whereby such other person suffers
injury.25
In Picart vs. Smith,  26 decided more than seventy years ago but still a sound rule, we held:
The test by which to determine the existence of negligence in a particular case may be
stated as follows: Did the defendant in doing the alleged negligent act use that reasonable
care and caution which an ordinarily prudent person would have used in the same situation ?
If not, then he is guilty of negligence. The law here in effect adopts the standard supposed
to be supplied by the imaginary conduct of the discreet paterfamilias of the Roman law. The
existence of negligence in a given case is not determined by reference to the personal
judgment of the actor in the situation before him. The Law considers what would be
reckless, blameworthy, or negligent in the man of ordinary intelligence and prudence and
determines liability by that.
Respondent Isidro posits that any immobile object along the highway, like a parked truck,
poses serious danger to a moving vehicle which has the right to be on the highway. He
argues that since the parked cargo truck in this case was a threat to life and limb and
property, it was incumbent upon the driver as well as the petitioner, who claims to be a
helper of the truck driver, to exercise extreme care so that the motorist negotiating the road
would be properly forewarned of the peril of a parked vehicle. Isidro submits that the
burden of proving that care and diligence were observed is shifted to the petitioner, for, as
previously claimed, his (Isidro's) Isuzu truck had a right to be on the road, while the
immobile cargo truck had no business, so to speak, to be there. Likewise, Isidro proffers
that the petitioner must show to the satisfaction of a reasonable mind that the driver and
he (petitioner) himself, provided an early warning device, like that required by law, or, by
some other adequate means that would properly forewarn vehicles of the impending danger
that the parked vehicle posed considering the time, place, and other peculiar circumstances
of the occasion. Absent such proof of care, as in the case at bar, Isidro concludes, would,
under the doctrine of Res ipsa loquitur, evoke the presumption of negligence on the part of
the driver of the parked cargo truck as well as his helper, the petitioner herein, who was
fixing the flat tire of the said truck. 27
Respondent Isidro's contention is untenable.
The evidence on record discloses that three or four meters from the rear of the parked
truck, a lighted kerosene lamp was placed. 28 Moreover, there is the admission of
respondent Isidro's driver, Daniel Serrano, to Wit: 29

131
 Question No. 8 (by Patrolman Josefino Velasco)—Will you narrate to me in brief
how the accident happens (sic) if you can still remember?
Answer: (by Daniel Serrano)
That on or about 10:40 p.m., 15 May 1979 while driving Isuzu
truck at Baretbet, Bagabag, Nueva Vizcaya and at KM 285, I met
another vehicle who (sic) did not dim his (sic) lights which
cause (sic) me to be blinded with intense glare of the light that's
why I did not notice a parked truck who (sic) was repairing a front
flat tire. When I was a few meters away, I saw the truck which was
loaded with round logs. I step (sic) on my foot brakes but it did not
function with my many attempts. I have (sic) found out later that
the fluid pipe on the rear right was cut that's why the breaks did not
function. (Emphasis supplied).
Whether the cargo truck was parked along the road or on half the shoulder of the right side
of the road would be of no moment taking into account the warning device consisting of the
lighted kerosene lamp placed three or four meters from the back of the truck. 30 But despite
this warning which we rule as sufficient, the Isuzu truck driven by Daniel Serrano, an
employee of the private respondent, still bumped the rear of the parked cargo truck. As a
direct consequence of such accident the petitioner sustained injuries on his left forearm
and left foot. His left leg was later amputated from below the knee when gangrene had set
in. 31
It is clear from the foregoing disquisition that the absence or want of care of Daniel Serrano
has been established by clear and convincing evidence. It follows that in stamping its
imprimatur upon the invocation by respondent Isidro of the doctrine of Res ipsa loquitur to
escape liability for the negligence of his employee, the respondent court committed
reversible error.
The respondent court ruled: 32
xxx xxx xxx
In addition to this, we agree with the following arguments of appellant
Godofredo Isidro which would show that the accident was caused due to the
negligence of the driver of the cargo truck:
xxx xxx xxx
... In the case at bar the burden of proving that care and diligence
was (sic) observed is shifted evidently to the plaintiff, for, as
adverted to, the motorists have the right to be on the road, while
the immobile truck has no business, so to speak, to be there. It is
thus for the plaintiff to show to the satisfaction of a reasonable
mind that the driver and he himself did employ early warning
device such as that required by law or by some other adequate
means or device that would properly forewarn vehicles of the
impending danger that the parked vehicle posed considering the
time, place and other peculiar circumstances of the occasion. Absent
such proof of care, as in the case at bar, will evoke the
presumption of negligence under the doctrine of res ipsa loquitur,
on the part of the driver of the parked cargo truck as well as

132
 plaintiff who was fixing the flat tire of said truck. (pp. 14-17,
Appellant's Brief). (Emphasis supplied).
At this juncture, it may be enlightening and helpful in the proper resolution of the issue of
negligence to examine the doctrine of Res ipsa loquitur.
This doctrine is stated thus: "Where the thing which causes injury is shown to be under the
management of the defendant, and the accident is such as in the ordinary course of things
does not happen if those who have the management use proper care, it affords reasonable
evidence, in the absence of an explanation by the defendant, that the accident arose from
want of care. 33 Or as Black's Law Dictionary  34 puts it:
Res ipsa loquitur. The thing speaks for itself Rebuttable presumption or
inference that defendant was negligent, which arises upon proof that
instrumentality causing injury was in defendant's exclusive control, and that
the accident was one which ordinarily does not happen in absence of
negligence. Res ipsa loquitur is rule of evidence whereby negligence of alleged
wrongdoer may be inferred from mere fact that accident happened provided
character of accident and circumstances attending it lead reasonably to belief
that in absence of negligence it would not have occurred and that thing which
caused injury is shown to have been under management and control of alleged
wrongdoer. Hillen v. Hooker Const. Co., Tex. Civ. App., 484 S.W. 2d 133, 155.
Under doctrine of "res ipsa loquitur" the happening of an injury permits an
inference of negligence where plaintiff produces substantial evidence that
injury was caused by an agency or instrumentality under exclusive control and
management of defendant, and that the occurrence was such that in the
ordinary course of things would not happen if reasonable care had been used.
In this jurisdiction we have applied this doctrine in quite a number of cases, notably in
Africa et al. vs. Caltex, Inc., et al., 35 and the latest is in the case of F.F. Cruz and Co., Inc.
vs. CA.36
The doctrine of Res ipsa loquitur as a rule of evidence is peculiar to the law of negligence
which recognizes that prima facie negligence may be established without direct proof and
furnishes a substitute for specific proof of negligence. 37 The doctrine is not a rule of
substantive law 38 but merely a mode of proof or a mere procedural convenience. 39 The
rule, when applicable to the facts and circumstances of a particular case, is not intended to
and does not dispense with the requirement of proof of culpable negligence on the part of
the party charged. 40 It merely determines and regulates what shall be prima facie evidence
thereof and facilitates the burden of plaintiff of proving a breach of the duty of due
care.41 The doctrine can be invoked when and only when, under the circumstances
involved, direct evidence is absent and not readily available. 42 Hence, it has generally been
held that the presumption of inference arising from the doctrine cannot be availed of, or is
overcome, where plaintiff has knowledge and testifies or presents evidence as to the specific
act of negligence which is the cause of the injury complained of or where there is direct
evidence as to the precise cause of the accident and all the facts and circumstances
attendant on the occurrence clearly appear. 43 Finally, once the actual cause of injury is
established beyond controversy, whether by the plaintiff or by the defendant, no
presumptions will be involved and the doctrine becomes inapplicable when the
circumstances have been so completely eludicated that no inference of defendant's liability
can reasonably be made, whatever the source of the evidence, 44 as in this case.
133
The private respondent is sued under Art. 2176 in relation to Art. 2180, paragraph 5, of the
Civil Code. In the latter, when an injury is caused by the negligence of a servant or
employee there instantly arises a presumption of law that there was negligence on the part
of the master or employer either in the selection of the servant or employee, or in
supervision over him after selection, or both. Such presumption is juris tantum and
not juris et de jure and consequently, may be rebutted. If follows necessarily that if the
employer shows to the satisfaction of the court that in the selection and in the 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. 45 In disclaiming liability for the incident, the
private respondent stresses that the negligence of his employee has already been
adequately overcome by his driver's statement that he knew his responsibilities as a driver
and that the truck owner used to instruct him to be careful in driving. 46
We do not agree with the private respondent in his submission. In the first place, it is clear
that the driver did not know his responsibilities because he apparently did not check his
vehicle before he took it on the road. If he did he could have discovered earlier that the
brake fluid pipe on the right was cut, and could have repaired it and thus the accident
could have been avoided. Moveover, to our mind, the fact that the private respondent used
to intruct his driver to be careful in his driving, that the driver was licensed, and the fact
that he had no record of any accident, as found by the respondent court, are not sufficient
to destroy the finding of negligence of the Regional Trial Court given the facts established at
the trial 47 The private respondent or his mechanic, who must be competent, should have
conducted a thorough inspection of his vehicle before allowing his driver to drive it. In the
light of the circumstances obtaining in the case, we hold that Isidro failed to prove that the
diligence of a good father of a family in the supervision of his employees which would
exculpate him from solidary liability with his driver to the petitioner. But even if we concede
that the diligence of a good father of a family was observed by Isidro in the supervision of
his driver, there is not an iota of evidence on record of the observance by Isidro of the same
quantum of diligence in the supervision of his mechanic, if any, who would be directly in
charge in maintaining the road worthiness of his (Isidro's) truck. But that is not all. There
is paucity of proof that Isidro exercised the diligence of a good father of a family in the
selection of his driver, Daniel Serrano, as well as in the selection of his mechanic, if any, in
order to insure the safe operation of his truck and thus prevent damage to others.
Accordingly, the responsibility of Isidro as employer treated in Article 2180, paragraph 5, of
the Civil Code has not ceased.
WHEREFORE, the petition is hereby GRANTED. The Decision of the respondent court as
well as its Resolution denying the petitioner's motion for reconsideration are hereby SET
ASIDE and the decision of the trial court, dated January 20, 1983, is hereby
REINSTATED in toto. With costs against the private respondents.
SO ORDERED.
Melencio-Herrera, (Chairman), Paras and Padilla, JJ., concur.

G.R. No. 159132             December 18, 2008

FE CAYAO-LASAM, petitioner,
vs.
SPOUSES CLARO and EDITHA RAMOLETE, respondents.*
134
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
filed by Dr. Fe Cayao-Lasam (petitioner) seeking to annul the Decision 1 dated July 4, 2003
of the Court of Appeals (CA) in CA-G.R. SP No. 62206.
The antecedent facts:
On July 28, 1994, respondent, three months pregnant Editha Ramolete (Editha) was
brought to the Lorma Medical Center (LMC) in San Fernando, La Union due to vaginal
bleeding. Upon advice of petitioner relayed via telephone, Editha was admitted to the LMC
on the same day. A pelvic sonogram 2 was then conducted on Editha revealing the fetus’
weak cardiac pulsation.3 The following day, Editha’s repeat pelvic sonogram 4 showed that
aside from the fetus’ weak cardiac pulsation, no fetal movement was also appreciated. Due
to persistent and profuse vaginal bleeding, petitioner advised Editha to undergo a
Dilatation and Curettage Procedure (D&C) or "raspa."
On July 30, 1994, petitioner performed the D&C procedure. Editha was discharged from
the hospital the following day.
On September 16, 1994, Editha was once again brought at the LMC, as she was suffering
from vomiting and severe abdominal pains. Editha was attended by Dr. Beatriz de la Cruz,
Dr. Victor B. Mayo and Dr. Juan V. Komiya. Dr. Mayo allegedly informed Editha that there
was a dead fetus in the latter’s womb. After, Editha underwent laparotomy, 5 she was found
to have a massive intra-abdominal hemorrhage and a ruptured uterus. Thus, Editha had to
undergo a procedure for hysterectomy6 and as a result, she has no more chance to bear a
child.
On November 7, 1994, Editha and her husband Claro Ramolete (respondents) filed a
Complaint7 for Gross Negligence and Malpractice against petitioner before the Professional
Regulations Commission (PRC).
Respondents alleged that Editha’s hysterectomy was caused by petitioner’s unmitigated
negligence and professional incompetence in conducting the D&C procedure and the
petitioner’s failure to remove the fetus inside Editha’s womb. 8 Among the alleged acts of
negligence were: first, petitioner’s failure to check up, visit or administer medication on
Editha during her first day of confinement at the LMC; 9 second, petitioner recommended
that a D&C procedure be performed on Editha without conducting any internal
examination prior to the procedure; 10 third, petitioner immediately suggested a D&C
procedure instead of closely monitoring the state of pregnancy of Editha. 11
In her Answer,12 petitioner denied the allegations of negligence and incompetence with the
following explanations: upon Editha’s confirmation that she would seek admission at the
LMC, petitioner immediately called the hospital to anticipate the arrival of Editha and
ordered through the telephone the medicines Editha needed to take, which the nurses
carried out; petitioner visited Editha on the morning of July 28, 1994 during her rounds;
on July 29, 1994, she performed an internal examination on Editha and she discovered
that the latter’s cervix was already open, thus, petitioner discussed the possible D&C
procedure, should the bleeding become more profuse; on July 30 1994, she conducted
another internal examination on Editha, which revealed that the latter’s cervix was still
open; Editha persistently complained of her vaginal bleeding and her passing out of some
meaty mass in the process of urination and bowel movement; thus, petitioner advised
Editha to undergo D&C procedure which the respondents consented to; petitioner was very
135
vocal in the operating room about not being able to see an abortus; 13 taking the words of
Editha to mean that she was passing out some meaty mass and clotted blood, she assumed
that the abortus must have been expelled in the process of bleeding; it was Editha who
insisted that she wanted to be discharged; petitioner agreed, but she advised Editha to
return for check-up on August 5, 1994, which the latter failed to do.
Petitioner contended that it was Editha’s gross negligence and/or omission in insisting to
be discharged on July 31, 1994 against doctor’s advice and her unjustified failure to return
for check-up as directed by petitioner that contributed to her life-threatening condition on
September 16, 1994; that Editha’s hysterectomy was brought about by her very abnormal
pregnancy known as placenta increta, which was an extremely rare and very unusual case
of abdominal placental implantation. Petitioner argued that whether or not a D&C
procedure was done by her or any other doctor, there would be no difference at all because
at any stage of gestation before term, the uterus would rupture just the same.
On March 4, 1999, the Board of Medicine (the Board) of the PRC rendered a
Decision,14 exonerating petitioner from the charges filed against her. The Board held:
Based on the findings of the doctors who conducted the laparotomy on Editha, hers
is a case of Ectopic Pregnancy Interstitial. This type of ectopic pregnancy is one that
is being protected by the uterine muscles and manifestations may take later than
four (4) months and only attributes to two percent (2%) of ectopic pregnancy cases.
When complainant Editha was admitted at Lorma Medical Center on July 28, 1994
due to vaginal bleeding, an ultra-sound was performed upon her and the result of the
Sonogram Test reveals a morbid fetus but did not specify where the fetus was
located. Obstetricians will assume that the pregnancy is within the uterus unless so
specified by the Sonologist who conducted the ultra-sound. Respondent (Dr. Lasam)
cannot be faulted if she was not able to determine that complainant Editha is having
an ectopic pregnancy interstitial. The D&C conducted on Editha is necessary
considering that her cervix is already open and so as to stop the profuse bleeding.
Simple curettage cannot remove a fetus if the patient is having an ectopic pregnancy,
since ectopic pregnancy is pregnancy conceived outside the uterus and curettage is
done only within the uterus. Therefore, a more extensive operation needed in this
case of pregnancy in order to remove the fetus.15
Feeling aggrieved, respondents went to the PRC on appeal. On November 22, 2000, the PRC
rendered a Decision16 reversing the findings of the Board and revoking petitioner’s authority
or license to practice her profession as a physician.17
Petitioner brought the matter to the CA in a Petition for Review under Rule 43 of the Rules
of Court. Petitioner also dubbed her petition as one for certiorari18 under Rule 65 of the
Rules of Court.
In the Decision dated July 4, 2003, the CA held that the Petition for Review under Rule 43
of the Rules of Court was an improper remedy, as the enumeration of the quasi-
judicial agencies in Rule 43 is exclusive.19 PRC is not among the quasi-judicial bodies
whose judgment or final orders are subject of a petition for review to the CA, thus, the
petition for review of the PRC Decision, filed at the CA, was improper. The CA further held
that should the petition be treated as a petition for certiorari under Rule 65, the same
would still be dismissed for being improper and premature. Citing Section 26 20 of Republic
Act (R.A.) No. 2382 or the Medical Act of 1959, the CA held that the plain, speedy and

136
adequate remedy under the ordinary course of law which petitioner should have availed
herself of was to appeal to the Office of the President.21
Hence, herein petition, assailing the decision of the CA on the following grounds:
1. THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN HOLDING THAT
THE PROFESSIONAL REGULATION[S] COMMISSION (PRC) WAS EXCLUDED
AMONG THE QUASI-JUDICIAL AGENCIES CONTEMPLATED UNDER RULE 43 OF
THE RULES OF CIVIL PROCEDURE;
2. EVEN ASSUMING, ARGUENDO, THAT PRC WAS EXCLUDED FROM THE
PURVIEW OF RULE 43 OF THE RULES OF CIVIL PROCEDURE, THE PETITIONER
WAS NOT PRECLUDED FROM FILING A PETITION FOR CERTIORARI WHERE THE
DECISION WAS ALSO ISSUED IN EXCESS OF OR WITHOUT JURISDICTION, OR
WHERE THE DECISION WAS A PATENT NULLITY;
3. HEREIN RESPONDENTS-SPOUSES ARE NOT ALLOWED BY LAW TO APPEAL
FROM THE DECISION OF THE BOARD OF MEDICINE TO THE PROFESSIONAL
REGULATION[S] COMMISSION;
4. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN
DENYING FOR IMPROPER FORUM THE PETITION FOR REVIEW/PETITION FOR
CERTIORARI WITHOUT GOING OVER THE MERITS OF THE GROUNDS RELIED
UPON BY THE PETITIONER;
5. PRC’S GRAVE OMISSION TO AFFORD HEREIN PETITONER A CHANCE TO BE
HEARD ON APPEAL IS A CLEAR VIOLATION OF HER CONSTITUTIONAL RIGHT TO
DUE PROCESS AND HAS THE EFFECT OF RENDERING THE JUDGMENT NULL
AND VOID;
6. COROLLARY TO THE FOURTH ASSIGNED ERROR, PRC COMMITTED GRAVE
ABUSE OF DISCRETION, AMOUNTING TO LACK OF JURISDICTION, IN ACCEPTING
AND CONSIDERING THE MEMORANDUM ON APPEAL WITHOUT PROOF OF
SERVICE TO HEREIN PETITIONER, AND IN VIOLATION OF ART. IV, SEC. 35 OF
THE RULES AND REGULATIONS GOVERNING THE REGULATION AND PRACTICE
OF PROFESSIONALS;
7. PRC COMMITTED GRAVE ABUSE OF DISCRETION IN REVOKING PETITIONER’S
LICENSE TO PRACTICE MEDICINE WITHOUT AN EXPERT TESTIMONY TO
SUPPORT ITS CONCLUSION AS TO THE CAUSE OF RESPONDENT EDITHAT [SIC]
RAMOLETE’S INJURY;
8. PRC COMMITTED AN EVEN GRAVER ABUSE OF DISCRETION IN TOTALLY
DISREGARDING THE FINDING OF THE BOARD OF MEDICINE, WHICH HAD THE
NECESSARY COMPETENCE AND EXPERTISE TO ESTABLISH THE CAUSE OF
RESPONDENT EDITHA’S INJURY, AS WELL AS THE TESTIMONY OF THE EXPERT
WITNESS AUGUSTO MANALO, M.D. ;[and]
9. PRC COMMITTED GRAVE ABUSE OF DISCRETION IN MAKING CONCLUSIONS
OF FACTS THAT WERE NOT ONLY UNSUPPORTED BY EVIDENCE BUT WERE
ACTUALLY CONTRARY TO EVIDENCE ON RECORD.22
The Court will first deal with the procedural issues.
Petitioner claims that the law does not allow complainants to appeal to the PRC from the
decision of the Board. She invokes Article IV, Section 35 of the Rules and Regulations
Governing the Regulation and Practice of Professionals, which provides:

137
 Sec. 35. The respondent may appeal the decision of the Board within thirty days from
receipt thereof to the Commission whose decision shall be final. Complainant, when
allowed by law, may interpose an appeal from the Decision of the Board within
the same period. (Emphasis supplied)
Petitioner asserts that a careful reading of the above law indicates that while the
respondent, as a matter of right, may appeal the Decision of the Board to the Commission,
the complainant may interpose an appeal from the decision of the Board only when so
allowed by law.23 Petitioner cited Section 26 of Republic Act No. 2382 or "The Medical Act of
1959," to wit:
Section 26. Appeal from judgment. The decision of the Board of Medical Examiners
(now Medical Board) shall automatically become final thirty days after the date of its
promulgation unless the respondent, during the same period, has appealed to the
Commissioner of Civil Service (now Professional Regulations Commission) and later
to the Office of the President of the Philippines. If the final decision is not
satisfactory, the respondent may ask for a review of the case, or may file in court a
petition for certiorari.
Petitioner posits that the reason why the Medical Act of 1959 allows only the respondent in
an administrative case to file an appeal with the Commission while the complainant is not
allowed to do so is double jeopardy. Petitioner is of the belief that the revocation of license
to practice a profession is penal in nature.24
The Court does not agree.
For one, the principle of double jeopardy finds no application in administrative cases.
Double jeopardy attaches only: (1) upon a valid indictment; (2) before a competent court; (3)
after arraignment; (4) when a valid plea has been entered; and (5) when the defendant was
acquitted or convicted, or the case was dismissed or otherwise terminated without the
express consent of the accused. 25 These elements were not present in the proceedings
before the Board of Medicine, as the proceedings involved in the instant case were
administrative and not criminal in nature. The Court has already held that double jeopardy
does not lie in administrative cases.26
Moreover, Section 35 of the Rules and Regulations Governing the Regulation and Practice
of Professionals cited by petitioner was subsequently amended to read:
Sec. 35. The complainant/respondent may appeal the order, the resolution or the
decision of the Board within thirty (30) days from receipt thereof to the Commission
whose decision shall be final and executory. Interlocutory order shall not be
appealable to the Commission. (Amended by Res. 174, Series of 1990). 27 (Emphasis
supplied)
Whatever doubt was created by the previous provision was settled with said amendment. It
is axiomatic that the right to appeal is not a natural right or a part of due process, but a
mere statutory privilege that may be exercised only in the manner prescribed by law. 28 In
this case, the clear intent of the amendment is to render the right to appeal from a decision
of the Board available to both complainants and respondents.
Such conclusion is bolstered by the fact that in 2006, the PRC issued Resolution No. 06-
342(A), or the New Rules of Procedure in Administrative Investigations in the Professional
Regulations Commission and the Professional Regulatory Boards, which provides for the
method of appeal, to wit:

138
 Sec. 1. Appeal; Period Non-Extendible.- The decision, order or resolution of the
Board shall be final and executory after the lapse of fifteen (15) days from receipt of
the decision, order or resolution without an appeal being perfected or taken by either
the respondent or the complainant. A party aggrieved by the decision, order or
resolution may file a notice of appeal from the decision, order or resolution of
the Board to the Commission within fifteen (15) days from receipt thereof, and
serving upon the adverse party a notice of appeal together with the appellant’s brief
or memorandum on appeal, and paying the appeal and legal research fees. x x x 29
The above-stated provision does not qualify whether only the complainant or respondent
may file an appeal; rather, the new rules provide that "a party aggrieved" may file a notice
of appeal. Thus, either the complainant or the respondent who has been aggrieved by the
decision, order or resolution of the Board may appeal to the Commission. It is an
elementary rule that when the law speaks in clear and categorical language, there is no
need, in the absence of legislative intent to the contrary, for any interpretation. 30 Words and
phrases used in the statute should be given their plain, ordinary, and common usage or
meaning.31
Petitioner also submits that appeals from the decisions of the PRC should be with the CA,
as Rule 4332 of the Rules of Court was precisely formulated and adopted to provide for a
uniform rule of appellate procedure for quasi-judicial agencies. 33 Petitioner further
contends that a quasi-judicial body is not excluded from the purview of Rule 43 just
because it is not mentioned therein.34
On this point, the Court agrees with the petitioner.
Sec. 1, Rule 43 of the Rules of Court provides:
Section 1. Scope. - This Rule shall apply to appeals from judgments or final orders
of the Court of Tax Appeals, and from awards, judgments, final orders or
resolutions of or authorized by any quasi-judicial agency in the exercise of its
quasi-judicial functions. Among these agencies are the Civil Service Commission,
Central Board of Assessment Appeals, Securities and Exchange Commission, Office
of the President, Land Registration Authority, Social Security Commission, Civil
Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer,
National Electrification Administration, Energy Regulatory Board, National
Telecommunications Commission, Department of Agrarian Reform under Republic
Act No. 6657, Government Service Insurance System, Employees Compensation
Commission, Agricultural Inventions Board, Insurance Commission, Philippine
Atomic Energy Commission, Board of Investments, Construction Industry Arbitration
Commission, and voluntary arbitrators authorized by law. (Emphasis supplied)
Indeed, the PRC is not expressly mentioned as one of the agencies which are expressly
enumerated under Section 1, Rule 43 of the Rules of Court. However, its absence from the
enumeration does not, by this fact alone, imply its exclusion from the coverage of said
Rule.35 The Rule expressly provides that it should be applied to appeals from awards,
judgments final orders or resolutions of any quasi-judicial agency in the exercise of its
quasi-judicial functions. The phrase "among these agencies" confirms that the enumeration
made in the Rule is not exclusive to the agencies therein listed. 36
Specifically, the Court, in Yang v. Court of Appeals,37 ruled
that Batas Pambansa (B.P.) Blg. 129  conferred upon the CA exclusive appellate
38

jurisdiction over appeals from decisions of the PRC. The Court held:
139
 The law has since been changed, however, at least in the matter of the particular
court to which appeals from the Commission should be taken. On August 14, 1981,
Batas Pambansa Bilang 129 became effective and in its Section 29, conferred on the
Court of Appeals "exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions except those falling under the appellate
jurisdiction of the Supreme Court. x x x." In virtue of BP 129, appeals from the
Professional Regulations Commission are now exclusively cognizable by the
Court of Appeals.39 (Emphasis supplied)
Clearly, the enactment of B.P. Blg. 129, the precursor of the present Rules of Civil
Procedure,40 lodged with the CA such jurisdiction over the appeals of decisions made by the
PRC.
Anent the substantive merits of the case, petitioner questions the PRC decision for being
without an expert testimony to support its conclusion and to establish the cause of
Editha’s injury. Petitioner avers that in cases of medical malpractice, expert testimony is
necessary to support the conclusion as to the cause of the injury. 41
Medical malpractice is a particular form of negligence which consists in the failure of a
physician or surgeon to apply to his practice of medicine that degree of care and skill which
is ordinarily employed by the profession generally, under similar conditions, and in like
surrounding circumstances.42 In order to successfully pursue such a claim, a patient must
prove that the physician or surgeon either failed to do something which a reasonably
prudent physician or surgeon would not have done, and that the failure or action caused
injury to the patient.43
There are four elements involved in medical negligence cases: duty, breach, injury and
proximate causation.44
A physician-patient relationship was created when Editha employed the services of the
petitioner. As Editha’s physician, petitioner was duty-bound to use at least the same level
of care that any reasonably competent doctor would use to treat a condition under the
same circumstances.45 The breach of these professional duties of skill and care, or their
improper performance by a physician surgeon, whereby the patient is injured in body or in
health, constitutes actionable malpractice. 46 As to this aspect of medical malpractice, the
determination of the reasonable level of care and the breach thereof, expert testimony is
essential.47 Further, inasmuch as the causes of the injuries involved in malpractice actions
are determinable only in the light of scientific knowledge, it has been recognized that expert
testimony is usually necessary to support the conclusion as to causation. 48
In the present case, respondents did not present any expert testimony to support their
claim that petitioner failed to do something which a reasonably prudent physician or
surgeon would have done.
Petitioner, on the other hand, presented the testimony of Dr. Augusto M. Manalo, who was
clearly an expert on the subject.
Generally, to qualify as an expert witness, one must have acquired special knowledge of the
subject matter about which he or she is to testify, either by the study of recognized
authorities on the subject or by practical experience.49
Dr. Manalo specializes in gynecology and obstetrics, authored and co-authored various
publications on the subject, and is a professor at the University of the
Philippines.50 According to him, his diagnosis of Editha’s case was "Ectopic Pregnancy
140
Interstitial (also referred to as Cornual), Ruptured." 51 In stating that the D&C procedure
was not the proximate cause of the rupture of Editha’s uterus resulting in her
hysterectomy, Dr. Manalo testified as follows:
Atty. Hidalgo:
Q:     Doctor, we want to be clarified on this matter. The complainant had testified
here that the D&C was the proximate cause of the rupture of the uterus. The
condition which she found herself in on the second admission. Will you please tell us
whether that is true or not?
A:     Yah, I do not think so for two reasons. One, as I have said earlier, the
instrument cannot reach the site of the pregnancy, for it to further push the
pregnancy outside the uterus. And, No. 2, I was thinking a while ago about another
reason- well, why I don’t think so, because it is the triggering factor for the rupture, it
could have–the rupture could have occurred much earlier, right after the D&C or a
few days after the D&C.
Q:     In this particular case, doctor, the rupture occurred to have happened minutes
prior to the hysterectomy or right upon admission on September 15, 1994 which is
about 1 ½ months after the patient was discharged, after the D&C was conducted.
Would you tell us whether there is any relation at all of the D&C and the rupture in
this particular instance?
A:     I don’t think so for the two reasons that I have just mentioned- that it
would not be possible for the instrument to reach the site of pregnancy. And,
No. 2, if it is because of the D&C that rupture could have occurred
earlier.52 (Emphases supplied)
Clearly, from the testimony of the expert witness and the reasons given by him, it is evident
that the D&C procedure was not the proximate cause of the rupture of Editha’s uterus.
During his cross-examination, Dr. Manalo testified on how he would have addressed
Editha’s condition should he be placed in a similar circumstance as the petitioner. He
stated:
Atty. Ragonton:
Q:     Doctor, as a practicing OB-Gyne, when do you consider that you have done a
good, correct and ideal dilatation and curettage procedure?
A:     Well, if the patient recovers. If the patient gets well. Because even after the
procedure, even after the procedure you may feel that you have scraped everything,
the patient stops bleeding, she feels well, I think you should still have some
reservations, and wait a little more time.
Q:     If you were the OB-Gyne who performed the procedure on patient Editha
Ramolete, would it be your standard practice to check the fetal parts or fetal tissues
that were allegedly removed?
A:     From what I have removed, yes. But in this particular case, I think it was
assumed that it was part of the meaty mass which was expelled at the time she was
urinating and flushed in the toilet. So there’s no way.
Q:     There was [sic] some portions of the fetal parts that were removed?
A:     No, it was described as scanty scraping if I remember it right–scanty.
Q:     And you would not mind checking those scant or those little parts that were
removed?

141
 A:     Well, the fact that it was described means, I assume that it was
checked, ‘no. It was described as scanty and the color also, I think was
described. Because it would be very unusual, even improbable that it would not
be examined, because when you scrape, the specimens are right there before
your eyes. It’s in front of you. You can touch it. In fact, some of them will stick
to the instrument and therefore to peel it off from the instrument, you have to
touch them. So, automatically they are examined closely.
Q:     As a matter of fact, doctor, you also give telephone orders to your patients
through telephone?
A:     Yes, yes, we do that, especially here in Manila because you know, sometimes a
doctor can also be tied-up somewhere and if you have to wait until he arrive at a
certain place before you give the order, then it would be a lot of time wasted. Because
if you know your patient, if you have handled your patient, some of the symptoms
you can interpret that comes with practice. And, I see no reason for not allowing
telephone orders unless it is the first time that you will be encountering the
patient. That you have no idea what the problem is.
Q:     But, doctor, do you discharge patients without seeing them?
A:     Sometimes yes, depending on how familiar I am with the patient. We are on the
question of telephone orders. I am not saying that that is the idle [sic] thing to do,
but I think the reality of present day practice somehow justifies telephone
orders. I have patients whom I have justified and then all of a sudden, late in the
afternoon or late in the evening, would suddenly call they have decided that they will
go home inasmuch as they anticipated that I will discharge them the following day.
So, I just call and ask our resident on duty or the nurse to allow them to go because I
have seen that patient and I think I have full grasp of her problems. So, that’s when I
make this telephone orders. And, of course before giving that order I ask about how
she feels.53 (Emphases supplied)
From the foregoing testimony, it is clear that the D&C procedure was conducted in
accordance with the standard practice, with the same level of care that any reasonably
competent doctor would use to treat a condition under the same circumstances, and that
there was nothing irregular in the way the petitioner dealt with Editha.
Medical malpractice, in our jurisdiction, is often brought as a civil action for damages
under Article 217654 of the Civil Code. The defenses in an action for damages, provided for
under Article 2179 of the Civil Code are:
Art. 2179. When the plaintiff’s own negligence was the immediate and proximate
cause of his injury, he cannot recover damages. But if his negligence was only
contributory, the immediate and proximate cause of the injury being the defendant’s
lack of due care, the plaintiff may recover damages, but the courts shall mitigate the
damages to be awarded.
Proximate cause has been defined as that which, in natural and continuous sequence,
unbroken by any efficient intervening cause, produces injury, and without which the result
would not have occurred.55 An injury or damage is proximately caused by an act or a failure
to act, whenever it appears from the evidence in the case that the act or omission played a
substantial part in bringing about or actually causing the injury or damage; and that the
injury or damage was either a direct result or a reasonably probable consequence of the act
or omission.56
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In the present case, the Court notes the findings of the Board of Medicine:
When complainant was discharged on July 31, 1994, herein respondent advised her
to return on August 4, 1994 or four (4) days after the D&C. This advise was
clear in complainant’s Discharge Sheet. However, complainant failed to do
so. This being the case, the chain of continuity as required in order that the doctrine
of proximate cause can be validly invoked was interrupted. Had she returned, the
respondent could have examined her thoroughly. 57 x x x (Emphases supplied)
Also, in the testimony of Dr. Manalo, he stated further that assuming that there was in fact
a misdiagnosis, the same would have been rectified if Editha followed the petitioner’s order
to return for a check-up on August 4, 1994. Dr. Manalo stated:
Granting that the obstetrician-gynecologist has been misled (justifiably) up to
thus point that there would have been ample opportunity to rectify the
misdiagnosis, had the patient returned, as instructed for her follow-up
evaluation. It was one and a half months later that the patient sought
consultation with another doctor. The continued growth of an ectopic pregnancy,
until its eventual rupture, is a dynamic process. Much change in physical findings
could be expected in 1 ½ months, including the emergence of suggestive ones. 58
It is undisputed that Editha did not return for a follow-up evaluation, in defiance of the
petitioner’s advise. Editha omitted the diligence required by the circumstances which could
have avoided the injury. The omission in not returning for a follow-up evaluation played a
substantial part in bringing about Editha’s own injury. Had Editha returned, petitioner
could have conducted the proper medical tests and procedure necessary to determine
Editha’s health condition and applied the corresponding treatment which could have
prevented the rupture of Editha’s uterus. The D&C procedure having been conducted in
accordance with the standard medical practice, it is clear that Editha’s omission was the
proximate cause of her own injury and not merely a contributory negligence on her part.
Contributory negligence is the act or omission amounting to want of ordinary care on the
part of the person injured, which, concurring with the defendant’s negligence, is the
proximate cause of the injury. 59 Difficulty seems to be apprehended in deciding which acts
of the injured party shall be considered immediate causes of the accident. 60 Where the
immediate cause of an accident resulting in an injury is the plaintiff’s own act, which
contributed to the principal occurrence as one of its determining factors, he cannot recover
damages for the injury.61 Again, based on the evidence presented in the present case
under review, in which no negligence can be attributed to the petitioner, the
immediate cause of the accident resulting in Editha’s injury was her own omission
when she did not return for a follow-up check up, in defiance of petitioner’s orders.
The immediate cause of Editha’s injury was her own act; thus, she cannot recover
damages from the injury.
Lastly, petitioner asserts that her right to due process was violated because she was never
informed by either respondents or by the PRC that an appeal was pending before the
PRC.62 Petitioner claims that a verification with the records section of the PRC revealed that
on April 15, 1999, respondents filed a Memorandum on Appeal before the PRC, which did
not attach the actual registry receipt but was merely indicated therein. 63
Respondents, on the other hand avers that if the original registry receipt was not attached
to the Memorandum on Appeal, PRC would not have entertained the appeal or accepted
such pleading for lack of notice or proof of service on the other party. 64 Also, the registry
143
receipt could not be appended to the copy furnished to petitioner’s former counsel, because
the registry receipt was already appended to the original copy of the Memorandum of
Appeal filed with PRC.65
It is a well-settled rule that when service of notice is an issue, the rule is that the person
alleging that the notice was served must prove the fact of service. The burden of proving
notice rests upon the party asserting its existence. 66 In the present case, respondents did
not present any proof that petitioner was served a copy of the Memorandum on Appeal.
Thus, respondents were not able to satisfy the burden of proving that they had in fact
informed the petitioner of the appeal proceedings before the PRC.
In EDI-Staffbuilders International, Inc. v. National Labor Relations Commission,67 in which
the National Labor Relations Commission failed to order the private respondent to furnish
the petitioner a copy of the Appeal Memorandum, the Court held that said failure deprived
the petitioner of procedural due process guaranteed by the Constitution, which could have
served as basis for the nullification of the proceedings in the appeal. The same holds true in
the case at bar. The Court finds that the failure of the respondents to furnish the petitioner
a copy of the Memorandum of Appeal submitted to the PRC constitutes a violation of due
process. Thus, the proceedings before the PRC were null and void.
All told, doctors are protected by a special rule of law. They are not guarantors of care. They
are not insurers against mishaps or unusual consequences 68 specially so if the patient
herself did not exercise the proper diligence required to avoid the injury.
WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals
dated July 4, 2003 in CA-GR SP No. 62206 is hereby REVERSED and SET ASIDE. The
Decision of the Board of Medicine dated March 4, 1999 exonerating petitioner
is AFFIRMED. No pronouncement as to costs.
SO ORDERED.

G.R. No. 119092 December 10, 1998

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

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

144
The passengers of the Cimarron were mostly employees of the Project Management
Consultants, Inc. (PMCI). They had just visited the construction site of a company project
at Lian, Batangas. The other passengers were family members and friends whom they
invited to an excursion to the beach after the visit to the construction site. The group
stayed at Lian beach until 5:30 p.m., when they decided to go back to Manila.
The Cimarron, with Plate No. 840-45, was owned by Salvador Salenga, father of one of the
employees of PMCI. Driving the vehicle was Rolando Hernandez. It appears that at about
8:00 p.m., as it was traveling along Aguinaldo Highway in Imus, Cavite on its way back to
Manila, the Cimarron was hit on its front portion by petitioner's panel truck, bearing Plate
No. 581 XM, which was traveling in the opposite direction. The panel truck was on its way
to petitioner's plant in Dasmariñas, Cavite after delivering some linen to the Makati Medical
Center. The driver, Herman Hernandez, claimed that a jeepney in front of him suddenly
stopped. He said he stepped on the brakes to avoid hitting the jeepney and that this caused
his vehicle to swerve to the left and encroach on a portion of the opposite lane. As a result,
his panel truck collided with the Cimarron on the north-bound lane.
The driver of the Cimarron, Rolando Hernandez, and two of his passengers, namely, Jason
Bernabe and Dalmacio Salunoy, died. Several of the other passengers of the Cimarron were
injured and taken to various hospitals.
On December 4, 1980, private respondents filed this civil case for damages before the then
Court of First Instance of Rizal, Pasig Branch, against petitioner.
On November 23, 1990, the Regional Trial Court of Makati, to which the case was
transferred following the reorganization of the judiciary, rendered judgment for private
respondents. The dispositive portion of its decision reads:
It is for the reasons stated above that the court is persuaded to award the
damages incurred by the plaintiffs as proved in the trial as follows:
Actual or compensatory expenses:
a. Charito Estolano P35,813.87 (Exh. J)
b. Nicanor Bernabe III 20,024.94
& Josefina C. Bernabe
c. Julieta, Ailyn & 45,830.45 (Exh. QQ)
Josefina Enriquez
and Josefina Valeiro
d. Leonor Macaspac 2,740.00
e. Victor Rey Ignacio 14,820.64 (Exh. EEE)
f. Rene Tablante 10,032.40 (Exh. QQQ)
g. Nenita Salonoy, widow; 20,000.00
and Jack & Manilyn,
children
Moral damages should also be awarded as follows:
For the injuries sustained by:
a. Charito Estolano P10,000.00 (Exh. F)
b. Julieta P. Enriquez 15,000.00 (Exh. MM)
c. Ailyn C. Enriquez 8,000.00 (Exh. NN)
d. Josefina R. Enriquez 10,000.00 (Exh. OO)
e. Josefina P. Valerio 2,000.00 (Exh. PP)
f. Nenita Salonoy 20,000.00 (Exh. DD)
145
 g. Nicanor Bernabe III 8,000.00 (Exh. Q)
h. Josephine Bernabe 2,000.00 (Exh. R)
i. John Joseph Bernabe 10,000.00
j. Manilyn G. Salonoy 10,000.00 (Exh. EE)
k. Jack Salonoy 10,000.00 (Exh. JJ)
l. Leonor C. Macaspac 2,000.00 (Exh. AAA)
m. Victor Ignacio 8,000.00 (Exh. DDD)
n. Rene Tablanta 8,000.00 (Exh. FFF)
and finally the heirs of Jason Bernabe should be awarded the sum of
P50,000.00 for the latter's death. The heirs of Dalmacio Salunoy should be
given the sum of P100,000.00 for moral damages and unearned income.
The foregoing considered, judgment is rendered in favor of plaintiffs ordering
defendant to pay the amounts aforecited and to pay the further sum of
P50,000.00 for attorney's fees and the costs.
SO ORDERED.
As already stated, the Court of Appeals, to which the decision of the trial court was
appealed, affirmed the decision on January 26, 1995. Hence, this appeal.
First. Petitioner contends that the driver of the Cimarron was guilty of contributory
negligence and, therefore, its liability should be mitigated, if not totally extinguished. It
claims that the driver of the Cimarron was guilty or violation of traffic rules and regulations
at the time of the mishap. Hence, in accordance with Art. 2185 of the Civil Code, he was
presumed to be negligent.
According to petitioner, the negligence consisted of the following.
1. The Cimarron was overloaded because there were from 20 to 25 passengers inside when
the passenger capacity of the vehicle was only 17.
2. The front seat of the Cimarron was occupied by four adults, including the driver.
3. The Cimarron had only one headlight on (its right headlight) as its left headlight was not
functioning.
Petitioner cites Art. III, §2 of R.A. No. 4136, known as the Land Transportation and Traffic
Code, which provides that "No person operating any vehicle shall allow more passengers or
more freight or cargo in his vehicle than its registered carry capacity" and Art. IV, §3(e)
which states that "Every motor vehicle of more than one meter of projected width, while in
use on any public highway shall bear two headlights. . . which not later than one-half hour
after sunset and until at least one-half hour before sunrise and whenever weather
conditions so require, shall both be lighted."
Petitioner asserts that the fact that its panel truck encroached on a portion of the lane of
the Cimarron does not show that its driver was negligent. Petitioner cites the case
of Bayasen v. Court of Appeals,1 which allegedly held that the sudden swerving of a
vehicle caused by its driver stepping on the brakes is not negligence per se.
Petitioner further claims that even if petitioner's swerving to the lane of respondents
were considered proof of negligence, this fact would not negate the presumption of
negligence on the part of the other driver arising from his violations of traffic rules
and regulations.
Petitioner likewise invokes the ruling in Mckee v. Intermediate Appellate Court,2 in
which a driver who invaded the opposite lane and caused a collision between his car
and a truck coming from the opposite lane, was exonerated based on the doctrine of
146
last clear chance, which states that a person who has the last clear chance or
opportunity of avoiding an accident, notwithstanding the negligent acts of his
opponent, is solely responsible for the consequences of the accident.
Petitioner contends that the ruling in that case should be applied to the present case.
According to petitioner, although the driver of the panel truck was initially negligent,
the driver of the Cimarron had the last opportunity to avoid the accident. However,
because of his negligence (i.e., the aforementioned violations of traffic rules and
regulations such as the use of only one headlight at night and the overcrowding at
the front seat of the vehicle), he was not able to avoid a collision with the panel
truck.
We find the foregoing contention to be without merit.
First of all, it has not been shown how the alleged negligence of the Cimarron driver
contributed to the collision between the vehicles. Indeed, petitioner has the burden
of showing a causal connection between the injury received and the violation of the
Land Transportation and Traffic Code. He must show that the violation of the statute
was the proximate or legal cause of the injury or that it substantially contributed
thereto. Negligence, consisting in whole or in part, of violation of law, like any other
negligence, is without legal consequence unless it is a contributing cause of the
injury.3 Petitioner says that "driving an overloaded vehicle with only one functioning
headlight during nighttime certainly increases the risk of accident," 4 that because
the Cimarron had only one headlight, there was "decreased visibility," and that the
tact that the vehicle was overloaded and its front seat overcrowded "decreased [its]
maneuverability,"5 However, mere allegations such as these are not sufficient to
discharge its burden of proving clearly that such alleged negligence was the
contributing cause of the injury.
Furthermore, based on the evidence in this case, there was no way either driver could
have avoided the collision. The panel truck driver testified: 6
Q. You stated you were following a jeepney along the highway
in Imus, Cavite, what happened afterwards, if any?
A. The passenger jeepney I was following made a sudden stop
so I stepped on the brakes.
Q. Upon stepping on your brakes, what happened if any?
A. The Mercedes Benz (panel) suddenly swerved to the left, sir.
Q. How big was the swerving to the left?
A. The distance which my vehicle swerved beyond the middle
line or center line to the left was about this distance, sir
(witness demonstrating by using both hands the distance).
ATTY. ALILING:
Can we stipulate that it is 1 foot, Your Honor.
ATTY. GONZALES:
A little more, 1 1/2 feet.
ATTY. ALILING:
1 1/4 feet.
ATTY. GONZALES:
Between 1 1/4 and 1 1/2 feet.

147
The panel truck driver's testimony is consistent with the testimonies of private
respondents that the panel truck went out of control and simply smashed into the
Cimarron in which they were riding. Thus, Nicanor Bernabe III
testified: 7

Q: And did you see how the accident happened?

A: I just saw a glare of light. That is all and then the impact.
Q: Where did you see that glare of light?
A: Coming in front ahead of us.
Q: When you say ahead of you, was it . . . ?
A: Towards us.
x x x           x x x          x x x
Q: And from what did those glare of light come from.
A: Based on information I received, the light came from the
headlights of a certain panel owned by Sanitary Steam
Laundry, Inc.
x x x           x x x          x x x
Q: You said that the lights were going towards you. Now, at
what pace did these lights come toward you?
A: Fast pace.
Charito Estolano, another passenger who was seated in front of the Cimarron,
similarly testified that they just saw the panel truck hurtling toward them. She
said: 8
Q Now, you said earlier that you were involved in an accident.
What was that accident?
A An approaching vehicle hit us.
Q Now, why do you know that there was the approaching
vehicle?
A There was a light which glared us and I knew that it came
from a vehicle. We were blinded.
Q Where was this vehicle headed for?
A Headed for Cavite.
Q Coming from?
A Coming from Manila, I think.
Q So that, actually, in relation to your vehicle, it was coming
from the opposite direction?
A Yes, sir.
Q Now, you said that the light headed towards your vehicle.
On which side of the highway was your Tamaraw vehicle
travelling at that time?
A We were on the right lane.
Q Did you actually see this light from the vehicle coming from
the opposite direction heading towards your vehicle?
A Yes, sir,
Q And what happened after that?
A After that, there was an impact.
Q All right. Will you tell the Court which bumped which?
148
 A We were bumped by the vehicle which was coming from the
opposite direction.
The foregoing testimonies show that the driver of the panel truck lost control of his
vehicle and bumped the Cimarron. Hence, even if both headlights of the Cimarron
were lighted, it would have been bumped just the same because the driver of the
panel truck could not stop despite the fact that he applied the brakes. Petitioner's
contention that because of "decreased visibility," caused by the fact that the
Cimarron allegedly had only one headlight on, its driver failed to see the Cimarron is
without any basis in fact. Only its driver claimed that the Cimarron had only one
headlight on. The police investigator did not state in his report or in his testimony
that the Cimarron had only one headlight on.
Nor is there any basis in fact for petitioner's contention that because of overcrowding
in the front seat of the Cimarron there was "decreased maneuverability" which
prevented the Cimarron driver from avoiding the panel truck. There is absolutely no
basis for this claim. There is nothing in the testimonies of the passengers of the
Cimarron, particularly Charito Estolano, who was seated in front, which suggest that
the driver had no elbow room for maneuvering the vehicle. To the contrary, from the
testimony of some of the witnesses,9 it appears that the driver of the Cimarron tried
to avoid the collision but because of the emergency created by the speeding panel
truck coming from the opposite direction he was not able to fully move his Cimarron
away from the path of the oncoming vehicle. We are convinced that no "manuevering"
which the Cimarron driver could have done would have avoided a collision with the
panel truck, given the suddenness of the events. Clearly, the overcrowding in the
front seat was immaterial.
All these point to the fact that the proximate cause of the accident was the
negligence of petitioner's driver. As the trial court noted, the swerving of petitioner's
panel truck to the opposite lane could mean not only that petitioner's driver was
running the vehicle at a very high speed but that he was tailgating the passenger
jeepney ahead of it as well.
Petitioner's driver claimed that the distance between the panel truck and the
passenger jeepney in front was about 12 meters. 10 If this was so, he would have had
no difficulty bringing his panel truck to a stop. It is very probable that the driver did
not really apply his brakes (which is why there were no skid marks) but that finding
the jeepney in front of him to be in close proximity, he tried to avoid hitting it by
swerving his vehicle to the left. In the process, however, he invaded a portion of the
opposite lane and consequently hit the Cimarron. Indeed, the panel truck driver
testified that his vehicle was running at the speed of 60 miles per hour. 11 He tried to
correct himself when asked by petitioner's counsel whether the panel truck
speedometer indicated miles or kilometers by saying that the speedometer measured
kilometers and not miles, but on cross examination his testimony got muddled. 12
Be that as it may, whether the driver meant 60 miles per hour (which could be 96.77
kilometers per hour) or 60 kilometers per hour, the fact remains that the panel truck
was overspeeding because the maximum allowable speed for truck and buses on open
country roads, such as the Aguinaldo Highway in Imus, Cavite, is only 50 kilometers
per hour. 13

149
The case of Bayasen, which petitioner invokes, cannot apply to this case. There was
no swerving of the vehicle in that case but skidding, and it was caused by the fact
that the road was wet and slippery. In this case, the road was dry and safe. There was
no reason for the vehicle to swerve because of road condition. The only explanation
for this occurrence was human error.
Petitioner's reliance on the McKee case is also misplaced. In that case, the driver of
the vehicle at fault, a truck, had an opportunity to avoid the collision but he ignored
the signals from the other vehicle, a car, to slow down and allow it to safely pass the
bridge. In this case, there was no such opportunity given the Cimarron on the night
of the mishap. Everything happened so quickly that before the passengers of the
Cimarron knew it, the vehicle had been bumped by the truck.
Second. On its liability as employer of the negligent driver, petitioner contends that
the non-submission of the NBI clearance and police clearance of its driver does not
mean that it failed to exercise the diligence of a good father of the family in the
selection and supervision of its employees. It argues that there is no law requiring
employees to submit NBI and police clearance prior to their employment. Hence,
petitioner's failure to require submission of these documents does not mean that it
did not exercise due diligence in the selection and supervision of its employees. On
the other hand, it asserts that its employment of Herman Hernandez as a driver
means that he had passed the screening tests of the company, including submission
of the aforementioned documents. Petitioner maintains that the presumption is that
the said driver submitted NBI and police clearance.
Petitioner likewise contends that the Court of Appeal's position that it failed to
exercise due diligence in the selection and supervision of its employees by not
requiring its prospective employees to undergo psychological and physical tests
before employment has no basis in law because there is no law requiring such tests
prior to hiring employees.
The petitioner's contention has no merit. The Court of Appeals did not say that
petitioner's failure to submit NBI and police clearances of its driver was proof that
petitioner failed to exercise due diligence in the selection of its employees. What the
Court of Appeals said was that petitioner's policy of requiring prospective employees
to submit NBI and police clearance and to have at least two (2) years experience as
driver prior to employment was not enough to prove the exercise of due diligence and
that even this policy petitioner failed to prove by its failure to present the driver's
NBI and police records during the trial.
With respect to the requirement of passing psychological and physical tests prior to
his employment, although no law requires it, such circumstance would certainly be a
reliable indicator of the exercise of due diligence. As the trial court said: 14
. . . No tests of skill, physical as well as mental and emotional, were
conducted on their would-be employees. No on-the-job training and
seminars reminding employees, especially drivers, of road courtesies and
road rules and regulations were done. There were no instructions given to
defendant's drivers as to how to react in cases of emergency nor what to
do after an emergency occurs. There was even failure on the part of
defendant to present its concerned employee's 204 file. All these could
only mean failure on the part of defendant to exercise the diligence
150
 required of it of a good father of a family in the selection and supervision
of its employees.
Indeed, driving exacts a more than usual toll on the senses. 15 Accordingly, it
behooves employers to exert extra care in the selection and supervision of their
employees. They must go beyond the minimum requirements fixed by law. In
this case, David Bautista, the office manager of petitioner in its Dasmariñas
plant, said that petitioner has a policy of requiring job applicants to submit
clearances from the police and the NBI. In the case of applicants for the
position of driver they are required to have at least two (2) years driving
experience and to be holders of a professional driver's license for at least two
years. But the supposed company policies on employment were not in writing.
Nor did Bautista show in what manner he supervised the drivers to ensure that
they drove their vehicles in a safe way.
Third. With respect to the question of damages, we find no reversible error
committed in the award of actual damages to private respondents. To justify an
award of actual damages, there must be competent proof of the actual amount of loss.
Credence can be given only to claims which are duly supported by receipts. 16 Here,
the actual damages claimed by private respondents were duly supported by receipts
and appear to have been really incurred.
As to the moral damages awarded, we find them to be reasonable and necessary in
view of the circumstances of this case. Moral damages are awarded to allow the
victims to obtain means, diversion, or amusement to alleviate the moral suffering
they had undergone due to the defendant's culpable action. 17 In this case, private
respondents doubtless suffered some ordeal because some of them lost their loved
ones, while others lost their future. Within the meaning of Art. 2217 of the Civil
Code, they suffered sleepless night, mental anguish, serious anxiety, and wounded
feelings. An award of moral damages in their favor is thus justified.
The award of P50,000,00 to the heirs of Jason Bernabe as death indemnity is likewise
in accordance with law. 18 However, the award of P100,000 to the heirs of Dalmacio
Salunoy, denominated in the decision of the trial court as "moral damages and
unearned income" cannot be upheld. The heirs were already included among those
awarded moral damages. Marilyn Salunoy was ordered to be paid P10,000, Jack
Salunoy, P10,000, and their mother Nenita Salunoy, P20,000, as moral damages. The
amount of P100,000 was presumably awarded primarily for loss of earning capacity
but even then the amount must be modified. In accordance with our cases 19 on this
question, the formula for determining the life expectancy of Dalmacio Salunoy must
be determined by applying the formula 2/3 multiplied by (80 minus the age of the
deceased). Since Salunoy was 46 years of age at the time of his death, as stated in his
death certificate, then his life expectancy was 22.6 years, or up to 68 years old.
Next, his net earnings must be computed. At the time of his death. Dalmacio Salunoy
was earning more than P900.00 a month as bookkeeper at the PMCI so that his
annual gross earning was about P11,000.00. From this amount, about 50% should be
deducted as reasonable and necessary living expenses because it seems his wife
occasionally finds work and thus helps in the household expenses.
Based on the foregoing, his net earning capacity was P124,300.00 computed as
follows: 20
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 net earning life Gross reasonable &
capacity (x) = expectany x annual less necessary
income living
expenses
x = [2 (80-46)] x [P11,000 - P5,500]
3
= 22.6 x 5,500
= P124,300.00
In addition, the heirs of Dalmacio Salunoy should be paid P50,000.00 as death
indemnity.
Finally, the award of attorney's fees should be disallowed as the trial court did not
give any justification for granting it in its decision. It is now settled that awards of
attorney's fees must be based on findings of fact and law, stated in the decision of the
trial court. 21
WHEREFORE, the decision of the Court of Appeals is MODIFIED in the sense that the
award of P100,000.00 denominated "for moral damages and unearned income" is
deleted, and in lieu thereof the amount of P124,300.00 for loss of earning capacity
and the further amount of P50,000.00 for death indemnity are awarded to the heirs
of Dalmacio Salunoy and the award of P50,000.00 for attorney's fees is disallowed. In
all other respects the appealed decision is AFFIRMED.
SO ORDERED.
Bellosillo, Puno and Martinez, JJ., concur.
Footnotes

G.R. No. 173180               August 24, 2011

ALBERT TISON and CLAUDIO L. JABON, Petitioners,
vs.
SPS. GREGORIO POMASIN and CONSORCIA PONCE POMASIN, DIANNE POMASIN
PAGUNSAN, CYNTHIA POMASIN, SONIA PEROL, ANTONIO SESISTA, GINA SESISTA,
and REYNALDO SESISTA, Respondents.
DECISION
PEREZ, J.:
Two vehicles, a tractor-trailer and a jitney, 1 figured in a vehicular mishap along Maharlika
Highway in Barangay Agos, Polangui, Albay last 12 August 1994. Laarni Pomasin (Laarni)
was driving the jitney towards the direction of Legaspi City while the tractor-trailer, driven
by Claudio Jabon (Jabon), was traversing the opposite lane going towards Naga City. 2
The opposing parties gave two different versions of the incident.
Gregorio Pomasin (Gregorio), Laarni’s father, was on board the jitney and seated on the
passenger’s side. He testified that while the jitney was passing through a curve going
downward, he saw a tractor-trailer coming from the opposite direction and encroaching on
the jitney’s lane. The jitney was hit by the tractor-trailer and it was dragged further causing
death and injuries to its passengers.3
On the other hand, Jabon recounted that while he was driving the tractor-trailer, he
noticed a jitney on the opposite lane falling off the shoulder of the road. Thereafter, it began
running in a zigzag manner and heading towards the direction of the truck. To avoid
152
collision, Jabon immediately swerved the tractor-trailer to the right where it hit a tree and
sacks of palay. Unfortunately, the jitney still hit the left fender of the tractor-trailer before it
was thrown a few meters away. The tractor-trailer was likewise damaged. 4
Multiple death and injuries to those in the jitney resulted.
Gregorio was injured and brought to the Albay Provincial Hospital in Legaspi City. His
daughter, Andrea Pomasin Pagunsan, sister Narcisa Pomasin Roncales and Abraham
Dionisio Perol died on the spot. His other daughter Laarni, the jitney driver, and
granddaughter Annie Jane Pomasin Pagunsan expired at the hospital. His wife, Consorcia
Pomasin, another granddaughter Dianne Pomasin Pagunsan, Ricky Ponce, Vicente
Pomasin, Gina Sesista, Reynaldo Sesista, Antonio Sesista and Sonia Perol sustained
injuries.5 On the other hand, Jabon and one of the passengers in the tractor-trailer were
injured.6
Albert Tison (Tison), the owner of the truck, extended financial assistance to respondents
by giving them ₱1,000.00 each immediately after the accident and ₱200,000.00 to Cynthia
Pomasin (Cynthia), one of Gregorio’s daughters. Cynthia, in turn, executed an Affidavit of
Desistance.
On 14 November 1994, respondents filed a complaint for damages against petitioners
before the Regional Trial Court (RTC) of Antipolo. They alleged that the proximate cause of
the accident was the negligence, imprudence and carelessness of petitioners. Respondents
prayed for indemnification for the heirs of those who perished in the accident at ₱50,000.00
each; ₱500,000.00 for hospitalization, medical and burial expenses; ₱350,000.00 for
continuous hospitalization and medical expenses of Spouses Pomasin; ₱1,000,000.00 as
moral damages; ₱250,000.00 as exemplary damages; ₱30,000.00 for loss of income of
Cynthia; ₱100,000.00 as attorney’s fees plus ₱1,000.00 per court appearance; ₱50,000.00
for litigation expenses; and cost of suit.7
In their Answer, petitioners countered that it was Laarni’s negligence which proximately
caused the accident. They further claimed that Cynthia was authorized by Spouses
Pomasin to enter into an amicable settlement by executing an Affidavit of Desistance.
Notwithstanding the affidavit, petitioners complained that respondents filed the instant
complaint to harass them and profit from the recklessness of Laarni. Petitioners
counterclaimed for damages.
Petitioners subsequently filed a motion to dismiss the complaint in view of the Affidavit of
Desistance executed by Cynthia. The motion was denied for lack of merit. 8
On 7 February 2000, the Regional Trial Court rendered judgment in favor of petitioners
dismissing the complaint for damages, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of the defendants and against
plaintiffs hereby DISMISSING the instant complaint considering that plaintiffs have
authorized Cynthia Pomasin to settle the case amicably for ₱200,000.00; and that the
proximate cause of the accident did not arise from the fault or negligence of defendants’
driver/employee but from plaintiff’s driver.9
The trial court considered the testimony of Jabon regarding the incident more convincing
and reliable than that of Gregorio’s, a mere passenger, whose observation and attention to
the road is not as focused as that of the driver. The trial court concluded that Laarni
caused the collision of the jitney and the tractor-trailer. The trial court likewise upheld the
Affidavit of Desistance as having been executed with the tacit consent of respondents.

153
The Court of Appeals disagreed with the trial court and ruled that the reckless driving of
Jabon caused the vehicular collision. In support of such finding, the Court of Appeals relied
heavily on Gregorio’s testimony that Jabon was driving the tractor-trailer downward too
fast and it encroached the lane of the jitney. Based on the gravity of the impact and the
damage caused to the jitney resulting in the death of some passengers, the Court of
Appeals inferred that Jabon must be speeding. The appellate court noted that the
restriction in Jabon’s driver’s license was violated, thus, giving rise to the presumption that
he was negligent at the time of the accident. Tison was likewise held liable for damages for
his failure to prove due diligence in supervising Jabon after he was hired as driver of the
truck. Finally, the appellate court disregarded the Affidavit of Desistance executed by
Cynthia because the latter had no written power of attorney from respondents and that she
was so confused at the time when she signed the affidavit that she did not read its content.
The dispositive portion of the assailed Decision states:
WHEREFORE, the present appeal is granted, and the trial court’s Decision dated February
7, 2003 is set aside. Defendants-appellees are ordered to pay plaintiffs-appellants or their
heirs the following:
a) Actual damages of ₱136,000.00 as above computed, to be offset with the
₱200,000.00 received by plaintiff-appellant Cynthia Pomasin;
b) Civil indemnity of ₱50,000.00 for the death of each victim, to be offset with the
balance of ₱64,000.00 from the aforementioned ₱200,000.00 of civil indemnity
received by plaintiff-appellant Cynthia Pomasin. Hence, the net amount is computed
at ₱37,200.00 each, as follows:
Narcisa Pomasin ₱37,200.00
Laarni Pomasin ₱37,200.00
Andrea P. Pagunsan ₱37,200.00
Dionisio Perol ₱37,200.00
Annie Jane P. Pagunsan ₱37,200.00
c) Moral damages of ₱50,000.00 to each of the victims; and
d) Attorney’s fees of 10% of the total award.10
Petitioners filed a Motion for Reconsideration, which was, however, denied by the Court of
Appeals in a Resolution11 dated 19 July 2006.
The petition for review raises mixed questions of fact and law which lead back to the very
issue litigated by the trial court: Who is the negligent party or the party at fault?
The issue of negligence is factual in nature. 12 And the rule, and the exceptions, is that
factual findings of the Court of Appeals are generally conclusive but may be reviewed when:
(1) the factual findings of the Court of Appeals and the trial court are contradictory; (2) the
findings are grounded entirely on speculation, surmises or conjectures; (3) the inference
made by the Court of Appeals from its findings of fact is manifestly mistaken, absurd or
impossible; (4) there is grave abuse of discretion in the appreciation of facts; (5) the
appellate court, in making its findings, goes beyond the issues of the case and such
findings are contrary to the admissions of both appellant and appellee; (6) the judgment of
the Court of Appeals is premised on a misapprehension of facts; (7) the Court of Appeals
fails to notice certain relevant facts which, if properly considered, will justify a different
conclusion; and (8) the findings of fact of the Court of Appeals are contrary to those of the
trial court or are mere conclusions without citation of specific evidence, or where the facts
set forth by the petitioner are not disputed by respondent, or where the findings of fact of
154
the Court of Appeals are premised on the absence of evidence but are contradicted by the
evidence on record.13
The exceptions to the rule underscore the substance and weight of the findings of the trial
court. They render inconclusive contrary findings by the appellate court. The reason is now
a fundamental principle:
[A]ppellate courts do not disturb the findings of the trial courts with regard to the
assessment of the credibility of witnesses. The reason for this is that trial courts have the
‘unique opportunity to observe the witneses first hand and note their demeanor, conduct
and attitude under grilling examination.
The exceptions to this rule are when the trial court’s findings of facts and conclusions are
not supported by the evidence on record, or when certain facts of substance and value,
likely to change the outcome of the case, have been overlooked by the trial court, or when
the assailed decision is based on a misapprehension of facts.14
This interplay of rules and exceptions is more pronounced in this case of quasi-delict in
which, according to Article 2176 of the Civil Code, whoever by act or omission causes
damage to another, there being fault or negligence, is obliged to pay for the damage done.
To sustain a claim based on quasi-delict, the following requisites must concur: (a) damage
suffered by the plaintiff; (b) fault or negligence of defendant; and (c) connection of cause
and effect between the fault or negligence of defendant and the damage incurred by the
plaintiff.15 These requisites must be proved by a preponderance of evidence. 16 The
claimants, respondents in this case, must, therefore, establish their claim or cause of
action by preponderance of evidence, evidence which is of greater weight, or more
convincing than that which is offered in opposition to it.17
The trial court found that the jitney driver was negligent. We give weight to this finding
greater than the opposite conclusion reached by the appellate court that the driver of the
tractor-trailer caused the vehicular collision.
One reason why the trial court found credible the version of Jabon was because his
concentration as driver is more focused than that of a mere passenger. The trial court
expounded, thus:
In the appreciation of the testimony of eye-witnesses, one overriding consideration is their
opportunity for observation in getting to know or actually seeing or observing the matter
they testify to. This most particularly holds true in vehicular collision or accident cases
which oftentimes happen merely momentarily or in the split of a second. In the case of a
running or travelling vehicle, especially in highway travel which doubtless involves faster
speed than in ordinary roads, the driver is concentrated on his driving continuously from
moment to moment even in long trips. While in the case of a mere passenger, he does not
have to direct his attention to the safe conduct of the travelling vehicle, as in fact he may
converse with other passengers and pay no attention to the driving or safe conduct of the
travelling vehicle, as he may even doze off to sleep if he wants to, rendering his opportunity
for observation on the precise cause of the accident or collision or immediately preceding
thereto not as much as that of the driver whose attention is continuously focused on his
driving. So that as between the respective versions of the plaintiffs thru their passenger and
that of the defendants thru their driver as to the cause or antecedent causes that led to the
vehicular collision in this case, the version of the driver of defendant should ordinarily be
more reliable than the version of a mere passenger of Plaintiffs’ vehicle, simply because the
attention of the passenger is not as much concentrated on the driving as that of the driver,
155
consequently the capacity for observation of the latter of the latter on the matter testified to
which is the precise point of inquiry --- the proximate cause of the accident --- is more
reasonably reliable. Moreover, the passenger’s vision is not as good as that of the driver
from the vantage point of the driver’s seat especially in nighttime, thus rendering a
passenger’s opportunity for observation on the antecedent causes of the collision lesser
than that of the driver. This being so, this Court is more inclined to believe the story of
defendant’s driver Claudio Jabon that the jitney driven by Laarni Pomasin fell off the
shoulder of the curved road causing it to run thereafter in a zigzag manner and in the
process the two vehicles approaching each other from opposite directions at highway speed
came in contact with each other, the zigzagging jeep hitting the left fender of the truck all
the way to the fuel tank, the violent impact resulting in the lighter vehicle, the jitney, being
thrown away due to the disparate size of the truck. 18
The appellate court labelled the trial court’s rationalization as a "sweeping conjecture" 19 and
countered that Gregorio was actually occupying the front seat of the jitney and had actually
a clear view of the incident despite the fact that he was not driving.
While it is logical that a driver’s attention to the road travelled is keener than that of a mere
passenger, it should also be considered that the logic will hold only if the two are similarly
circumstanced, and only as a general rule, so that, it does not necessarily follow that
between the opposing testimonies of a driver and a passenger, the former is more credible.
The factual setting of the event testified on must certainly be considered.
The trial court did just that in the instant case. Contrary to the observation of the Court of
Appeals, the relative positions of a driver and a passenger in a vehicle was not the only
basis of analysis of the trial court. Notably, aside from Jabon’s alleged vantage point to
clearly observe the incident, the trial court also took into consideration Gregorio’s
admission that prior to the accident, the jitney was running on the "curving and downward"
portion of the highway. The appellate court, however, took into account the other and
opposite testimony of Gregorio that it was their jitney that was going uphill and when it was
about to reach a curve, he saw the incoming truck running very fast and encroaching the
jitney’s lane.
We perused the transcript of stenographic notes and found that the truck was actually
ascending the highway when it collided with the descending jitney.
During the direct examination, Jabon narrated that the tractor-trailer was ascending at a
speed of 35 to 40 kilometers per hour when he saw the jitney on the opposite lane running
in a zigzag manner, thus:
Q: Now, when you passed by the municipality of Polangui, Albay at about 5:00 of August
12, 1994, could you tell the Court if there was any untoward incident that happened?
A: There was sir.
Q: Could you please tell the Court?
A: While on my way to Liboro coming from Sorsogon, I met on my way a vehicle going on a
zigzag direction and it even fell on the shoulder and proceeded going on its way on a zigzag
direction.
Q: Could you describe to the Court what was the kind of vehicle you saw running in zigzag
direction?
A: A Toyota-jitney loaded with passengers with top-load.
Q: You said that the top[-]load of the jeep is loaded?
A: Yes, sir.
156
Q: Could you please tell the Court what was your speed at the time when you saw that
jeepney with top[-]load running on a zigzag manner?
A: I was running 35 to 40 kilometers per hour because I was ascending plain. (Emphasis
supplied).20
In that same direct examination, Jabon confirmed that he was ascending, viz:
Q: Could you please describe the condition in the area at the time of the incident, was it
dark or day time?
A: It was still bright.
COURT: But it was not approaching sunset?
A: Yes, sir.
Q: Was there any rain at that time?
A: None sir.
Q: So the road was dry?
A: Yes sir.
Q: You said you were ascending towards the direction of Liboro, Camarines Sur, is that
correct at the time the incident happened?
A: Yes sir.21 (Emphasis supplied).
Upon the other hand, Gregorio, during his direct examination described the road condition
where the collision took place as "curving and downward," thus:
Q: Could you please describe the place where the incident happened in so far as the road
condition is concerned?
A: The road was curving and downward.
Q: And the road was of course clear from traffic, is that correct?
A: Yes sir.
Q: And practically, your jitney was the only car running at that time?
A: Yes sir.22 (Emphasis supplied).
Significantly, this is a confirmation of the testimony of Jabon.
However, on rebuttal, Gregorio turned around and stated that the jitney was going uphill
when he saw the tractor-trailer running down very fact and encroaching on their lane, to
wit:
Q: Mr. Claudio Jabon, the driver of the trailer truck that collided with your owner jeepney
that you were riding testified in open Court on July 24, 1997 which I quote, ‘while on my
way to Liboro coming to Sorsogon I met a vehicle going on a zig-zag direction and it even fell
on the shoulder and proceeded going on its way on zig-zag direction’, what can you say
about this statement of this witness?
A: We were no[t] zigzagging but because we were going uphill and about to reach a curved
(sic) we saw the on-coming vehicle going down very fast and encroaching on our lane so our
driver swerved our vehicle to the right but still we were hit by the on-coming
vehicle.23 (Emphasis supplied).
The declaration of Jabon with respect to the road condition was straightforward and
consistent.1awp The recollection of Gregorio veered from "curving and downward" to
uphill.24 On this point, Jabon and his testimony is more credible.
The fact that the jitney easily fell into the road shoulder, an undebated fact, supports the
trial court’s conclusion that the jitney was indeed going downhill which, it may be repeated,
was the original testimony of Gregorio that the road was "curving and downward." 25 It is
this conclusion, prodded by the inconsistency of Gregorio’s testimony, that gives credence
157
to the further testimony of Jabon that the herein respondent’s jitney, "loaded with
passengers with top-load" "was running in a zigzag manner." 26
Going downward, the jitney had the tendency to accelerate. The fall into the shoulder of the
road can result in the loss of control of the jitney, which explains why it was running in a
zigzag manner before it hit the tractor-trailer.
There was no showing that the tractor-trailer was speeding. There is a preponderance of
evidence that the tractor-trailer was in fact ascending. Considering its size and the weight
of the tractor-trailer, its speed could not be more than that of a fully loaded jitney which
was running downhill in a zigzagging manner.
Neither can it be inferred that Jabon was negligent. In hindsight, it can be argued that
Jabon should have swerved to the right upon seeing the jitney zigzagging before it collided
with the tractor-trailer. Accidents, though, happen in an instant, and, understandably in
this case, leaving the driver without sufficient time and space to maneuver a vehicle the
size of a tractor-trailer uphill and away from collision with the jitney oncoming downhill.
Clearly, the negligence of Gregorio’s daughter, Laarni was the proximate cause of the
accident.
We did not lose sight of the fact that at the time of the incident, Jabon was prohibited from
driving the truck due to the restriction imposed on his driver’s license, i.e., restriction code
2 and 3. As a matter of fact, Jabon even asked the Land Transportation Office to reinstate
his articulated license containing restriction code 8 which would allow him to drive a
tractor-trailer. The Court of Appeals concluded therefrom that Jabon was violating a traffic
regulation at the time of the collision.
Driving without a proper license is a violation of traffic regulation. Under Article 2185 of the
Civil Code, the legal presumption of negligence arises if at the time of the mishap, a person
was violating any traffic regulation. However, in Sanitary Steam Laundry, Inc. v. Court of
Appeals,27 we held that a causal connection must exist between the injury received and the
violation of the traffic regulation. It must be proven that the violation of the traffic
regulation was the proximate or legal cause of the injury or that it substantially contributed
thereto. Negligence, consisting in whole or in part, of violation of law, like any other
negligence, is without legal consequence unless it is a contributing cause of the
injury.28 Likewise controlling is our ruling in Añonuevo v. Court of Appeals 29 where we
reiterated that negligence per se, arising from the mere violation of a traffic statute, need
not be sufficient in itself in establishing liability for damages. In said case, Añonuevo, who
was driving a car, did not attempt "to establish a causal connection between the safety
violations imputed to the injured cyclist, and the accident itself. Instead, he relied on a
putative presumption that these violations in themselves sufficiently established negligence
appreciable against the cyclist. Since the onus on Añonuevo is to conclusively prove the
link between the violations and the accident, we can deem him as having failed to discharge
his necessary burden of proving the cyclist’s own liability." 30 We took the occasion to state
that:
The rule on negligence per se must admit qualifications that may arise from the logical
consequences of the facts leading to the mishap. The doctrine (and Article 2185, for that
matter) is undeniably useful as a judicial guide in adjudging liability, for it seeks to impute
culpability arising from the failure of the actor to perform up to a standard established by a
legal fiat. But the doctrine should not be rendered inflexible so as to deny relief when in
fact there is no causal relation between the statutory violation and the injury sustained.
158
Presumptions in law, while convenient, are not intractable so as to forbid rebuttal rooted in
fact. After all, tort law is remunerative in spirit, aiming to provide compensation for the
harm suffered by those whose interests have been invaded owing to the conduct of other. 31
In the instant case, no causal connection was established between the tractor-trailer
driver’s restrictions on his license to the vehicular collision. Furthermore, Jabon was able
to sufficiently explain that the Land Transportation Office merely erred in not including
restriction code 8 in his license.
Petitioners presented the Affidavit of Desistance executed by Cynthia to exonerate them
from any liability. An affidavit of desistance is usually frowned upon by courts. Little or no
persuasive value is often attached to a desistance. 32 The subject affidavit does not deserve a
second look more so that it appears that Cynthia was not armed with a special power of
attorney to enter into a settlement with petitioners. At any rate, it is an exercise of futility to
delve into the effects of the affidavit of desistance executed by one of the respondents since
it has already been established that petitioners are not negligent.
WHEREFORE, the petition is GRANTED. The challenged Decision and Resolution of the
Court of Appeals are REVERSED and SET ASIDE. Civil Case No. 94-3418 lodged before the
Regional Trial Court of Antipolo City, Branch 74, is DISMISSED for lack of merit.
SO ORDERED.
JOSE PORTUGAL PEREZ
Associate Justice
WE CONCUR:

G.R. No. 188715               April 6, 2011

Petitioner,
vs.
FEDERICO P. CARIN, Respondent.
DECISION
CARPIO MORALES, J.:
Assailed via this petition for review of petitioner Rodolfo N. Regala is the May 26, 2009
Decision1 of the Court of Appeals which affirmed with modification the May 29, 2006
Decision2 of the Regional Trial Court (RTC) of Las Piñas City, Br. 255 in Civil Case No. LP-
99-0058, ordering petitioner to pay respondent Federico P. Carin moral and exemplary
damages and attorney’s fees.
Petitioner and respondent are adjacent neighbors at Spirig Street, BF Resort Village, Las
Piñas City. When petitioner decided to renovate his one storey residence by constructing a
second floor, he under the guise of merely building an extension to his residence,
approached respondent sometime in May 1998 for permission to bore a hole through a
perimeter wall shared by both their respective properties, to which respondent verbally
consented on condition that petitioner would clean the area affected by the work.
As earlier indicated, petitioner’s real intention was to build a second floor, in fact with a
terrace atop the dividing wall. In the course of the construction of the second floor,
respondent and his wife Marietta suffered from the dust and dirt which fell on their
property. As petitioner failed to address the problem to respondent’s satisfaction,
respondent filed a letter-complaint 3 with the Office of the City Engineer and Building
Official of Las Piñas City on June 9, 1998.
159
In his letter-complaint, respondent related that, despite the lack of a building permit for the
construction of a second floor, petitioner had demolished the dividing wall, failed to clean
the debris falling therefrom, allowed his laborers to come in and out of his (respondent’s)
property without permission by simply jumping over the wall, and trampled on his
vegetable garden; and that despite his protestations, petitioner persisted in proceeding with
the construction, he claiming to be the owner of the perimeter wall.
Several "sumbongs"4 (complaints) were soon lodged by respondent before the Office of
Barangay Talon Dos against petitioner for encroachment, rampant invasion of privacy and
damages arising from the construction, and for illegal construction of scaffoldings inside
his (respondent’s) property.
As no satisfactory agreement was reached at the last barangay conciliation proceedings in
December 1998, and petitioner having continued the construction work despite issuance of
several stop-work notices from the City Engineer’s Office for lack of building permit,
respondent filed on March 1999 a complaint 5 for damages against petitioner before the RTC
of Las Piñas City.
In his complaint, respondent alleged in the main that, instead of boring just one hole as
agreed upon, petitioner demolished the whole length of the wall from top to bottom into five
parts for the purpose of constructing a second floor with terrace; and that debris and dust
piled up on respondent’s property ruining his garden and forcing him to, among other
things, shut some of the windows of his house. Respondent thus prayed for the award of
moral and exemplary damages.
Petitioner, denying respondent’s allegations, claimed in his Answer 6 that he was the sole
and exclusive owner of the wall referred to as a perimeter wall, the same having been built
within the confines of his property and being part and parcel of the house and lot package
he purchased from the developer, BF Homes, Inc., in 1981; that the issue of its ownership
has never been raised by respondent or his predecessor; and that securing the consent of
respondent and his neighbors was a mere formality in compliance with the requirements of
the Building Official to facilitate the issuance of a building permit, hence, it should not be
taken to mean that he (petitioner) acknowledges respondent to be a co-owner of the wall.
He added that he eventually secured the requisite building permit 7 in March 1999 and had
duly paid the administrative fine. 8
Further, petitioner, denying that a demolition of the whole length of the wall took place,
claimed that he and his contractor’s laborers had been diligently cleaning respondent’s area
after every day’s work until respondent arrogantly demanded the dismantling of the
scaffoldings, and barred the workforce from, and threatening to shoot anyone entering the
premises; and that the complaint was instituted by respondent as leverage to force him to
withdraw the criminal case for slander and light threats 9 which he had earlier filed against
respondent for uttering threats and obscenities against him in connection with the
construction work.
At the trial, after respondent and his wife confirmed the material allegations of the
complaint, petitioner took the witness stand and presented his witnesses.
Architect Antonio Punzalan III10 testified that he installed GI sheets to prevent debris from
falling onto respondent’s property and had instructed his workers to clean the affected area
after every work day at 5:00 p.m., but they were later barred by respondent from entering
his property.

160
Engineer Crisostomo Chan11 from the Office of the Building Official of Las Piñas City
testified, among other things, on the circumstances surrounding the complaint for illegal
construction filed by respondent and that a building permit was eventually issued to
petitioner on March 15, 1999.
Engineer Sonia Haduca12 declared that upon a joint survey conducted on the properties of
both petitioner and respondent in December 1998 to determine their exact boundaries, she
found an encroachment by petitioner of six centimeters at the lower portion of the existing
wall negligible, since the Land Survey Law permits an encroachment of up to ten
centimeters.
By Decision of May 29, 2006, Branch 255 of the Las Piñas City RTC rendered judgment in
favor of respondent whom it awarded moral damages in the sum of ₱100,000, exemplary
damages of ₱100,000 and attorney’s fees of ₱50,000 plus costs of suit.13
In finding for respondent, the trial court declared that, apart from the fact that petitioner
knowingly commenced the renovation of his house without the requisite building permit
from the City Engineer’s Office, he misrepresented to respondent his true intent of
introducing renovations. For, it found that instead of just boring a hole in the perimeter
wall as originally proposed, petitioner divided the wall into several sections to serve as a
foundation for his firewall (which ended up higher than the perimeter wall) and the second
storey of his house.
The trial court further declared that respondent and his family had thus to contend with
the noise, dust and debris occasioned by the construction, which petitioner and his work
crew failed to address despite respondent’s protestations, by refusing to clean the mess or
install the necessary safety devices.
Applying Article 2176 of the Civil Code on quasi-delicts, the trial court ruled that petitioner
was at fault and negligent for failing to undertake sufficient safety measures to prevent
inconvenience and damage to respondent to thus entitle respondent to moral and
exemplary damages.
On appeal by petitioner, the Court of Appeals affirmed the trial court’s decision with
modification by reducing the award of moral and exemplary damages to ₱50,000 and
₱25,000, respectively. The appellate court anchored its affirmance on Article 19 of the New
Civil Code which directs every person to, in the exercise of his rights and in the
performance of his duties, act with justice, and observe honesty and good faith.
By Resolution14 of July 10, 2009, the appellate court denied petitioner’s motion for
reconsideration as well as respondent’s prayer in his Comment that the original awards
made by the trial court be restored.
Hence, petitioner’s present petition faulting the appellate court in
Affirming with modification the decision of the trial court….considering the absence of any
competent proof to warrant the grant of moral and exemplary damages as well as attorney’s
fees.15 (underscoring supplied)
Petitioner maintains that since moral and exemplary damages are compensatory in nature,
being meant neither to punish nor enrich, the claimant must establish that not only did he
sustain injury but also that the other party had acted in bad faith or was motivated by ill
will. To petitioner, respondents failed to discharge this burden. He adds that the trial court
did not delve into whether petitioner’s renovations were the primary cause of respondent’s
claimed injuries, viz violation of privacy, sleepless nights and mental anguish, among other
things, as it instead focused on the lack of a building permit as basis for the awards.
161
Rebutting the testimony of respondent’s wife as to the alleged unauthorized intrusion of
petitioner’s workers into respondent’s property in order to erect scaffoldings, petitioner
points out that such an undertaking would take a considerable length of time and could
not have gone unnoticed had consent not been given by respondent.
Moreover, petitioner posits, if consent had truly been withheld, there was nothing to
prevent respondent from dismantling or immediately removing the offending structures – a
course of action he did not even attempt.
In his Comment16 to the petition, respondent quotes heavily from the appellate and trial
court’s findings that fault and negligence attended petitioner’s renovation, thus justifying
the award of damages. He goes on to reiterate his plea that the awards given by the trial
court in its decision of May 29, 2006 should be reinstated.
The petition is partly impressed with merit.
The trial court’s award of moral and exemplary damages, as affirmed by the appellate court,
was premised on the damage and suffering sustained by respondent arising from quasi-
delict under Article 217617 of the Civil Code. Thus the trial court explained:
Indeed, there was fault or negligence on the part of the defendant when he did not provide
sufficient safety measures to prevent causing a lot of inconvenience and disturbance to the
plaintiff and his family. The evidence presented by the plaintiff regarding the dirt or debris,
as well as the absence of devices or safety measures to prevent the same from falling inside
plaintiff’s property, were duly established. It did not help the cause of the defendant that he
made a lot of misrepresentations regarding the renovations on his house and he did not
initially have a building permit for the same. In fact, it was only after the construction
works were completed that the said permit was issued and upon payment of an
administrative fine by the defendant. 18
In prayers for moral damages, however, recovery is more an exception rather than the rule.
Moral damages are not meant to be punitive but are designed to compensate and alleviate
the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar harm unjustly caused to a
person. To be entitled to such an award, the claimant must satisfactorily prove that he has
suffered damages and that the injury causing it has sprung from any of the cases listed in
Articles 221919 and 222020 of the Civil Code. Moreover, the damages must be shown to be
the proximate result of a wrongful act or omission. The claimant must thus establish the
factual basis of the damages and its causal tie with the acts of the defendant.
In fine, an award of moral damages calls for the presentation of 1) evidence of besmirched
reputation or physical, mental or psychological suffering sustained by the claimant; 2) a
culpable act or omission factually established; 3) proof that the wrongful act or omission of
the defendant is the proximate cause of the damages sustained by the claimant; and 4) the
proof that the act is predicated on any of the instances expressed or envisioned by Article
2219 and Article 2220 of the Civil Code.21
In the present case, respondent failed to establish by clear and convincing evidence that
the injuries he sustained were the proximate effect of petitioner’s act or omission. It thus
becomes necessary to instead look into the manner by which petitioner carried out his
renovations to determine whether this was directly responsible for any distress respondent
may have suffered since the law requires that a wrongful or illegal act or omission must
have preceded the damages sustained by the claimant.

162
It bears noting that petitioner was engaged in the lawful exercise of his property rights to
introduce renovations to his abode. While he initially did not have a building permit and
may have misrepresented his real intent when he initially sought respondent’s consent, the
lack of the permit was inconsequential since it only rendered petitioner liable to
administrative sanctions or penalties.1avvphi1
The testimony of petitioner and his witnesses, specifically Architect Punzalan,
demonstrates that they had actually taken measures to prevent, or at the very least,
minimize the damage to respondent’s property occasioned by the construction work.
Architect Punzalan details how upon reaching an agreement with petitioner for the
construction of the second floor, he (Punzalan) surveyed petitioner’s property based on the
Transfer Certificate of Title (TCT) and Tax Declarations 22 and found that the perimeter wall
was within the confines of petitioner’s property; that he, together with petitioner, secured
the consent of the neighbors (including respondent) prior to the start of the renovation as
reflected in a Neighbor’s Consent 23 dated June 12, 1998; before the construction began, he
undertook measures to prevent debris from falling into respondent’s property such as the
installation of GI sheet strainers, the construction of scaffoldings 24 on respondent’s
property, the instructions to his workers to clean the area before leaving at 5:00 p.m; 25 and
that the workers conducted daily clean-up of respondent’s property with his consent, until
animosity developed between the parties. 26
Malice or bad faith implies a conscious and intentional design to do a wrongful act for a
dishonest purpose or moral obliquity; it is different from the negative idea of negligence in
that malice or bad faith contemplates a state of mind affirmatively operating with furtive
design or ill will.27 While the Court harbors no doubt that the incidents which gave rise to
this dispute have brought anxiety and anguish to respondent, it is unconvinced that the
damage inflicted upon respondent’s property was malicious or willful, an element crucial to
merit an award of moral damages under Article 2220 of the Civil Code.
Necessarily, the Court is not inclined to award exemplary damages. 28
Petitioner, however, cannot steer clear from any liability whatsoever. Respondent and his
family’s rights to the peaceful enjoyment of their property have, at the very least, been
inconvenienced from the incident borne of petitioner’s construction work. Any pecuniary
loss or damage suffered by respondent cannot be established as the records are bereft of
any factual evidence to establish the same. Nominal damages may thus be adjudicated in
order that a right of the plaintiff, respondent herein, which has been violated or invaded by
the defendant, petitioner herein, may be vindicated or recognized, and not for the purpose
of indemnifying the plaintiff for any loss suffered by him. 29
WHEREFORE, the petition is GRANTED. The May 26, 2009 Decision of the Court of
Appeals is VACATED. The Court orders petitioner to pay respondent the sum of ₱25,000 as
nominal damages.
No costs.
SO ORDERED.

G.R. No. L-2075            November 29, 1949

MARGARITA AFIALDA, plaintiff-appellant,
vs.
BASILIO HISOLE and FRANCISCO HISOLE, defendants-appellees.
163
Nicolas P. Nonato for appellant.
Gellada, Mirasol and Ravena for appellees.
REYES, J.:
This is an action for damages arising from injury caused by an animal. The complaint
alleges that the now deceased, Loreto Afialda, was employed by the defendant spouses as
caretaker of their carabaos at a fixed compensation; that while tending the animals he was,
on March 21, 1947, gored by one of them and later died as a consequence of his injuries;
that the mishap was due neither to his own fault nor to force majeure; and that plaintiff is
his elder sister and heir depending upon him for support.
Before filing their answer, defendants moved for the dismissal of the complaint for lack of a
cause of action, and the motion having been granted by the lower court, plaintiff has taken
this appeal.
Plaintiff seeks to hold defendants liable under article 1905 of the Civil Code, which reads:
The possessor of an animal, or the one who uses the same, is liable for any damages
it may cause, even if such animal should escape from him or stray away.
This liability shall cease only in case, the damage should arise from force majeure or
from the fault of the person who may have suffered it.
The question presented is whether the owner of the animal is liable when damage is caused
to its caretaker.
The lower court took the view that under the above-quoted provision of the Civil Code, the
owner of an animal is answerable only for damages caused to a stranger, and that for
damage caused to the caretaker of the animal the owner would be liable only if he had been
negligent or at fault under article 1902 of the same code. Claiming that the lower court was
in error, counsel for plaintiff contends that the article 1905 does not distinguish between
damage caused to the caretaker and makes the owner liable whether or not he has been
negligent or at fault. For authority counsel cites the following opinion which Manresa
quotes from a decision of the Spanish Supreme Court:
El articulo 1905 del codigo Civil no consienta otra interpretacion que la que, clara y
evidentemente, se deriva de sus terminos literales, bastando, segun el mismo, que un
animal cause perjuicio para que nasca la responsibilidad del dueno, aun no
imputandose a este ninguna clase de culpa o negligencia, habida,sin duda, cuenta
por el lgislador de que tal concepto de dueno es suficiente para que arrastre las
consecuencias favorables o adversas de esta clase de propiedad, salvo la exception en
el mismo contenida. (12 Manresa, Commentaries on the Spanish CivilCode, 573.)
This opinion, however, appears to have been rendered in a case where an animal caused
injury to a stranger or third person. It is therefore no authority for a case like the present
where the person injured was the caretaker of the animal. The distinction is important. For
the statute names the possessor or user of the animal as the person liable for "any
damages it may cause," and this for the obvious reason that the possessor or user has the
custody and control of the animal and is therefore the one in a position to prevent it from
causing damage.
In the present case, the animal was in custody and under the control of the caretaker, who
was paid for his work as such. Obviously, it was the caretaker's business to try to prevent
the animal from causing injury or damage to anyone, including himself. And being injured
by the animal under those circumstances, was one of the risks of the occupation which he
had voluntarily assumed and for which he must take the consequences.
164
In a decision of the Spanish Supreme Court, cited by Manresa in his Commentaries (Vol.
12, p. 578), the death of an employee who was bitten by a feline which his master had
asked him to take to his establishment was by said tribunal declared to be "a veritable
accident of labor" which should come under the labor laws rather than under article 1905
of the Civil Code. The present action, however, is not brought under the Workmen's
Compensation Act, there being no allegation that, among other things, defendant's
business, whatever that might be, had a gross income of P20,000. As already stated,
defendant's liability is made to rest on article 1905 of the Civil Code. but action under that
article is not tenable for the reasons already stated. On the other hand, if action is to be
based on article 1902 of the Civil Code, it is essential that there be fault or negligence on
the part of the defendants as owners of the animal that caused the damage. But the
complaint contains no allegation on those points.
There being no reversible error in the order appealed from, the same is hereby affirmed, but
without costs in view of the financial situation of the appellant.
Moran, C.J., Ozaeta, Paras, Bengzon, Padilla, Tuason, Montemayor and Torres, JJ., concur.

G.R. No. L-53401 November 6, 1989

THE ILOCOS NORTE ELECTRIC COMPANY, petitioner,
vs.
HONORABLE COURT OF APPEALS, (First Division) LILIAN JUAN LUIS, JANE JUAN
YABES, VIRGINIA JUAN CID, GLORIA JUAN CARAG, and PURISIMA
JUAN, respondents.
Herman D. Coloma for petitioner.
Glicerio S. Ferrer for private respondents.

PARAS, J.:
Sought to be reversed in this petition is the Decision * of the respondent Court of Appeals'
First Division, setting aside the judgment of the then Court of First Instance (CFI) of Ilocos
Norte, with the following dispositive portion:
WHEREFORE, the appealed judgment is hereby set aside and another rendered
in its stead whereby defendant is hereby sentenced to pay plaintiffs actual
damages of P30,229.45; compensatory damages of P50,000.00; exemplary
damages of P10,000.00; attorney's fees of P3,000.00; plus the costs of suit in
both instances. (p. 27 Rollo)
Basically, this case involves a clash of evidence whereby both patties strive for the
recognition of their respective versions of the scenario from which the disputed claims
originate. The respondent Court of Appeals (CA) summarized the evidence of the parties as
follows:
From the evidence of plaintiffs it appears that in the evening of June 28 until
the early morning of June 29, 1967 a strong typhoon by the code name
"Gening" buffeted the province of Ilocos Norte, bringing heavy rains and
consequent flooding in its wake. Between 5:30 and 6:00 A.M. on June 29,
1967, after the typhoon had abated and when the floodwaters were beginning
to recede the deceased Isabel Lao Juan, fondly called Nana Belen, ventured out
of the house of her son-in-law, Antonio Yabes, on No. 19 Guerrero Street,
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Laoag City, and proceeded northward towards the direction of the Five Sisters
Emporium, of which she was the owner and proprietress, to look after the
merchandise therein that might have been damaged. Wading in waist-deep
flood on Guerrero, the deceased was followed by Aida Bulong, a Salesgirl at the
Five Sisters Grocery, also owned by the deceased, and by Linda Alonzo
Estavillo, a ticket seller at the YJ Cinema, which was partly owned by the
deceased. Aida and Linda walked side by side at a distance of between 5 and 6
meters behind the deceased, Suddenly, the deceased screamed "Ay" and
quickly sank into the water. The two girls attempted to help, but fear
dissuaded them from doing so because on the spot where the deceased sank
they saw an electric wire dangling from a post and moving in snake-like
fashion in the water. Upon their shouts for help, Ernesto dela Cruz came out of
the house of Antonio Yabes. Ernesto tried to go to the deceased, but at four
meters away from her he turned back shouting that the water was grounded.
Aida and Linda prodded Ernesto to seek help from Antonio Yabes at the YJ
Cinema building which was four or five blocks away.
When Antonio Yabes was informed by Ernesto that his mother-in law had been
electrocuted, he acted immediately. With his wife Jane, together with Ernesto
and one Joe Ros, Yabes passed by the City Hall of Laoag to request the police
to ask the people of defendant Ilocos Norte Electric Company or INELCO to cut
off the electric current. Then the party waded to the house on Guerrero Street.
The floodwater was receding and the lights inside the house were out indicating
that the electric current had been cut off in Guerrero. Yabes instructed his
boys to fish for the body of the deceased. The body was recovered about two
meters from an electric post.
In another place, at about 4:00 A.M. on that fateful date, June 29, 1967,
Engineer Antonio Juan, Power Plant Engineer of the National Power
Corporation at the Laoag Diesel-Electric Plant, noticed certain fluctuations in
their electric meter which indicated such abnormalities as grounded or short-
circuited lines. Between 6:00 and 6:30 A.M., he set out of the Laoag NPC
Compound on an inspection. On the way, he saw grounded and disconnected
lines. Electric lines were hanging from the posts to the ground. Since he could
not see any INELCO lineman, he decided to go to the INELCO Office at the Life
Theatre on Rizal Street by way of Guerrero. As he turned right at the
intersection of Guerrero and Rizal, he saw an electric wire about 30 meters
long strung across the street "and the other end was seeming to play with the
current of the water." (p. 64, TSN, Oct. 24, 1972) Finding the Office of the
INELCO still closed, and seeing no lineman therein, he returned to the NPC
Compound.
At about 8:10 A.M., Engr. Juan went out of the compound again on another
inspection trip. Having learned of the death of Isabel Lao Juan, he passed by
the house of the deceased at the corner of Guerrero and M.H. del Pilar streets
to which the body had been taken. Using the resuscitator which was a
standard equipment in his jeep and employing the skill he acquired from an in
service training on resuscitation, he tried to revive the deceased. His efforts
proved futile. Rigor mortis was setting in. On the left palm of the deceased,
166
Engr. Juan noticed a hollow wound. Proceeding to the INELCO Office, he met
two linemen on the way. He told them about the grounded lines of the INELCO
In the afternoon of the same day, he went on a third inspection trip
preparatory to the restoration of power. The dangling wire he saw on Guerrero
early in the morning of June 29, 1967 was no longer there.
Many people came to the house at the corner of Guerrero and M.H. del Pilar
after learning that the deceased had been electrocuted. Among the
sympathizers was Dr. Jovencio Castro, Municipal Health Officer of Sarrat,
Ilocos Norte. Upon the request of the relatives of the deceased, Dr. Castro
examined the body at about 8:00 A.M. on June 29, 1967. The skin was grayish
or, in medical parlance, cyanotic, which indicated death by electrocution. On
the left palm, the doctor found an "electrically charged wound" (Exh. C-1: p.
101, TSN, Nov. 28, 1972) or a first degree burn. About the base of the thumb
on the left hand was a burned wound. (Exh. C-2, pp. 102-103, Ibid.) The
certificate of death prepared by Dr. Castro stated the cause of' death
as ,'circulatory shock electrocution" (Exh. I; p. 103, Ibid.).
In defense and exculpation, defendant presented the testimonies of its officers
and employees, namely, Conrado Asis, electric engineer; Loreto Abijero,
collector-inspector; Fabico Abijero, lineman; and Julio Agcaoili, president-
manager of INELCO Through the testimonies of these witnesses, defendant
sought to prove that on and even before June 29, 1967 the electric service
system of the INELCO in the whole franchise area, including Area No. 9 which
covered the residence of Antonio Yabes at No. 18 Guerrero Street, did not suffer
from any defect that might constitute a hazard to life and property. The service
lines, devices and other INELCO equipment in Area No. 9 had been newly-
installed prior to the date in question. As a public service operator and in line
with its business of supplying electric current to the public, defendant had
installed safety devices to prevent and avoid injuries to persons and damage to
property in case of natural calamities such as floods, typhoons, fire and others.
Defendant had 12 linesmen charged with the duty of making a round-the-clock
check-up of the areas respectively assigned to them.
Defendant asserts that although a strong typhoon struck the province of Ilocos
Norte on June 29, 1967, putting to streets of Laoag City under water, only a
few known places in Laoag were reported to have suffered damaged electric
lines, namely, at the southern approach of the Marcos Bridge which was
washed away and where the INELCO lines and posts collapsed; in the eastern
part near the residence of the late Governor Simeon Mandac; in the far north
near the defendant's power plant at the corner of Segundo and Castro Streets,
Laoag City and at the far northwest side, near the premises of the Ilocos Norte
National High School. Fabico Abijero, testified that in the early morning before
6 o'clock on June 29, 1967 he passed by the intersection of Rizal and Guerrero
Streets to switch off the street lights in Area No. 9. He did not see any cut or
broken wires in or near the vicinity. What he saw were many people fishing out
the body of Isabel Lao Juan.
A witness in the person of Dr. Antonio Briones was presented by the defense to
show that the deceased could not have died of electrocution Substantially, the
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 testimony of the doctor is as follows: Without an autopsy on the cadaver of the
victim, no doctor, not even a medicolegal expert, can speculate as to the real
cause of death. Cyanosis could not have been found in the body of the
deceased three hours after her death, because cyanosis which means lack of
oxygen circulating in the blood and rendering the color of the skin purplish,
appears only in a live person. The presence of the elongated burn in the left
palm of the deceased (Exhibits C-1 and C-2) is not sufficient to establish her
death by electrocution; since burns caused by electricity are more or less
round in shape and with points of entry and exit. Had the deceased held the
lethal wire for a long time, the laceration in her palm would have been bigger
and the injury more massive. (CA Decision, pp. 18-21, Rollo)
An action for damages in the aggregate amount of P250,000 was instituted by the heirs of
the deceased with the aforesaid CFI on June 24, 1968. In its Answer (Vide, Record on
Appeal, p. 55, Rollo), petitioner advanced the theory, as a special defense, that the deceased
could have died simply either by drowning or by electrocution due to negligence
attributable only to herself and not to petitioner. In this regard, it was pointed out that the
deceased, without petitioner's knowledge, caused the installation of a burglar deterrent by
connecting a wire from the main house to the iron gate and fence of steel matting, thus,
charging the latter with electric current whenever the switch is on. Petitioner then
conjectures that the switch to said burglar deterrent must have been left on, hence,
causing the deceased's electrocution when she tried to open her gate that early morning of
June 29, 1967. After due trial, the CFI found the facts in favor of petitioner and dismissed
the complaint but awarded to the latter P25,000 in moral damages and attorney's fees of
P45,000. An appeal was filed with the CA which issued the controverted decision.
In this petition for review the petitioner assigns the following errors committed by the
respondent CA:
1. The respondent Court of Appeals committed grave abuse of
discretion and error in considering the purely hearsay alleged
declarations of Ernesto de la Cruz as part of the res gestae.
2. The respondent Court of Appeals committed grave abuse of
discretion and error in holding that the strong typhoon "Gening"
which struck Laoag City and Ilocos Norte on June 29, 1967 and
the flood and deluge it brought in its wake were not fortuitous
events and did not exonerate petitioner-company from liability for
the death of Isabel Lao Juan.
3. The respondent Court of Appeals gravely abused its discretion
and erred in not applying the legal principle of "assumption of risk"
in the present case to bar private respondents from collecting
damages from petitioner company.
4. That the respondent Court of Appeals gravely erred and abused
its discretion in completely reversing the findings of fact of the trial
court.
5. The findings of fact of the respondent Court of Appeals are
reversible under the recognized exceptions.
6. The trial court did not err in awarding moral damages and
attorney's fees to defendant corporation, now petitioner company.
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 7. Assuming arguendo that petitioner company may be held liable
from the death of the late Isabel Lao Juan, the damages granted by
respondent Court of Appeals are improper and exhorbitant.
(Petitioners Memorandum, p. 133, Rollo)
Basically, three main issues are apparent: (1) whether or not the deceased died of
electrocution; (2) whether or not petitioner may be held liable for the deceased's death; and
(3) whether or not the respondent CA's substitution of the trial court's factual findings for
its own was proper.
In considering the first issue, it is Our view that the same be resolved in the affirmative. By
a preponderance of evidence, private respondents were able to show that the deceased died
of electrocution, a conclusion which can be primarily derived from the photographed burnt
wounds (Exhibits "C", "C-1", "C-2") on the left palm of the former. Such wounds
undoubtedly point to the fact that the deceased had clutched a live wire of the petitioner.
This was corroborated by the testimony of Dr. Jovencio Castro who actually examined the
body of the deceased a few hours after the death and described the said burnt wounds as a
"first degree burn" (p. 144, TSN, December 11, 1972) and that they were "electrically
charged" (p. 102, TSN, November 28, 1972). Furthermore, witnesses Linda Alonzo Estavillo
and Aida Bulong added that after the deceased screamed "Ay" and sank into the water, they
tried to render some help but were overcome with fear by the sight of an electric wire
dangling from an electric post, moving in the water in a snake-like fashion (supra). The
foregoing therefore justifies the respondent CA in concluding that "(t)he nature of the
wounds as described by the witnesses who saw them can lead to no other conclusion than
that they were "burns," and there was nothing else in the street where the victim was
wading thru which could cause a burn except the dangling live wire of defendant company"
(CA Decision, p. 22, Rollo).
But in order to escape liability, petitioner ventures into the theory that the deceased was
electrocuted, if such was really the case when she tried to open her steel gate, which was
electrically charged by an electric wire she herself caused to install to serve as a burglar
deterrent. Petitioner suggests that the switch to said burglar alarm was left on. But this is
mere speculation, not backed up with evidence. As required by the Rules, "each party must
prove his own affirmative allegations." (Rule 131, Sec. 1). Nevertheless, the CA significantly
noted that "during the trial, this theory was abandoned" by the petitioner (CA Decision, p.
23, Rollo).
Furthermore the CA properly applied the principle of res gestae. The CA said:
Linda Alonzo Estavillo, a ticket seller, and Aida Bulong, a salesgirl, were with
the deceased during that fateful morning of June 29, 1967. This Court has not
been offered any sufficient reason to discredit the testimonies of these two
young ladies. They were one in the affirmation that the deceased, while wading
in the waist-deep flood on Guerrero Street five or six meters ahead of them,
suddenly screamed "Ay" and quickly sank into the water. When they
approached the deceased to help, they were stopped by the sight of an electric
wire dangling from a post and moving in snake-like fashion in the water.
Ernesto dela Cruz also tried to approach the deceased, but he turned back
shouting that the water was grounded. These bits of evidence carry much
weight. For the subject of the testimonies was a startling occurrence, and the

169
 declarations may be considered part of the res gestae. (CA Decision, p. 21,
Rollo)
For the admission of the res gestae in evidence, the following requisites must be present:
(1) that the principal act, the res gestae, be a startling occurrence; (2) that the statements
were made before the declarant had time to contrive or devise; (3) that the statements made
must concern the occurrence in question and its immediately attending circumstances
(People vs. Ner, 28 SCRA 1151; People vs. Balbas, 122 SCRA 959). We do not find any
abuse of discretion on the CA' part in view of the satisfaction of said requisites in the case
at bar.
The statements made relative to the startling occurrence are admitted in evidence precisely
as an exception to the hearsay rule on the grounds of trustworthiness and necessity.
"Trustworthiness" because the statements are made instinctively (Wesley vs. State, 53 Ala.
182), and "necessity" because such natural and spontaneous utterances are more
convincing than the testimony of the same person on the stand (Mobile vs. Ascraft 48 Ala.
31). Therefore, the fact that the declarant, Ernesto de la Cruz, was not presented to testify
does not make the testimony of Linda Alonzo Estavillo and Aida Bulong hearsay since the
said declaration is part of the res gestae. Similarly, We considered part of the res gestae a
conversation between two accused immediately after commission of the crime as overheard
by a prosecution witness (People vs. Reyes, 82 Phil. 563).
While it may be true that, as petitioner argues (vide petitioner's Memorandum, p. 135,
Rollo), Ernesto de la Cruz was not an actual witness to the instant when the deceased sank
into the waist-deep water, he acted upon the call of help of Aida Bulong and Linda Alonzo
Estavillo with the knowledge of, and immediately after, the sinking of the deceased. In fact
the startling event had not yet ceased when Ernesto de la Cruz entered the scene
considering that the victim remained submerged. Under such a circumstance, it is
undeniable that a state of mind characterized by nervous excitement had been triggered in
Ernesto de la Cruz's being as anybody under the same contingency could have experienced.
As such, We cannot honestly exclude his shouts that the water was grounded from the res
gestae just because he did not actually see the sinking of the deceased nor hear her scream
"Ay."
Neither can We dismiss the said declaration as a mere opinion of Ernesto de la Cruz. While
We concede to the submission that the statement must be one of facts rather than opinion,
We cannot agree to the proposition that the one made by him was a mere opinion. On the
contrary, his shout was a translation of an actuality as perceived by him through his sense
of touch.
Finally, We do not agree that the taking of Ernesto de la Cruz' testimony was suppressed by
the private respondents, thus, is presumed to be adverse to them pursuant to Section 5(e),
Rule 131. For the application of said Rule as against a party to a case, it is necessary that
the evidence alleged to be suppressed is available only to said party (People vs. Tulale, L-
7233, 18 May 1955, 97 Phil. 953). The presumption does not operate if the evidence in
question is equally available to both parties (StaplesHowe Printing Co. vs. Bldg. and Loan
Assn., 36 Phil. 421). It is clear from the records that petitioner could have called Ernesto de
la Cruz to the witness stand. This, precisely, was Linda Alonzo Estavillo's suggestion to
petitioner's counsel when she testified on cross examination:
Q. And that Erning de la Cruz, how far did he reach from the gate of the
house?
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 A. Well, you can ask that matter from him sir because he is here. (TSN,
p. 30, 26 Sept. 1972)
The foregoing shows that petitioner had the opportunity to verify the declarations of
Ernesto de la Cruz which, if truly adverse to private respondent, would have helped its
case. However, due to reasons known only to petitioner, the opportunity was not taken.
Coming now to the second issue, We tip the scales in the private respondents' favor. The
respondent CA acted correctly in disposing the argument that petitioner be exonerated from
liability since typhoons and floods are fortuitous events. While it is true that typhoons and
floods are considered Acts of God for which no person may be held responsible, it was not
said eventuality which directly caused the victim's death. It was through the intervention of
petitioner's negligence that death took place. We subscribe to the conclusions of the
respondent CA when it found:
On the issue whether or not the defendant incurred liability for the
electrocution and consequent death of the late Isabel Lao Juan, defendant
called to the witness-stand its electrical engineer, chief lineman, and lineman
to show exercise of extraordinary diligence and to negate the charge of
negligence. The witnesses testified in a general way about their duties and the
measures which defendant usually adopts to prevent hazards to life and limb.
From these testimonies, the lower court found "that the electric lines and other
equipment of defendant corporation were properly maintained by a well-trained
team of lineman, technicians and engineers working around the clock to insure
that these equipments were in excellent condition at all times." (P. 40, Record
on Appeal) The finding of the lower court, however, was based on what the
defendant's employees were supposed to do, not on what they actually did or
failed to do on the date in question, and not on the occasion of
the emergency situation brought about by the typhoon.
The lower court made a mistake in assuming that defendant's employees
worked around the clock during the occurrence of the typhoon on the night of
June 28 and until the early morning of June 29, 1967, Engr. Antonio Juan of
the National Power Corporation affirmed that when he first set out on an
inspection trip between 6:00 and 6:30 A.M. on June 29, 1967, he saw
grounded and disconnected electric lines of the defendant but he saw
no INELCO lineman. The INELCO Office at the Life theatre on Rizal Street
was still closed. (pp. 63-64, TSN, Oct. 24, 1972) Even the witnesses of
defendant contradict the finding of the lower court. Conrado Asis, defendant's
electrical engineer, testified that he conducted a general inspection of the
franchise area of the INELCO only on June 30, 1967, the day following the
typhoon. The reason he gave for the delay was that all their vehicles were
submerged. (p. 337, TSN, July 20, 1973) According to Asis, he arrived at his
office at 8:00 A.M. on June 30 and after briefing his men on what to do they
started out. (p. 338, lbid) One or two days after the typhoon, the INELCO
people heard "rumors that someone was electrocuted" so he sent one of his
men to the place but his man reported back that there was no damaged wire.
(p. 385, Id.) Loreto Abijero, chief lineman of defendant, corroborated Engr.
Juan. He testified that at about 8:00 A.M. on June 29, 1967 Engr. Juan came
to the INELCO plant and asked the INELCO people to inspect their lines. He
171
 went with Engr. Juan and their inspection lasted from 8:00 A.M. to 12:00
noon. (pp. 460, 465, TSN, Jan. 28, 1975) Fabico Abijero lineman of defendant,
testified that at about 6:00 on June 29, 1967 the typhoon ceased. At that time,
he was at the main building of the Divine Word College of Laoag where he had
taken his family for refuge. (pp. 510-511, Ibid.)
In times of calamities such as the one which occurred in Laoag City on the
night of June 28 until the early hours of June 29, 1967, extraordinary
diligence requires a supplier of electricity to be in constant vigil to prevent or
avoid any probable incident that might imperil life or limb. The evidence does
not show that defendant did that. On the contrary, evidence discloses that
there were no men (linemen or otherwise) policing the area, nor even manning
its office. (CA Decision, pp. 24-25, Rollo)
Indeed, under the circumstances of the case, petitioner was negligent in seeing to it that no
harm is done to the general public"... considering that electricity is an agency, subtle and
deadly, the measure of care required of electric companies must be commensurate with or
proportionate to the danger. The duty of exercising this high degree of diligence and care
extends to every place where persons have a right to be" (Astudillo vs. Manila Electric, 55
Phil. 427). The negligence of petitioner having been shown, it may not now absolve itself
from liability by arguing that the victim's death was solely due to a fortuitous event. "When
an act of God combines or concurs with the negligence of the defendant to produce an
injury, the defendant is liable if the injury would not have resulted but for his own
negligent conduct or omission" (38 Am. Jur., p. 649).
Likewise, the maxim "volenti non fit injuria" relied upon by petitioner finds no application
in the case at bar. It is imperative to note the surrounding circumstances which impelled
the deceased to leave the comforts of a roof and brave the subsiding typhoon. As testified
by Linda Alonzo Estavillo (see TSN, p. 5, 26 Sept. 1972) and Aida Bulong (see TSN, p. 43,
26 Sept. 1972), the deceased, accompanied by the former two, were on their way to the
latter's grocery store "to see to it that the goods were not flooded." As such, shall We punish
her for exercising her right to protect her property from the floods by imputing upon her the
unfavorable presumption that she assumed the risk of personal injury? Definitely not. For
it has been held that a person is excused from the force of the rule, that when he
voluntarily assents to a known danger he must abide by the consequences, if an emergency
is found to exist or if the life or property of another is in peril (65A C.S.C. Negligence(174(5),
p. 301), or when he seeks to rescue his endangered property (Harper and James, "The Law
of Torts." Little, Brown and Co., 1956, v. 2, p. 1167). Clearly, an emergency was at hand as
the deceased's property, a source of her livelihood, was faced with an impending loss.
Furthermore, the deceased, at the time the fatal incident occurred, was at a place where
she had a right to be without regard to petitioner's consent as she was on her way to
protect her merchandise. Hence, private respondents, as heirs, may not be barred from
recovering damages as a result of the death caused by petitioner's negligence (ibid., p.
1165, 1166).
But petitioner assails the CA for having abused its discretion in completely reversing the
trial court's findings of fact, pointing to the testimonies of three of its employees its
electrical engineer, collector-inspector, lineman, and president-manager to the effect that it
had exercised the degree of diligence required of it in keeping its electric lines free from
defects that may imperil life and limb. Likewise, the said employees of petitioner
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categorically disowned the fatal wires as they appear in two photographs taken on the
afternoon of June 29, 1967 (Exhs. "D" and "E"), suggesting that said wires were just hooked
to the electric post (petitioner's Memorandum, p. 170, Rollo). However, as the CA properly
held, "(t)he finding of the lower court ... was based on what the defendant's employees were
supposed to do, not on what they actually did or failed to do on the date in question, and
not on the occasion of the emergency situation brought about by the typhoon" (CA Decision,
p. 25, Rollo). And as found by the CA, which We have already reiterated above, petitioner
was in fact negligent. In a like manner, petitioner's denial of ownership of the several wires
cannot stand the logical conclusion reached by the CA when it held that "(t)he nature of the
wounds as described by the witnesses who saw them can lead to no other conclusion than
that they were 'burns', and there was nothing else in the street where the victim was
wading thru which could cause a burn except the dangling live wire of defendant company"
(supra).
"When a storm occurs that is liable to prostrate the wires, due care requires prompt efforts
to discover and repair broken lines" (Cooley on Torts, 4th ed., v. 3, p. 474). The fact is that
when Engineer Antonio Juan of the National Power Corporation set out in the early
morning of June 29, 1967 on an inspection tour, he saw grounded and disconnected lines
hanging from posts to the ground but did not see any INELCO lineman either in the streets
or at the INELCO office (vide, CA Decision, supra). The foregoing shows that petitioner's
duty to exercise extraordinary diligence under the circumstance was not observed,
confirming the negligence of petitioner. To aggravate matters, the CA found:
. . .even before June 28 the people in Laoag were already alerted about the
impending typhoon, through radio announcements. Even the fire department
of the city announced the coming of the big flood. (pp. 532-534, TSN, March
13, 1975) At the INELCO irregularities in the flow of electric current were noted
because "amperes of the switch volts were moving". And yet, despite these
danger signals, INELCO had to wait for Engr. Juan to request that defendant's
switch be cut off but the harm was done. Asked why the delay, Loreto Abijero
answered that he "was not the machine tender of the electric plant to switch off
the current." (pp. 467-468, Ibid.) How very characteristic of gross inefficiency!
(CA Decision, p. 26, Rollo)
From the preceding, We find that the CA did not abuse its discretion in reversing the trial
court's findings but tediously considered the factual circumstances at hand pursuant to its
power to review questions of fact raised from the decision of the Regional Trial Court,
formerly the Court of First Instance (see sec. 9, BP 129).
In considering the liability of petitioner, the respondent CA awarded the following in private
respondent's favor: P30,229.45 in actual damages (i.e., P12,000 for the victim's death and
P18,229.45 for funeral expenses); P50,000 in compensatory damages, computed in
accordance with the formula set in the Villa-Rey Transit case (31 SCRA 511) with the base
of P15,000 as average annual income of the deceased; P10,000 in exemplary damages;
P3,000 attorney's fees; and costs of suit. Except for the award of P12,000 as compensation
for the victim's death, We affirm the respondent CA's award for damages and attorney's
fees. Pusuant to recent jurisprudence (People vs. Mananquil, 132 SCRA 196; People vs.
Traya, 147 SCRA 381), We increase the said award of P12,000 to P30,000, thus, increasing
the total actual damages to P48,229.45.

173
The exclusion of moral damages and attorney's fees awarded by the lower court was
properly made by the respondent CA, the charge of malice and bad faith on the part of
respondents in instituting his case being a mere product of wishful thinking and
speculation. Award of damages and attorney's fees is unwarranted where the action was
filed in good faith; there should be no penalty on the right to litigate (Espiritu vs. CA, 137
SCRA 50). If damage results from a person's exercising his legal rights, it
is damnum absque injuria (Auyong Hian vs. CTA, 59 SCRA 110).
WHEREFORE, the questioned decision of the respondent, except for the slight modification
that actual damages be increased to P48,229.45 is hereby AFFIRMED.
SO ORDERED.
Melencio-Herrera (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.

G.R. No. 154259             February 28, 2005

NIKKO HOTEL MANILA GARDEN and RUBY LIM, petitioners,
vs.
ROBERTO REYES, a.k.a. "AMAY BISAYA," respondent.
DECISION
CHICO-NAZARIO, J.:
In this petition for review on certiorari, petitioners Nikko Hotel Manila Garden (Hotel
Nikko)1 and Ruby Lim assail the Decision 2 of the Court of Appeals dated 26 November 2001
reversing the Decision3 of the Regional Trial Court (RTC) of Quezon City, Branch 104, as
well as the Resolution4 of the Court of Appeals dated 09 July 2002 which denied petitioners’
motion for reconsideration.
The cause of action before the trial court was one for damages brought under the human
relations provisions of the New Civil Code. Plaintiff thereat (respondent herein) Roberto
Reyes, more popularly known by the screen name "Amay Bisaya," alleged that at around
6:00 o’clock in the evening of 13 October 1994, while he was having coffee at the lobby of
Hotel Nikko,5 he was spotted by his friend of several years, Dr. Violeta Filart, who then
approached him.6 Mrs. Filart invited him to join her in a party at the hotel’s penthouse in
celebration of the natal day of the hotel’s manager, Mr. Masakazu Tsuruoka. 7 Mr. Reyes
asked if she could vouch for him for which she replied: "of course." 8 Mr. Reyes then went up
with the party of Dr. Filart carrying the basket of fruits which was the latter’s present for
the celebrant.9 At the penthouse, they first had their picture taken with the celebrant after
which Mr. Reyes sat with the party of Dr. Filart. 10 After a couple of hours, when the buffet
dinner was ready, Mr. Reyes lined-up at the buffet table but, to his great shock, shame and
embarrassment, he was stopped by petitioner herein, Ruby Lim, who claimed to speak for
Hotel Nikko as Executive Secretary thereof. 11 In a loud voice and within the presence and
hearing of the other guests who were making a queue at the buffet table, Ruby Lim told
him to leave the party ("huwag ka nang kumain, hindi ka imbitado, bumaba ka na
lang").12 Mr. Reyes tried to explain that he was invited by Dr. Filart. 13 Dr. Filart, who was
within hearing distance, however, completely ignored him thus adding to his shame and
humiliation.14 Not long after, while he was still recovering from the traumatic experience, a
Makati policeman approached and asked him to step out of the hotel. 15 Like a common
criminal, he was escorted out of the party by the policeman. 16 Claiming damages, Mr. Reyes

174
asked for One Million Pesos actual damages, One Million Pesos moral and/or exemplary
damages and Two Hundred Thousand Pesos attorney’s fees. 17
Ruby Lim, for her part, admitted having asked Mr. Reyes to leave the party but not under
the ignominious circumstance painted by the latter. Ms. Lim narrated that she was the
Hotel’s Executive Secretary for the past twenty (20) years. 18 One of her functions included
organizing the birthday party of the hotel’s former General Manager, Mr. Tsuruoka. 19 The
year 1994 was no different. For Mr. Tsuruoka’s party, Ms. Lim generated an exclusive guest
list and extended invitations accordingly.20 The guest list was limited to approximately sixty
(60) of Mr. Tsuruoka’s closest friends and some hotel employees and that Mr. Reyes was
not one of those invited. 21 At the party, Ms. Lim first noticed Mr. Reyes at the bar counter
ordering a drink.22 Mindful of Mr. Tsuruoka’s wishes to keep the party intimate, Ms. Lim
approached Mr. Boy Miller, the "captain waiter," to inquire as to the presence of Mr. Reyes
who was not invited.23 Mr. Miller replied that he saw Mr. Reyes with the group of Dr.
Filart.24 As Dr. Filart was engaged in conversation with another guest and as Ms. Lim did
not want to interrupt, she inquired instead from the sister of Dr. Filart, Ms. Zenaida Fruto,
who told her that Dr. Filart did not invite Mr. Reyes. 25 Ms. Lim then requested Ms. Fruto to
tell Mr. Reyes to leave the party as he was not invited. 26 Mr. Reyes, however, lingered
prompting Ms. Lim to inquire from Ms. Fruto who said that Mr. Reyes did not want to
leave.27 When Ms. Lim turned around, she saw Mr. Reyes conversing with a Captain Batung
whom she later approached. 28 Believing that Captain Batung and Mr. Reyes knew each
other, Ms. Lim requested from him the same favor from Ms. Fruto, i.e., for Captain Batung
to tell Mr. Reyes to leave the party as he was not invited. 29 Still, Mr. Reyes lingered. When
Ms. Lim spotted Mr. Reyes by the buffet table, she decided to speak to him herself as there
were no other guests in the immediate vicinity. 30 However, as Mr. Reyes was already helping
himself to the food, she decided to wait. 31 When Mr. Reyes went to a corner and started to
eat, Ms. Lim approached him and said: "alam ninyo, hindo ho kayo dapat nandito. Pero total
nakakuha na ho kayo ng pagkain, ubusin na lang ninyo at pagkatapos kung pwede lang po
umalis na kayo."32 She then turned around trusting that Mr. Reyes would show enough
decency to leave, but to her surprise, he began screaming and making a big scene, and
even threatened to dump food on her.33 1awphi1.nét
Dr. Violeta Filart, the third defendant in the complaint before the lower court, also gave her
version of the story to the effect that she never invited Mr. Reyes to the party. 34 According to
her, it was Mr. Reyes who volunteered to carry the basket of fruits intended for the
celebrant as he was likewise going to take the elevator, not to the penthouse but to Altitude
49.35 When they reached the penthouse, she reminded Mr. Reyes to go down as he was not
properly dressed and was not invited. 36 All the while, she thought that Mr. Reyes already
left the place, but she later saw him at the bar talking to Col. Batung. 37 Then there was a
commotion and she saw Mr. Reyes shouting.38 She ignored Mr. Reyes.39 She was
embarrassed and did not want the celebrant to think that she invited him. 40
After trial on the merits, the court a quo dismissed the complaint,41 giving more credence to
the testimony of Ms. Lim that she was discreet in asking Mr. Reyes to leave the party. The
trial court likewise ratiocinated that Mr. Reyes assumed the risk of being thrown out of the
party as he was uninvited:
Plaintiff had no business being at the party because he was not a guest of Mr. Tsuruoka,
the birthday celebrant. He assumed the risk of being asked to leave for attending a party to
which he was not invited by the host. Damages are pecuniary consequences which the law
175
imposes for the breach of some duty or the violation of some right. Thus, no recovery can
be had against defendants Nikko Hotel and Ruby Lim because he himself was at fault
(Garciano v. Court of Appeals, 212 SCRA 436). He knew that it was not the party of
defendant Violeta Filart even if she allowed him to join her and took responsibility for his
attendance at the party. His action against defendants Nikko Hotel and Ruby Lim must
therefore fail.42
On appeal, the Court of Appeals reversed the ruling of the trial court as it found more
commanding of belief the testimony of Mr. Reyes that Ms. Lim ordered him to leave in a
loud voice within hearing distance of several guests:
In putting appellant in a very embarrassing situation, telling him that he should not finish
his food and to leave the place within the hearing distance of other guests is an act which is
contrary to morals, good customs . . ., for which appellees should compensate the appellant
for the damage suffered by the latter as a consequence therefore (Art. 21, New Civil Code).
The liability arises from the acts which are in themselves legal or not prohibited, but
contrary to morals or good customs. Conversely, even in the exercise of a formal right, [one]
cannot with impunity intentionally cause damage to another in a manner contrary to
morals or good customs.43
The Court of Appeals likewise ruled that the actuation of Ms. Lim in approaching several
people to inquire into the presence of Mr. Reyes exposed the latter to ridicule and was
uncalled for as she should have approached Dr. Filart first and both of them should have
talked to Mr. Reyes in private:
Said acts of appellee Lim are uncalled for. What should have been done by appellee Lim
was to approach appellee Mrs. Filart and together they should have told appellant Reyes in
private that the latter should leave the party as the celebrant only wanted close friends
around. It is necessary that Mrs. Filart be the one to approach appellant because it was she
who invited appellant in that occasion. Were it not for Mrs. Filart’s invitation, appellant
could not have suffered such humiliation. For that, appellee Filart is equally liable.
...
The acts of [appellee] Lim are causes of action which are predicated upon mere rudeness or
lack of consideration of one person, which calls not only protection of human dignity but
respect of such dignity. Under Article 20 of the Civil Code, every person who violates this
duty becomes liable for damages, especially if said acts were attended by malice or bad
faith. Bad faith does not simply connote bad judgment or simple negligence. It imports a
dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of a
known duty to some motive or interest or ill-will that partakes of the nature of fraud
(Cojuangco, Jr. v. CA, et al., 309 SCRA 603). 44
Consequently, the Court of Appeals imposed upon Hotel Nikko, Ruby Lim and Dr. Violeta
Filart the solidary obligation to pay Mr. Reyes (1) exemplary damages in the amount of Two
Hundred Thousand Pesos (P200,000); (2) moral damages in the amount of Two Hundred
Thousand Pesos (P200,000); and (3) attorney’s fees in the amount of Ten Thousand Pesos
(P10,000).45 On motion for reconsideration, the Court of Appeals affirmed its earlier decision
as the argument raised in the motion had "been amply discussed and passed upon in the
decision sought to be reconsidered."46
Thus, the instant petition for review. Hotel Nikko and Ruby Lim contend that the Court of
Appeals seriously erred in –
I.
176
… NOT APPLYING THE DOCTRINE OF VOLENTI NON FIT INJURIA CONSIDERING THAT BY
ITS OWN FINDINGS, AMAY BISAYA WAS A GATE-CRASHER
II.
… HOLDING HOTEL NIKKO AND RUBY LIM JOINTLY AND SEVERALLY LIABLE WITH DR.
FILART FOR DAMAGES SINCE BY ITS OWN RULING, AMAY BISAYA "COULD NOT HAVE
SUFFERED SUCH HUMILIATION," "WERE IT NOT FOR DR. FILART’S INVITATION"
III.
… DEPARTING FROM THE FINDINGS OF FACT OF THE TRIAL COURT AS REGARDS THE
CIRCUMSTANCES THAT ALLEGEDLY CAUSED THE HUMILIATION OF AMAY BISAYA
IV.
… IN CONCLUDING THAT AMAY BISAYA WAS TREATED UNJUSTLY BECAUSE OF HIS
POVERTY, CONSIDERING THAT THIS WAS NEVER AN ISSUE AND NO EVIDENCE WAS
PRESENTED IN THIS REGARD
V.
… IN FAILING TO PASS UPON THE ISSUE ON THE DEFECTS OF THE APPELLANT’S
BRIEF, THEREBY DEPARTING FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL
PROCEEDINGS
Petitioners Lim and Hotel Nikko contend that pursuant to the doctrine of volenti non fit
injuria, they cannot be made liable for damages as respondent Reyes assumed the risk of
being asked to leave (and being embarrassed and humiliated in the process) as he was a
"gate-crasher."
The doctrine of volenti non fit injuria ("to which a person assents is not esteemed in law as
injury"47 ) refers to self-inflicted injury48 or to the consent to injury 49 which precludes the
recovery of damages by one who has knowingly and voluntarily exposed himself to danger,
even if he is not negligent in doing so. 50 As formulated by petitioners, however, this doctrine
does not find application to the case at bar because even if respondent Reyes assumed the
risk of being asked to leave the party, petitioners, under Articles 19 and 21 of the New Civil
Code, were still under obligation to treat him fairly in order not to expose him to
unnecessary ridicule and shame.
Thus, the threshold issue is whether or not Ruby Lim acted abusively in asking Roberto
Reyes, a.k.a. "Amay Bisaya," to leave the party where he was not invited by the celebrant
thereof thereby becoming liable under Articles 19 and 21 of the Civil Code. Parenthetically,
and if Ruby Lim were so liable, whether or not Hotel Nikko, as her employer, is solidarily
liable with her.
As the trial court and the appellate court reached divergent and irreconcilable conclusions
concerning the same facts and evidence of the case, this Court is left without choice but to
use its latent power to review such findings of facts. Indeed, the general rule is that we are
not a trier of facts as our jurisdiction is limited to reviewing and revising errors of law. 51 One
of the exceptions to this general rule, however, obtains herein as the findings of the Court
of Appeals are contrary to those of the trial court. 52 The lower court ruled that Ms. Lim did
not abuse her right to ask Mr. Reyes to leave the party as she talked to him politely and
discreetly. The appellate court, on the other hand, held that Ms. Lim is liable for damages
as she needlessly embarrassed Mr. Reyes by telling him not to finish his food and to leave
the place within hearing distance of the other guests. Both courts, however, were in
agreement that it was Dr. Filart’s invitation that brought Mr. Reyes to the party.
The consequential question then is: Which version is credible?
177
From an in depth review of the evidence, we find more credible the lower court’s findings of
fact.
First, let us put things in the proper perspective.
We are dealing with a formal party in a posh, five-star hotel, 53 for-invitation-only, thrown for
the hotel’s former Manager, a Japanese national. Then came a person who was clearly
uninvited (by the celebrant)54 and who could not just disappear into the crowd as his face is
known by many, being an actor. While he was already spotted by the organizer of the party,
Ms. Lim, the very person who generated the guest list, it did not yet appear that the
celebrant was aware of his presence. Ms. Lim, mindful of the celebrant’s instruction to keep
the party intimate, would naturally want to get rid of the "gate-crasher" in the most hush-
hush manner in order not to call attention to a glitch in an otherwise seamless affair and,
in the process, risk the displeasure of the celebrant, her former boss. To unnecessarily call
attention to the presence of Mr. Reyes would certainly reflect badly on Ms. Lim’s ability to
follow the instructions of the celebrant to invite only his close friends and some of the
hotel’s personnel. Mr. Reyes, upon whom the burden rests to prove that indeed Ms. Lim
loudly and rudely ordered him to leave, could not offer any satisfactory explanation why
Ms. Lim would do that and risk ruining a formal and intimate affair. On the contrary, Mr.
Reyes, on cross-examination, had unwittingly sealed his fate by admitting that when Ms.
Lim talked to him, she was very close. Close enough for him to kiss:
Q: And, Mr. Reyes, you testified that Miss Lim approached you while you were at the
buffet table? How close was she when she approached you?
A: Very close because we nearly kissed each other.
Q: And yet, she shouted for you to go down? She was that close and she shouted?
A: Yes. She said, "wag kang kumain, hindi ka imbitado dito, bumaba ka na lang."
Q: So, you are testifying that she did this in a loud voice?
...
A: Yes. If it is not loud, it will not be heard by many.55
In the absence of any proof of motive on the part of Ms. Lim to humiliate Mr. Reyes and
expose him to ridicule and shame, it is highly unlikely that she would shout at him from a
very close distance. Ms. Lim having been in the hotel business for twenty years wherein
being polite and discreet are virtues to be emulated, the testimony of Mr. Reyes that she
acted to the contrary does not inspire belief and is indeed incredible. Thus, the lower court
was correct in observing that –
Considering the closeness of defendant Lim to plaintiff when the request for the latter to
leave the party was made such that they nearly kissed each other, the request was meant
to be heard by him only and there could have been no intention on her part to cause
embarrassment to him. It was plaintiff’s reaction to the request that must have made the
other guests aware of what transpired between them. . .
Had plaintiff simply left the party as requested, there was no need for the police to take him
out.56
Moreover, another problem with Mr. Reyes’s version of the story is that it is unsupported. It
is a basic rule in civil cases that he who alleges proves. Mr. Reyes, however, had not
presented any witness to back his story up. All his witnesses – Danny Rodinas, Pepito
Guerrero and Alexander Silva - proved only that it was Dr. Filart who invited him to the
party.57

178
Ms. Lim, not having abused her right to ask Mr. Reyes to leave the party to which he was
not invited, cannot be made liable to pay for damages under Articles 19 and 21 of the Civil
Code. Necessarily, neither can her employer, Hotel Nikko, be held liable as its liability
springs from that of its employee.58
Article 19, known to contain what is commonly referred to as the principle of abuse of
rights,59 is not a panacea for all human hurts and social grievances. Article 19 states:
Art. 19. Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good
faith.1awphi1.nét
Elsewhere, we explained that when "a right is exercised in a manner which does not
conform with the norms enshrined in Article 19 and results in damage to another, a legal
wrong is thereby committed for which the wrongdoer must be responsible." 60 The object of
this article, therefore, is to set certain standards which must be observed not only in the
exercise of one’s rights but also in the performance of one’s duties. 61 These standards are
the following: act with justice, give everyone his due and observe honesty and good
faith.62 Its antithesis, necessarily, is any act evincing bad faith or intent to injure. Its
elements are the following: (1) There is a legal right or duty; (2) which is exercised in bad
faith; (3) for the sole intent of prejudicing or injuring another. 63 When Article 19 is violated,
an action for damages is proper under Articles 20 or 21 of the Civil Code. Article 20
pertains to damages arising from a violation of law 64 which does not obtain herein as Ms.
Lim was perfectly within her right to ask Mr. Reyes to leave. Article 21, on the other hand,
states:
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.
Article 2165 refers to acts contra bonus mores and has the following elements: (1) There is an
act which is legal; (2) but which is contrary to morals, good custom, public order, or public
policy; and (3) it is done with intent to injure.66
A common theme runs through Articles 19 and 21, 67 and that is, the act complained of
must be intentional.68
As applied to herein case and as earlier discussed, Mr. Reyes has not shown that Ms. Lim
was driven by animosity against him. These two people did not know each other personally
before the evening of 13 October 1994, thus, Mr. Reyes had nothing to offer for an
explanation for Ms. Lim’s alleged abusive conduct except the statement that Ms. Lim, being
"single at 44 years old," had a "very strong bias and prejudice against (Mr. Reyes) possibly
influenced by her associates in her work at the hotel with foreign businessmen." 69 The
lameness of this argument need not be belabored. Suffice it to say that a complaint based
on Articles 19 and 21 of the Civil Code must necessarily fail if it has nothing to recommend
it but innuendos and conjectures.
Parenthetically, the manner by which Ms. Lim asked Mr. Reyes to leave was likewise
acceptable and humane under the circumstances. In this regard, we cannot put our
imprimatur on the appellate court’s declaration that Ms. Lim’s act of personally
approaching Mr. Reyes (without first verifying from Mrs. Filart if indeed she invited Mr.
Reyes) gave rise to a cause of action "predicated upon mere rudeness or lack of
consideration of one person, which calls not only protection of human dignity but respect of
such dignity."70 Without proof of any ill-motive on her part, Ms. Lim’s act of by-passing Mrs.
179
Filart cannot amount to abusive conduct especially because she did inquire from Mrs.
Filart’s companion who told her that Mrs. Filart did not invite Mr. Reyes. 71 If at all, Ms. Lim
is guilty only of bad judgment which, if done with good intentions, cannot amount to bad
faith.
Not being liable for both actual and moral damages, neither can petitioners Lim and Hotel
Nikko be made answerable for exemplary damages 72 especially for the reason stated by the
Court of Appeals. The Court of Appeals held –
Not a few of the rich people treat the poor with contempt because of the latter’s lowly
station in life.l^vvphi1.net This has to be limited somewhere. In a democracy, such a limit
must be established. Social equality is not sought by the legal provisions under
consideration, but due regard for decency and propriety (Code Commission, pp. 33-34).
And by way of example or correction for public good and to avert further commission of
such acts, exemplary damages should be imposed upon appellees. 73
The fundamental fallacy in the above-quoted findings is that it runs counter with the very
facts of the case and the evidence on hand.l^vvphi1.net It is not disputed that at the time of
the incident in question, Mr. Reyes was "an actor of long standing; a co-host of a radio
program over DZRH; a Board Member of the Music Singer Composer (MUSICO) chaired by
popular singer Imelda Papin; a showbiz Coordinator of Citizen Crime Watch; and 1992
official candidate of the KBL Party for Governor of Bohol; and an awardee of a number of
humanitarian organizations of the Philippines." 74 During his direct examination on rebuttal,
Mr. Reyes stressed that he had income75 and nowhere did he say otherwise. On the other
hand, the records are bereft of any information as to the social and economic standing of
petitioner Ruby Lim. Consequently, the conclusion reached by the appellate court cannot
withstand scrutiny as it is without basis.
All told, and as far as Ms. Lim and Hotel Nikko are concerned, any damage which Mr.
Reyes might have suffered through Ms. Lim’s exercise of a legitimate right done within the
bounds of propriety and good faith, must be his to bear alone.
WHEREFORE, premises considered, the petition filed by Ruby Lim and Nikko Hotel Manila
Garden is GRANTED. The Decision of the Court of Appeals dated 26 November 2001 and its
Resolution dated 09 July 2002 are hereby REVERSED and SET ASIDE. The Decision of the
Regional Trial Court of Quezon City, Branch 104, dated 26 April 1999 is hereby
AFFIRMED. No costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

G.R. No. 175172               September 29, 2009

CRESENCIA ACHEVARA, ALFREDO ACHEVARA, and BENIGNO VALDEZ, Petitioners,
vs.
ELVIRA RAMOS, JOHN ARNEL RAMOS, and KHRISTINE CAMILLE
RAMOS, Respondents.
DECISION
PERALTA, J.:
This is a petition for review on certiorari 1 of the Decision dated April 25, 2006 of the Court
of Appeals in CA-G.R. CV No. 67027, and its Resolution dated October 23, 2006, denying
petitioners’ motion for reconsideration. The Court of Appeals affirmed with modification the
180
Decision of the Regional Trial Court (RTC) of Ilocos Sur, Branch 22, dated February 14,
2000, holding petitioners solidarily liable to respondents for damages incurred due to a
vehicular accident, which resulted in the death of Arnulfo Ramos.
The facts are as follows:
On June 27, 1995, respondents Elvira Ramos and her two minor children, namely, John
Arnel Ramos and Khristine Camille Ramos, filed with the RTC of Ilocos Sur a
Complaint2 for damages under Article 2176 3 of the Civil Code against petitioners Cresencia
Achevara, Alfredo Achevara and Benigno Valdez for the death of Arnulfo Ramos, husband of
Elvira Ramos and father of her two children, in a vehicular accident that happened on April
22, 1995 at the national highway along Barangay Tablac, Candon, Ilocos Sur. Crescencia
Achevara was sued as the operator of the passenger jeep with Plate No. DKK-995, which
was involved in the vehicular accident. Alfredo Achevara was impleaded as the husband of
the operator and as the administrator of the conjugal partnership properties of the Spouses
Achevara.
In their Complaint,4 respondents alleged that in the morning of April 22, 1995, Benigno
Valdez was driving a passenger jeep heading north on the national highway
in Barangay Tablac, Candon, Ilocos Sur in a reckless, careless, and negligent manner. He
tried to overtake a motorcycle, causing the passenger jeep to encroach on the opposite lane
and bump the oncoming vehicle driven by Arnulfo Ramos. The injuries sustained by
Arnulfo Ramos caused his death, notwithstanding prompt medical assistance. Respondents
alleged that Crescencia Achevara failed to exercise due diligence in the selection and
supervision of Benigno Valdez as driver of the passenger jeep. Respondents sought to
recover actual damages for medical expenses in the sum of ₱33,513.00 and funeral
expenses in the sum of ₱30,000.00, as well as moral and exemplary damages, lost
earnings, attorney's fees and litigation expenses.
In their Answer,5 petitioners denied respondents’ allegation that Benigno Valdez overtook a
motorcycle and bumped the vehicle driven by Arnulfo Ramos. They alleged that on April 22,
1995, Benigno Valdez was driving southward at a moderate speed when he saw an owner-
type jeep coming from the south and heading north, running in a zigzag manner, and
encroaching on the west lane of the road. To avoid a collision, Valdez drove the passenger
jeep towards the shoulder of the road, west of his lane, but the owner-type jeep continued
to move toward the western lane and bumped the left side of the passenger jeep. Petitioners
alleged that it was Arnulfo Ramos who was careless and negligent in driving a motor
vehicle, which he very well knew had a mechanical defect. Hence, respondents had no
cause of action against petitioners.
During trial on the merits, respondents presented three witnesses: Alfredo Gamera, Dr.
Emilio Joven and Elvira Ramos.
Alfredo Gamera testified that at about 10:00 a.m. of April 22, 1995, he and his wife were
seated at the waiting shed along the national highway in Tablac, Candon, Ilocos Sur,
waiting for a ride to the town proper of Candon. He saw a motorcycle, driven by Police
Officer 3 (PO3) Baltazar de Peralta, coming from the interior part of Tablac and proceeding
south toward the town proper. He also saw a southbound passenger jeep, driven by
Benigno Valdez, that wanted to overtake the motorcycle of PO3 De Peralta. As it tried to
overtake the motorcycle, the passenger jeep encroached on the lane of the northbound
owner-type jeep driven by Arnulfo Ramos, which resulted in the collision. Gamera stated
that the point of impact was on the lane of the vehicle of Arnulfo Ramos. Thereafter, the
181
passenger jeep screeched to a halt at the fence of the Funtanilla family. The owner-type
jeep was destroyed and the windshield was broken.6
Gamera testified that he was about 100 meters from the place where the vehicular accident
occurred. The speed of the passenger jeep was about 70 kilometers per hour, while that of
the owner-type jeep was about 30 kilometers per hour.7
On cross-examination, it was found that Gamera went to the Police Station in Candon,
Ilocos Sur to execute his sworn statement only on May 30, 1992, one month after the
incident and after respondent Elvira Ramos talked to him. Moreover, at the preliminary
investigation, Gamera did not mention in his sworn statement that his wife was present
during the incident, which fact was admitted by respondent’s counsel. Further, at that
time, Gamera was working as a jueteng collector at the same joint where the deceased
Arnulfo Ramos was also employed, and he had known Ramos for five years. 8
Dr. Emilio Joven, a surgeon of the Lorma Medical Center, San Fernando, La Union, testified
that Arnulfo Ramos was admitted at the Lorma Hospital at about 12:50 p.m. on April 22,
1995. The latter sustained external injuries, mostly on the left side of the body, which could
have been caused by a vehicular accident. The CT scan result of Arnulfo Ramos showed
blood clots inside the brain, scattered small hemorrhagic contusions, and swelling and
blood clots on the base of the brain, which internal injuries caused his death. 9 The
immediate cause of death was "acute cranio-cerebral injury." 10
Respondent Elvira Ramos testified on the damages she incurred due to the vehicular
accident, which resulted in the death of her husband. She spent ₱33,513.00 for
hospitalization and ₱30,000.00 for the funeral. She prayed for the award of lost earnings,
moral damages, exemplary damages, attorney’s fees, appearance fees and other costs of
litigation.11
She also testified that the owner-type jeep was registered in the name of Matilde Tacad 12 of
Sto. Domingo, Ilocos Sur.13a1f
Petitioners presented six witnesses, namely, PO3 Baltazar de Peralta, Special Police Officer
2 (SPO2) Marvin Valdez, Herminigildo Pagaduan, Benigno Valdez, Emilia Achevara and
Alfredo Achevara.
PO3 Baltazar de Peralta stated that he was assigned to Santiago, Ilocos Sur. He testified
that at about 9:00 a.m. of April 22, 1995, he was on board his motorcycle at the waiting
shed erected on the eastern side of the national highway in Tablac, Ilocos Sur. He was
about to go southward, but waited a while to let a southbound passenger jeep pass by.
Then he followed behind the passenger jeep.
When the passenger jeep was about 75 meters away from him on the western lane of the
national highway, PO3 De Peralta spotted an owner-type jeep coming from the south on the
eastern lane of the road. He observed that the owner-type jeep was running in a zigzag
manner as it went over the many holes on the road. It did not slacken speed, causing the
jeep’s front wheels to wiggle, before it bumped the passenger jeep coming from the north.
The collision occurred on the lane of the passenger jeep, about two feet away from the
center line of the road, causing the owner-type jeep to turn around and return to its former
position, with its right wheel removed; while the passenger jeep veered to the right lane. 14
After the collision, PO3 De Peralta assisted the owner-type jeep’s driver, who fell to the
ground, and helped load him into a tricycle that would take him to the hospital. Then he
went to the driver of the passenger jeep and asked him what happened. The driver
remarked, "Even if you do not like to meet an accident, if that is what happened, you
182
cannot do anything." Thereafter, PO3 De Peralta proceeded on his way southward. He
reported the incident at the Police Station of Candon, Ilocos Sur. 15
PO3 De Peralta testified that the accident happened on a straight part of the highway, but
there were many holes on the eastern lane. He stated that nothing impeded his view of the
incident.16
PO3 De Peralta also testified that he had known respondents’ witness, Alfredo Gamera, who
was his barangay mate for 20 years. He declared that he never saw Gamera at the waiting
shed or at the scene of the incident on the morning of April 22, 1995. 17
Investigator SPO2 Marvin Valdez of the Candon Police Station testified that at about 11:00
a.m. of April 22, 1995, he received a report of the vehicular accident that occurred at the
national highway in Tablac, Candon, Ilocos Sur, which was three kilometers from the police
station. He proceeded to the site with some companions. He saw a passenger jeep
positioned diagonally on the western shoulder of the road facing southwest, while an
owner-type jeep was on the right lane. The driver of the owner-type jeep was seriously
injured and was brought to the hospital.18
SPO2 Valdez testified that the owner-type jeep’s right tire was detached, and its left front
portion was damaged, while the passenger jeep’s left tire was detached, and its left side
portion was damaged.19
Herminigildo Pagaduan testified that at 7:00 a.m. of April 22, 1995, he was at the house
of Barangay Captain Victorino Gacusan of San Antonio, Candon, Ilocos Sur. Gacusan was
then the overall monitor of the jueteng joint operation in Candon, Ilocos Sur. Pagaduan
and Gacusan had earlier agreed to attend the wake of an army captain at Tamorong,
Candon, Ilocos Sur that morning. While Pagaduan was waiting for Barangay Captain
Gacusan, the latter made a phone call requesting for a vehicle to take them to Tamorong.
Not long after, a yellow owner-type jeep arrived, which was driven by Arnulfo Ramos, an
employee of the jueteng joint. All of them rode the jeep with Plate No. ACG
713. Barangay Captain Gacusan was on the driver’s seat, Pagaduan sat beside Gacusan,
while Arnulfo Ramos and the others sat on the rear seat.20
Pagaduan further testified that the group headed west to Tamorong via Darapidap. When
they reached a bridge, Barangay Captain Gacusan tried to increase the speed of the jeep,
but it suddenly wiggled. Gacusan stopped the jeep, and they all alighted from it. Gacusan
told Arnulfo Ramos to have the mechanical defect repaired at the auto shop. Hence, they
did not proceed to Tamorong, but returned to the house of Gacusan by tricycle. The next
day, he heard from Gacusan that the jeep they had used in their aborted trip to Tamorong
met an accident.21
On cross-examination, Pagaduan testified that it was defense counsel Atty. Tudayan who
requested him to testify, because Atty. Tudayan had heard him discuss the incident with
some jueteng employees.22
Petitioner Benigno Valdez testified that on April 22, 1995, he was driving the passenger
jeep of his aunt, Crescencia Achevara, on the national highway in Tablac, Candon, Ilocos
Sur heading south, while the owner-type jeep of Arnulfo Ramos was heading north. Valdez
stated that the owner-type jeep was wiggling and running fast in a zigzag manner, when its
right front wheel got detached and the owner-type jeep bumped the left side of his
passenger jeep. Valdez swerved the passenger jeep to the western edge of the road to avoid
a collision, but to no avail, as it bumped a post. He passed out. When he regained
consciousness, he saw the driver of the owner-type jeep being rescued. 23
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Valdez surrendered himself to the Police Station in Candon, Ilocos Sur. He informed the
police that his vehicle was bumped by the owner-type jeep driven by Arnulfo Ramos, and he
showed his driver’s license to the police.24
Valdez branded as false the testimony of respondents’ witness, Alfredo Gamera, that the
former tried to overtake the motorcycle of PO3 Baltazar de Peralta and encroached on the
lane of the owner-type jeep driven by Arnulfo Ramos. Valdez testified that before the
vehicular accident, he saw a policeman following him, but there was a tricycle between
them. He denied that he was driving fast and stated that his speed at that time registered
only 20 on the speedometer.25
Petitioner Alfredo Achevara testified that Crescencia Achevara was his wife, while Benigno
Valdez was the nephew of his wife. He and his wife owned the passenger jeep with Plate No.
DKK-995 that was involved in the vehicular accident. Valdez had been the driver of the
vehicle since 1992, although he drove it only during daytime. 26
Alfredo Achevara declared that before they employed Benigno Valdez to drive the passenger
jeep, the former exercised the diligence of a good father of a family in selecting, training and
supervising the latter.27 They required Valdez to show them his professional driver’s license,
and investigated his personal background and training/experience as a driver. For his
apprenticeship, they required him to drive from Metro Manila to Tagaytay City, and then
back to Metro Manila for a day.
Achevara stated that he knew Benigno Valdez since 1988. As their driver since 1992,
Valdez never committed any traffic violation. On April 22, 1995, he handed the key of the
jeep to Valdez at about 7:30 a.m. at their barangay in Padaoil, Sta. Cruz, Ilocos Sur to fetch
the sound system in Santiago, Ilocos Sur for their fiesta. He told Valdez to avoid an
accident, bring his license and avoid being hot-tempered.28
On February 14, 2000, the RTC of Narvacan, Ilocos Sur, Branch 22, rendered a Decision in
Civil Case No. 1431-N in favor of respondents.
The trial court found that the testimony of respondents’ witness, Alfredo Gamera, was
controverted by the testimony of PO3 Baltazar de Peralta and the finding of police
investigator SPO2 Marvin Valdez. Gamera testified that the vehicular accident occurred
because the passenger jeep tried to overtake the motorcycle driven by PO3 Baltazar de
Peralta and encroached on the lane of the owner-type jeep driven by Arnulfo Ramos.
Gamera’s testimony was, however, refuted by PO3 Baltazar de Peralta, who testified that
the passenger jeep did not overtake his motorcycle since he was the one following behind
the passenger jeep. Hence, the trial court concluded that the passenger jeep did not
encroach on the lane of the owner-type jeep on the left side of the road to allegedly overtake
the motorcycle.
Moreover, Gamera testified that the collision occurred on the lane of the owner-type jeep,
and one of the wheels of the owner-type jeep was detached, so that it stayed immobile at
the place of collision, about two meters east from the center line of the national highway.
However, SPO2 Marvin Valdez, who investigated the incident, found both vehicles on the
western lane of the national highway. Thus, the trial court stated that it was undeniable
that the collision took place on the western lane of the national highway, which was the
passenger jeep’s lane.
The trial court held that, as contended by respondents, the doctrine of last clear chance
was applicable to this case. It cited Picart v. Smith, 29 which applied the said doctrine, thus,
where both parties are guilty of negligence, but the negligent act of one succeeds that of the
184
other by an appreciable interval of time, the person who has the last fair chance to avoid
the impending harm and fails to do so is chargeable with the consequences, without
reference to the prior negligence of the other party.
The trial court held that the driver of the passenger jeep, Benigno Valdez, having seen the
risk exhibited by the wiggling of the front wheels of the owner-type jeep, causing it to run in
a zigzag manner, should have parked his vehicle on the right shoulder of the road so that
the mishap could have been prevented. Since he ignored to take this reasonable
precaution, the omission and/or breach of this duty on his part was the constitutive legal
cause of the mishap.30
The trial court stated that the doctrine of last clear chance, as applied to this case, implied
a contributory negligence on the part of the late Arnulfo Ramos, who knew of the
mechanical defect of his vehicle.
Further, the trial court held that the evidence of the Spouses Achevara failed to show that
they exercised due diligence in the selection and supervision of Benigno Valdez as driver of
their passenger jeep.31
The dispositive portion of the trial court’s Decision reads:
WHEREFORE, a decision is hereby rendered in favor of the plaintiffs and against the
defendants, the latter to account for and to pay jointly and solidarily to the plaintiffs,
because of the contributory negligence on the part of the late Arnulfo Ramos, the reduced
amount itemized as follows to wit:
1) Thirty Thousand Pesos (₱30,000.00) - part of the total receipted expenses at the
hospitals;
2) Twenty Thousand Pesos (₱20,000.00) - for funeral expenses;
3) Sixty Thousand Pesos (₱60,000.00) - for moral damages;
4) Fifty Thousand Pesos (₱50,000.00) - for exemplary damages;
5) Thirty Thousand Pesos (₱30,000.00) - for attorney's fees, and
6) Ten Thousand Pesos (₱10,000.00) - for actual and other costs of litigation. 32
The Spouses Achevara and Benigno Valdez appealed the trial court’s Decision to the Court
of Appeals.
In a Decision dated April 25, 2009, the Court of Appeals affirmed with modification the
Decision of the trial court, the dispositive portion of which reads:
WHEREFORE, premises considered, the appeal is hereby DISMISSED and the assailed
February 14, 2000 Decision of the RTC of Narvacan, Ilocos Sur, Branch 22, in Civil Case
No. 1431-N, is hereby AFFIRMED with MODIFICATION, that in addition to other awards
made by the trial court, defendants-appellants are hereby ordered to pay, jointly and
severally, the plaintiffs-appellees the sum of ₱50,000.00 as indemnity for the death of
Arnulfo Ramos and the moral damages and attorney's fees awarded by the trial court are
hereby REDUCED to ₱50,000.00 and P10,000.00, respectively, while the awards made by
the trial court for exemplary damages and "for actual and other costs of litigation" are
hereby DELETED.33
The motion for reconsideration of the Spouses Achevara and Benigno Valdez was denied for
lack of merit by the Court of Appeals in a Resolution 34 dated October 23, 2006.
Hence, the Spouses Achevara and Benigno Valdez filed this petition.
The main issue is whether or not petitioners are liable to respondents for damages incurred
as a result of the vehicular accident.

185
Petitioners contend that the doctrine of last clear chance is not applicable to this case,
because the proximate cause of the accident was the negligence of the late Arnulfo Ramos
in knowingly driving the defective owner-type jeep. When the front wheel of the owner-type
jeep was removed, the said jeep suddenly encroached on the western lane and bumped the
left side of the passenger jeep driven by Benigno Valdez. Considering that the interval
between the time the owner-type jeep encroached on the lane of Valdez to the time of
impact was only a matter of seconds, Valdez no longer had the opportunity to avoid the
collision. Pantranco North Express Inc. v. Besa 35 held that the doctrine of last clear chance
"can never apply where the party charged is required to act instantaneously, and if the
injury cannot be avoided by the application of all means at hand after the peril is or should
have been discovered."
Petitioners assert that Arnulfo Ramos’ negligence in driving the owner-type jeep − despite
knowledge of its mechanical defect, and his failure to have it repaired first before driving, to
prevent damage to life and property − did not only constitute contributory negligence.
Ramos’ negligence was the immediate and proximate cause of the accident, which resulted
in his untimely demise. Benigno Valdez should not be made to suffer the unlawful and
negligent acts of Ramos. Since forseeability is the fundamental basis of negligence, Valdez
could not have foreseen that an accident might happen due to the mechanical defect in the
vehicle of Ramos. It was Ramos alone who fully knew and could foresee that an accident
was likely to occur if he drove his defective jeep, which indeed happened. Hence, the
proximate cause of the vehicular accident was the negligence of Ramos in driving a
mechanically defective vehicle.
In short, petitioners contend that Arnulfo Ramos’ own negligence in knowingly driving a
mechanically defective vehicle was the immediate and proximate cause of his death, and
that the doctrine of last clear chance does not apply to this case.
Petitioners’ arguments are meritorious.
The Court notes that respondents’ version of the vehicular accident was rebutted by
petitioners. The testimony of respondents’ witness, Alfredo Gamera, that the vehicular
accident occurred because the passenger jeep driven by Benigno Valdez tried to overtake
the motorcycle driven by PO3 Baltazar de Peralta and encroached on the lane of the owner-
type jeep, which resulted in the collision, was refuted by PO3 Baltazar de Peralta, who
testified that the passenger jeep did not overtake his motorcycle since he was the one
following behind the passenger jeep. Hence, the trial court correctly concluded that the
passenger jeep did not encroach on the lane of the owner-type jeep on the left side of the
road to allegedly overtake the motorcycle.
Gamera also testified that the collision took place on the lane of the owner-type jeep, and
one of its wheels was detached and stayed immobile at the place of collision, about two
meters east the center line of the national highway. However, SPO2 Marvin Valdez, who
investigated the incident, found both vehicles on the western lane of the national highway.
The owner-type jeep was diagonally positioned on the right, western lane; while the
passenger jeep was on the western shoulder of the road, diagonally facing southwest. The
trial court, therefore, correctly held that it was undeniable that the collision took place on
the western lane of the national highway or the lane of the passenger jeep driven by
Benigno Valdez. It was the owner-type jeep driven by Arnulfo Ramos that encroached on
the lane of the passenger jeep.

186
It must be pointed out that Herminigildo Pagaduan testified that in the early morning of
April 22, 1995, he and Barangay Captain Gacusan, along with Arnulfo Ramos, aborted
their trip to Tamorong, Candon, Ilocos Sur, using the same owner-type jeep because it was
wiggling. Ramos was advised to have the mechanical defect repaired. Yet, later in the
morning, Ramos was driving the owner-type jeep on the national highway in Candon.
Benigno Valdez testified that the owner-type jeep was wiggling and running fast in a zigzag
manner when its right front wheel got detached, and the owner-type jeep suddenly bumped
the passenger jeep he was driving, hitting the left side of the passenger jeep opposite his
seat. Although Valdez swerved the passenger jeep to the western edge of the road, it was
still hit by the owner-type jeep.
Foreseeability is the fundamental test of negligence. To be negligent, a defendant must have
acted or failed to act in such a way that an ordinary reasonable man would have realized
that certain interests of certain persons were unreasonably subjected to a general but
definite class of risks.36
Seeing that the owner-type jeep was wiggling and running fast in a zigzag manner as it
travelled on the opposite side of the highway, Benigno Valdez was made aware of the
danger ahead if he met the owner-type jeep on the road. Yet he failed to take precaution by
immediately veering to the rightmost portion of the road or by stopping the passenger jeep
at the right shoulder of the road and letting the owner-type jeep pass before proceeding
southward; hence, the collision occurred. The Court of Appeals correctly held that Benigno
Valdez was guilty of inexcusable negligence by neglecting to take such precaution, which a
reasonable and prudent man would ordinarily have done under the circumstances and
which proximately caused injury to another.
On the other hand, the Court also finds Arnulfo Ramos guilty of gross negligence for
knowingly driving a defective jeep on the highway. An ordinarily prudent man would know
that he would be putting himself and other vehicles he would encounter on the road at risk
for driving a mechanically defective vehicle. Under the circumstances, a prudent man
would have had the owner-type jeep repaired or would have stopped using it until it was
repaired. Ramos was, therefore, grossly negligent in continuing to drive on the highway the
mechanically defective jeep, which later encroached on the opposite lane and bumped the
passenger jeep driven by Benigno Valdez. Gross negligence is the absence of care or
diligence as to amount to a reckless disregard of the safety of persons or property. 37 It
evinces a thoughtless disregard of consequences without exerting any effort to avoid
them.381avvphi1
The acts of negligence of Arnulfo Ramos and Benigno Valdez were contemporaneous when
Ramos continued to drive a wiggling vehicle on the highway despite knowledge of its
mechanical defect, while Valdez did not immediately veer to the rightmost side of the road
upon seeing the wiggling vehicle of Ramos − perhaps because it still kept to its lane and
Valdez did not know the extent of its mechanical defect. However, when the owner-type jeep
encroached on the lane of the passenger jeep, Valdez realized the peril at hand and steered
the passenger jeep toward the western shoulder of the road to avoid a collision. It was at
this point that it was perceivable that Ramos must have lost control of his vehicle, and that
it was Valdez who had the last opportunity to avoid the collision by swerving the passenger
jeep towards the right shoulder of the road.1avvphi1
The doctrine of last clear chance applies to a situation where the plaintiff was guilty of prior
or antecedent negligence, but the defendant − who had the last fair chance to avoid the
187
impending harm and failed to do so − is made liable for all the consequences of the
accident, notwithstanding the prior negligence of the plaintiff. 39 However, the doctrine does
not apply where the party charged is required to act instantaneously, and the injury cannot
be avoided by the application of all means at hand after the peril is or should have been
discovered.40
The doctrine of last clear chance does not apply to this case, because even if it can be said
that it was Benigno Valdez who had the last chance to avoid the mishap when the owner-
type jeep encroached on the western lane of the passenger jeep, Valdez no longer had the
opportunity to avoid the collision. The Answer of petitioners stated that when the owner-
type jeep encroached on the lane of the passenger jeep, Benigno Valdez maneuvered his
vehicle towards the western shoulder of the road to avoid a collision, but the owner-type
jeep driven by Ramos continued to move to the western lane and bumped the left side of
the passenger jeep. Thus, petitioners assert in their Petition that considering that the time
the owner-type jeep encroached on the lane of Valdez to the time of impact was only a
matter of seconds, he no longer had the opportunity to avoid the collision. Although the
records are bereft of evidence showing the exact distance between the two vehicles when
the owner-type jeep encroached on the lane of the passenger jeep, it must have been near
enough, because the passenger jeep driven by Valdez was unable to avoid the collision.
Hence, the doctrine of last clear chance does not apply to this case.
Article 2179 of the Civil Code provides:
When the plaintiff’s own negligence was the immediate and proximate cause of his injury,
he cannot recover damages. But if his negligence was only contributory, the immediate and
proximate cause of the injury being the defendant’s lack of due care, the plaintiff may
recover damages, but the courts shall mitigate the damages to be awarded. 41
In this case, both Arnulfo Ramos and Benigno Valdez failed to exercise reasonable care and
caution that an ordinarily prudent man would have taken to prevent the vehicular
accident. Since the gross negligence of Arnulfo Ramos and the inexcusable negligence of
Benigno Valdez were the proximate cause of the vehicular accident, respondents cannot
recover damages pursuant to Article 2179 of the Civil Code.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R.
CV No. 67027, dated April 25, 2006, and its Resolution dated October 23, 2006, are hereby
REVERSED and SET ASIDE.
No costs.

G.R. No. 129792 December 21, 1999

JARCO MARKETING CORPORATION, LEONARDO KONG, JOSE TIOPE and ELISA
PANELO, petitioners,
vs.
HONORABLE COURT OF APPEALS, CONRADO C. AGUILAR and CRISELDA R.
AGUILAR, respondents.
 
DAVIDE, JR., J.:
In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioners seek
the reversal of the 17 June 1996 decision 1 of the Court of Appeals in C.A. G.R. No. CV
37937 and the resolution 2 denying their motion for reconsideration. The assailed decision
188
set aside the 15 January 1992 judgment of the Regional Trial Court (RTC), Makati City,
Branch 60 in Civil Case No. 7119 and ordered petitioners to pay damages and attorney's
fees to private respondents Conrado and Criselda (CRISELDA) Aguilar.
Petitioner Jarco Marketing Corporation is the owner of Syvel's Department Store, Makati
City. Petitioners Leonardo Kong, Jose Tiope and Elisa Panelo are the store's branch
manager, operations manager, and supervisor, respectively. Private respondents are
spouses and the parents of Zhieneth Aguilar (ZHIENETH).
In the afternoon of 9 May 1983, CRISELDA and ZHIENETH were at the 2nd floor of Syvel's
Department Store, Makati City. CRISELDA was signing her credit card slip at the payment
and verification counter when she felt a sudden gust of wind and heard a loud thud. She
looked behind her. She then beheld her daughter ZHIENETH on the floor, her young body
pinned by the bulk of the store's gift-wrapping counter/structure. ZHIENETH was crying
and screaming for help. Although shocked, CRISELDA was quick to ask the assistance of
the people around in lifting the counter and retrieving ZHIENETH from the floor. 3
ZHIENETH was quickly rushed to the Makati Medical Center where she was operated on.
The next day ZHIENETH lost her speech and thereafter communicated with CRISELDA by
writing on a magic slate. The injuries she sustained took their toil on her young body. She
died fourteen (14) days after the accident or on 22 May 1983, on the hospital bed. She was
six years old. 4
The cause of her death was attributed to the injuries she sustained. The provisional
medical certificate 5 issued by ZHIENETH's attending doctor described the extent of her
injuries:
Diagnoses:
1. Shock, severe, sec. to intra-abdominal injuries due
to blunt injury
2. Hemorrhage, massive, intraperitoneal sec. to
laceration, (L) lobe liver
3. Rupture, stomach, anterior & posterior walls
4. Complete transection, 4th position, duodenum
5. Hematoma, extensive, retroperitoneal
6. Contusion, lungs, severe
CRITICAL
After the burial of their daughter, private respondents demanded upon petitioners the
reimbursement of the hospitalization, medical bills and wake and funeral expenses 6 which
they had incurred. Petitioners refused to pay. Consequently, private respondents filed a
complaint for damages, docketed as Civil Case No. 7119 wherein they sought the payment
of P157,522.86 for actual damages, P300,000 for moral damages, P20,000 for attorney's
fees and an unspecified amount for loss of income and exemplary damages.
In their answer with counterclaim, petitioners denied any liability for the injuries and
consequent death of ZHIENETH. They claimed that CRISELDA was negligent in exercising
care and diligence over her daughter by allowing her to freely roam around in a store filled
with glassware and appliances. ZHIENETH too, was guilty of contributory negligence since
she climbed the counter, triggering its eventual collapse on her. Petitioners also
emphasized that the counter was made of sturdy wood with a strong support; it never fell
nor collapsed for the past fifteen years since its construction.

189
Additionally, petitioner Jarco Marketing Corporation maintained that it observed the
diligence of a good father of a family in the selection, supervision and control of its
employees. The other petitioners likewise raised due care and diligence in the performance
of their duties and countered that the complaint was malicious for which they suffered
besmirched reputation and mental anguish. They sought the dismissal of the complaint
and an award of moral and exemplary damages and attorney's fees in their favor.
In its decision 7 the trial court dismissed the complaint and counterclaim after finding that
the preponderance of the evidence favored petitioners. It ruled that the proximate cause of
the fall of the counter on ZHIENETH was her act of clinging to it. It believed petitioners'
witnesses who testified that ZHIENETH clung to the counter, afterwhich the structure and
the girl fell with the structure falling on top of her, pinning her stomach. In contrast, none
of private respondents' witnesses testified on how the counter fell. The trial court also held
that CRISELDA's negligence contributed to ZHIENETH's accident.
In absolving petitioners from any liability, the trial court reasoned that the counter was
situated at the end or corner of the 2nd floor as a precautionary measure hence, it could
not be considered as an attractive nuisance. 8 The counter was higher than ZHIENETH. It
has been in existence for fifteen years. Its structure was safe and well-balanced.
ZHIENETH, therefore, had no business climbing on and clinging to it.
Private respondents appealed the decision, attributing as errors of the trial court its
findings that: (1) the proximate cause of the fall of the counter was ZHIENETH's
misbehavior; (2) CRISELDA was negligent in her care of ZHIENETH; (3) petitioners were not
negligent in the maintenance of the counter; and (4) petitioners were not liable for the death
of ZHIENETH.
Further, private respondents asserted that ZHIENETH should be entitled to the conclusive
presumption that a child below nine (9) years is incapable of contributory negligence. And
even if ZHIENETH, at six (6) years old, was already capable of contributory negligence, still
it was physically impossible for her to have propped herself on the counter. She had a small
frame (four feet high and seventy pounds) and the counter was much higher and heavier
than she was. Also, the testimony of one of the store's former employees, Gerardo Gonzales,
who accompanied ZHIENETH when she was brought to the emergency room of the Makati
Medical Center belied petitioners' theory that ZHIENETH climbed the counter. Gonzales
claimed that when ZHIENETH was asked by the doctor what she did, ZHIENETH replied,
"[N]othing, I did not come near the counter and the counter just fell on me." 9 Accordingly,
Gonzales' testimony on ZHIENETH's spontaneous declaration should not only be
considered as part of res gestae but also accorded credit.
Moreover, negligence could not be imputed to CRISELDA for it was reasonable for her to
have let go of ZHIENETH at the precise moment that she was signing the credit card slip.
Finally, private respondents vigorously maintained that the proximate cause of
ZHIENETH's death, was petitioners' negligence in failing to institute measures to have the
counter permanently nailed.
On the other hand, petitioners argued that private respondents raised purely factual issues
which could no longer be disturbed. They explained that ZHIENETH's death while
unfortunate and tragic, was an accident for which neither CRISELDA nor even ZHIENETH
could entirely be held faultless and blameless. Further, petitioners adverted to the trial
court's rejection of Gonzales' testimony as unworthy of credence.

190
As to private respondent's claim that the counter should have been nailed to the ground,
petitioners justified that it was not necessary. The counter had been in existence for several
years without any prior accident and was deliberately placed at a corner to avoid such
accidents. Truth to tell, they acted without fault or negligence for they had exercised due
diligence on the matter. In fact, the criminal case 10 for homicide through simple negligence
filed by private respondents against the individual petitioners was dismissed; a verdict of
acquittal was rendered in their favor.
The Court of Appeals, however, decided in favor of private respondents and reversed the
appealed judgment. It found that petitioners were negligent in maintaining a structurally
dangerous counter. The counter was shaped like an inverted "L" 11 with a top wider than
the base. It was top heavy and the weight of the upper portion was neither evenly
distributed nor supported by its narrow base. Thus, the counter was defective, unstable
and dangerous; a downward pressure on the overhanging portion or a push from the front
could cause the counter to fall. Two former employees of petitioners had already previously
brought to the attention of the management the danger the counter could cause. But the
latter ignored their concern. The Court of Appeals faulted the petitioners for this omission,
and concluded that the incident that befell ZHIENETH could have been avoided had
petitioners repaired the defective counter. It was inconsequential that the counter had been
in use for some time without a prior incident.
The Court of Appeals declared that ZHIENETH, who was below seven (7) years old at the
time of the incident, was absolutely incapable of negligence or other tort. It reasoned that
since a child under nine (9) years could not be held liable even for an intentional wrong,
then the six-year old ZHIENETH could not be made to account for a mere mischief or
reckless act. It also absolved CRISELDA of any negligence, finding nothing wrong or out of
the ordinary in momentarily allowing ZHIENETH to walk while she signed the document at
the nearby counter.
The Court of Appeals also rejected the testimonies of the witnesses of petitioners. It found
them biased and prejudiced. It instead gave credit to the testimony of disinterested witness
Gonzales. The Court of Appeals then awarded P99,420.86 as actual damages, the amount
representing the hospitalization expenses incurred by private respondents as evidenced by
the hospital's statement of account. 12 It denied an award for funeral expenses for lack of
proof to substantiate the same. Instead, a compensatory damage of P50,000 was awarded
for the death of ZHIENETH.
We quote the dispositive portion of the assailed decision, 13 thus:
WHEREFORE, premises considered, the judgment of the lower court is SET
ASIDE and another one is entered against [petitioners], ordering them to pay
jointly and severally unto [private respondents] the following:
1. P50,000.00 by way of compensatory damages for
the death of Zhieneth Aguilar, with legal interest (6%
p.a.) from 27 April 1984;
2. P99,420.86 as reimbursement for hospitalization
expenses incurred; with legal interest (6% p.a.) from
27 April 1984;
3. P100,000.00 as moral and exemplary damages;
4. P20,000.00 in the concept of attorney's fees; and
5. Costs.
191
Private respondents sought a reconsideration of the decision but the same was denied in
the Court of Appeals' resolution 14 of 16 July 1997.
Petitioners now seek the reversal of the Court of Appeals' decision and the reinstatement of
the judgment of the trial court. Petitioners primarily argue that the Court of Appeals erred
in disregarding the factual findings and conclusions of the trial court. They stress that
since the action was based on tort, any finding of negligence on the part of the private
respondents would necessarily negate their claim for damages, where said negligence was
the proximate cause of the injury sustained. The injury in the instant case was the death of
ZHIENETH. The proximate cause was ZHIENETH's act of clinging to the counter. This act
in turn caused the counter to fall on her. This and CRISELDA's contributory negligence,
through her failure to provide the proper care and attention to her child while inside the
store, nullified private respondents' claim for damages. It is also for these reasons that
parents are made accountable for the damage or injury inflicted on others by their minor
children. Under these circumstances, petitioners could not be held responsible for the
accident that befell ZHIENETH.
Petitioners also assail the credibility of Gonzales who was already separated from Syvel's at
the time he testified; hence, his testimony might have been tarnished by ill-feelings against
them.
For their part, private respondents principally reiterated their arguments that neither
ZHIENETH nor CRISELDA was negligent at any time while inside the store; the findings
and conclusions of the Court of Appeals are substantiated by the evidence on record; the
testimony of Gonzales, who heard ZHIENETH comment on the incident while she was in
the hospital's emergency room should receive credence; and finally, ZHIENETH's part of
the res gestae declaration "that she did nothing to cause the heavy structure to fall on her"
should be considered as the correct version of the gruesome events.
We deny the petition.
The two issues to be resolved are: (1) whether the death of ZHIENETH was accidental or
attributable to negligence; and (2) in case of a finding of negligence, whether the same was
attributable to private respondents for maintaining a defective counter or to CRISELDA and
ZHIENETH for failing to exercise due and reasonable care while inside the store premises.
An accident pertains to an unforeseen event in which no fault or negligence attaches to the
defendant. 15 It is "a fortuitous circumstance, event or happening; an event happening
without any human agency, or if happening wholly or partly through human agency, an
event which under the circumstances is unusual or unexpected by the person to whom it
happens." 16
On the other hand, negligence is the omission to do something which a reasonable man,
guided by those considerations which ordinarily regulate the conduct of human affairs,
would do, or the doing of something which a prudent and reasonable man would not
do. 17 Negligence is "the failure to observe, for the protection of the interest of another
person, that degree of care, precaution and vigilance which the circumstances justly
demand, whereby such other person suffers injury." 18
Accident and negligence are intrinsically contradictory; one cannot exist with the other.
Accident occurs when the person concerned is exercising ordinary care, which is not
caused by fault of any person and which could not have been prevented by any means
suggested by common prudence. 19

192
The test in determining the existence of negligence is enunciated in the landmark case
of Plicart v. Smith, 20 thus: Did the defendant in doing the alleged negligent act use that
reasonable care and caution which an ordinarily prudent person would have used in the
same situation? If not, then he is guilty of negligence. 21
We rule that the tragedy which befell ZHIENETH was no accident and that ZHIENETH's
death could only be attributed to negligence.
We quote the testimony of Gerardo Gonzales who was at the scene of the incident and
accompanied CRISELDA and ZHIENETH to the hospital:
Q While at the Makati Medical Center, did you hear or notice
anything while the child was being treated?
A At the emergency room we were all surrounding the child. And
when the doctor asked the child "what did you do," the child said
"nothing, I did not come near the counter and the counter just fell
on me."
Q (COURT TO ATTY. BELTRAN)
You want the words in Tagalog to be translated?
ATTY. BELTRAN
Yes, your Honor.
COURT
Granted. Intercalate "wala po, hindi po ako lumapit doon. Basta
bumagsak." 22
This testimony of Gonzales pertaining to ZHIENETH's statement formed (and should be
admitted as) part of the res gestae under Section 42, Rule 130 of the Rules of Court, thus:
Part of res gestae. Statements made by a person while a startling occurrence is
taking place or immediately prior or subsequent thereto with respect to the
circumstances thereof, may be given in evidence as part of the res gestae. So,
also, statements accompanying an equivocal act material to the issue, and
giving it a legal significance, may be received as part of the res gestae.
It is axiomatic that matters relating to declarations of pain or suffering and statements
made to a physician are generally considered declarations and admissions. 23 All that is
required for their admissibility as part of the res gestae is that they be made or uttered
under the influence of a startling event before the declarant had the time to think and
concoct a falsehood as witnessed by the person who testified in court. Under the
circumstances thus described, it is unthinkable for ZHIENETH, a child of such tender age
and in extreme pain, to have lied to a doctor whom she trusted with her life. We therefore
accord credence to Gonzales' testimony on the matter, i.e., ZHIENETH performed no act
that facilitated her tragic death. Sadly, petitioners did, through their negligence or omission
to secure or make stable the counter's base.
Gonzales' earlier testimony on petitioners' insistence to keep and maintain the structurally
unstable gift-wrapping counter proved their negligence, thus:
Q When you assumed the position as gift wrapper at the second
floor, will you please describe the gift wrapping counter, were you
able to examine?
A Because every morning before I start working I used to clean that
counter and since not nailed and it was only standing on the floor,
it was shaky.
193
 x x x           x x x          x x x
Q Will you please describe the counter at 5:00 o'clock [sic] in the
afternoon on [sic] May 9 1983?
A At that hour on May 9, 1983, that counter was standing beside
the verification counter. And since the top of it was heavy and
considering that it was not nailed, it can collapse at anytime, since
the top is heavy.
x x x           x x x          x x x
Q And what did you do?
A I informed Mr. Maat about that counter which is [sic] shaky and
since Mr. Maat is fond of putting display decorations on tables, he
even told me that I would put some decorations. But since I told
him that it not [sic] nailed and it is shaky he told me "better inform
also the company about it." And since the company did not do
anything about the counter, so I also did not do anything about
the counter. 24 [Emphasis supplied]
Ramon Guevarra, another former employee, corroborated the testimony of Gonzales, thus:
Q Will you please described [sic] to the honorable Court the
counter where you were assigned in January 1983?
x x x           x x x          x x x
A That counter assigned to me was when my supervisor ordered
me to carry that counter to another place. I told him that the
counter needs nailing and it has to be nailed because it might
cause injury or accident to another since it was shaky.
Q When that gift wrapping counter was transferred at the second
floor on February 12, 1983, will you please describe that to the
honorable Court?
A I told her that the counter wrapper [sic] is really in good [sic]
condition; it was shaky. I told her that we had to nail it.
Q When you said she, to whom are you referring to [sic]?
A I am referring to Ms. Panelo, sir.
Q And what was the answer of Ms. Panelo when you told her that
the counter was shaky?
A She told me "Why do you have to teach me. You are only my
subordinate and you are to teach me?" And she even got angry at
me when I told her that.
x x x           x x x          x x x
Q From February 12, 1983 up to May 9, 1983, what if any, did Ms.
Panelo or any employee of the management do to that (sic)
x x x           x x x          x x x
Witness:
None, sir. They never nailed the counter. They only nailed the
counter after the accident happened. 25 [Emphasis supplied]
Without doubt, petitioner Panelo and another store supervisor were personally informed of
the danger posed by the unstable counter. Yet, neither initiated any concrete action to
remedy the situation nor ensure the safety of the store's employees and patrons as a
194
reasonable and ordinary prudent man would have done. Thus, as confronted by the
situation petitioners miserably failed to discharge the due diligence required of a good
father of a family.
On the issue of the credibility of Gonzales and Guevarra, petitioners failed to establish that
the former's testimonies were biased and tainted with partiality. Therefore, the allegation
that Gonzales and Guevarra's testimonies were blemished by "ill feelings" against
petitioners — since they (Gonzales and Guevarra) were already separated from the company
at the time their testimonies were offered in court — was but mere speculation and
deserved scant consideration.
It is settled that when the issue concerns the credibility of witnesses, the appellate courts
will not as a general rule disturb the findings of the trial court, which is in a better position
to determine the same. The trial court has the distinct advantage of actually hearing the
testimony of and observing the deportment of the witnesses. 26 However, the rule admits of
exceptions such as when its evaluation was reached arbitrarily or it overlooked or failed to
appreciate some facts or circumstances of weight and substance which could affect the
result of the case. 27 In the instant case, petitioners failed to bring their claim within the
exception.
Anent the negligence imputed to ZHIENETH, we apply the conclusive presumption that
favors children below nine (9) years old in that they are incapable of contributory
negligence. In his book, 28 former Judge Cezar S. Sangco stated:
In our jurisdiction, a person under nine years of age is conclusively presumed
to have acted without discernment, and is, on that account, exempt from
criminal liability. The same presumption and a like exemption from criminal
liability obtains in a case of a person over nine and under fifteen years of age,
unless it is shown that he has acted with discernment. Since negligence may
be a felony and a quasi-delict and required discernment as a condition of
liability, either criminal or civil, a child under nine years of age is, by analogy,
conclusively presumed to be incapable of negligence; and that the presumption
of lack of discernment or incapacity for negligence in the case of a child over
nine but under fifteen years of age is a rebuttable one, under our law. The rule,
therefore, is that a child under nine years of age must be conclusively
presumed incapable of contributory negligence as a matter of law. [Emphasis
supplied]
Even if we attribute contributory negligence to ZHIENETH and assume that she climbed
over the counter, no injury should have occurred if we accept petitioners' theory that the
counter was stable and sturdy. For if that was the truth, a frail six-year old could not have
caused the counter to collapse. The physical analysis of the counter by both the trial court
and Court of Appeals and a scrutiny of the evidence 29 on record reveal otherwise, i.e., it
was not durable after all. Shaped like an inverted "L," the counter was heavy, huge, and its
top laden with formica. It protruded towards the customer waiting area and its base was
not secured. 30
CRISELDA too, should be absolved from any contributory negligence. Initially, ZHIENETH
held on to CRISELDA's waist, later to the latter's hand. 31 CRISELDA momentarily released
the child's hand from her clutch when she signed her credit card slip. At this precise
moment, it was reasonable and usual for CRISELDA to let go of her child. Further, at the
time ZHIENETH was pinned down by the counter, she was just a foot away from her
195
mother; and the gift-wrapping counter was just four meters away from CRISELDA. 32 The
time and distance were both significant. ZHIENETH was near her mother and did not loiter
as petitioners would want to impress upon us. She even admitted to the doctor who treated
her at the hospital that she did not do anything; the counter just fell on her.
WHEREFORE, in view of all the foregoing, the instant petition is DENIED and the
challenged decision of the Court of Appeals of 17 June 1996 in C.A. G.R. No. CV 37937 is
hereby AFFIRMED.
Costs against petitioners.
SO ORDERED.
Puno, Kapunan, Pardo and Ynares-Santiago, 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
196
 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:

197
 1. P41,840.00, as actual damages, representing the miscellaneous expenses of the
plaintiff as a result of her severed left leg;
2. The sums of (a) P37,500.00, for the unrealized profits because of the stoppage of
plaintiff's Bistro La Conga restaurant three (3) weeks after the accident on June 24,
1990; (b) P20,000.00, a month, as unrealized profits of the plaintiff in her Bistro La
Conga restaurant, from August, 1990 until the date of this judgment and (c)
P30,000.00, a month for unrealized profits in plaintiff's two (2) beauty salons from
July, 1990 until the date of this decision;
3. P1,000,000.00, in moral damages;
4. P50,000.00, as exemplary damages;
5. P60,000.00, as reasonable attorney's fees; and
6. Costs.
As a result of the trial court's decision, defendants filed an Omnibus Motion for New Trial
and for Reconsideration, citing testimony in Criminal Case O.C. No. 804367 (People vs.
Richard Li), tending to show that the point of impact, as depicted by the pieces of
glass/debris from the parties' cars, appeared to be at the center of the right lane of Aurora
Blvd. The trial court denied the motion. Defendants forthwith filed an appeal with the
respondent Court of Appeals. In a Decision rendered March 30, 1994, the Court of Appeals
found that there was "ample basis from the evidence of record for the trial court's finding
that the plaintiff's car was properly parked at the right, beside the sidewalk when it was
bumped by defendant's car."1 Dismissing the defendants' argument that the plaintiff's car
was improperly parked, almost at the center of the road, the respondent court noted that
evidence which was supposed to prove that the car was at or near center of the right lane
was never presented during the trial of the case. 2 The respondent court furthermore
observed that:
Defendant Li's testimony that he was driving at a safe speed of 55 km./hour is self
serving; it was not corroborated. It was in fact contradicted by eyewitness Rodriguez
who stated that he was outside his beerhouse located at Aurora Boulevard after A.
Lake Street, at or about 2:00 a.m. of June 24, 1990 when his attention was caught
by a beautiful lady (referring to the plaintiff) alighting from her car and opening the
trunk compartment; he noticed the car of Richard Li "approaching very fast ten (10)
meters away from the scene"; defendant's car was zigzagging", although there were no
holes and hazards on the street, and "bumped the leg of the plaintiff" who was
thrown against the windshield of defendant's care, causing its destruction. He came
to the rescue of the plaintiff, who was pulled out from under defendant's car and was
able to say "hurting words" to Richard Li because he noticed that the latter was
under the influence of liquor, because he "could smell it very well" (p. 36, et. seq.,
tsn, June 17, 1991). He knew that plaintiff owned a beerhouse in Sta. Mesa in the
1970's, but did not know either plaintiff or defendant Li before the accident.
In agreeing with the trial court that the defendant Li was liable for the injuries sustained by
the plaintiff, the Court of Appeals, in its decision, however, absolved the Li's employer,
Alexander Commercial, Inc. from any liability towards petitioner Lourdes Valenzuela and
reduced the amount of moral damages to P500,000.00. Finding justification for exemplary
damages, the respondent court allowed an award of P50,000.00 for the same, in addition to
costs, attorney's fees and the other damages. The Court of Appeals, likewise, dismissed the
defendants' counterclaims.3
198
Consequently, both parties assail the respondent court's decision by filing two separate
petitions before this Court. Richard Li, in G.R. No. 117944, contends that he should not be
held liable for damages because the proximate cause of the accident was Ma. Lourdes
Valenzuela's own negligence. Alternatively, he argues that in the event that this Court finds
him negligent, such negligence ought to be mitigated by the contributory negligence of
Valenzuela.
On the other hand, in G.R. No. 115024, Ma. Lourdes Valenzuela assails the respondent
court's decision insofar as it absolves Alexander Commercial, Inc. from liability as the
owner of the car driven by Richard Li and insofar as it reduces the amount of the actual
and moral damages awarded by the trial court.4
As the issues are intimately related, both petitions are hereby consolidated.
It is plainly evident that the petition for review in G.R. No. 117944 raises no substantial
questions of law. What it, in effect, attempts to have this Court review are factual findings
of the trial court, as sustained by the Court of Appeals finding Richard Li grossly negligent
in driving the Mitsubishi Lancer provided by his company in the early morning hours of
June 24, 1990. This we will not do. As a general rule, findings of fact of the Court of
Appeals are binding and conclusive upon us, and this Court will not normally disturb such
factual findings unless the findings of fact of the said court are palpably unsupported by
the evidence on record or unless the judgment itself is based on a misapprehension of
facts.5
In the first place, Valenzuela's version of the incident was fully corroborated by an
uninterested witness, Rogelio Rodriguez, the owner-operator of an establishment located
just across the scene of the accident. On trial, he testified that he observed a car being
driven at a "very fast" speed, racing towards the general direction of Araneta
Avenue.6 Rodriguez further added that he was standing in front of his establishment, just
ten to twenty feet away from the scene of the accident, when he saw the car hit Valenzuela,
hurtling her against the windshield of the defendant's Mitsubishi Lancer, from where she
eventually fell under the defendant's car. Spontaneously reacting to the incident, he
crossed the street, noting that a man reeking with the smell of liquor had alighted from the
offending vehicle in order to survey the incident. 7 Equally important, Rodriguez declared
that he observed Valenzuela's car parked parallel and very near the sidewalk, 8 contrary to
Li's allegation that Valenzuela's car was close to the center of the right lane. We agree that
as between Li's "self-serving" asseverations and the observations of a witness who did not
even know the accident victim personally and who immediately gave a statement of the
incident similar to his testimony to the investigator immediately after the incident, the
latter's testimony deserves greater weight. As the court emphasized:
The issue is one of credibility and from Our own examination of the transcript, We
are not prepared to set aside the trial court's reliance on the testimony of Rodriguez
negating defendant's assertion that he was driving at a safe speed. While Rodriguez
drives only a motorcycle, his perception of speed is not necessarily impaired. He was
subjected to cross-examination and no attempt was made to question .his
competence or the accuracy of his statement that defendant was driving "very fast".
This was the same statement he gave to the police investigator after the incident, as
told to a newspaper report (Exh. "P"). We see no compelling basis for disregarding his
testimony.

199
 The alleged inconsistencies in Rodriguez' testimony are not borne out by an
examination of the testimony. Rodriguez testified that the scene of the accident was
across the street where his beerhouse is located about ten to twenty feet away (pp.
35-36, tsn, June 17, 1991). He did not state that the accident transpired immediately
in front of his establishment. The ownership of the Lambingan se Kambingan is not
material; the business is registered in the name of his mother, but he explained that
he owns the establishment (p. 5, tsn, June 20, 1991). Moreover, the testimony that
the streetlights on his side of Aurora Boulevard were on the night the accident
transpired (p. 8) is not necessarily contradictory to the testimony of Pfc. Ramos that
there was a streetlight at the corner of Aurora Boulevard and F. Roman Street (p. 45,
tsn, Oct. 20, 1991).
With respect to the weather condition, Rodriguez testified that there was only a
drizzle, not a heavy rain and the rain has stopped and he was outside his
establishment at the time the accident transpired (pp. 64-65, tsn, June 17, 1991).
This was consistent with plaintiff's testimony that it was no longer raining when she
left Bistro La Conga (pp. 10-11, tsn, April 29, 1991). It was defendant Li who stated
that it was raining all the way in an attempt to explain why he was travelling at only
50-55 kph. (p. 11, tsn, Oct. 14, 1991). As to the testimony of Pfc. Ramos that it was
raining, he arrived at the scene only in response to a telephone call after the accident
had transpired (pp. 9-10, tsn, Oct. 28, 1991). We find no substantial inconsistencies
in Rodriguez's testimony that would impair the essential integrity of his testimony or
reflect on his honesty. We are compelled to affirm the trial court's acceptance of the
testimony of said eyewitness.
Against the unassailable testimony of witness Rodriguez we note that Li's testimony was
peppered with so many inconsistencies leading us to conclude that his version of the
accident was merely adroitly crafted to provide a version, obviously self-serving, which
would exculpate him from any and all liability in the incident. Against Valenzuela's
corroborated claims, his allegations were neither backed up by other witnesses nor by the
circumstances proven in the course of trial. He claimed that he was driving merely at a
speed of 55 kph. when "out of nowhere he saw a dark maroon lancer right in front of him,
which was (the) plaintiff's car". He alleged that upon seeing this sudden "apparition" he put
on his brakes to no avail as the road was slippery. 9
One will have to suspend disbelief in order to give credence to Li's disingenuous and
patently self-serving asseverations. The average motorist alert to road conditions will have
no difficulty applying the brakes to a car traveling at the speed claimed by Li. Given a light
rainfall, the visibility of the street, and the road conditions on a principal metropolitan
thoroughfare like Aurora Boulevard, Li would have had ample time to react to the changing
conditions of the road if he were alert - as every driver should be - to those conditions.
Driving exacts a more than usual toll on the senses. Physiological "fight or
flight" 10 mechanisms are at work, provided such mechanisms were not dulled by drugs,
alcohol, exhaustion, drowsiness, etc.11 Li's failure to react in a manner which would have
avoided the accident could therefore have been only due to either or both of the two factors:
1) that he was driving at a "very fast" speed as testified by Rodriguez; and 2) that he was
under the influence of alcohol.12 Either factor working independently would have
diminished his responsiveness to road conditions, since normally he would have slowed
down prior to reaching Valenzuela's car, rather than be in a situation forcing him to
200
suddenly apply his brakes. As the trial court noted (quoted with approval by respondent
court):
Secondly, as narrated by defendant Richard Li to the San Juan Police immediately
after the incident, he said that while driving along Aurora Blvd., out of nowhere he
saw a dark maroon lancer right in front of him which was plaintiff's car, indicating,
again, thereby that, indeed, he was driving very fast, oblivious of his surroundings
and the road ahead of him, because if he was not, then he could not have missed
noticing at a still far distance the parked car of the plaintiff at the right side near the
sidewalk which had its emergency lights on, thereby avoiding forcefully bumping at
the plaintiff who was then standing at the left rear edge of her car.
Since, according to him, in his narration to the San Juan Police, he put on his brakes
when he saw the plaintiff's car in front of him, but that it failed as the road was wet
and slippery, this goes to show again, that, contrary to his claim, he was, indeed,
running very fast. For, were it otherwise, he could have easily completely stopped his
car, thereby avoiding the bumping of the plaintiff, notwithstanding that the road was
wet and slippery. Verily, since, if, indeed, he was running slow, as he claimed, at only
about 55 kilometers per hour, then, inspite of the wet and slippery road, he could
have avoided hitting the plaintiff by the mere expedient or applying his brakes at the
proper time and distance.
It could not be true, therefore, as he now claims during his testimony, which is
contrary to what he told the police immediately after the accident and is, therefore,
more believable, that he did not actually step on his brakes but simply swerved a
little to the right when he saw the on-coming car with glaring headlights, from the
opposite direction, in order to avoid it.
For, had this been what he did, he would not have bumped the car of the plaintiff
which was properly parked at the right beside the sidewalk. And, it was not even
necessary for him to swerve a little to the right in order to safely avoid a collision with
the on-coming car, considering that Aurora Blvd. is a double lane avenue separated
at the center by a dotted white paint, and there is plenty of space for both cars, since
her car was running at the right lane going towards Manila on the on-coming car was
also on its right lane going to Cubao.13
Having come to the conclusion that Li was negligent in driving his company-issued
Mitsubishi Lancer, the next question for us to determine is whether or not Valenzuela was
likewise guilty of contributory negligence in parking her car alongside Aurora Boulevard,
which entire area Li points out, is a no parking zone.
We agree with the respondent court that Valenzuela was not guilty of contributory
negligence.
Contributory negligence is conduct on the part of the injured party, contributing as a legal
cause to the harm he has suffered, which falls below the standard to which he is required
to conform for his own protection. 14 Based on the foregoing definition, the standard or act to
which, according to petitioner Li, Valenzuela ought to have conformed for her own
protection was not to park at all at any point of Aurora Boulevard, a no parking zone. We
cannot agree.
Courts have traditionally been compelled to recognize that an actor who is confronted with
an emergency is not to be held up to the standard of conduct normally applied to an
individual who is in no such situation. The law takes stock of impulses of humanity when
201
placed in threatening or dangerous situations and does not require the same standard of
thoughtful and reflective care from persons confronted by unusual and oftentimes
threatening conditions.15
Under the "emergency rule" adopted by this Court in Gan vs. Court of Appeals,16 an
individual who suddenly finds himself in a situation of danger and is required to act
without much time to consider the best means that may be adopted to avoid the impending
danger, is not guilty of negligence if he fails to undertake what subsequently and upon
reflection may appear to be a better solution, unless the emergency was brought by his own
negligence.17
Applying this principle to a case in which the victims in a vehicular accident swerved to the
wrong lane to avoid hitting two children suddenly darting into the street, we held, in Mc
Kee vs. Intermediate Appellate Court,18 that the driver therein, Jose Koh, "adopted the best
means possible in the given situation" to avoid hitting the children. Using the "emergency
rule" the Court concluded that Koh, in spite of the fact that he was in the wrong lane when
the collision with an oncoming truck occurred, was not guilty of negligence. 19
While the emergency rule applies to those cases in which reflective thought, or the
opportunity to adequately weigh a threatening situation is absent, the conduct which is
required of an individual in such cases is dictated not exclusively by the suddenness of the
event which absolutely negates thoroughful care, but by the over-all nature of the
circumstances. A woman driving a vehicle suddenly crippled by a flat tire on a rainy night
will not be faulted for stopping at a point which is both convenient for her to do so and
which is not a hazard to other motorists. She is not expected to run the entire boulevard in
search for a parking zone or turn on a dark street or alley where she would likely find no
one to help her. It would be hazardous for her not to stop and assess the emergency (simply
because the entire length of Aurora Boulevard is a no-parking zone) because the hobbling
vehicle would be both a threat to her safety and to other motorists. In the instant case,
Valenzuela, upon reaching that portion of Aurora Boulevard close to A. Lake St., noticed
that she had a flat tire. To avoid putting herself and other motorists in danger, she did
what was best under the situation. As narrated by respondent court: "She stopped at a
lighted place where there were people, to verify whether she had a flat tire and to solicit
help if needed. Having been told by the people present that her rear right tire was flat and
that she cannot reach her home she parked along the sidewalk, about 1 1/2 feet away,
behind a Toyota Corona Car."20 In fact, respondent court noted, Pfc. Felix Ramos, the
investigator on the scene of the accident confirmed that Valenzuela's car was parked very
close to the sidewalk.21 The sketch which he prepared after the incident showed
Valenzuela's car partly straddling the sidewalk, clear and at a convenient distance from
motorists passing the right lane of Aurora Boulevard. This fact was itself corroborated by
the testimony of witness Rodriguez.22
Under the circumstances described, Valenzuela did exercise the standard reasonably
dictated by the emergency and could not be considered to have contributed to the
unfortunate circumstances which eventually led to the amputation of one of her lower
extremities. The emergency which led her to park her car on a sidewalk in Aurora
Boulevard was not of her own making, and it was evident that she had taken all reasonable
precautions.
Obviously in the case at bench, the only negligence ascribable was the negligence of Li on
the night of the accident. "Negligence, as it is commonly understood is conduct which
202
creates an undue risk of harm to others." 23 It is the failure to observe that degree of care,
precaution, and vigilance which the circumstances justly demand, whereby such other
person suffers injury.24 We stressed, in Corliss vs. Manila Railroad Company,25 that
negligence is the want of care required by the circumstances.
The circumstances established by the evidence adduced in the court below plainly
demonstrate that Li was grossly negligent in driving his Mitsubishi Lancer. It bears
emphasis that he was driving at a fast speed at about 2:00 A.M. after a heavy downpour
had settled into a drizzle rendering the street slippery. There is ample testimonial evidence
on record to show that he was under the influence of liquor. Under these conditions, his
chances of effectively dealing with changing conditions on the road were significantly
lessened. As Presser and Keaton emphasize:
[U]nder present day traffic conditions, any driver of an automobile must be prepared
for the sudden appearance of obstacles and persons on the highway, and of other
vehicles at intersections, such as one who sees a child on the curb may be required
to anticipate its sudden dash into the street, and his failure to act properly when they
appear may be found to amount to negligence.26
Li's obvious unpreparedness to cope with the situation confronting him on the night of the
accident was clearly of his own making.
We now come to the question of the liability of Alexander Commercial, Inc. Li's employer. In
denying liability on the part of Alexander Commercial, the respondent court held that:
There is no evidence, not even defendant Li's testimony, that the visit was in
connection with official matters. His functions as assistant manager sometimes
required him to perform work outside the office as he has to visit buyers and
company clients, but he admitted that on the night of the accident he came from BF
Homes Paranaque he did not have "business from the company" (pp. 25-26, ten,
Sept. 23, 1991). The use of the company car was partly required by the nature of his
work, but the privilege of using it for non-official business is a "benefit", apparently
referring to the fringe benefits attaching to his position.
Under the civil law, an employer is liable for the negligence of his employees in the
discharge of their respective duties, the basis of which liability is not respondeat
superior, but the relationship of pater familias, which theory bases the liability of the
master ultimately on his own negligence and not on that of his servant (Cuison v.
Norton and Harrison Co., 55 Phil. 18). Before an employer may be held liable for the
negligence of his employee, the act or omission which caused damage must have
occurred while an employee was in the actual performance of his assigned tasks or
duties (Francis High School vs. Court of Appeals, 194 SCRA 341). In defining an
employer's liability for the acts done within the scope of the employee's assigned
tasks, the Supreme Court has held that this includes any act done by an employee,
in furtherance of the interests of the employer or for the account of the employer at
the time of the infliction of the injury or damage (Filamer Christian Institute vs.
Intermediate Appellate Court, 212 SCRA 637). An employer is expected to impose
upon its employees the necessary discipline called for in the performance of any act
"indispensable to the business and beneficial to their employer" (at p. 645).
In light of the foregoing, We are unable to sustain the trial court's finding that since
defendant Li was authorized by the company to use the company car "either officially
or socially or even bring it home", he can be considered as using the company car in
203
 the service of his employer or on the occasion of his functions. Driving the company
car was not among his functions as assistant manager; using it for non-official
purposes would appear to be a fringe benefit, one of the perks attached to his
position. But to impose liability upon the employer under Article 2180 of the Civil
Code, earlier quoted, there must be a showing that the damage was caused by their
employees in the service of the employer or on the occasion of their functions. There
is no evidence that Richard Li was at the time of the accident performing any act in
furtherance of the company's business or its interests, or at least for its benefit. The
imposition of solidary liability against defendant Alexander Commercial Corporation
must therefore fail.27
We agree with the respondent court that the relationship in question is not based on the
principle of respondeat superior, which holds the master liable for acts of the servant, but
that of pater familias, in which the liability ultimately falls upon the employer, for his
failure to exercise the diligence of a good father of the family in the selection and
supervision of his employees. It is up to this point, however, that our agreement with the
respondent court ends. Utilizing the bonus pater familias standard expressed in Article
2180 of the Civil Code, 28 we are of the opinion that Li's employer, Alexander Commercial,
Inc. is jointly and solidarily liable for the damage caused by the accident of June 24, 1990.
First, the case of St. Francis High School vs. Court of Appeals29 upon which respondent
court has placed undue reliance, dealt with the subject of a school and its teacher's
supervision of students during an extracurricular activity. These cases now fall under the
provision on special parental authority found in Art. 218 of the Family Code which
generally encompasses all authorized school activities, whether inside or outside school
premises.
Second, the employer's primary liability under the concept of pater familias embodied by
Art 2180 (in relation to Art. 2176) of the Civil Code is quasi-delictual or tortious in
character. His liability is relieved on a showing that he exercised the diligence of a good
father of the family in the selection and supervision of its employees. Once evidence is
introduced showing that the employer exercised the required amount of care in selecting its
employees, half of the employer's burden is overcome. The question of diligent supervision,
however, depends on the circumstances of employment.
Ordinarily, evidence demonstrating that the employer has exercised diligent supervision of
its employee during the performance of the latter's assigned tasks would be enough to
relieve him of the liability imposed by Article 2180 in relation to Article 2176 of the Civil
Code. The employer is not expected to exercise supervision over either the employee's
private activities or during the performance of tasks either unsanctioned by the former or
unrelated to the employee's tasks. The case at bench presents a situation of a different
character, involving a practice utilized by large companies with either their employees of
managerial rank or their representatives.
It is customary for large companies to provide certain classes of their employees with
courtesy vehicles. These company cars are either wholly owned and maintained by the
company itself or are subject to various plans through which employees eventually acquire
their vehicles after a given period of service, or after paying a token amount. Many
companies provide liberal "car plans" to enable their managerial or other employees of rank
to purchase cars, which, given the cost of vehicles these days, they would not otherwise be
able to purchase on their own.
204
Under the first example, the company actually owns and maintains the car up to the point
of turnover of ownership to the employee; in the second example, the car is really owned
and maintained by the employee himself. In furnishing vehicles to such employees, are
companies totally absolved of responsibility when an accident involving a company-issued
car occurs during private use after normal office hours?
Most pharmaceutical companies, for instance, which provide cars under the first plan,
require rigorous tests of road worthiness from their agents prior to turning over the car
(subject of company maintenance) to their representatives. In other words, like a good
father of a family, they entrust the company vehicle only after they are satisfied that the
employee to whom the car has been given full use of the said company car for company or
private purposes will not be a threat or menace to himself, the company or to others. When
a company gives full use and enjoyment of a company car to its employee, it in effect
guarantees that it is, like every good father, satisfied that its employee will use the privilege
reasonably and responsively.
In the ordinary course of business, not all company employees are given the privilege of
using a company-issued car. For large companies other than those cited in the example of
the preceding paragraph, the privilege serves important business purposes either related to
the image of success an entity intends to present to its clients and to the public in general,
or - for practical and utilitarian reasons - to enable its managerial and other employees of
rank or its sales agents to reach clients conveniently. In most cases, providing a company
car serves both purposes. Since important business transactions and decisions may occur
at all hours in all sorts of situations and under all kinds of guises, the provision for the
unlimited use of a company car therefore principally serves the business and goodwill of a
company and only incidentally the private purposes of the individual who actually uses the
car, the managerial employee or company sales agent. As such, in providing for a company
car for business use and/or for the purpose of furthering the company's image, a company
owes a responsibility to the public to see to it that the managerial or other employees to
whom it entrusts virtually unlimited use of a company issued car are able to use the
company issue capably and responsibly.
In the instant case, Li was an Assistant Manager of Alexander Commercial, Inc. In his
testimony before the trial court, he admitted that his functions as Assistant Manager did
not require him to scrupulously keep normal office hours as he was required quite often to
perform work outside the office, visiting prospective buyers and contacting and meeting
with company clients. 30 These meetings, clearly, were not strictly confined to routine hours
because, as a managerial employee tasked with the job of representing his company with
its clients, meetings with clients were both social as well as work-related functions. The
service car assigned to Li by Alexander Commercial, Inc. therefore enabled both Li - as well
as the corporation - to put up the front of a highly successful entity, increasing the latter's
goodwill before its clientele. It also facilitated meeting between Li and its clients by
providing the former with a convenient mode of travel.
Moreover, Li's claim that he happened to be on the road on the night of the accident
because he was coming from a social visit with an officemate in Paranaque was a bare
allegation which was never corroborated in the court below. It was obviously self-serving.
Assuming he really came from his officemate's place, the same could give rise to
speculation that he and his officemate had just been from a work-related function, or they
were together to discuss sales and other work related strategies.
205
In fine, Alexander Commercial, inc. has not demonstrated, to our satisfaction, that it
exercised the care and diligence of a good father of the family in entrusting its company car
to Li. No allegations were made as to whether or not the company took the steps necessary
to determine or ascertain the driving proficiency and history of Li, to whom it gave full and
unlimited use of a company car.31 Not having been able to overcome the burden of
demonstrating that it should be absolved of liability for entrusting its company car to Li,
said company, based on the principle of bonus pater familias, ought to be jointly and
severally liable with the former for the injuries sustained by Ma. Lourdes Valenzuela during
the accident.
Finally, we find no reason to overturn the amount of damages awarded by the respondent
court, except as to the amount of moral damages. In the case of moral damages, while the
said damages are not intended to enrich the plaintiff at the expense of a defendant, the
award should nonetheless be commensurate to the suffering inflicted. In the instant case
we are of the opinion that the reduction in moral damages from an amount of
P1,000,000.00 to P800,000,00 by the Court of Appeals was not justified considering the
nature of the resulting damage and the predictable sequelae of the injury.
As a result of the accident, Ma. Lourdes Valenzuela underwent a traumatic amputation of
her left lower extremity at the distal left thigh just above the knee. Because of this,
Valenzuela will forever be deprived of the full ambulatory functions of her left extremity,
even with the use of state of the art prosthetic technology. Well beyond the period of
hospitalization (which was paid for by Li), she will be required to undergo adjustments in
her prosthetic devise due to the shrinkage of the stump from the process of healing.
These adjustments entail costs, prosthetic replacements and months of physical and
occupational rehabilitation and therapy. During her lifetime, the prosthetic devise will have
to be replaced and re-adjusted to changes in the size of her lower limb effected by the
biological changes of middle-age, menopause and aging. Assuming she reaches menopause,
for example, the prosthetic will have to be adjusted to respond to the changes in bone
resulting from a precipitate decrease in calcium levels observed in the bones of all post-
menopausal women. In other words, the damage done to her would not only be permanent
and lasting, it would also be permanently changing and adjusting to the physiologic
changes which her body would normally undergo through the years. The replacements,
changes, and adjustments will require corresponding adjustive physical and occupational
therapy. All of these adjustments, it has been documented, are painful.
The foregoing discussion does not even scratch the surface of the nature of the resulting
damage because it would be highly speculative to estimate the amount of psychological
pain, damage and injury which goes with the sudden severing of a vital portion of the
human body. A prosthetic device, however technologically advanced, will only allow a
reasonable amount of functional restoration of the motor functions of the lower limb. The
sensory functions are forever lost. The resultant anxiety, sleeplessness, psychological
injury, mental and physical pain are inestimable.
As the amount of moral damages are subject to this Court's discretion, we are of the
opinion that the amount of P1,000,000.00 granted by the trial court is in greater accord
with the extent and nature of the injury - physical and psychological - suffered by
Valenzuela as a result of Li's grossly negligent driving of his Mitsubishi Lancer in the early
morning hours of the accident.

206
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.

Separate Opinions
VITUG, J., concurring:
Pursuant to Article 21801 of the Civil Code that acknowledges responsibility under a
relationship of patria potestas, a person may be held accountable not only for his own
direct culpable act or negligence but also for those of others albeit predicated on his own
supposed failure to exercise due care in his supervisory authority and functions. In the
case of an employer, that vicarious liability attaches only when the tortious conduct of the
employee relates to, or is in the course of, his employment. The question to ask should be
whether, at the time of the damage or injury, the employee is engaged in the affairs or
concerns of the employer or, independently, in that of his own. While an employer incurs
no liability when an employee's conduct, act or omission is beyond the range of
employment,2 a minor deviation from the assigned task of an employee, however, does not
affect the liability of an employer.3

Footnotes

G.R. No. 159213, July 03, 2013

VECTOR SHIPPING CORPORATION AND FRANCISCO
SORIANO, Petitioners, v. AMERICAN HOME ASSURANCE COMPANY AND SULPICIO
LINES, INC., Respondents.

DECISION
BERSAMIN, J.:
 
Subrogation under Article 2207 of the Civil Code gives rise to a cause of action created by
law. For purposes of the law on the prescription of actions, the period of limitation is ten
years.
The Case

Vector Shipping Corporation (Vector) and Francisco Soriano appeal the decision
promulgated on July 22, 2003, 1 whereby the Court of Appeals (CA) held them jointly and
severally liable to pay P7,455,421.08 to American Home Assurance Company (respondent)
as and by way of actual damages on the basis of respondent being the subrogee of its
insured Caltex Philippines, Inc. (Caltex).
Antecedents

Vector was the operator of the motor tanker M/T Vector, while Soriano was the registered
owner of the M/T Vector. Respondent is a domestic insurance corporation. 2
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On September 30, 1987, Caltex entered into a contract of affreightment 3 with Vector for the
transport of Caltex’s petroleum cargo through the M/T Vector. Caltex insured the
petroleum cargo with respondent for P7,455,421.08 under Marine Open Policy No. 34-
5093-6.4  In the evening of December 20, 1987, the M/T Vector and the M/V Doña Paz, the
latter a vessel owned and operated by Sulpicio Lines, Inc., collided in the open sea near
Dumali Point in Tablas Strait, located between the Provinces of Marinduque and Oriental
Mindoro. The collision led to the sinking of both vessels. The entire petroleum cargo of
Caltex on board the M/T Vector perished.5 On July 12, 1988, respondent indemnified
Caltex for the loss of the petroleum cargo in the full amount of P7,455,421.08. 6

On March 5, 1992, respondent filed a complaint against Vector, Soriano, and Sulpicio
Lines, Inc. to recover the full amount of P7,455,421.08 it paid to Caltex (Civil Case No. 92-
620).7 The case was raffled to Branch 145 of the Regional Trial Court (RTC) in Makati City.

On December 10, 1997, the RTC issued a resolution dismissing Civil Case No. 92-620 on
the following grounds:cralavvonlinelawlibrary
This action is upon a quasi-delict and as such must be commenced within four 4 years from
the day they may be brought. [Art. 1145 in relation to Art. 1150, Civil Code] “From the day
[the action] may be brought” means from the day the quasi-delict occurred. [Capuno v.
Pepsi Cola, 13 SCRA 663]

The tort complained of in this case occurred on 20 December 1987. The action arising
therefrom would under the law prescribe, unless interrupted, on 20 December 1991.

When the case was filed against defendants Vector Shipping and Francisco Soriano on 5
March 1992, the action not having been interrupted, had already prescribed.

Under the same situation, the cross-claim of Sulpicio Lines against Vector Shipping and
Francisco Soriano filed on 25 June 1992 had likewise prescribed.

The letter of demand upon defendant Sulpicio Lines allegedly on 6 November 1991 did not
interrupt the [tolling] of the prescriptive period since there is no evidence that it was
actually received by the addressee. Under such circumstances, the action against Sulpicio
Lines had likewise prescribed.

Even assuming that such written extra-judicial demand was received and the prescriptive
period interrupted in accordance with Art. 1155, Civil Code, it was only for the 10-day
period within which Sulpicio Lines was required to settle its obligation. After that period
lapsed, the prescriptive period started again. A new 4-year period to file action was not
created by the extra-judicial demand; it merely suspended and extended the period for 10
days, which in this case meant that the action should be commenced by 30 December
1991, rather than 20 December 1991.

Thus, when the complaint against Sulpicio Lines was filed on 5 March 1992, the action had
208
prescribed.

PREMISES CONSIDERED, the complaint of American Home Assurance Company and the
cross-claim of Sulpicio Lines against Vector Shipping Corporation and Francisco Soriano
are DISMISSED.

Without costs.

SO ORDERED.8

Respondent appealed to the CA, which promulgated its assailed decision on July 22, 2003
reversing the RTC.9 Although thereby absolving Sulpicio Lines, Inc. of any liability to
respondent, the CA held Vector and Soriano jointly and severally liable to respondent for
the reimbursement of the amount of P7,455,421.08 paid to Caltex,
explaining:cralavvonlinelawlibrary
x x x x

The resolution of this case is primarily anchored on the determination of what kind of
relationship existed between Caltex and M/V Dona Paz and between Caltex and M/T Vector
for purposes of applying the laws on prescription. The Civil Code expressly provides for the
number of years before the extinctive prescription s[e]ts in depending on the relationship
that governs the parties.

x x x x

After a careful perusal of the factual milieu and the evidence adduced by the parties, We
are constrained to rule that the relationship that

existed between Caltex and M/V Dona Paz is that of a quasi-delict while that between
Caltex and M/T Vector is culpa contractual based on a Contract of Affreightment or a
charter party.

x x x x

On the other hand, the claim of appellant against M/T Vector is anchored on a breach of
contract of affreightment. The appellant averred that M/T Vector committed such act for
having misrepresented to the appellant that said vessel is seaworthy when in fact it is not.
The contract was executed between Caltex and M/T Vector on September 30, 1987 for the
latter to transport thousands of barrels of different petroleum products. Under Article
1144 of the New Civil Code, actions based on written contract must be brought within 10
years from the time the right of action accrued. A passenger of a ship, or his heirs, can
bring an action based on culpa contractual within a period of 10 years because the ticket
issued for the transportation is by itself a complete written contract (Peralta de Guerrero
vs. Madrigal Shipping Co., L 12951, November 17, 1959). Viewed with reference to the
statute of limitations, an action against a carrier, whether of goods or of passengers, for
injury resulting from a breach of contract for safe carriage is one on contract, and not in
209
tort, and is therefore, in the absence of a specific statute relating to such actions governed
by the statute fixing the period within which actions for breach of contract must be
brought (53 C.J.S. 1002 citing Southern Pac. R. Co. of Mexico vs. Gonzales 61 P. 2d
377, 48 Ariz. 260, 106 A.L.R. 1012).

Considering that We have already concluded that the prescriptive periods for filing action
against M/V Doña Paz based on quasi delict and M/T Vector based on breach of
contract have not yet expired, are We in a position to decide the appeal on its merit.

We say yes.

x x x x

Article 2207 of the Civil Code on subrogation is explicit that if the plaintiff’s property has
been insured, and he has received indemnity from the insurance company for the injury or
loss arising out of the wrong or breach of contract complained of, the insurance company
should be subrogated to the rights of the insured against the wrongdoer or the person who
has violated the contract. Undoubtedly, the herein appellant has the rights of a subrogee to
recover from M/T Vector what it has paid by way of indemnity to Caltex.

WHEREFORE, foregoing premises considered, the decision dated December 10, 1997 of the
RTC of Makati City, Branch 145 is hereby REVERSED. Accordingly, the defendant-
appellees Vector Shipping Corporation and Francisco Soriano are held jointly and severally
liable to the plaintiff-appellant American Home Assurance Company for the payment of
P7,455,421.08 as and by way of actual damages.

SO ORDERED.10

Respondent sought the partial reconsideration of the decision of the CA, contending that
Sulpicio Lines, Inc. should also be held jointly liable with Vector and Soriano for the actual
damages awarded.11 On their part, however, Vector and Soriano immediately appealed to
the Court on September 12, 2003.12 Thus, on October 1, 2003, the CA held in abeyance its
action on respondent’s partial motion for reconsideration pursuant to its internal rules
until the Court has resolved this appeal.13
Issues

The main issue is whether this action of respondent was already barred by prescription for
bringing it only on March 5, 1992. A related issue concerns the proper determination of the
nature of the cause of action as arising either from a quasi-delict or a breach of contract.

The Court will not pass upon whether or not Sulpicio Lines, Inc. should also be held jointly
liable with Vector and Soriano for the actual damages claimed.
Ruling

The petition lacks merit.

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Vector and Soriano posit that the RTC correctly dismissed respondent’s complaint on the
ground of prescription. They insist that this action was premised on a quasi-delict or upon
an injury to the rights of the plaintiff, which, pursuant to Article 1146 of the Civil Code,
must be instituted within four years from the time the cause of action accrued; that
because respondent’s cause of action accrued on December 20, 1987, the date of the
collision, respondent had only four years, or until December 20, 1991, within which to
bring its action, but its complaint was filed only on March 5, 1992, thereby rendering its
action already barred for being commenced beyond the four-year prescriptive period; 14 and
that there was no showing that respondent had made extrajudicial written demands upon
them for the reimbursement of the insurance proceeds as to interrupt the running of the
prescriptive period.15

We concur with the CA’s ruling that respondent’s action did not yet prescribe. The legal
provision governing this case was not Article 1146 of the Civil Code,16 but Article 1144 of
the Civil Code, which states:cralavvonlinelawlibrary
Article 1144. The following actions must be brought within ten years from the time the
cause of action accrues:cralavvonlinelawlibrary
(1) Upon a written contract;chanroblesvirtualawlibrary
(2) Upon an obligation created by law;chanroblesvirtualawlibrary
(3) Upon a judgment.

We need to clarify, however, that we cannot adopt the CA’s characterization of the cause of
action as based on the contract of affreightment between Caltex and Vector, with the
breach of contract being the failure of Vector to make the M/T Vector seaworthy, as to
make this action come under Article 1144 (1), supra. Instead, we find and hold that that
the present action was not upon a written contract, but upon an obligation created by law.
Hence, it came under Article 1144 (2) of the Civil Code. This is because the subrogation of
respondent to the rights of Caltex as the insured was by virtue of the express provision of
law embodied in Article 2207 of the Civil Code, to wit:cralavvonlinelawlibrary
Article 2207.  If the plaintiff’s property has been insured, and he has received indemnity
from the insurance company for the injury or loss arising out of the wrong or breach of
contract complained of, the insurance company shall be subrogated to the rights of the
insured against the wrongdoer or the person who has violated the contract.  If the
amount paid by the insurance company does not fully cover the injury or loss, the
aggrieved party shall be entitled to recover the deficiency from the person causing the loss
or injury. (Emphasis supplied)

The juridical situation arising under Article 2207 of the Civil Code is well explained in Pan
Malayan Insurance Corporation v. Court of Appeals,17 as follows:cralavvonlinelawlibrary
Article 2207 of the Civil Code is founded on the well-settled principle of subrogation. If the
insured property is destroyed or damaged through the fault or negligence of a party other
than the assured, then the insurer, upon payment to the assured, will be subrogated to the
rights of the assured to recover from the wrongdoer to the extent that the insurer has been
obligated to pay. Payment by the insurer to the assured operates as an equitable
assignment to the former of all remedies which the latter may have against the third
party whose negligence or wrongful act caused the loss. The right of subrogation is
211
not dependent upon, nor does it grow out of, any privity of contract or upon written
assignment of claim. It accrues simply upon payment of the insurance claim by the
insurer [Compania Maritima v. Insurance Company of North America, G.R. No. L-18965,
October 30, 1964, 12 SCRA 213; Fireman’s Fund Insurance Company v. Jamilla &
Company, Inc., G.R. No. L-27427, April 7, 1976, 70 SCRA 323].18

Verily, the contract of affreightment that Caltex and Vector entered into did not give rise to
the legal obligation of Vector and Soriano to pay the demand for reimbursement by
respondent because it concerned only the agreement for the transport of Caltex’s petroleum
cargo. As the Court has aptly put it in Pan Malayan Insurance Corporation v. Court of
Appeals, supra, respondent’s right of subrogation pursuant to Article 2207, supra, was “not
dependent upon, nor d[id] it grow out of, any privity of contract or upon written assignment
of claim [but] accrue[d] simply upon payment of the insurance claim by the insurer.”

Considering that the cause of action accrued as of the time respondent actually indemnified
Caltex in the amount of P7,455,421.08 on July 12, 1988, 19  the action was not yet barred
by the time of the filing of its complaint on March 5, 1992, 20 which was well within the 10-
year period prescribed by Article 1144 of the Civil Code.

The insistence by Vector and Soriano that the running of the  prescriptive period was not
interrupted because of the failure of respondent to serve any extrajudicial demand was
rendered inconsequential by our foregoing finding that respondent’s cause of action was
not based on a quasi-delict that prescribed in four years from the date of the collision on
December 20, 1987, as the RTC misappreciated, but on an obligation created by law, for
which the law fixed a longer prescriptive period of ten years from the accrual of the action.

Still, Vector and Soriano assert that respondent had no right of subrogation to begin with,
because the complaint did not allege that respondent had actually paid Caltex for the loss
of the cargo. They further assert that the subrogation receipt submitted by respondent was
inadmissible for not being properly identified by Ricardo C. Ongpauco, respondent’s
witness, who, although supposed to identify the subrogation receipt based on his affidavit,
was not called to testify in court; and that respondent presented only one witness in the
person of Teresita Espiritu, who identified Marine Open Policy No. 34-5093-6 issued by
respondent to Caltex.21

We disagree with petitioners’ assertions. It is undeniable that respondent preponderantly

established its right of subrogation. Its Exhibit C was Marine Open Policy No. 34-5093-6
that it had issued to Caltex to insure the petroleum cargo against marine peril. 22 Its Exhibit
D was the formal written claim of Caltex for the payment of the insurance coverage of
P7,455,421.08 coursed through respondent’s adjuster.23 Its Exhibits E to H were marine
documents relating to the perished cargo on board the M/V Vector that were processed for
the purpose of verifying the insurance claim of Caltex. 24 Its Exhibit I was the subrogation
receipt dated July 12, 1988 showing that respondent paid Caltex P7,455,421.00 as the full
settlement of Caltex’s claim under Marine Open Policy No. 34-5093-6. 25 All these exhibits
were unquestionably duly presented, marked, and admitted during the trial. 26 Specifically,
Exhibit C was admitted as an authentic copy of Marine Open Policy No. 34-5093-6, while
212
Exhibits D, E, F, G, H and I, inclusive, were admitted as parts of the testimony of
respondent’s witness Efren Villanueva, the manager for the adjustment service of the
Manila Adjusters and Surveyors Company. 27

Consistent with the pertinent law and jurisprudence, therefore, Exhibit I was already
enough by itself to prove the payment of P7,455,421.00 as the full settlement of Caltex’s
claim.28 The payment made to Caltex as the insured being thereby duly documented,
respondent became subrogated as a matter of course pursuant to Article 2207 of the Civil
Code. In legal contemplation, subrogation is the “substitution of another person in the
place of the creditor, to whose rights he succeeds in relation to the debt;” and is
“independent of any mere contractual relations between the parties to be affected by it, and
is broad enough to cover every instance in which one party is required to pay a debt for
which another is primarily answerable, and which in equity and conscience ought to be
discharged by the latter.”29

Lastly, Vector and Soriano argue that Caltex waived and abandoned its claim by not setting
up a cross-claim against them in Civil Case No. 18735, the suit that Sulpicio Lines, Inc.
had brought to claim damages for the loss of the M/V Doña Paz from them, Oriental
Assurance Company (as insurer of the M/T Vector), and Caltex; that such failure to set up
its cross-claim on the part of Caltex, the real party in interest who had suffered the loss,
left respondent without any better right than Caltex, its insured, to recover anything from
them, and forever barred Caltex from asserting any claim against them for the loss of the
cargo; and that respondent was similarly barred from asserting its present claim due to its
being merely the successor-in-interest of Caltex.

The argument of Vector and Soriano would have substance and merit had Civil Case No.
18735 and this case involved the same parties and litigated the same rights and
obligations. But the two actions were separate from and independent of each other. Civil
Case No. 18735 was instituted by Sulpicio Lines, Inc. to recover damages for the loss of its
M/V Doña Paz. In contrast, this action was brought by respondent to recover from Vector
and Soriano whatever it had paid to Caltex under its marine insurance policy on the basis
of its right of subrogation. With the clear variance between the two actions, the failure to
set up the cross-claim against them in Civil Case No. 18735 is no reason to bar this action.

WHEREFORE, the Court DENIES the petition for review on certiorari; AFFIRMS the

decision promulgated on July 22, 2003; and ORDERS petitioners to pay the costs of suit.

SO ORDERED.

Sereno, C.J.,  *Velasco, Jr., Leonardo-De Castro, and Villarama, Jr, JJ., concur.

G.R. No. L-55750 November 8, 1989

RUBEN, BELLA, ARNULFO, CARUSO, ANITA, ELSIE, all surnamed MELGAR, and
ERLINA MELGAR ASECO, petitioners,
vs.
THE HON. CARLOS R. BUENVIAJE, JUDGE, COURT OF FIRST INSTANCE OF
213
CAMARINES SUR, BR. VII, and the SPOUSES OSCAR PRADES and VICTORIA
PRADES, respondents.
Rafael Triunfante for petitioners.
Romulo A. Badilla and Rolando Grageda Alberto for respondents.

PARAS, J.:
This is a petition for certiorari (not petition for review on certiorari) seeking the annulment
of the Order of Branch VII * of the Court of First Instance of Camarines Sur in Iriga City
dated September 23, 1980 denying the motion to dismiss filed by the defendants, the
petitioners herein, in Civil Case No. IR-858, and its Order dated November 11, 1980
denying the motion for reconsideration of the said September 23, 1980 order, as well as
admitting the amended complaint filed by the plaintiffs therein.
The questioned Order of September 23, 1980 reads as follows:
Resolving the motion to dismiss filed by defendants on the ground of lack of
sufficient cause of action in the light of the averments stated in the complaint,
this Court is of the belief and so holds that the said motion to dismiss cannot
be granted for lack of merit. (p. 16, Rollo)
The equally questioned order of November 11, 1980 states:
Resolving defendant's motion for reconsideration filed on October 3, 1980
which, among other things, seeks dismissal of the complaint on the ground
that the "steps taken by the plaintiffs are procedurally erroneous and
substantially improper." In the light of the opposition interposed by counsel for
the plaintiff filed on November 10, 1980 which emphasized the argument that
said defendants as heirs of the estate of Felicidad Balla cannot properly argue
that they can sue as heirs and at the same time maintain that they cannot
be used as such heirs, and which opposition is found to be well taken, the
motion for reconsideration is as, it is, denied.
The Amended Complaint filed by counsel for the plaintiffs on November 7, 1980
is hereby admitted. Plaintiffs are required to furnish sufficient copies of the
Amended Complaint. (p. 27, Rollo)
The antecedents of the case are as follows:
In the early morning of January 11, 1980 a vehicular accident happened along the National
Highway of Barangay Agos, Polangui, Albay, whereby a passenger bus bearing Plate No.
PUB 4J 136 '79 owned and operated by the late Felicidad Balla and driven by Domingo
Casin swerved to the left lane and came into head-on-collision with a Ford Fiera with Plate
No. S 860 4F '79 owned by Mateo Lim Relucio and driven by Ruben Lim Relucio coming
from the opposite direction. It then swerved further to the left this time colliding head-on-
with a passenger bus, FUSO with Plate No. PUB 45 255 '79 owned by Benjamin Flores and
driven by Fabian Prades. As a result of the accident, Felicidad Balla, owner and operator of
the passenger bus with Plate No. PUB 4J 136 '79, and mother of herein petitioners together
with Domingo Casin, driver of the bus, died on the spot. Ruben Lim Relucio, driver of the
service jeep and Fabian Prades, driver of the other passenger bus died in the same
accident. (Rollo, pp. 3, 10 & 19)
On July 4, 1980 the spouses Oscar Prades and Victoria Prades private respondents herein
as the only surviving forced heirs of the deceased Fabian Prades, filed a complaint in the
Court of First Instance of Camarines Sur against the children of deceased Felicidad Balla,
214
petitioners herein for damages, docketed as Civil Case No. IR-858 (Rollo, p. 9). The
complaint (Rollo, p. 9) alleged, among others:
5. That it was Felicidad Balla's driver Domino Casin of "Fuso" with Plate No.
PUB 4J 136 Pil '79, who drove his vehicle in a reckless and imprudent manner
which was the sole, direct and proximate cause of the incident which resulted
to the death of Fabian Prades;
6. That both driver Domino Casin and owner Felicidad Balla of passenger
"Fuso" with Plate No. PUB 4J 136 Pil '79 died in said incident:
7. That defendants' mother, Felicidad Balla, for allowing her driver Casin to
drive recklessly and not observing the required diligence in the selection and
supervision of her employee, despite her presence in the illfated passenger bus,
the estate of deceased Felicidad Balla should be held liable to the damages
suffered by plaintiff.
The defendants in the complaint, petitioners herein, moved for the dismissal of the case on
the ground that the complaint states no cause of action against them, arguing that it is
entirely incorrect to hold the children liable for the alleged negligence of their deceased
mother and to consider suing the heirs of a deceased person the same as suing the estate
of said deceased person inasmuch as the last portion of Section 21 of Rule 3 of the Rules of
Court means that the creditor should institute the proper intestate proceedings wherein
which he may be able to interpose his claim (Rollo, p. 14).
Respondent court denied the motion to dismiss in its order of September 23, 1980 for lack
of merit (Rollo, p. 16). On September 30, 1989 the defendants, petitioners herein, filed a
motion for reconsideration (Rollo, p. 17,) on the ground that:
Distinction should be made between a suit against the estate of Felicidad Balla
and the present action which is a personal action against the children of
Felicidad Balla, considering that the children have absolutely no participation
directly or indirectly in the alleged negligent acts of Felicidad Balla, and there is
absolutely no logical basis to hold the children liable for damages resulting
from alleged negligent acts of Felicidad Balla. In fact that second sentence of
Article 1311 of the New Civil Code provides:
... The heir is not liable beyond the value of the property he
received from the decedent. ... 7
In their argument, the defendants adopted and cited the conclusion and ruling of Branch V
of the same court in two similar cases brought against them by the owner of the 3rd vehicle
that featured in the same accident and by the widow of the deceased driver of the same
vehicle docketed as Civil Case Nos. 867-LV and 863-LV, respectively, wherein the
defendants also filed a motion to dismiss (Rollo, p. 19). Said court concluded that "the steps
taken by the plaintiffs are procedurally erroneous and substantially improper." The same
court directed the plaintiffs therein to file their redress in accordance with the Rules of
Court.
On November 7, 1980, plaintiff spouses, private respondents herein, filed their comment
and motion to admit amended complaint (Rollo, p. 21) together with an amended complaint
(Rollo, p. 23), amending the title of the case naming as defendants the Estate of the late
Felicidad Balla as represented by the children named in the original complaint.
On November 11, 1980 respondent court issued its order denying the motion for
reconsideration and admitting the amended complaint (Rollo, p. 27).
215
Hence this petition filed with this Court on December 23, 1980 (Rollo, p. 3).
On June 5, 1981 the Court (Second Division) resolved to give due course to the petition and
required the parties to file their respective memoranda within twenty days from notice
(Rollo, p. 40).
On September 14, 1981 the Court (Second Division) resolved to consider the case
submitted for decision (Rollo, p. 66).
The sole issue in the instant case is whether or not the Court of First Instance has the
power to entertain a suit for damages arising from the death of a person, filed against the
estate of another deceased person as represented by the heirs.
As aforestated, what was originally filed was a complaint for damages against petitioners
herein, who are the children and surviving forced heirs of the deceased Felicidad Balla,
owner and operator of the passenger bus "FUSO" which allegedly caused the death of the
deceased Fabian Prades.
Under Section 5 Rule 86 of the Rules of Court, actions that are abated by death are: (1) All
claims for money against the decedent, arising from contract, express or implied, whether
the same be due, not due or contingent; (2) All claims for funeral expenses and expenses for
the last sickness of the decedent; and (3) Judgments for money against the decedent (Aguas
v. Llemos, 5 SCRA 959 [1962]). It is evident that the case at bar is not among those
enumerated. Otherwise stated, actions for damages caused by the tortious conduct of the
defendant survive the death of the latter.
The action can therefore be properly brought under Section 1, Rule 87 of the Rules of
Court, against an executor or administrator. The rule provides:
Section 1. Actions which may and which may not be brought against executor
or administrator. — No action upon a claim for the recovery of money or debt
or interest thereon shall be commenced against the executor or administrator;
but actions to recover real or personal property, or an interest therein, from the
state, or to enforce a lien thereon, and actions to recover damages for an injury
to person or property, real or personal, may be commenced against him.
Hence, the inclusion of the "estate of Felicidad Balla" in the amended complaint as
defendant.
The point of controversy is however on the fact that no estate proceedings exist for the
reason that her children had not filed any proceedings for the settlement of her estate,
claiming that Balla left no properties (Rollo, p. 6).
Thus, while petitioners may have correctly moved for the dismissal of the case and private
respondents have forthwith corrected the deficiency by filing an amended complaint, even
before the lower court could act on petitioner's motion for reconsideration of the denial of
their motion to dismiss, the action under Section 17 of Rule 3 of the Rules of Court, which
allows the suit against the legal representative of the deceased, that is, the executor or
administrator of his estate, would still be futile, for the same reason that there appears to
be no steps taken towards the settlement of the estate of the late Felicidad Balla, nor has
an executor or administrator of the estate been appointed. From the statement made by the
petitioners that "many persons die without leaving any asset at all" (Reply to Respondents'
Comment, p. 78; Memorandum for Petitioners, Rollo, p. 5), which insinuates that the
deceased left no assets, it is reasonable to believe that the petitioners will not take any step
to expedite the early settlement of the estate, judicially or extra-judicially if only to defeat
the damage suit against the estate. (Note however the deceased Balla apparently left the
216
bus). Under the circumstances the absence of an estate proceeding may be avoided by
requiring the heirs to take the place of the deceased (Javier v. Araneta, 90 Phil. 292 [1951]).
As restated in a much later case, in case of unreasonable delay in the appointment of an
executor or administrator of the estate or in case where the heirs resort to an extrajudicial
settlement of the estate, the court may adopt the alternative of allowing the heirs of the
deceased to be substituted for the deceased (Lawas v. Court of Appeals, 146 SCRA 173
[1986]).
PREMISES CONSIDERED, the petition is hereby dismissed and petitioners are ordered
substituted for the deceased Felicidad Balla.
SO ORDERED.
Padilla, Sarmiento and Regalado, JJ., concur.
Melencio-Herrera, (Chairperson), J., is on leave.
 
Footnotes

G.R. No. 163609             November 27, 2008

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

217
City for more intensive treatment. 9 Despite medical attention, Marvin expired six (6) days
after the accident.10
Petitioners spouses Buenaventura and Rosario Jayme, the parents of Marvin, filed a
complaint for damages with the RTC against respondents. 11 In their complaint, they prayed
that all respondents be held solidarily liable for their loss. They pointed out that that
proximate cause of Marvin's death was Lozano's negligent and reckless operation of the
vehicle. They prayed for actual, moral, and exemplary damages, attorney's fees, and
litigation expenses.
In their respective Answers, all respondents denied liability for Marvin's death. Apostol and
Simbulan averred that Lozano took the pick-up truck without their consent. Likewise,
Miguel and Lozano pointed out that Marvin's sudden sprint across the highway made it
impossible to avoid the accident. Yet, Miguel denied being on board the vehicle when it hit
Marvin. The Municipality of Koronadal adopted the answer of Lozano and Miguel. As for
First Integrated Bonding and Insurance Company, Inc., the vehicle insurer, it insisted that
its liability is contributory and is only conditioned on the right of the insured. Since the
insured did not file a claim within the prescribed period, any cause of action against it had
prescribed.
RTC Disposition
On January 25, 1999, the RTC rendered judgment in favor of spouses Jayme, the
dispositive portion of which reads:
WHEREFORE, in view of the foregoing, the defendant Municipality of Koronadal
cannot be held liable for the damages incurred by other defendant (sic) being an
agency of the State performing a (sic) governmental functions. The same with
defendant Hermogenes Simbulan, not being the owner of the subject vehicle, he is
absolved of any liability. The complaint against defendant First Integrated Bonding
Insurance Company, Inc. is hereby ordered dismissed there being no cause of action
against said insurance company.
However, defendants Fidel Lozano, Rodrigo Apostol, and Mayor Fernando Miguel of
Koronadal, South Cotabato, are hereby ordered jointly and severally to pay the
plaintiff (sic) the following sums:
1. One Hundred Seventy Three Thousand One Hundred One and Forty
Centavos (P173,101.40) Pesos as actual damages with legal interest of 12% per
annum computed from February 11, 1989 until fully paid;
2. Fifty Thousand (P50,000.00) Pesos as moral damages;
3. Twenty Thousand (P20,000.00) Pesos as exemplary damages;
4. Twenty Thousand (P20,000.00) Pesos as Attorney's fees;
5. Fifty Thousand (P50,000.00) Pesos for the death of Marvin Jayme;
6. Three Thousand (P3,000.00) as litigation expenses; and
7. To pay the cost of this suit.
SO ORDERED.12
Dissatisfied with the RTC ruling, Mayor Miguel interposed an appeal to the CA.
CA Disposition
In his appeal, Mayor Miguel contended that the RTC erred in ruling that he was Lozano's
employer and, hence, solidarily liable for the latter's negligent act. Records showed that the
Municipality of Koronadal was the driver's true and lawful employer. Mayor Miguel also

218
denied that he did not exercise due care and diligence in the supervision of Lozano. The
incident, although unfortunate, was unexpected and cannot be attributed to him.
On October 22, 2003, the CA granted the appeal, disposing as follows:
WHEREFORE, the Decision appealed from is REVERSED and SET ASIDE, insofar as
defendant-appellant Mayor Fernando Q. Miguel is concerned, and the complaint
against him is DISMISSED.
IT IS SO ORDERED.13
The CA held that Mayor Miguel should not be held liable for damages for the death of
Marvin Jayme. Said the appellate court:
Moreover, plaintiffs-appellees admitted that Mayor Miguel was not the employer of
Lozano. Thus, paragraph 9 of the complaint alleged that the Municipality of
Koronadal was the employer of both Mayor Miguel and Lozano. Not being the
employer of Lozano, Mayor Miguel could not thus be held liable for the damages
caused by the former. Mayor Miguel was a mere passenger in the Isuzu pick-up at
the time of the accident.14 (Emphasis supplied)
The CA also reiterated the settled rule that it is the registered owner of a vehicle who is
jointly and severally liable with the driver for damages incurred by passengers or third
persons as a consequence of injuries or death sustained in the operation of the vehicle.
Issues
The spouses Jayme have resorted to the present recourse and assign to the CA the
following errors:
I.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT MAYOR
FERNANDO MIGUEL CANNOT BE HELD LIABLE FOR THE DEATH OF MARVIN
JAYME WHICH CONCLUSION IS CONTRARY TO LAW AND THE SETTLED
PRONOUNCEMENTS OF THIS HONORABLE TRIBUNAL;
II.
THE FINDINGS OF FACTS OF THE HONORABLE COURT OF APPEALS ARE
CONTRARY TO THE FINDINGS OF THE TRIAL COURT AND ARE CONTRADICTED
BY THE EVIDENCE ON RECORD; MOREOVER, THE CONCLUSIONS DRAWN BY
THE HONORABLE COURT OF APPEALS ARE ALL BASED ON CONJECTURES AND
SURMISES AND AGAINST ACCEPTED COURSE OF JUDICIAL PROCEEDINGS
WHICH URGENTLY CALL FOR AN EXERCISE OF THIS HONORABLE COURT'S
SUPERVISION.15
Our Ruling
The doctrine of vicarious liability or imputed liability finds no application in the
present case.
Spouses Jayme contend, inter alia, that vicarious liability attaches to Mayor Miguel. He was
not a mere passenger, but instead one who had direct control and supervision over Lozano
during the time of the accident. According to petitioners, the element of direct control is not
negated by the fact that Lozano's employer was the Municipality of Koronadal. Mayor
Miguel, being Lozano's superior, still had control over the manner the vehicle was operated.
Article 218016 of the Civil Code provides that a person is not only liable for one's own quasi-
delictual acts, but also for those persons for whom one is responsible for. This liability is
popularly known as vicarious or imputed liability. To sustain claims against employers for
the acts of their employees, the following requisites must be established: (1) That the
219
employee was chosen by the employer personally or through another; (2) That the service to
be rendered in accordance with orders which the employer has the authority to give at all
times; and (3) That the illicit act of the employee was on the occasion or by reason of the
functions entrusted to him.17
Significantly, to make the employee liable under paragraphs 5 and 6 of Article 2180, it
must be established that the injurious or tortuous act was committed at the time the
employee was performing his functions.18
Furthermore, the employer-employee relationship cannot be assumed. It is incumbent
upon the plaintiff to prove the relationship by preponderant evidence. In Belen v.
Belen,19 this Court ruled that it was enough for defendant to deny an alleged employment
relationship. The defendant is under no obligation to prove the negative averment. This
Court said:
It is an old and well-settled rule of the courts that the burden of proving the action is
upon the plaintiff, and that if he fails satisfactorily to show the facts upon which he
bases his claim, the defendant is under no obligation to prove his exceptions. This
rue is in harmony with the provisions of Section 297 of the Code of Civil Procedure
holding that each party must prove his own affirmative allegations, etc. 20
In resolving the present controversy, it is imperative to find out if Mayor Miguel is, indeed,
the employer of Lozano and therefore liable for the negligent acts of the latter. To determine
the existence of an employment relationship, We rely on the four-fold test. This involves: (1)
the employer's power of selection; (2) payment of wages or other remuneration; (3) the
employer's right to control the method of doing the work; and (4) the employer's right of
suspension or dismissal.21
Applying the foregoing test, the CA correctly held that it was the Municipality of Koronadal
which was the lawful employer of Lozano at the time of the accident. It is uncontested that
Lozano was employed as a driver by the municipality. That he was subsequently assigned
to Mayor Miguel during the time of the accident is of no moment. This Court has, on
several occasions, held that an employer-employee relationship still exists even if the
employee was loaned by the employer to another person or entity because control over the
employee subsists.22 In the case under review, the Municipality of Koronadal remains to be
Lozano's employer notwithstanding Lozano's assignment to Mayor Miguel.
Spouses Jayme argued that Mayor Miguel had at least supervision and control over Lozano
and how the latter operated or drove the Isuzu pick-up during the time of the accident.
They, however, failed to buttress this claim.
Even assuming arguendo that Mayor Miguel had authority to give instructions or directions
to Lozano, he still can not be held liable. In Benson v. Sorrell,23 the New England Supreme
Court ruled that mere giving of directions to the driver does not establish that the
passenger has control over the vehicle. Neither does it render one the employer of the
driver. This Court, in Soliman, Jr. v. Tuazon,24 ruled in a similar vein, to wit:
x x x The fact that a client company may give instructions or directions to the
security guards assigned to it, does not, by itself, render the client responsible as
an employer of the security guards concerned and liable for their wrongful acts and
omissions. Those instructions or directions are ordinarily no more than requests
commonly envisaged in the contract for services entered into with the security
agency. x x x25 (Emphasis supplied)

220
Significantly, no negligence may be imputed against a fellow employee although the person
may have the right to control the manner of the vehicle's operation. 26 In the absence of an
employer-employee relationship establishing vicarious liability, the driver's negligence
should not be attributed to a fellow employee who only happens to be an occupant of the
vehicle.27 Whatever right of control the occupant may have over the driver is not sufficient
by itself to justify an application of the doctrine of vicarious liability. Handley v.
Lombardi28 is instructive on this exception to the rule on vicarious liability:
Plaintiff was not the master or principal of the driver of the truck, but only an
intermediate and superior employee or agent. This being so, the doctrine
of respondeat superior or qui facit per alium is not properly applicable to him.  His
power to direct and control the driver was not as master, but only by virtue of the
fact that they were both employed by Kruse, and the further fact that as Kruse's
agent he was delegated Kruse's authority over the driver. x x x
In the case of actionable negligence, the rule is well settled both in this state and
elsewhere that the negligence of a subordinate employee or subagent is not to be
imputed to a superior employee or agent, but only to the master or principal. (Hilton
v. Oliver, 204 Cal. 535 [61 A. L. R. 297, 269 Pac. 425; Guild v. Brown, 115 Cal. App.
374 [1 Pac. (2d) 528; Ellis v. Southern Ry. Co., 72 S. C. 464 [2 L. R. A. (N. S.) 378, 52
S. E. 228; Thurman v. Pittsburg & M. Copper Co., 41 Mont. 141 [108 Pac. 588]; 2 Cor.
Jur., p. 829; and see the elaborate note in 61 A. L. R. 277, and particularly that part
commencing at p. 290.) We can see no logical reason for drawing any distinction in
this regard between actionable negligence and contributory negligence. x x x 29
The rule was reiterated in Bryant v. Pacific Elec. Ry. Co.[30 and again in Sichterman v.
Hollingshead Co.31
In Swanson v. McQuown,32 a case involving a military officer who happened to be riding in a
car driven by a subordinate later involved in an accident, the Colorado Supreme Court
adhered to the general rule that a public official is not liable for the wrongful acts of his
subordinates on a vicarious basis since the relationship is not a true master-servant
situation.33 The court went on to rule that the only exception is when they cooperate in the
act complained of, or direct or encourage it.34
In the case at bar, Mayor Miguel was neither Lozano's employer nor the vehicle's registered
owner. There existed no causal relationship between him and Lozano or the vehicle used
that will make him accountable for Marvin's death. Mayor Miguel was a mere passenger at
the time of the accident.
Parenthetically, it has been held that the failure of a passenger to assist the driver, by
providing him warnings or by serving as lookout does not make the passenger liable for the
latter's negligent acts.35 The driver's duty is not one that may be delegated to others. 36
As correctly held by the trial court, the true and lawful employer of Lozano is the
Municipality of Koronadal. Unfortunately for Spouses Jayme, the municipality may not be
sued because it is an agency of the State engaged in governmental functions and, hence,
immune from suit. This immunity is illustrated in Municipality of San Fernando, La Union v.
Firme,37 where this Court held:
It has already been remarked that municipal corporations are suable because their
charters grant them the competence to sue and be sued. Nevertheless, they are
generally not liable for torts committed by them in the discharge of governmental
functions and can only be held answerable only if it can be shown that they were
221
 acting in proprietary capacity. In permitting such entities to be sued, the State
merely gives the claimant the right to show that the defendant was not acting in
governmental capacity when the injury was committed or that the case comes under
the exceptions recognized by law. Failing this, the claimant cannot recover. 38
Verily, liability attaches to the registered owner, the negligent driver and his direct
employer. The CA observation along this line are worth restating:
Settled is the rule that the registered owner of a vehicle is jointly and severally liable
with the driver for damages incurred by passengers and third persons as a
consequence of injuries or death sustained in the operation of said vehicles.
Regardless of who the actual owner of the vehicle is, the operator of record continues
to be the operator of the vehicle as regards the public and third persons, and as such
is directly and primarily responsible for the consequences incident (sic) to its
operation x x x.39
The accidental death of Marvin Jayme is a tragic loss for his parents. However, justice
demands that only those liable under our laws be held accountable for Marvin's demise.
Justice can not sway in favor of petitioners simply to assuage their pain and loss. The law
on the matter is clear: only the negligent driver, the driver's employer, and the registered
owner of the vehicle are liable for the death of a third person resulting from the negligent
operation of the vehicle.
WHEREFORE, the petition is DENIED and the appealed Decision AFFIRMED.
SO ORDERED.
RUBEN T. REYES
Associate Justice

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.chanroblesvirtualawlibrary chanrobles virtual law library
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
222
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.chanroblesvirtualawlibrary chanrobles
virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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
223
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.chanroblesvirtualawlibrary chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles
virtual law library
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 . . . ."chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law
library
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
224
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.chanroblesvirtualawlibrary chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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.)chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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
225
who, by his act or omission, was the cause of it.chanroblesvirtualawlibrary chanrobles
virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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.

226
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?chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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
227
the defendant had been negligent in the employment of the driver, or that he had any
knowledge of his lack of skill or carefulness.chanroblesvirtualawlibrary chanrobles virtual
law library
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."chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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
228
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.chanroblesvirtualawlibrary chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library

229
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.chanroblesvirtualawlibrary chanrobles
virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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
230
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.chanroblesvirtualawlibrary chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
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.chanroblesvirtualawlibrary chanrobles virtual law library
Arellano, C.J., Torres, Street and Avanceña, JJ., concur.

G.R. No. 141538             March 23, 2004

HERMANA R. CEREZO, petitioner,
vs.
DAVID TUAZON, respondent.

DECISION

CARPIO, J.:
The Case
This is a petition for review on certiorari1 to annul the Resolution 2 dated 21 October 1999 of
the Court of Appeals in CA-G.R. SP No. 53572, as well as its Resolution dated 20 January
2000 denying the motion for reconsideration. The Court of Appeals denied the petition for
annulment of the Decision 3 dated 30 May 1995 rendered by the Regional Trial Court of
Angeles City, Branch 56 ("trial court"), in Civil Case No. 7415. The trial court ordered
petitioner Hermana R. Cerezo ("Mrs. Cerezo") to pay respondent David Tuazon ("Tuazon")
actual damages, loss of earnings, moral damages, and costs of suit.
Antecedent Facts
Around noontime of 26 June 1993, a Country Bus Lines passenger bus with plate number
NYA 241 collided with a tricycle bearing plate number TC RV 126 along Captain M. Palo
Street, Sta. Ines, Mabalacat, Pampanga. On 1 October 1993, tricycle driver Tuazon filed a
complaint for damages against Mrs. Cerezo, as owner of the bus line, her husband Attorney
Juan Cerezo ("Atty. Cerezo"), and bus driver Danilo A. Foronda ("Foronda"). The complaint
alleged that:
231
 7. At the time of the incident, plaintiff [Tuazon] was in his proper lane when the
second-named defendant [Foronda], being then the driver and person in charge of the
Country Bus with plate number NYA 241, did then and there willfully, unlawfully,
and feloniously operate the said motor vehicle in a negligent, careless, and imprudent
manner without due regard to traffic rules and regulations, there being a "Slow
Down" sign near the scene of the incident, and without taking the necessary
precaution to prevent loss of lives or injuries, his negligence, carelessness and
imprudence resulted to severe damage to the tricycle and serious physical injuries to
plaintiff thus making him unable to walk and becoming disabled, with his thumb and
middle finger on the left hand being cut[.]4
On 1 October 1993, Tuazon filed a motion to litigate as a pauper. Subsequently, the trial
court issued summons against Atty. Cerezo and Mrs. Cerezo ("the Cerezo spouses") at the
Makati address stated in the complaint. However, the summons was returned unserved on
10 November 1993 as the Cerezo spouses no longer held office nor resided in Makati. On
18 April 1994, the trial court issued alias summons against the Cerezo spouses at their
address in Barangay Sta. Maria, Camiling, Tarlac. The alias summons and a copy of the
complaint were finally served on 20 April 1994 at the office of Atty. Cerezo, who was then
working as Tarlac Provincial Prosecutor. Atty. Cerezo reacted angrily on learning of the
service of summons upon his person. Atty. Cerezo allegedly told Sheriff William Canlas:
"Punyeta, ano ang gusto mong mangyari? Gusto mong hindi ka makalabas ng buhay dito?
Teritoryo ko ito. Wala ka sa teritoryo mo."5
The records show that the Cerezo spouses participated in the proceedings before the trial
court. The Cerezo spouses filed a comment with motion for bill of particulars dated 29 April
1994 and a reply to opposition to comment with motion dated 13 June 1994. 6 On 1 August
1994, the trial court issued an order directing the Cerezo spouses to file a comment to the
opposition to the bill of particulars. Atty. Elpidio B. Valera ("Atty. Valera") of Valera and
Valera Law Offices appeared on behalf of the Cerezo spouses. On 29 August 1994, Atty.
Valera filed an urgent ex-parte motion praying for the resolution of Tuazon’s motion to
litigate as a pauper and for the issuance of new summons on the Cerezo spouses to satisfy
proper service in accordance with the Rules of Court.7
On 30 August 1994, the trial court issued an order resolving Tuazon’s motion to litigate as
a pauper and the Cerezo spouses’ urgent ex-parte motion. The order reads:
At the hearing on August 30, 1994, the plaintiff [Tuazon] testified that he is presently
jobless; that at the time of the filing of this case, his son who is working in Malaysia
helps him and sends him once in a while P300.00 a month, and that he does not
have any real property. Attached to the Motion to Litigate as Pauper are his Affidavit
that he is unemployed; a Certification by the Barangay Captain of his poblacion that
his income is not enough for his family’s subsistence; and a Certification by the
Office of the Municipal Assessor that he has no landholding in the Municipality of
Mabalacat, Province of Pampanga.
The Court is satisfied from the unrebutted testimony of the plaintiff that he is entitled
to prosecute his complaint in this case as a pauper under existing rules.
On the other hand, the Court denies the prayer in the Appearance and Urgent Ex-
Parte Motion requiring new summons to be served to the defendants. The Court is of
the opinion that any infirmity in the service of the summons to the defendant before

232
 plaintiff was allowed to prosecute his complaint in this case as a pauper has been
cured by this Order.
If within 15 days from receipt of this Order, the defendants do not question on appeal
this Order of this Court, the Court shall proceed to resolve the Motion for Bill of
Particulars.8
On 27 September 1994, the Cerezo spouses filed an urgent ex-parte motion for
reconsideration. The trial court denied the motion for reconsideration.
On 14 November 1994, the trial court issued an order directing the Cerezo spouses to file
their answer within fifteen days from receipt of the order. The Cerezo spouses did not file
an answer. On 27 January 1995, Tuazon filed a motion to declare the Cerezo spouses in
default. On 6 February 1995, the trial court issued an order declaring the Cerezo spouses
in default and authorizing Tuazon to present his evidence. 9
On 30 May 1995, after considering Tuazon’s testimonial and documentary evidence, the
trial court ruled in Tuazon’s favor. The trial court made no pronouncement on Foronda’s
liability because there was no service of summons on him. The trial court did not hold Atty.
Cerezo liable as Tuazon failed to show that Mrs. Cerezo’s business benefited the family,
pursuant to Article 121(3) of the Family Code. The trial court held Mrs. Cerezo solely liable
for the damages sustained by Tuazon arising from the negligence of Mrs. Cerezo’s
employee, pursuant to Article 2180 of the Civil Code. The dispositive portion of the trial
court’s decision reads:
WHEREFORE, judgment is hereby rendered ordering the defendant Hermana Cerezo
to pay the plaintiff:
a) For Actual Damages - P69,485.35
1) Expenses for operation and medical
Treatment
2) Cost of repair of the tricycle
b) For loss of earnings - 39,921.00
c) For moral damages - 43,300.00
d) And to pay the cost of the suit. - 20,000.00
The docket fees and other expenses in the filing of this suit shall be lien on whatever
judgment may be rendered in favor of the plaintiff.
SO ORDERED.10
Mrs. Cerezo received a copy of the decision on 25 June 1995. On 10 July 1995, Mrs. Cerezo
filed before the trial court a petition for relief from judgment on the grounds of "fraud,
mistake or excusable negligence." Testifying before the trial court, both Mrs. Cerezo and
Atty. Valera denied receipt of notices of hearings and of orders of the court. Atty. Valera
added that he received no notice before or during the 8 May 1995 elections, "when he was a
senatorial candidate for the KBL Party, and very busy, using his office and residence as
Party National Headquarters." Atty. Valera claimed that he was able to read the decision of
the trial court only after Mrs. Cerezo sent him a copy.11
Tuazon did not testify but presented documentary evidence to prove the participation of the
Cerezo spouses in the case. Tuazon presented the following exhibits:
Exhibit 1 - Sheriff’s return and summons;
Exhibit 1-A - Alias summons dated April 20, 1994;
233
 Exhibit 2 - Comment with Motion;
Exhibit 3 - Minutes of the hearing held on August 1, 1994;
Exhibit 3-A - Signature of defendant’s counsel;
Exhibit 4 - Minutes of the hearing held on August 30, 1994;
Exhibit 4-A - Signature of the defendant’s counsel;
Exhibit 5 - Appearance and Urgent Ex-Parte Motion;
Exhibit 6 - Order dated November 14, 1994;
Exhibit 6-A - Postal certification dated January 13, 1995;
Exhibit 7 - Order dated February [illegible];
Exhibit 7-A - Court’s return slip addressed to Atty. Elpidio Valera;
Exhibit 7-B - Court’s return slip addressed to Spouses Juan and
Hermana Cerezo;
Exhibit 8 - Decision dated May [30], 1995
Exhibit 8-A - Court’s return slip addressed to defendant Hermana
Cerezo;
Exhibit 8-B - Court’s return slip addressed to defendant’s counsel,
Atty. Elpidio Valera;
Exhibit 9 - Order dated September 21, 1995;
Exhibit 9-A - Second Page of Exhibit 9;
Exhibit 9-B - Third page of Exhibit 9;
Exhibit 9-C - Fourth page of Exhibit 9;
Exhibit 9-D - Court’s return slip addressed to Atty. Elpidio Valera;
and
Exhibit 9-E - Court’s return slip addressed to plaintiff’s counsel, Atty.
Norman Dick de Guzman.12
On 4 March 1998, the trial court issued an order 13 denying the petition for relief from
judgment. The trial court stated that having received the decision on 25 June 1995, the
Cerezo spouses should have filed a notice of appeal instead of resorting to a petition for
relief from judgment. The trial court refused to grant relief from judgment because the
Cerezo spouses could have availed of the remedy of appeal. Moreover, the Cerezo spouses
not only failed to prove fraud, accident, mistake or excusable negligence by conclusive
evidence, they also failed to prove that they had a good and substantial defense. The trial
court noted that the Cerezo spouses failed to appeal because they relied on an expected
settlement of the case.
The Cerezo spouses subsequently filed before the Court of Appeals a petition
for certiorari under Section 1 of Rule 65. The petition was docketed as CA-G.R. SP No.
48132.14 The petition questioned whether the trial court acquired jurisdiction over the case
considering there was no service of summons on Foronda, whom the Cerezo spouses
claimed was an indispensable party. In a resolution 15 dated 21 January 1999, the Court of
Appeals denied the petition for certiorari and affirmed the trial court’s order denying the
petition for relief from judgment. The Court of Appeals declared that the Cerezo spouses’
failure to file an answer was due to their own negligence, considering that they continued to
234
participate in the proceedings without filing an answer. There was also nothing in the
records to show that the Cerezo spouses actually offered a reasonable settlement to
Tuazon. The Court of Appeals also denied Cerezo spouses’ motion for reconsideration for
lack of merit.
The Cerezo spouses filed before this Court a petition for review on certiorari under Rule 45.
Atty. Cerezo himself signed the petition, docketed as G.R. No. 137593. On 13 April 1999,
this Court rendered a resolution denying the petition for review on certiorari for failure to
attach an affidavit of service of copies of the petition to the Court of Appeals and to the
adverse parties. Even if the petition complied with this requirement, the Court would still
have denied the petition as the Cerezo spouses failed to show that the Court of Appeals
committed a reversible error. The Court’s resolution was entered in the Book of Entries and
Judgments when it became final and executory on 28 June 1999.16
Undaunted, the Cerezo spouses filed before the Court of Appeals on 6 July 1999 a petition
for annulment of judgment under Rule 47 with prayer for restraining order. Atty. Valera
and Atty. Dionisio S. Daga ("Atty. Daga") represented Mrs. Cerezo in the petition, docketed
as CA-G.R. SP No. 53572.17 The petition prayed for the annulment of the 30 May 1995
decision of the trial court and for the issuance of a writ of preliminary injunction enjoining
execution of the trial court’s decision pending resolution of the petition.
The Court of Appeals denied the petition for annulment of judgment in a resolution dated
21 October 1999. The resolution reads in part:
In this case, records show that the petitioner previously filed with the lower court a
Petition for Relief from Judgment on the ground that they were wrongfully declared in
default while waiting for an amicable settlement of the complaint for damages. The
court a quo correctly ruled that such petition is without merit. The defendant
spouses admit that during the initial hearing they appeared before the court and
even mentioned the need for an amicable settlement. Thus, the lower court acquired
jurisdiction over the defendant spouses.
Therefore, petitioner having availed of a petition for relief, the remedy of an
annulment of judgment is no longer available. The proper action for the petitioner is
to appeal the order of the lower court denying the petition for relief.
Wherefore, the instant petition could not be given due course and should accordingly
be dismissed.
SO ORDERED.18
On 20 January 2000, the Court of Appeals denied the Cerezo spouses’ motion for
reconsideration.19 The Court of Appeals stated:
A distinction should be made between a court’s jurisdiction over a person and its
jurisdiction over the subject matter of a case. The former is acquired by the proper
service of summons or by the parties’ voluntary appearance; while the latter is
conferred by law.
Resolving the matter of jurisdiction over the subject matter, Section 19(1) of B[atas]
P[ambansa] 129 provides that Regional Trial Courts shall exercise exclusive original
jurisdiction in all civil actions in which the subject of the litigation is incapable of
pecuniary estimation. Thus it was proper for the lower court to decide the instant
case for damages.
Unlike jurisdiction over the subject matter of a case which is absolute and conferred
by law; any defects [sic] in the acquisition of jurisdiction over a person (i.e., improper
235
 filing of civil complaint or improper service of summons) may be waived by the
voluntary appearance of parties.
The lower court admits the fact that no summons was served on defendant Foronda.
Thus, jurisdiction over the person of defendant Foronda was not acquired, for which
reason he was not held liable in this case. However, it has been proven that
jurisdiction over the other defendants was validly acquired by the court a quo.
The defendant spouses admit to having appeared in the initial hearings and in the
hearing for plaintiff’s motion to litigate as a pauper. They even mentioned conferences
where attempts were made to reach an amicable settlement with plaintiff. However,
the possibility of amicable settlement is not a good and substantial defense which will
warrant the granting of said petition.
xxx
Assuming arguendo that private respondent failed to reserve his right to institute a
separate action for damages in the criminal action, the petitioner cannot now raise
such issue and question the lower court’s jurisdiction because petitioner and her
husband have waived such right by voluntarily appearing in the civil case for
damages. Therefore, the findings and the decision of the lower court may bind them.
Records show that the petitioner previously filed with the lower court a Petition for
Relief from Judgment on the ground that they were wrongfully declared in default
while waiting for an amicable settlement of the complaint for damages. The court a
quo correctly ruled that such petition is without merit, jurisdiction having been
acquired by the voluntary appearance of defendant spouses.
Once again, it bears stressing that having availed of a petition for relief, the remedy of
annulment of judgment is no longer available.
Based on the foregoing, the motion for reconsideration could not be given due course
and is hereby DENIED.
SO ORDERED.20
The Issues
On 7 February 2000, Mrs. Cerezo, this time with Atty. Daga alone representing her, filed
the present petition for review on certiorari before this Court. Mrs. Cerezo claims that:
1. In dismissing the Petition for Annulment of Judgment, the Court of Appeals
assumes that the issues raised in the petition for annulment is based on extrinsic
fraud related to the denied petition for relief notwithstanding that the grounds relied
upon involves questions of lack of jurisdiction.
2. In dismissing the Petition for Annulment, the Court of Appeals disregarded the
allegation that the lower court[’s] findings of negligence against defendant-driver
Danilo Foronda [whom] the lower court did not summon is null and void for want of
due process and consequently, such findings of negligence which is [sic] null and
void cannot become the basis of the lower court to adjudge petitioner-employer liable
for civil damages.
3. In dismissing the Petition for Annulment, the Court of Appeals ignored the
allegation that defendant-driver Danilo A. Foronda whose negligence is the main
issue is an indispensable party whose presence is compulsory but [whom] the lower
court did not summon.
4. In dismissing the Petition for Annulment, the Court of Appeals ruled that
assuming arguendo that private respondent failed to reserve his right to institute a
236
 separate action for damages in the criminal action, the petitioner cannot now raise
such issue and question the lower court’s jurisdiction because petitioner [has] waived
such right by voluntarily appearing in the civil case for damages notwithstanding
that lack of jurisdiction cannot be waived.21
The Court’s Ruling
The petition has no merit. As the issues are interrelated, we shall discuss them jointly.
Remedies Available to a Party Declared in Default
An examination of the records of the entire proceedings shows that three lawyers filed and
signed pleadings on behalf of Mrs. Cerezo, namely, Atty. Daga, Atty. Valera, and Atty.
Cerezo. Despite their number, Mrs. Cerezo’s counsels failed to avail of the proper remedies.
It is either by sheer ignorance or by malicious manipulation of legal technicalities that they
have managed to delay the disposition of the present case, to the detriment of pauper
litigant Tuazon.
Mrs. Cerezo claims she did not receive any copy of the order declaring the Cerezo spouses
in default. Mrs. Cerezo asserts that she only came to know of the default order on 25 June
1995, when she received a copy of the decision. On 10 July 1995, Mrs. Cerezo filed before
the trial court a petition for relief from judgment under Rule 38, alleging "fraud, mistake, or
excusable negligence" as grounds. On 4 March 1998, the trial court denied Mrs. Cerezo’s
petition for relief from judgment. The trial court stated that Mrs. Cerezo could have availed
of appeal as a remedy and that she failed to prove that the judgment was entered through
fraud, accident, mistake, or excusable negligence. Mrs. Cerezo then filed before the Court of
Appeals a petition for certiorari under Section 1 of Rule 65 assailing the denial of the
petition for relief from judgment. On 21 January 1999, the Court of Appeals dismissed Mrs.
Cerezo’s petition. On 24 February 1999, the appellate court denied Mrs. Cerezo’s motion for
reconsideration. On 11 March 1999, Mrs. Cerezo filed before this Court a petition for review
on certiorari under Rule 45, questioning the denial of the petition for relief from judgment.
We denied the petition and our resolution became final and executory on 28 June 1999.
On 6 July 1999, a mere eight days after our resolution became final and executory, Mrs.
Cerezo filed before the Court of Appeals a petition for annulment of the judgment of the
trial court under Rule 47. Meanwhile, on 25 August 1999, the trial court issued over the
objection of Mrs. Cerezo an order of execution of the judgment in Civil Case No. 7415. On
21 October 1999, the Court of Appeals dismissed the petition for annulment of judgment.
On 20 January 2000, the Court of Appeals denied Mrs. Cerezo’s motion for reconsideration.
On 7 February 2000, Mrs. Cerezo filed the present petition for review on certiorari under
Rule 45 challenging the dismissal of her petition for annulment of judgment.
Lina v. Court of Appeals22 enumerates the remedies available to a party declared in default:
a) The defendant in default may, at any time after discovery thereof and before
judgment, file a motion under oath to set aside the order of default on the ground
that his failure to answer was due to fraud, accident, mistake or excusable
negligence, and that he has a meritorious defense (Sec. 3, Rule 18 [now Sec. 3(b),
Rule 9]);
b) If the judgment has already been rendered when the defendant discovered the
default, but before the same has become final and executory, he may file a motion
for new trial under Section 1 (a) of Rule 37;

237
 c) If the defendant discovered the default after the judgment has become final and
executory, he may file a petition for relief under Section 2 [now Section 1] of Rule
38; and
d) He may also appeal from the judgment rendered against him as contrary to the
evidence or to the law, even if no petition to set aside the order of default has been
presented by him (Sec. 2, Rule 41). (Emphasis added)
Moreover, a petition for certiorari to declare the nullity of a judgment by default is also
available if the trial court improperly declared a party in default, or even if the trial court
properly declared a party in default, if grave abuse of discretion attended such
declaration.23
Mrs. Cerezo admitted that she received a copy of the trial court’s decision on 25 June 1995.
Based on this admission, Mrs. Cerezo had at least three remedies at her disposal: an
appeal, a motion for new trial, or a petition for certiorari.
Mrs. Cerezo could have appealed under Rule 41 24 from the default judgment within 15 days
from notice of the judgment. She could have availed of the power of the Court of Appeals to
try cases and conduct hearings, receive evidence, and perform all acts necessary to resolve
factual issues raised in cases falling within its appellate jurisdiction. 25
Mrs. Cerezo also had the option to file under Rule 37 26 a motion for new trial within the
period for taking an appeal. If the trial court grants a new trial, the original judgment is
vacated, and the action will stand for trial de novo. The recorded evidence taken in the
former trial, as far as the same is material and competent to establish the issues, shall be
used at the new trial without retaking the same. 27
Mrs. Cerezo also had the alternative of filing under Rule 65 28 a petition
for certiorari assailing the order of default within 60 days from notice of the judgment. An
order of default is interlocutory, and an aggrieved party may file an appropriate special civil
action under Rule 65.29 In a petition for certiorari, the appellate court may declare void both
the order of default and the judgment of default.
Clearly, Mrs. Cerezo had every opportunity to avail of these remedies within the
reglementary periods provided under the Rules of Court. However, Mrs. Cerezo opted to file
a petition for relief from judgment, which is available only in exceptional cases. A petition
for relief from judgment should be filed within the reglementary period of 60 days from
knowledge of judgment and six months from entry of judgment, pursuant to
Rule 38 of the Rules of Civil Procedure. 30 Tuason v. Court of Appeals31 explained the
nature of a petition for relief from judgment:
When a party has another remedy available to him, which may either be a motion for
new trial or appeal from an adverse decision of the trial court, and he was not
prevented by fraud, accident, mistake or excusable negligence from filing such
motion or taking such appeal, he cannot avail himself of this petition. Indeed, relief
will not be granted to a party who seeks avoidance from the effects of the judgment
when the loss of the remedy at law was due to his own negligence; otherwise the
petition for relief can be used to revive the right to appeal which has been lost thru
inexcusable negligence.
Evidently, there was no fraud, accident, mistake, or excusable negligence that prevented
Mrs. Cerezo from filing an appeal, a motion for new trial or a petition for certiorari. It was
error for her to avail of a petition for relief from judgment.

238
After our resolution denying Mrs. Cerezo’s petition for relief became final and executory,
Mrs. Cerezo, in her last ditch attempt to evade liability, filed before the Court of Appeals a
petition for annulment of the judgment of the trial court. Annulment is available only on
the grounds of extrinsic fraud and lack of jurisdiction. If based on extrinsic fraud, a party
must file the petition within four years from its discovery, and if based on lack of
jurisdiction, before laches or estoppel bars the petition. Extrinsic fraud is not a valid
ground if such fraud was used as a ground, or could have been used as a ground, in a
motion for new trial or petition for relief from judgment. 32
Mrs. Cerezo insists that lack of jurisdiction, not extrinsic fraud, was her ground for filing
the petition for annulment of judgment. However, a party may avail of the remedy of
annulment of judgment under Rule 47 only if the ordinary remedies of new trial, appeal,
petition for relief from judgment, or other appropriate remedies are no longer available
through no fault of the party.33 Mrs. Cerezo could have availed of a new trial or appeal but
through her own fault she erroneously availed of the remedy of a petition for relief, which
was denied with finality. Thus, Mrs. Cerezo may no longer avail of the remedy of
annulment.
In any event, the trial court clearly acquired jurisdiction over Mrs. Cerezo’s person. Mrs.
Cerezo actively participated in the proceedings before the trial court, submitting herself to
the jurisdiction of the trial court. The defense of lack of jurisdiction fails in light of her
active participation in the trial court proceedings. Estoppel or laches may also bar lack of
jurisdiction as a ground for nullity especially if raised for the first time on appeal by a party
who participated in the proceedings before the trial court, as what happened in this case. 34
For these reasons, the present petition should be dismissed for utter lack of merit. The
extraordinary action to annul a final judgment is restricted to the grounds specified in the
rules. The reason for the restriction is to prevent this extraordinary action from being used
by a losing party to make a complete farce of a duly promulgated decision that has long
become final and executory. There would be no end to litigation if parties who have
unsuccessfully availed of any of the appropriate remedies or lost them through their fault
could still bring an action for annulment of judgment. 35 Nevertheless, we shall discuss the
issues raised in the present petition to clear any doubt about the correctness of the
decision of the trial court.
Mrs. Cerezo’s Liability and the Trial Court’s Acquisition of Jurisdiction
Mrs. Cerezo contends that the basis of the present petition for annulment is lack of
jurisdiction. Mrs. Cerezo asserts that the trial court could not validly render judgment since
it failed to acquire jurisdiction over Foronda. Mrs. Cerezo points out that there was no
service of summons on Foronda. Moreover, Tuazon failed to reserve his right to institute a
separate civil action for damages in the criminal action. Such contention betrays a faulty
foundation. Mrs. Cerezo’s contention proceeds from the point of view of criminal law and
not of civil law, while the basis of the present action of Tuazon is quasi-delict under the
Civil Code, not delict under the Revised Penal Code.
The same negligent act may produce civil liability arising from a delict under Article 103 of
the Revised Penal Code, or may give rise to an action for a quasi-delict under Article 2180
of the Civil Code. An aggrieved party may choose between the two remedies. An action
based on a quasi-delict may proceed independently from the criminal action. 36 There is,
however, a distinction between civil liability arising from a delict and civil liability arising

239
from a quasi-delict. The choice of remedy, whether to sue for a delict or a quasi-delict,
affects the procedural and jurisdictional issues of the action. 37
Tuazon chose to file an action for damages based on a quasi-delict. In his complaint,
Tuazon alleged that Mrs. Cerezo, "without exercising due care and diligence in the
supervision and management of her employees and buses," hired Foronda as her driver.
Tuazon became disabled because of Foronda’s "recklessness, gross negligence and
imprudence," aggravated by Mrs. Cerezo’s "lack of due care and diligence in the selection
and supervision of her employees, particularly Foronda."38
The trial court thus found Mrs. Cerezo liable under Article 2180 of the Civil Code. Article
2180 states in part:
Employers shall be liable for the damages caused by their employees and household
helpers acting within the scope of their assigned tasks, even though the former are
not engaged in any business or industry.
Contrary to Mrs. Cerezo’s assertion, Foronda is not an indispensable party to the case. An
indispensable party is one whose interest is affected by the court’s action in the litigation,
and without whom no final resolution of the case is possible. 39 However, Mrs. Cerezo’s
liability as an employer in an action for a quasi-delict is not only solidary, it is also primary
and direct. Foronda is not an indispensable party to the final resolution of Tuazon’s action
for damages against Mrs. Cerezo.
The responsibility of two or more persons who are liable for a quasi-delict is
solidary.40 Where there is a solidary obligation on the part of debtors, as in this case, each
debtor is liable for the entire obligation. Hence, each debtor is liable to pay for the entire
obligation in full. There is no merger or renunciation of rights, but only mutual
representation.41 Where the obligation of the parties is solidary, either of the parties is
indispensable, and the other is not even a necessary party because complete relief is
available from either.42 Therefore, jurisdiction over Foronda is not even necessary as Tuazon
may collect damages from Mrs. Cerezo alone.
Moreover, an employer’s liability based on a quasi-delict is primary and direct, while the
employer’s liability based on a delict is merely subsidiary. 43 The words "primary and direct,"
as contrasted with "subsidiary," refer to the remedy provided by law for enforcing the
obligation rather than to the character and limits of the obligation. 44 Although liability
under Article 2180 originates from the negligent act of the employee, the aggrieved party
may sue the employer directly. When an employee causes damage, the law presumes that
the employer has himself committed an act of negligence in not preventing or avoiding the
damage. This is the fault that the law condemns. While the employer is civilly liable in a
subsidiary capacity for the employee’s criminal negligence, the employer is also civilly liable
directly and separately for his own civil negligence in failing to exercise due diligence in
selecting and supervising his employee. The idea that the employer’s liability is solely
subsidiary is wrong.45
The action can be brought directly against the person responsible (for another),
without including the author of the act. The action against the principal is accessory
in the sense that it implies the existence of a prejudicial act committed by the
employee, but it is not subsidiary in the sense that it can not be instituted till after
the judgment against the author of the act or at least, that it is subsidiary to the
principal action; the action for responsibility (of the employer) is in itself a principal
action.46
240
Thus, there is no need in this case for the trial court to acquire jurisdiction over Foronda.
The trial court’s acquisition of jurisdiction over Mrs. Cerezo is sufficient to dispose of the
present case on the merits.
In contrast, an action based on a delict seeks to enforce the subsidiary liability of the
employer for the criminal negligence of the employee as provided in Article 103 of the
Revised Penal Code. To hold the employer liable in a subsidiary capacity under a delict, the
aggrieved party must initiate a criminal action where the employee’s delict and
corresponding primary liability are established.47 If the present action proceeds from a
delict, then the trial court’s jurisdiction over Foronda is necessary. However, the present
action is clearly for the quasi-delict of Mrs. Cerezo and not for the delict of Foronda.
The Cerezo spouses’ contention that summons be served anew on them is untenable in
light of their participation in the trial court proceedings. To uphold the Cerezo spouses’
contention would make a fetish of a technicality. 48 Moreover, any irregularity in the service
of summons that might have vitiated the trial court’s jurisdiction over the persons of the
Cerezo spouses was deemed waived when the Cerezo spouses filed a petition for relief from
judgment.49
We hold that the trial court had jurisdiction and was competent to decide the case in favor
of Tuazon and against Mrs. Cerezo even in the absence of Foronda. Contrary to Mrs.
Cerezo’s contention, Foronda is not an indispensable party to the present case. It is not
even necessary for Tuazon to reserve the filing of a separate civil action because he opted to
file a civil action for damages against Mrs. Cerezo who is primarily and directly liable for
her own civil negligence. The words of Justice Jorge Bocobo in Barredo v. Garcia still hold
true today as much as it did in 1942:
x x x [T]o hold that there is only one way to make defendant’s liability effective, and
that is, to sue the driver and exhaust his (the latter’s) property first, would be
tantamount to compelling the plaintiff to follow a devious and cumbersome method of
obtaining relief. True, there is such a remedy under our laws, but there is also a
more expeditious way, which is based on the primary and direct responsibility of the
defendant under article [2180] of the Civil Code. Our view of the law is more likely to
facilitate remedy for civil wrongs, because the procedure indicated by the defendant
is wasteful and productive of delay, it being a matter of common knowledge that
professional drivers of taxis and other similar public conveyances do not have
sufficient means with which to pay damages. Why, then, should the plaintiff be
required in all cases to go through this roundabout, unnecessary, and probably
useless procedure? In construing the laws, courts have endeavored to shorten and
facilitate the pathways of right and justice. 50
Interest at the rate of 6% per annum is due on the amount of damages adjudged by the trial
court.51 The 6% per annum interest shall commence from 30 May 1995, the date of the
decision of the trial court. Upon finality of this decision, interest at 12% per annum, in lieu
of 6% per annum, is due on the amount of damages adjudged by the trial court until full
payment.
WHEREFORE, we DENY the instant petition for review. The Resolution dated 21 October
1999 of the Court of Appeals in CA-G.R. SP No. 53572, as well as its Resolution dated 20
January 2000 denying the motion for reconsideration, is AFFIRMED with
the MODIFICATION that the amount due shall earn legal interest at 6% per
annum computed from 30 May 1995, the date of the trial court’s decision. Upon finality of
241
this decision, the amount due shall earn interest at 12% per annum, in lieu of 6% per
annum, until full payment.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, and Azcuna, JJ., concur.
Panganiban, J., on official leave.

G.R. No. 85044 June 3, 1992

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

FELICIANO, J.:
On 20 October 1982, Adelberto Bundoc, then a minor of 10 years of age, shot Jennifer
Tamargo with an air rifle causing injuries which resulted in her death. Accordingly, a civil
complaint for damages was filed with the Regional Trial Court, Branch 20, Vigan, Ilocos
Sur, docketed as Civil Case No. 3457-V, by petitioner Macario Tamargo, Jennifer's adopting
parent, and petitioner spouses Celso and Aurelia Tamargo, Jennifer's natural parents
against respondent spouses Victor and Clara Bundoc, Adelberto's natural parents with
whom he was living at the time of the tragic incident. In addition to this case for damages,
a criminal information or Homicide through Reckless Imprudence was filed [Criminal Case
No. 1722-V] against Adelberto Bundoc. Adelberto, however, was acquitted and exempted
from criminal liability on the ground that he bad acted without discernment.
Prior to the incident, or on 10 December 1981, the spouses Sabas and Felisa Rapisura had
filed a petition to adopt the minor Adelberto Bundoc in Special Proceedings No. 0373-T
before the then Court of First Instance of Ilocos Sur. This petition for adoption was grunted
on, 18 November 1982, that is, after Adelberto had shot and killed Jennifer.
In their Answer, respondent spouses Bundoc, Adelberto's natural parents, reciting the
result of the foregoing petition for adoption, claimed that not they, but rather the adopting
parents, namely the spouses Sabas and Felisa Rapisura, were indispensable parties to the
action since parental authority had shifted to the adopting parents from the moment the
successful petition for adoption was filed.
Petitioners in their Reply contended that since Adelberto Bundoc was then actually living
with his natural parents, parental authority had not ceased nor been relinquished by the
mere filing and granting of a petition for adoption.
The trial court on 3 December 1987 dismissed petitioners' complaint, ruling that
respondent natural parents of Adelberto indeed were not indispensable parties to the
action.
Petitioners received a copy of the trial court's Decision on 7 December 1987. Within the 15-
day reglementary period, or on 14 December 1987, petitioners filed a motion for
reconsideration followed by a supplemental motion for reconsideration on 15 January
1988. It appearing, however, that the motions failed to comply with Sections 4 and 5 of
Rule 15 of the Revised Rules of Court — that notice of the motion shall be given to all
parties concerned at least three (3) days before the hearing of said motion; and that said
notice shall state the time and place of hearing — both motions were denied by the trial
242
court in an Order dated 18 April 1988. On 28 April 1988, petitioners filed a notice of
appeal. In its Order dated 6 June 1988, the trial court dismissed the notice at appeal, this
time ruling that the notice had been filed beyond the 15-day reglementary period ending 22
December 1987.
Petitioners went to the Court of Appeals on a petition
for mandamus and certiorari questioning the trial court's Decision dated 3 December
1987 and the Orders dated 18 April 1988 and 6 June 1988, The Court of Appeals
dismissed the petition, ruling that petitioners had lost their right to appeal.
In the present Petition for Review, petitioners once again contend that respondent spouses
Bundoc are the indispensable parties to the action for damages caused by the acts of their
minor child, Adelberto Bundoc. Resolution of this Petition hinges on the following issues:
(1) whether or not petitioners, notwithstanding loss of their right to appeal, may still file the
instant Petition; conversely, whether the Court may still take cognizance of the case even
through petitioners' appeal had been filed out of time; and (2) whether or not the effects of
adoption, insofar as parental authority is concerned may be given retroactive effect so as to
make the adopting parents the indispensable parties in a damage case filed against their
adopted child, for acts committed by the latter, when actual custody was yet lodged with
the biological parents.
1. It will be recalled that, petitioners' motion (and supplemental motion) for reconsideration
filed before the trial court, not having complied with the requirements of Section 13, Rule
41, and Section 4, Rule 15, of the Revised Rules of Court, were considered pro forma and
hence did not interrupt and suspend the reglementary period to appeal: the trial court held
that the motions, not having contained a notice of time and place of hearing, had become
useless pieces of paper which did not interrupt the reglementary period. 1 As in fact
repeatedly held by this Court, what is mandatory is the service of the motion on the
opposing counsel indicating the time and place of hearing. 2
In view, however, of the nature of the issue raised in the instant. Petition, and in order that
substantial justice may be served, the Court, invoking its right to suspend the application
of technical rules to prevent manifest injustice, elects to treat the notice of appeal as having
been seasonably filed before the trial court, and the motion (and supplemental motion) for
reconsideration filed by petitioner in the trial court as having interrupted the reglementary
period for appeal. As the Court held in Gregorio v. Court of Appeals: 3
Dismissal of appeal; purely on technical grounds is frowned upon where the
policy of the courts is to encourage hearings of appeal on their merits. The
rules of procedure ought not be applied in a very rigid technical sense, rules of
procedure are used only to help secure not override, substantial justice. if d
technical and rigid enforcement of the rules is made their aim would be
defeated. 4
2. It is not disputed that Adelberto Bundoc's voluntary act of shooting Jennifer Tamargo
with an air rifle gave rise to a cause of action on quasi-delict against him. As Article 2176
of the Civil Code provides:
Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if
there is no pre-existing contractual relation between the parties, is called
a quasi-delict . . .

243
Upon the other hand, the law imposes civil liability upon the father and, in case of his
death or incapacity, the mother, for any damages that may be caused by a minor child who
lives with them. Article 2180 of the Civil Code reads:
The obligation imposed by article 2176 is demandable not only for one's own
acts or omissions, but also for those of persons for whom one is responsible.
The father and, in case of his death or incapacity, the mother, are responsible
for the damages caused by the minor children who live in their company.
xxx xxx xxx
The responsibility treated of in this Article shall cease when the person herein
mentioned prove that they observed all the diligence of a good father of a family
to prevent damage. (Emphasis supplied)
This principle of parental liability is a species of what is frequently designated as vicarious
liability, or the doctrine of "imputed negligence" under Anglo-American tort law, where a
person is not only liable for torts committed by himself, but also for torts committed by
others with whom he has a certain relationship and for whom he is responsible. Thus,
parental liability is made a natural or logical consequence of the duties and responsibilities
of parents — their parental authority — which includes the instructing, controlling and
disciplining of the child. 5 The basis for the doctrine of vicarious liability was explained by
the Court in Cangco v. Manila Railroad Co. 6 in the following terms:
With respect to extra-contractual obligation arising from negligence, whether of
act or omission, it is competent for the legislature to elect — and our
Legislature has so elected — to limit such liability to cases in which the person
upon whom such an obligation is imposed is morally culpable or, on the
contrary, for reasons of public policy. to extend that liability, without regard to
the lack of moral culpability, so as to include responsibility for the negligence of
those persons whose acts or omissions are imputable, by a legal fiction, to
others who are in a position to exercise an absolute or limited control over them .
The legislature which adopted our Civil Code has elected to limit extra-
contractual liability — with certain well-defined exceptions — to cases in which
moral culpability can be directly imputed to the persons to be charged. This
moral responsibility may consist in having failed to exercise due care in one's
own acts, or in having failed to exercise due care in the selection and control of
one's agent or servants, or in the control of persons who, by reasons of their
status, occupy a position of dependency with respect to the person made liable
for their conduct.  7 (Emphasis Supplied)
The civil liability imposed upon parents for the torts of their minor children living
with them, may be seen to be based upon the parental authority vested by the Civil
Code upon such parents. The civil law assumes that when an unemancipated child
living with its parents commits a tortious acts, the parents were negligent in the
performance of their legal and natural duty closely to supervise the child who is in
their custody and control. Parental liability is, in other words, anchored upon
parental authority coupled with presumed parental dereliction in the discharge of the
duties accompanying such authority. The parental dereliction is, of course, only
presumed and the presumption can be overtuned under Article 2180 of the Civil
Code by proof that the parents had exercised all the diligence of a good father of a
family to prevent the damage.
244
In the instant case, the shooting of Jennifer by Adelberto with an air rifle occured when
parental authority was still lodged in respondent Bundoc spouses, the natural parents of
the minor Adelberto. It would thus follow that the natural parents who had then actual
custody of the minor Adelberto, are the indispensable parties to the suit for damages.
The natural parents of Adelberto, however, stoutly maintain that because a decree of
adoption was issued by the adoption court in favor of the Rapisura spouses, parental
authority was vested in the latter as adopting parents as of the time of the filing of the
petition for adoption that is, before Adelberto had shot Jennifer which an air rifle. The
Bundoc spouses contend that they were therefore free of any parental responsibility for
Adelberto's allegedly tortious conduct.
Respondent Bundoc spouses rely on Article 36 of the Child and Youth Welfare
Code 8 which reads as follows:
Art. 36. Decree of Adoption. — If, after considering the report of the Department
of Social Welfare or duly licensed child placement agency and the evidence
submitted before it, the court is satisfied that the petitioner is qualified to
maintain, care for, and educate the child, that the trial custody period has
been completed, and that the best interests of the child will be promoted by the
adoption, a decree of adoption shall be entered, which shall be effective he date
the original petition was filed. The decree shall state the name by which the
child is thenceforth to be known. (Emphasis supplied)
The Bundoc spouses further argue that the above Article 36 should be read in
relation to Article 39 of the same Code:
Art. 39. Effect of Adoption. — The adoption shall:
xxx xxx xxx
(2) Dissolve the authority vested in the natural parents, except where the
adopter is the spouse of the surviving natural parent;
xxx xxx xxx
(Emphasis supplied)
and urge that their Parental authority must be deemed to have been dissolved as of the
time the Petition for adoption was filed.
The Court is not persuaded. As earlier noted, under the Civil Code, the basis of parental
liability for the torts of a minor child is the relationship existing between the parents and
the minor child living with them and over whom, the law presumes, the parents exercise
supervision and control. Article 58 of the Child and Youth Welfare Code, re-enacted this
rule:
Article 58 Torts — Parents and guardians are responsible for the damage
caused by the child under their parental authority in accordance with the civil
Code. (Emphasis supplied)
Article 221 of the Family Code of the Philippines 9 has similarly insisted upon the requisite
that the child, doer of the tortious act, shall have beer in the actual custody of the parents
sought to be held liable for the ensuing damage:
Art. 221. Parents and other persons exercising parental authority shall be
civilly liable for the injuries and damages caused by the acts or omissions of
their unemancipated children living in their company and under their parental
authority subject to the appropriate defenses provided by law. (Emphasis
supplied)
245
We do not believe that parental authority is properly regarded as having been retroactively
transferred to and vested in the adopting parents, the Rapisura spouses, at the time the air
rifle shooting happened. We do not consider that retroactive effect may be giver to the
decree of adoption so as to impose a liability upon the adopting parents accruing at a time
when adopting parents had no actual or physically custody over the adopted child.
Retroactive affect may perhaps be given to the granting of the petition for adoption where
such is essential to permit the accrual of some benefit or advantage in favor of the adopted
child. In the instant case, however, to hold that parental authority had been retroactively
lodged in the Rapisura spouses so as to burden them with liability for a tortious act that
they could not have foreseen and which they could not have prevented (since they were at
the time in the United States and had no physical custody over the child Adelberto) would
be unfair and unconscionable. Such a result, moreover, would be inconsistent with the
philosophical and policy basis underlying the doctrine of vicarious liability. Put a little
differently, no presumption of parental dereliction on the part of the adopting parents, the
Rapisura spouses, could have arisen since Adelberto was not in fact subject to their control
at the time the tort was committed.
Article 35 of the Child and Youth Welfare Code fortifies the conclusion reached above.
Article 35 provides as follows:
Art. 35. Trial Custody. — No petition for adoption shall be finally granted
unless and until the adopting parents are given by the courts a supervised trial
custody period of at least six months to assess their adjustment and emotional
readiness for the legal union. During the period of trial custody, parental
authority shall be vested in the adopting parents. (Emphasis supplied)
Under the above Article 35, parental authority is provisionally vested in the adopting
parents during the period of trial custody, i.e., before the issuance of a decree of
adoption, precisely because the adopting parents are given actual custody of the child
during such trial period. In the instant case, the trial custody period either had not yet
begun or bad already been completed at the time of the air rifle shooting; in any case,
actual custody of Adelberto was then with his natural parents, not the adopting parents.
Accordingly, we conclude that respondent Bundoc spouses, Adelberto's natural parents,
were indispensable parties to the suit for damages brought by petitioners, and that the
dismissal by the trial court of petitioners' complaint, the indispensable parties being
already before the court, constituted grave abuse of discretion amounting to lack or excess
of jurisdiction.
WHEREFORE, premises considered, the Petition for Review is hereby GRANTED DUE
COURSE and the Decision of the Court of Appeals dated 6 September 1988, in C.A.-G.R.
No. SP-15016 is hereby REVERSED and SET ASIDE. Petitioners' complaint filed before the
trial court is hereby REINSTATED and this case is REMANDED to that court for further
proceedings consistent with this Decision. Costs against respondent Bundoc spouses. This
Decision is immediately executory.
SO ORDERED.
Gutierrez, Jr., Bidin, Davide, Jr. and Romero, concur.

G.R. No. 132266 December 21, 1999

246
CASTILEX INDUSTRIAL CORPORATION, petitioner,
vs.
VICENTE VASQUEZ, JR. and LUISA SO VASQUEZ, and CEBU DOCTORS' HOSPITAL,
INC., respondents.
 
DAVIDE, JR., C.J.:
The pivotal issue in this petition is whether an employer may be held vicariously liable for
the death resulting from the negligent operation by a managerial employee of a company-
issued vehicle.
The antecedents, as succinctly summarized by the Court of Appeals, are as follows:
On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So
Vasquez, was driving a Honda motorcycle around Fuente Osmeña Rotunda. He
was traveling counter-clockwise, (the normal flow of traffic in a rotunda) but
without any protective helmet or goggles. He was also only carrying a Student's
Permit to Drive at the time. Upon the other hand, Benjamin Abad [was a]
manager of Appellant Castilex Industrial Corporation, registered owner [of] a
Toyota Hi-Lux Pick-up with plate no. GBW-794. On the same date and time,
Abad drove the said company car out of a parking lot but instead of going
around the Osmeña rotunda he made a short cut against [the] flow of the
traffic in proceeding to his route to General Maxilom St. or to Belvic St.
In the process, the motorcycle of Vasquez and the pick-up of Abad collided with
each other causing severe injuries to the former. Abad stopped his vehicle and
brought Vasquez to the Southern Islands Hospital and later to the Cebu
Doctor's Hospital.
On September 5, 1988, Vasquez died at the Cebu Doctor's Hospital. It was
there that Abad signed an acknowledgment of Responsible Party (Exhibit K)
wherein he agreed to pay whatever hospital bills, professional fees and other
incidental charges Vasquez may incur.
After the police authorities had conducted the investigation of the accident, a
Criminal Case was filed against Abad but which was subsequently dismissed
for failure to prosecute. So, the present action for damages was commenced by
Vicente Vasquez, Jr. and Luisa So Vasquez, parents of the deceased Romeo So
Vasquez, against Jose Benjamin Abad and Castilex Industrial Corporation. In
the same action, Cebu Doctor's Hospital intervened to collect unpaid balance
for the medical expense given to Romeo So Vasquez.1
The trial court ruled in favor of private respondents Vicente and Luisa Vasquez and ordered
Jose Benjamin Abad (hereafter ABAD) and petitioner Castilex Industrial Corporation
(hereafter CASTILEX) to pay jointly and solidarily (1) Spouses Vasquez, the amounts of
P8,000.00 for burial expenses; P50,000.00 as moral damages; P10,000.00 as attorney's
fees; and P778,752.00 for loss of earning capacity; and (2) Cebu Doctor's Hospital, the sum
of P50,927.83 for unpaid medical and hospital bills at 3% monthly interest from 27 July
1989 until fully paid, plus the costs of litigation. 2
CASTILEX and ABAD separately appealed the decision.
In its decision3 of 21 May 1997, the Court of Appeals affirmed the ruling of the trial court
holding ABAD and CASTILEX liable but held that the liability of the latter is "only vicarious
and not solidary" with the former. It reduced the award of damages representing loss of
247
earning capacity from P778,752.00 to P214,156.80; and the interest on the hospital and
medical bills, from 3% per month to 12% per annum from 5 September 1988 until fully
paid.
Upon CASTILEX's motion for reconsideration, the Court of Appeals modified its decision by
(1) reducing the award of moral damages from P50,000 to P30,000 in view of the deceased's
contributory negligence; (b) deleting the award of attorney's fees for lack of evidence; and (c)
reducing the interest on hospital and medical bills to 6% per annum from 5 September
1988 until fully paid.4
Hence, CASTILEX filed the instant petition contending that the Court of Appeals erred in (1)
applying to the case the fifth paragraph of Article 2180 of the Civil Code, instead of the
fourth paragraph thereof; (2) that as a managerial employee, ABAD was deemed to have
been always acting within the scope of his assigned task even outside office hours because
he was using a vehicle issued to him by petitioner; and (3) ruling that petitioner had the
burden to prove that the employee was not acting within the scope of his assigned task.
Jose Benjamin ABAD merely adopted the statement of facts of petitioner which holds fast
on the theory of negligence on the part of the deceased.
On the other hand, respondents Spouses Vasquez argue that their son's death was caused
by the negligence of petitioner's employee who was driving a vehicle issued by petitioner
and who was on his way home from overtime work for petitioner; and that petitioner is thus
liable for the resulting injury and subsequent death of their son on the basis of the fifth
paragraph of Article 2180. Even if the fourth paragraph of Article 2180 were applied,
petitioner cannot escape liability therefor. They moreover argue that the Court of Appeals
erred in reducing the amount of compensatory damages when the award made by the trial
court was borne both by evidence adduced during the trial regarding deceased's wages and
by jurisprudence on life expectancy. Moreover, they point out that the petition is
procedurally not acceptable on the following grounds: (1) lack of an explanation for serving
the petition upon the Court of Appeals by registered mail, as required under Section 11,
Rule 13 of the Rules of Civil Procedure; and (2) lack of a statement of the dates of the
expiration of the original reglementary period and of the filing of the motion for extension of
time to file a petition for review.
For its part, respondent Cebu Doctor's Hospital maintains that petitioner CASTILEX is
indeed vicariously liable for the injuries and subsequent death of Romeo Vasquez caused
by ABAD, who was on his way home from taking snacks after doing overtime work for
petitioner. Although the incident occurred when ABAD was not working anymore "the
inescapable fact remains that said employee would not have been situated at such time and
place had he not been required by petitioner to do overtime work." Moreover, since
petitioner adopted the evidence adduced by ABAD, it cannot, as the latter's employer,
inveigle itself from the ambit of liability, and is thus estopped by the records of the case,
which it failed to refute.
We shall first address the issue raised by the private respondents regarding some alleged
procedural lapses in the petition.
Private respondent's contention of petitioner's violation of Section 11 of Rule 13 and Section
4 of Rule 45 of the 1997 Rules of Civil Procedure holds no water.
Sec. 11 of Rule 13 provides:
Sec. 11. Priorities in modes of services and filing. — Whenever practicable, the
service and filing of pleadings and other papers shall be done personally.
248
 Except with respect to papers emanating from the court, a resort to other
modes must be accompanied by a written explanation why the service or filing
was not done personally. A violation of this Rule may be cause to consider the
paper as not filed.
The explanation why service of a copy of the petition upon the Court of Appeals was done
by registered mail is found on Page 28 of the petition. Thus, there has been compliance
with the aforequoted provision.
As regards the allegation of violation of the material data rule under Section 4 of Rule 45,
the same is unfounded. The material dates required to be stated in the petition are the
following: (1) the date of receipt of the judgment or final order or resolution subject of the
petition; (2) the date of filing of a motion for new trial or reconsideration, if any; and (3) the
date of receipt of the notice of the denial of the motion. Contrary to private respondent's
claim, the petition need not indicate the dates of the expiration of the original reglementary
period and the filing of a motion for extension of time to file the petition. At any rate, aside
from the material dates required under Section 4 of Rule 45, petitioner CASTILEX also
stated in the first page of the petition the date it filed the motion for extension of time to file
the petition.
Now on the merits of the case.
The negligence of ABAD is not an issue at this instance. Petitioner CASTILEX presumes
said negligence but claims that it is not vicariously liable for the injuries and subsequent
death caused by ABAD.
Petitioner contends that the fifth paragraph of Article 2180 of the Civil Code should only
apply to instances where the employer is not engaged in business or industry. Since it is
engaged in the business of manufacturing and selling furniture it is therefore not covered
by said provision. Instead, the fourth paragraph should apply.
Petitioner's interpretation of the fifth paragraph is not accurate. The phrase "even though
the former are not engaged in any business or industry" found in the fifth paragraph
should be interpreted to mean that it is not necessary for the employer to be engaged in
any business or industry to be liable for the negligence of his employee who is acting within
the scope of his assigned task.5
A distinction must be made between the two provisions to determine what is applicable.
Both provisions apply to employers: the fourth paragraph, to owners and managers of an
establishment or enterprise; and the fifth paragraph, to employers in general, whether or
not engaged in any business or industry. The fourth paragraph covers negligent acts of
employees committed either in the service of the branches or on the occasion of their
functions, while the fifth paragraph encompasses negligent acts of employees acting within
the scope of their assigned task. The latter is an expansion of the former in both employer
coverage and acts included. Negligent acts of employees, whether or not the employer is
engaged in a business or industry, are covered so long as they were acting within the scope
of their assigned task, even though committed neither in the service of the branches nor on
the occasion of their functions. For, admittedly, employees oftentimes wear different hats.
They perform functions which are beyond their office, title or designation but which,
nevertheless, are still within the call of duty.
This court has applied the fifth paragraph to cases where the employer was engaged in a
business or industry such as truck operators 6 and banks.7 The Court of Appeals cannot,

249
therefore, be faulted in applying the said paragraph of Article 2180 of the Civil Code to this
case.
Under the fifth paragraph of Article 2180, whether or not engaged in any business or
industry, an employer is liable for the torts committed by employees within the scope of his
assigned tasks. But it is necessary to establish the employer-employee relationship; once
this is done, the plaintiff must show, to hold the employer liable, that the employee was
acting within the scope of his assigned task when the tort complained of was committed. It
is only then that the employer may find it necessary to interpose the defense of due
diligence in the selection and supervision of the employee.8
It is undisputed that ABAD was a Production Manager of petitioner CASTILEX at the time
of the tort occurrence. As to whether he was acting within the scope of his assigned task is
a question of fact, which the court a quo and the Court of Appeals resolved in the
affirmative.
Well-entrenched in our jurisprudence is the rule that the factual findings of the Court of
Appeals are entitled to great respect, and even finality at times. This rule is, however,
subject to exceptions such as when the conclusion is grounded on speculations, surmises,
or conjectures.9 Such exception obtain in the present case to warrant review by this Court
of the finding of the Court of Appeals that since ABAD was driving petitioner's vehicle he
was acting within the scope of his duties as a manager.
Before we pass upon the issue of whether ABAD was performing acts within the range of
his employment, we shall first take up the other reason invoked by the Court of Appeals in
holding petitioner CASTILEX vicariously liable for ABAD's negligence, i.e., that the
petitioner did not present evidence that ABAD was not acting within the scope of his
assigned tasks at the time of the motor vehicle mishap. Contrary to the ruling of the Court
of Appeals, it was not incumbent upon the petitioner to prove the same. It was enough for
petitioner CASTILEX to deny that ABAD was acting within the scope of his duties;
petitioner was not under obligation to prove this negative averment. Ei incumbit probatio qui
dicit, non qui negat (He who asserts, not he who denies, must prove). The Court has
consistently applied the ancient rule that if the plaintiff, upon whom rests the burden of
proving his cause of action, fails to show in a satisfactory manner facts which he bases his
claim, the defendant is under no obligation to prove his exception or defense. 10
Now on the issue of whether the private respondents have sufficiently established that
ABAD was acting within the scope of his assigned tasks.
ABAD, who was presented as a hostile witness, testified that at the time of the incident, he
was driving a company-issued vehicle, registered under the name of petitioner. He was then
leaving the restaurant where he had some snacks and had a chat with his friends after
having done overtime work for the petitioner.
No absolutely hard and fast rule can be stated which will furnish the complete answer to
the problem of whether at a given moment, an employee is engaged in his employer's
business in the operation of a motor vehicle, so as to fix liability upon the employer
because of the employee's action or inaction; but rather, the result varies with each state of
facts. 11
In Filamer Christian Institute v. Intermediate Appellant Court, 12 this Court had the occasion
to hold that acts done within the scope of the employee's assigned tasks includes "any act
done by an employee in furtherance of the interests of the employer or for the account of
the employer at the time of the infliction of the injury or damages."
250
The court a quo and the Court of Appeals were one in holding that the driving by a manager
of a company-issued vehicle is within the scope of his assigned tasks regardless of the time
and circumstances.
We do not agree. The mere fact that ABAD was using a service vehicle at the time of the
injurious incident is not of itself sufficient to charge petitioner with liability for the negligent
operation of said vehicle unless it appears that he was operating the vehicle within the
course or scope of his employment.
The following are principles in American Jurisprudence on the employer's liability for the
injuries inflicted by the negligence of an employee in the use of an employer's motor vehicle:
I. Operation of Employer's Motor Vehicle in Going to
or from Meals
It has been held that an employee who uses his employer's vehicle in going from his work to
a place where he intends to eat or in returning to work from a meal is not ordinarily acting
within the scope of his employment in the absence of evidence of some special business
benefit to the employer. Evidence that by using the employer's vehicle to go to and from
meals, an employee is enabled to reduce his time-off and so devote more time to the
performance of his duties supports the finding that an employee is acting within the scope
of his employment while so driving the vehicle. 13
II. Operation of Employer's Vehicle in Going to
or from Work
In the same vein, traveling to and from the place of work is ordinarily a personal problem or
concern of the employee, and not a part of his services to his employer. Hence, in the
absence of some special benefit to the employer other than the mere performance of the
services available at the place where he is needed, the employee is not acting within the
scope of his employment even though he uses his employer's motor vehicle. 14
The employer may, however, be liable where he derives some special benefit from having
the employee drive home in the employer's vehicle as when the employer benefits from
having the employee at work earlier and, presumably, spending more time at his actual
duties. Where the employee's duties require him to circulate in a general area with no fixed
place or hours of work, or to go to and from his home to various outside places of work, and
his employer furnishes him with a vehicle to use in his work, the courts have frequently
applied what has been called the "special errand" or "roving commission" rule, under which
it can be found that the employee continues in the service of his employer until he actually
reaches home. However, even if the employee be deemed to be acting within the scope of his
employment in going to or from work in his employer's vehicle, the employer is not liable for
his negligence where at the time of the accident, the employee has left the direct route to
his work or back home and is pursuing a personal errand of his own.
III. Use of Employer's Vehicle Outside Regular Working Hours
An employer who loans his motor vehicle to an employee for the latter's personal use
outside of regular working hours is generally not liable for the employee's negligent
operation of the vehicle during the period of permissive use, even where the employer
contemplates that a regularly assigned motor vehicle will be used by the employee for
personal as well as business purposes and there is some incidental benefit to the employer.
Even where the employee's personal purpose in using the vehicle has been accomplished
and he has started the return trip to his house where the vehicle is normally kept, it has

251
been held that he has not resumed his employment, and the employer is not liable for the
employee's negligent operation of the vehicle during the return trip. 15
The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based
on the doctrine of respondent superior, not on the principle of bonus pater familias as in
ours. Whether the fault or negligence of the employee is conclusive on his employer as in
American law or jurisprudence, or merely gives rise to the presumption juris tantum of
negligence on the part of the employer as in ours, it is indispensable that the employee was
acting in his employer's business or within the scope of his assigned task. 16
In the case at bar, it is undisputed that ABAD did some overtime work at the petitioner's
office, which was located in Cabangcalan, Mandaue City. Thereafter, he went to Goldie's
Restaurant in Fuente Osmeña, Cebu City, which is about seven kilometers away from
petitioner's place of business. 17 A witness for the private respondents, a sidewalk vendor,
testified that Fuente Osmeña is a "lively place" even at dawn because Goldie's Restaurant
and Back Street were still open and people were drinking thereat. Moreover, prostitutes,
pimps, and drug addicts littered the place. 18
At the Goldie's Restaurant, ABAD took some snacks and had a chat with friends. It was
when ABAD was leaving the restaurant that the incident in question occurred. That same
witness for the private respondents testified that at the time of the vehicular accident,
ABAD was with a woman in his car, who then shouted: "Daddy, Daddy!" 19 This woman
could not have been ABAD's daughter, for ABAD was only 29 years old at the time.
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a
personal purpose not in line with his duties at the time he figured in a vehicular accident.
It was then about 2:00 a.m. of 28 August 1988, way beyond the normal working hours.
ABAD's working day had ended; his overtime work had already been completed. His being
at a place which, as petitioner put it, was known as a "haven for prostitutes, pimps, and
drug pushers and addicts," had no connection to petitioner's business; neither had it any
relation to his duties as a manager. Rather, using his service vehicle even for personal
purposes was a form of a fringe benefit or one of the perks attached to his position.
Since there is paucity of evidence that ABAD was acting within the scope of the functions
entrusted to him, petitioner CASTILEX had no duty to show that it exercised the diligence
of a good father of a family in providing ABAD with a service vehicle. Thus, justice and
equity require that petitioner be relieved of vicarious liability for the consequences of the
negligence of ABAD in driving its vehicle. 20
WHEREFORE, the petition is GRANTED, and the appealed decision and resolution of the
Court of Appeals is AFFIRMED with the modification that petitioner Castilex Industrial
Corporation be absolved of any liability for the damages caused by its employee, Jose
Benjamin Abad.
SO ORDERED.
Puno, Kapunan, Pardo and Ynares-Santiago, JJ., concur.

BAZA MARKETING CORPORATION, Plaintiff-Appellant, v. BOLINAO SECURITY AND

INVESTIGATION SERVICE, INC., Defendant-Appellee.

Rolando S. Crisol, for Plaintiff-Appellant.

252
Mario F. Racela, for Defendant-Appellee.

SYNOPSIS
A security guard furnished by defendant-appellee to guard and protect the building,
properties and installations of its client, the Chamber of Commerce of the Philippines
(CCP), was convicted, together with another person, for the robbery of office equipment
belonging to plaintiff-appellant, a tenant in the Chamber of Commerce of the Philippines
premises. Because both convicts could not pay the civil indemnity arising from the crime,
plaintiff-appellant filed an action in the Court of First Instance of Manila against defendant-
appellee based on employer’s subsidiary liability underArticle 103 of the Revised Penal
Code. The trial court dismissed the case holding that defendant-appellee cannot be held
subsidiary liable for the loss of the office equipments of plaintiff-appellant inasmuch as the
security guard was not acting "in the discharge of his duties’’ as such when he committed
the robbery. On appeal, plaintiff-appellant maintained that it is enough that the employee
committed the offense while he was doing his assigned task as such employee, or on the
occasion thereof, it being immaterial whether the act of crime committed is a part of the
employee’s duty or assigned task. Defendant-appellee, on the other hand, denies liability
for the reason that its contract for security service was with the Chamber of Commerce of
the Philippines and not with plaintiff-appellant.

The Supreme Court held that the statutory limitation that the crime of the employee must
have been committed "in the discharge of his duties" is clearly intended to exclude crimes
not related to the performance of the duties assigned to him by his employer.

Assailed udgment, affirmed.

SYLLABUS

1. CRIMINAL LAW; REVISED PENAL CODE; ARTICLE 103 SUBSIDIARY CIVIL LIABILITY
OF EMPLOYER; DOES NOT OBTAIN WHERE CRIME COMMITTED BY EMPLOYEE HAD NO
RELATION TO THE PERFORMANCE OF ASSIGNED DUTIES. — The act contemplated in
Article 103 of the Revised Penal Code is necessarily a crime from which civil liability had
risen but which could not be satisfied by the convicted employee due to his insolvency. The
statutory limitation for the application of the employer’s subsidiary civil liability that the
crime of the employee must have been committed "in the discharge of his duties" is clearly
intended to exclude crimes not related to the performance of his duties assigned to him by
his employer.

2. ID.; ID.; ID.; ID.; ID.; CASE AT BAR. — In the instant case, the security guard in
question, in conniving with another to steal or rob the office equipment of plaintiff-
appellant, may not be said to have acted in the discharge of his duties as security guard.
The circumstance that the office of the plaintiff-appellant is in the same building for which
defendant-appellee had a contact for security service does not materially change the legal
implication of the said act. For all legal intents and purposes, the robbery could have been
committed in a neighboring building or establishment, in which case, it may hardly be

253
argued that the employer of the security guard should be made responsible for the
consequences of such malefaction. (See Marquez v. Castillo, 68 Phil. 568).

DECISION

VASQUEZ, J.:

This is an action filed in the Court of First Instance of Manila for the robbery of the value of
stolen office equipments. attorney’s fees and damages. After the issues were joined and a
pre-trial conducted, the parties, assisted by their respective counsels, submitted the
following "Admissions & Stipulations Of Facts" :jgc:chanrobles.com.ph

"COME NOW the above-named parties, Baza Marketing Corporation as plaintiff and Bolinao
Security & Investigation Service, Inc. as defendant, through their respective counsel, and to
this Honorable Court most respectfully allege, state and submit, namely:chanrob1es virtual
1aw library

(A) That during the pre-trial conference before this Honorable Court on January 16, 1968,
the following admissions were made the parties, to wit:chanrob1es virtual 1aw library

1) That the parties ADMITTED that the security guard, Jose Silvestre y Fajarillo, had been
convicted by the Court of First Instance of Manila, which fact is more particularly described
in the allegation in paragraphs 6 of the complaint;

2) That the parties ADMITTED that the above-named security guard is insolvent and can
not satisfy the civil liability imposed in the judgment of conviction, which facts are more
particularly described in the allegation in paragraphs 6 the complaint;

(B) That in addition to the above admissions made during aforementioned pre-trial
conference, the parties submit the following stipulation of facts, to wit:chanrob1es virtual
1aw library

1) That the parties ADMIT that Defendant is a corporation organized and existing in
accordance with the law Republic of the Philippines, under the name Bolinao Security &
Investigation Service, Inc., with office address at 1166 Fuente Street, Sampaloc, Manila;

2) That the parties ADMIT that the plaintiff is a lessee of the Chamber of Commerce of the
Philippines at its only building located at Magallanes Drive, Manila, which fact is
particularly described in paragraph 2 of the complaint;

3) That the parties ADMIT that on May 1, 1965, Bolinao Security & Investigation Service,
Inc. entered into a contract with the Chamber of Commerce of the Philippines whereby it
agreed to furnish security guards to the latter for the purpose of guarding and protecting its
properties and installations located at Magallanes Drive, Manila from theft, pilferage,
robbery, arson or other unlawful acts by strangers or third parties, and the Chamber of
Commerce of the Philippines agreed to pay each guard assigned for said purpose the
254
amount of P200.00 a month:chanrob1es virtual 1aw library

4) That the parties ADMIT that as of November 26, 1965, the aforementioned contract was
in force and Jose Silvestre y Fajarillo was one of the security guards furnished by the
defendant to the Chamber of Commerce of the Philippines to guard its properties and
installations as provided in the contract;

5) That parties ADMIT that plaintiff has had no contract with the defendant for security
services of its office equipment and supplies and therefore its office equipment, supplies
and other properties were never accounted for and placed under the control of the
defendant or any of its security guards assigned in the premises of the Chamber of
Commerce of the Philippines;

6) That the parties ADMIT that Jose Silvestre y Fajarillo was duty bound to and was in fact
guarding the building, properties and installations of the Chamber of Commerce of the
Philippines on November 26, 1965, and that in said building were contained the office
equipments and supplies as well as the office of the plaintiff;

7) That the Parties ADMIT that Jose Silvestre y Fajarillo while he was thus guarding the
building, properties and installations of the Chamber of Commerce of the Philippines,
conspired and confederated with an outsider, Ernesto Secreto y Arcenas, who was only a
16-year old boy, and by mutually helping each other, did then and there wilfully,
unlawfully a feloniously, by means of force upon things and with intent of gain and against
the will of the owner thereof, allowed Ernesto Secreto y Arcenas to gain entrance to the
office of the plaintiff by passing thru a hole of the building left so when an air conditioner
placed therein was taken out to be repaired, and once inside, stole and carried away
therefrom, office equipments of the plaintiff all valued at P5,440.00, which facts are
specifically mentioned in paragraph 4 of the complaint;

8) That the parties ADMIT that on June 16, 1966 the Court rendered its decision in the
aforesaid criminal case, the dispositive portion of which reads as follows:chanrob1es virtual
1aw library

‘WHEREFORE, the Court sentences defendant Jose Silvestre y Fajarillo to suffer an

indeterminate penalty ranging from ONE (1) YEAR, EIGHT (8) MONTHS and ONE (1) DAY of
prision correccional, as minimum, to FOUR (4) YEARS, NINE (9) MONTHS and ELEVEN
(11) DAYS, also of prision correccional, as maximum, and defendant Ernesto Secreto y
Arcenas, to suffer an indeterminate penalty of from FOUR (4) MONTHS of arresto mayor, as
minimum, to ONE (1) YEAR, 5 EIGHT (8) MONTHS and ONE (1) DAY of prision
correccional, as maximum.

x       x       x’

‘The Court further orders both defendants to indemnify, jointly and severally, the Baza
Marketing Corporation in, sum of P5,440.00, with subsidiary imprisonment in the event of
insolvency not to exceed one-third (1/3) of their respective principal penalties, and to pay
255
the costs pro-rata.

‘SO ORDERED,’

9) That the parties ADMIT that the foregoing decision became final and executory, a writ of
execution was issued August 13, 1966 for the enforcement of the civil liability of both
accused as decreed in the decision, but the same was returned unsatisfied, per return of
the sheriff dated August 22, 1966 on the ground of insolvency of both accused;

10) That the parties ADMIT that the extent of the damages of the plaintiff is P5,440.00;

11) That the parties ADMIT that plaintiff demands in writing on defendant for it to pay the
amount of P5,440.00 which is the total value of the stolen office equipments but that the
defendant refused to pay on the ground that it is not subsidiarily liable for whatever civil
liability was adjudged against Jose Silvestre y Fajarillo in the aforementioned criminal case;

12) That plaintiff and defendant hereby incorporate by way of reference and make as an
integral parts of this pleading, the following documents which were admitted as exhibits in
Civil Case No. 152058 of the City Court of Manila where the instant case was originally
tried and decided, to wit:chanrob1es virtual 1aw library

Photostat copy of the Agreement consisting of three (3) pages between the Bolinao Security
& Investigation Service, Inc. and the Chamber of Commerce of the Philippines, dated May
1, 1965 (marked as Exhibit ‘A’).

Duplicate copy of the Notice of Order Decision dated July 15, 1966 in Criminal Case No.
80784 of the Court of First Instance of Manila, entitled ‘People of the Philippines versus
Jose Silvestre y Fajarillo and Ernesto Secreto y Arcenas’ rendered on June 16, 1966 with
the Decision consisting of eight (8) pages attached (marked as Exhibit ‘B’).chanrobles
virtual lawlibrary

Portion of the decision pointing out the aggravating circumstance of grave abuse of
confidence on the part of the defendant Jose Silvestre y Fajarillo and already marked as
Plaintiff’s Exhibit ‘B-1’.

Writ of Execution issued by the Court of First Instance and already marked as Plaintiff’s
Exhibit ‘C’.

The Sheriff’s Return dated August 22, 1966 of Deputy Sheriff, Dante Ortiz, and already
marked as Plaintiff’s Exhibit ‘D’.

13) That plaintiff and defendant submit to the discretion of this Honorable Court the
propriety of awarding the damages and attorney’s fees prayed for in their complaint and
counterclaim, respectively, and the amount thereof.

Manila, Philippines, April 26, 1968.

256
(Sgd.) ROLANDO S. CRISOL (Sgd.) MARIO F. RACELA

Counsel for the Plaintiff Counsel for the Defendant

Ground Floor, C.C.P. Bldg. 303 Wm. Li Yao Building

Magallanes Drive, Manila Rizal Avenue, Manila

Solely on the basis of the above admissions and stipulations, the trial court rendered its
Decision dismissing the complaint on the following ratiocination:jgc:chanrobles.com.ph

"And so from this the sole issue to be solved by this Court, is whether Defendant which
furnished security guards to the Chamber of Commerce Building, wherein Plaintiff was one
of the tenants, is subsidiarily liable for the civil liability imposed on one its security guards,
as it has been proven that he is insolvent. Plaintiff’s action is based on Art. 103 RPC, which
requires three requisites before such a subsidiary liability may arise: first, that the
employer is engaged in a kind of industry; second, that the employee is insolvent and third,
that the crime was committed by the employee in the discharge of his duties. The first two
requisites are present for the furnishing of security guards in engaging in some kind of
industry, and the Stipulation of Facts shows that the security guard is insolvent. But was
the crime committed while in the discharge of his duties? This Court does not think so. The
duty of the security guard was to guard the premises assigned to him. The final decision
finding the security guard guilty of robbery shows that in connivance with a 16-year old,
gaining entrance through the opening left by the repair of the air-conditioning unit, the
robbers made away with office equipment owned by Plaintiff in the sum of P5,440.00. It is
clear that this connivance was not in the discharge of his duties as security guard so that
Defendant cannot be subsidiarily held liable for such an act.chanrobles virtual lawlibrary

The complaint is, therefore, dismissed with costs against Plaintiff.

SO ORDERED."cralaw virtua1aw library

The plaintiff’s appeal to the Court of Appeals was certified by the said Court to the Supreme
Court on the ground that the appeal involves pure questions of law.

Plaintiff-appellant has assigned a single error in its brief to wit:jgc:chanrobles.com.ph

"THE LOWER COURT ERRED IN HOLDING THAT DEFENDANT’S EMPLOYEE WAS NOT IN
THE DISCHARGE OF HIS DUTY WHEN HE COMMITTED THE CRIME AND THEREFORE
THE DEFENDANT EMPLOYER COULD NOT BE HELD SUBSIDIARILY LIABLE."cralaw
virtua1aw library

The trial court expressed the view that defendant-appellee may not be held liable for the
loss of the office equipments of plaintiff appellant inasmuch as the security guard was not
acting in the discharge of his duties as such when he connived with Ernesto Secreto, who
257
actually committed the robbery. The clear import of the trial court’s ruling is that the
subsidiary liability under Article 103 of the Revised Penal Code may only arise if the
employee commits the crime of which he was found guilty in line or in pursuance of the
discharge of his assigned duties.

Defendant-appellee agrees with the conclusion arrived at by the trial court but not on the
ground expressed by it. Defendant-appellee denies liability under Article 103 of the Revised
Penal Code for the reason that the security guard in question was not assigned by
defendant-appellee to guard the plaintiff-appellant’s properties, his duty being to act as a
security guard of the properties of the Chamber of Commerce of the Philippines. Defendant-
appellee would admit that if the properties which were stolen belonged to the Chamber of
Commerce of the Philippines, defendant-appellee would be liable in-asmuch as the
unlawful taking occurred in the performance discharge of the duties of the security guard.

Plaintiff-appellant, on the other hand, maintains that the subsidiary liability of the
employer under Article 103 of t Revised Penal Code does not require that the employee
commit the crime within the scope of his assigned tasks. Instead, it is enough if the
employee committed the act while he was doing his assigned task as such employee, or on
the occasion then it being immaterial whether the act or crime committed is a part of the
employee’s duty or assigned task. Plaintiff-appellant cites the example given by recognized
commentators on Criminal Law to illustrate his point, to wit: "Where a workman of a
construction company stole some thing he was making minor repairs in a house and after
being prosecuted was found guilty and the workman cannot satisfy his own civil liability,
under such a circumstance, the company is liable subsidiarily for the restitution of the
things or for payment of their value." (Reyes and Revised Penal Code, 1960 edition, pp.
632-633; Albert, Commentaries on the Revised Penal Code, 1945 edition, p. 282.) It is
argued that, as in the given example, the subsidiary liability of the employer may be
imposed even if the crime committed was not in the discharge of the duties of the security
guard, it not being a part of his duties to commit theft or
robbery.chanroblesvirtualawlibrary

We sustain the trial court’s dismissal of the case. The law makes the employer subsidiarily
liable for the civil liability arising from a crime committed by an employee "in the discharge
of his duties." (Article 103, Revised Penal Code.) This subsidiary liability does not arise from
any and all offenses that the employee may commit, but limited to those which he shall be
found guilty of in the discharge of his duties. The law does not say, as urged by plaintiff-
appellant, that the crime of the employee must be the one committed "while in the
discharge of his duties." It could not be contemplated that an employer will be held
responsible for any misdeed that his employee could have done while performing his
assigned task Thus, it is neither just nor logical that, if a security guard committed robbery
in a neighboring establishment near the one he is assigned to guard, or raped a woman
passerby in the course of his tour of duty, his employer should be made subsidiarily liable
for his said misdeed. In such circumstances, it cannot be said that the crime was
committed by the employee "in the discharge of his duties."cralaw virtua1aw library

This conclusion is supported by the ruling in Marquez v. Castillo, 68 Phil. 568, wherein it
258
was held that the subsidiary liability of the employer does not arise where the owner o car
which figured in an accident causing the death of one injuries to another, the said accident
not having occurred in the course of the performance of the duties for which the driver had
been hired, it appearing therein that the driver took the car without the employer’s
knowledge and used it as if it were his own.

In the case at bar, the security guard was assigned to guard the building, properties and
installations of the Chamber of Commerce of the Philippines. (Paragraph 6, Stipulations of
Facts.) The contract for security was between defendant-appellee and the Chamber of
Commerce of the Philippines. (Paragraph 3, Ibid.) No contract was ever entered by the
plaintiff-appellant and defendant-appellee for security services of its office equipments and
supplies which were never accounted for and placed under the control of defendant-
appellee or any of the security guards assigned in the premises of the Chamber of
Commerce of the Philippines. (Paragraph 5, Ibid.) In conniving with another to steal or rob
the office equipments of plaintiff-appellant, the security guard in question may not be said
to have acted in the discharge of his duties as security guard. The circumstance that the
office of plaintiff-appellant is in the same building for which defendant-appellee had a
contract for security service does not materially change the legal implication of the said act.
For all legal intents and purposes, the robbery could have been committed in a neighboring
building or establishment, in which case, it may hardly be argued that the employer of the
security guard should be made responsible for the consequences of such
malefaction.cralawnad

Plaintiff-appellant may not derive decisive support for his contention from the example
given by the commentaries of Criminal Law hereinabove-mentioned. It is not correct to say
that the employer’s subsidiary liability will be imposed even when the act is not done in
pursuance of the duties of the employee, the act of stealing not being included in an
employee’s assigned tasks; nor would an employer ever include among the duties of his
employee the commission of a crime. The act contemplated in Article 103 of the Revised
Penal Code is necessarily a crime from which civil liability had arisen but which could not
be satisfied by the accused employee. The statutory limitation that the crime of the
employee must have been committed "in the discharge of his duties" is clearly intended to
exclude crimes not related to the performance of duties assigned to him by his employer.
The crime in question pertains to this latter category.

WHEREFORE, the judgment appealed from is hereby AFFIRMED, with costs against
plaintiff-appellant.

SO ORDERED.

Makasiar, Melencio-Herrera, Plana, Relova and Gutierrez, Jr., JJ., concur.

Teehankee, J., concurs in the result.

G.R. No. 192123               March 10, 2014

259
DR. FERNANDO P. SOLIDUM, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
BERSAMIN, J.:
This appeal is taken by a physician-anesthesiologist who has been pronounced guilty of
reckless imprudence resulting in serious physical injuries by the Regional Trial Court (RTC)
and the Court of Appeals (CA). He had been part of the team of anesthesiologists during the
surgical pull-through operation conducted on a three-year old patient born with an
imperforate anus.1
The antecedents are as follows:
Gerald Albert Gercayo (Gerald) was born on June 2, 1992 2 with an imperforate anus. Two
days after his birth, Gerald underwent colostomy, a surgical procedure to bring one end of
the large intestine out through the abdominal wall, 3 enabling him to excrete through a
colostomy bag attached to the side of his body. 4
On May 17, 1995, Gerald, then three years old, was admitted at the Ospital ng Maynila for
a pull-through operation.5 Dr. Leandro Resurreccion headed the surgical team, and was
assisted by Dr. Joselito Luceño, Dr. Donatella Valeña and Dr. Joseph Tibio. The
anesthesiologists included Dr. Marichu Abella, Dr. Arnel Razon and petitioner Dr.
Fernando Solidum (Dr. Solidum).6 During the operation, Gerald experienced
bradycardia,7 and went into a coma.8 His coma lasted for two weeks, 9 but he regained
consciousness only after a month.10 He could no longer see, hear or move.11
Agitated by her son’s helpless and unexpected condition, Ma. Luz Gercayo (Luz) lodged a
complaint for reckless imprudence resulting in serious physical injuries with the City
Prosecutor’s Office of Manila against the attending physicians. 12
Upon a finding of probable cause, the City Prosecutor’s Office filed an information solely
against Dr. Solidum,13 alleging: –
That on or about May 17, 1995, in the City of Manila, Philippines, the said accused, being
then an anesthesiologist at the Ospital ng Maynila, Malate, this City, and as such was
tasked to administer the anesthesia on three-year old baby boy GERALD ALBERT
GERCAYO, represented by his mother, MA. LUZ GERCAYO, the former having been born
with an imperforate anus [no anal opening] and was to undergo an operation for anal
opening [pull through operation], did then and there willfully, unlawfully and feloniously
fail and neglect to use the care and diligence as the best of his judgment would dictate
under said circumstance, by failing to monitor and regulate properly the levels of
anesthesia administered to said GERALD ALBERT GERCAYO and using 100% halothane
and other anesthetic medications, causing as a consequence of his said carelessness and
negligence, said GERALD ALBERT GERCAYO suffered a cardiac arrest and consequently a
defect called hypoxic encephalopathy meaning insufficient oxygen supply in the brain,
thereby rendering said GERALD ALBERT GERCAYO incapable of moving his body, seeing,
speaking or hearing, to his damage and prejudice.
Contrary to law.14
The case was initially filed in the Metropolitan Trial Court of Manila, but was transferred to
the RTC pursuant to Section 5 of Republic Act No. 8369 (The Family Courts Act of
1997),15 where it was docketed as Criminal Case No. 01-190889.
Judgment of the RTC
260
On July 19, 2004, the RTC rendered its judgment finding Dr. Solidum guilty beyond
reasonable doubt of reckless imprudence resulting to serious physical injuries, 16 decreeing:
WHEREFORE, premises considered, the Court finds accused DR. FERNANDO P. SOLIDUM
GUILTY beyond reasonable doubt as principal of the crime charged and is hereby
sentenced to suffer the indeterminate penalty of TWO (2) MONTHS and ONE (1) DAY of
arresto mayor as minimum to ONE (1) YEAR, ONE (1) MONTH and TEN (10) DAYS of
prision correccional as maximum and to indemnify, jointly and severally with the Ospital
ng Maynila, Dr. Anita So and Dr. Marichu Abella, private complainant Luz Gercayo, the
amount of ₱500,000.00 as moral damages and ₱100,000.00 as exemplary damages and to
pay the costs.
Accordingly, the bond posted by the accused for his provisional liberty is hereby
CANCELLED.
SO ORDERED.17
Upon motion of Dr. Anita So and Dr. Marichu Abella to reconsider their solidary
liability,18 the RTC excluded them from solidary liability as to the damages, modifying its
decision as follows:
WHEREFORE, premises considered, the Court finds accused Dr. Fernando Solidum, guilty
beyond reasonable doubt as principal of the crime charged and is hereby sentenced to
suffer the indeterminate penalty of two (2) months and one (1) day of arresto mayor as
minimum to one (1) year, one (1) month and ten (10) days of prision correccional as
maximum and to indemnify jointly and severally with Ospital ng Maynila, private
complainant Luz Gercayo the amount of ₱500,000.00 as moral damages and ₱100,000 as
exemplary damages and to pay the costs.
Accordingly, the bond posted by the accused for his provisional liberty is hereby
cancelled.19
Decision of the CA
On January 20, 2010, the CA affirmed the conviction of Dr. Solidum, 20 pertinently stating
and ruling:
The case appears to be a textbook example of res ipsa loquitur.
xxxx
x x x [P]rior to the operation, the child was evaluated and found fit to undergo a major
operation. As noted by the OSG, the accused himself testified that pre-operation tests were
conducted to ensure that the child could withstand the surgery. Except for his imperforate
anus, the child was healthy. The tests and other procedures failed to reveal that he was
suffering from any known ailment or disability that could turn into a significant risk. There
was not a hint that the nature of the operation itself was a causative factor in the events
that finally led to hypoxia.
In short, the lower court has been left with no reasonable hypothesis except to attribute the
accident to a failure in the proper administration of anesthesia, the gravamen of the charge
in this case. The High Court elucidates in Ramos vs. Court of Appeals 321 SCRA 584 –
In cases where the res ipsa loquitur is applicable, the court is permitted to find a physician
negligent upon proper proof of injury to the patient, without the aid of expert testimony,
where the court from its fund of common knowledge can determine the proper standard of
care.
Where common knowledge and experience teach that a resulting injury would not have
occurred to the patient if due care had been exercised, an inference of negligence may be
261
drawn giving rise to an application of the doctrine of res ipsa loquitur without medical
evidence, which is ordinarily required to show not only what occurred but how and why it
occurred. When the doctrine is appropriate, all that the patient must do is prove a nexus
between the particular act or omission complained of and the injury sustained while under
the custody and management of the defendant without need to produce expert medical
testimony to establish the standard of care. Resort to res ipsa loquitur is allowed because
there is no other way, under usual and ordinary conditions, by which the patient can
obtain redress for injury suffered by him.
The lower court has found that such a nexus exists between the act complained of and the
injury sustained, and in line with the hornbook rules on evidence, we will afford the factual
findings of a trial court the respect they deserve in the absence of a showing of
arbitrariness or disregard of material facts that might affect the disposition of the case.
People v. Paraiso 349 SCRA 335.
The res ipsa loquitur test has been known to be applied in criminal cases. Although it
creates a presumption of negligence, it need not offend due process, as long as the accused
is afforded the opportunity to go forward with his own evidence and prove that he has no
criminal intent. It is in this light not inconsistent with the constitutional presumption of
innocence of an accused.
IN VIEW OF THE FOREGOING, the modified decision of the lower court is affirmed.
SO ORDERED.21
Dr. Solidum filed a motion for reconsideration, but the CA denied his motion on May 7,
2010.22
Hence, this appeal.
Issues
Dr. Solidum avers that:
I.
THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF
THE LOWER COURT IN UPHOLDING THE PETITIONER’S CONVICTION FOR THE
CRIME CHARGED BASED ON THE TRIAL COURT’S OPINION, AND NOT ON THE
BASIS OF THE FACTS ESTABLISHED DURING THE TRIAL. ALSO, THERE IS A
CLEAR MISAPPREHENSION OF FACTS WHICH IF CORRECTED, WILL RESULT TO
THE ACQUITTAL OF THE PETITIONER. FURTHER, THE HONORABLE COURT
ERRED IN AFFIRMING THE SAID DECISION OF THE LOWER COURT, AS THIS
BREACHES THE CRIMINAL LAW PRINCIPLE THAT THE PROSECUTION MUST
PROVE THE ALLEGATIONS OF THE INFORMATION BEYOND REASONABLE DOUBT,
AND NOT ON THE BASIS OF ITS PRESUMPTIVE CONCLUSION.
II.
THE HONORABLE COURT OF APPEALS ERRED IN APPLYING THE PRINCIPLE OF
RES IPSA LOQUITOR (sic) WHEN THE DEFENSE WAS ABLE TO PROVE THAT
THERE IS NO NEGLIGENCE ON THE PART OF THE PETITIONER, AND NO
OVERDOSING IN THE APPLICATION OF THE ANESTHETIC AGENT BECAUSE
THERE WAS NO 100% HALOTHANE ADMINISTERED TO THE CHILD, BUT ONLY
ONE (1%) PERCENT AND THE APPLICATION THEREOF, WAS REGULATED BY AN
ANESTHESIA MACHINE. THUS, THE APPLICATION OF THE PRINCIPLE OF RES
IPSA LOQUITOR (sic) CONTRADICTED THE ESTABLISHED FACTS AND THE LAW
APPLICABLE IN THE CASE.
262
 III.
THE AWARD OF MORAL DAMAGES AND EXEMPLARY DAMAGES IS NOT
JUSTIFIED THERE BEING NO NEGLIGENCE ON THE PART OF THE PETITIONER.
ASSUMING THAT THE CHILD IS ENTITLED TO FINANCIAL CONSIDERATION, IT
SHOULD BE ONLY AS A FINANCIAL ASSISTANCE, BECAUSE THERE WAS NO
NEGLIGENCE, AND NO OVERDOSING OF ANESTHETIC AGENT AND AS SUCH, THE
AWARD IS SO EXCESSIVE, AND NO FACTUAL AND LEGAL BASIS.23
To simplify, the following are the issues for resolution, namely: (a) whether or not the
doctrine of res ipsa loquitur was applicable herein; and (b) whether or not Dr. Solidum was
liable for criminal negligence.
Ruling
The appeal is meritorious.
Applicability of the Doctrine of Res Ipsa Loquitur
Res ipsa loquitur is literally translated as "the thing or the transaction speaks for itself."
The doctrine res ipsa loquitur means that "where the thing which causes injury is shown to
be under the management of the defendant, and the accident is such as in the ordinary
course of things does not happen if those who have the management use proper care, it
affords reasonable evidence, in the absence of an explanation by the defendant, that the
accident arose from want of care." 24 It is simply "a recognition of the postulate that, as a
matter of common knowledge and experience, the very nature of certain types of
occurrences may justify an inference of negligence on the part of the person who controls
the instrumentality causing the injury in the absence of some explanation by the defendant
who is charged with negligence. It is grounded in the superior logic of ordinary human
experience and on the basis of such experience or common knowledge, negligence may be
deduced from the mere occurrence of the accident itself.
Hence, res ipsa loquitur is applied in conjunction with the doctrine of common
knowledge."25
Jarcia, Jr. v. People26 has underscored that the doctrine is not a rule of substantive law,
but merely a mode of proof or a mere procedural convenience. The doctrine, when
applicable to the facts and circumstances of a given case, is not meant to and does not
dispense with the requirement of proof of culpable negligence against the party charged. It
merely determines and regulates what shall be prima facie evidence thereof, and helps the
plaintiff in proving a breach of the duty. The doctrine can be invoked when and only when,
under the circumstances involved, direct evidence is absent and not readily available. 27
The applicability of the doctrine of res ipsa loquitur in medical negligence cases was
significantly and exhaustively explained in Ramos v. Court of Appeals, 28 where the Court
said –
Medical malpractice cases do not escape the application of this doctrine. Thus, res ipsa
loquitur has been applied when the circumstances attendant upon the harm are
themselves of such a character as to justify an inference of negligence as the cause of that
harm. The application of res ipsa loquitur in medical negligence cases presents a question
of law since it is a judicial function to determine whether a certain set of circumstances
does, as a matter of law, permit a given inference.
Although generally, expert medical testimony is relied upon in malpractice suits to prove
that a physician has done a negligent act or that he has deviated from the standard
medical procedure, when the doctrine of res ipsa loquitur is availed by the plaintiff, the
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need for expert medical testimony is dispensed with because the injury itself provides the
proof of negligence. The reason is that the general rule on the necessity of expert testimony
applies only to such matters clearly within the domain of medical science, and not to
matters that are within the common knowledge of mankind which may be testified to by
anyone familiar with the facts. Ordinarily, only physicians and surgeons of skill and
experience are competent to testify as to whether a patient has been treated or operated
upon with a reasonable degree of skill and care. However, testimony as to the statements
and acts of physicians and surgeons, external appearances, and manifest conditions which
are observable by any one may be given by non-expert witnesses. Hence, in cases where the
res ipsa loquitur is applicable, the court is permitted to find a physician negligent upon
proper proof of injury to the patient, without the aid of expert testimony, where the court
from its fund of common knowledge can determine the proper standard of care. Where
common knowledge and experience teach that a resulting injury would not have occurred
to the patient if due care had been exercised, an inference of negligence may be drawn
giving rise to an application of the doctrine of res ipsa loquitur without medical evidence,
which is ordinarily required to show not only what occurred but how and why it occurred.
When the doctrine is appropriate, all that the patient must do is prove a nexus between the
particular act or omission complained of and the injury sustained while under the custody
and management of the defendant without need to produce expert medical testimony to
establish the standard of care. Resort to res ipsa loquitur is allowed because there is no
other way, under usual and ordinary conditions, by which the patient can obtain redress
for injury suffered by him.
Thus, courts of other jurisdictions have applied the doctrine in the following situations:
leaving of a foreign object in the body of the patient after an operation, injuries sustained
on a healthy part of the body which was not under, or in the area, of treatment, removal of
the wrong part of the body when another part was intended, knocking out a tooth while a
patient’s jaw was under anesthetic for the removal of his tonsils, and loss of an eye while
the patient plaintiff was under the influence of anesthetic, during or following an operation
for appendicitis, among others.
Nevertheless, despite the fact that the scope of res ipsa loquitur has been measurably
enlarged, it does not automatically apply to all cases of medical negligence as to
mechanically shift the burden of proof to the defendant to show that he is not guilty of the
ascribed negligence. Res ipsa loquitur is not a rigid or ordinary doctrine to be perfunctorily
used but a rule to be cautiously applied, depending upon the circumstances of each case. It
is generally restricted to situations in malpractice cases where a layman is able to say, as a
matter of common knowledge and observation, that the consequences of professional care
were not as such as would ordinarily have followed if due care had been exercised. A
distinction must be made between the failure to secure results, and the occurrence of
something more unusual and not ordinarily found if the service or treatment rendered
followed the usual procedure of those skilled in that particular practice. It must be
conceded that the doctrine of res ipsa loquitur can have no application in a suit against a
physician or surgeon which involves the merits of a diagnosis or of a scientific treatment.
The physician or surgeon is not required at his peril to explain why any particular
diagnosis was not correct, or why any particular scientific treatment did not produce the
desired result. Thus, res ipsa loquitur is not available in a malpractice suit if the only
showing is that the desired result of an operation or treatment was not accomplished. The
264
real question, therefore, is whether or not in the process of the operation any extraordinary
incident or unusual event outside of the routine performance occurred which is beyond the
regular scope of customary professional activity in such operations, which, if unexplained
would themselves reasonably speak to the average man as the negligent cause or causes of
the untoward consequence. If there was such extraneous intervention, the doctrine of res
ipsa loquitur may be utilized and the defendant is called upon to explain the matter, by
evidence of exculpation, if he could.
In order to allow resort to the doctrine, therefore, the following essential requisites must
first be satisfied, to wit: (1) the accident was of a kind that does not ordinarily occur unless
someone is negligent; (2) the instrumentality or agency that caused the injury was under
the exclusive control of the person charged; and (3) the injury suffered must not have been
due to any voluntary action or contribution of the person injured. 29
The Court considers the application here of the doctrine of res ipsa loquitur inappropriate.
Although it should be conceded without difficulty that the second and third elements were
present, considering that the anesthetic agent and the instruments were exclusively within
the control of Dr. Solidum, and that the patient, being then unconscious during the
operation, could not have been guilty of contributory negligence, the first element was
undeniably wanting. Luz delivered Gerald to the care, custody and control of his physicians
for a pull-through operation. Except for the imperforate anus, Gerald was then of sound
body and mind at the time of his submission to the physicians. Yet, he experienced
bradycardia during the operation, causing loss of his senses and rendering him immobile.
Hypoxia, or the insufficiency of oxygen supply to the brain that caused the slowing of the
heart rate, scientifically termed as bradycardia, would not ordinarily occur in the process of
a pull-through operation, or during the administration of anesthesia to the patient, but
such fact alone did not prove that the negligence of any of his attending physicians,
including the anesthesiologists, had caused the injury. In fact, the anesthesiologists
attending to him had sensed in the course of the operation that the lack of oxygen could
have been triggered by the vago-vagal reflex, prompting them to administer atropine to the
patient.30
This conclusion is not unprecedented. It was similarly reached in Swanson v.
Brigham,31 relevant portions of the decision therein being as follows:
On January 7, 1973, Dr. Brigham admitted 15-year-old Randall Swanson to a hospital for
the treatment of infectious mononucleosis. The patient's symptoms had included a swollen
throat and some breathing difficulty. Early in the morning of January 9 the patient was
restless, and at 1:30 a.m. Dr. Brigham examined the patient. His inspection of the patient's
air passage revealed that it was in satisfactory condition. At 4:15 a.m. Dr. Brigham received
a telephone call from the hospital, advising him that the patient was having respiratory
difficulty. The doctor ordered that oxygen be administered and he prepared to leave for the
hospital. Ten minutes later, 4:25 a.m., the hospital called a second time to advise the
doctor that the patient was not responding. The doctor ordered that a medicine be
administered, and he departed for the hospital. When he arrived, the physician who had
been on call at the hospital had begun attempts to revive the patient. Dr. Brigham joined
him in the effort, but the patient died.
The doctor who performed the autopsy concluded that the patient died between 4:25 a.m.
and 4:30 a.m. of asphyxia, as a result of a sudden, acute closing of the air passage. He also

265
found that the air passage had been adequate to maintain life up to 2 or 3 minutes prior to
death. He did not know what caused the air passage to suddenly close.
xxxx
It is a rare occurrence when someone admitted to a hospital for the treatment of infectious
mononucleosis dies of asphyxiation. But that is not sufficient to invoke res ipsa loquitur.
The fact that the injury rarely occurs does not in itself prove that the injury was probably
caused by someone's negligence. Mason v. Ellsworth, 3 Wn. App. 298, 474 P.2d 909 (1970).
Nor is a bad result by itself enough to warrant the application of the doctrine. Nelson v.
Murphy, 42 Wn.2d 737, 258 P.2d 472 (1953). See 2 S. Speiser, The Negligence Case – Res
Ipsa Loquitur § 24:10 (1972). The evidence presented is insufficient to establish the first
element necessary for application of res ipsa loquitur doctrine. The acute closing of the
patient’s air passage and his resultant asphyxiation took place over a very short period of
time. Under these circumstances it would not be reasonable to infer that the physician was
negligent. There was no palpably negligent act. The common experience of mankind does
not suggest that death would not be expected without negligence. And there is no expert
medical testimony to create an inference that negligence caused the injury.
Negligence of Dr. Solidum
In view of the inapplicability of the doctrine of res ipsa loquitur, the Court next determines
whether the CA correctly affirmed the conviction of Dr. Solidum for criminal negligence.
Negligence is defined as the failure to observe for the protection of the interests of another
person that degree of care, precaution, and vigilance that the circumstances justly demand,
whereby such other person suffers injury.32 Reckless imprudence, on the other hand,
consists of voluntarily doing or failing to do, without malice, an act from which material
damage results by reason of an inexcusable lack of precaution on the part of the person
performing or failing to perform such act.33
Dr. Solidum’s conviction by the RTC was primarily based on his failure to monitor and
properly regulate the level of anesthetic agent administered on Gerald by overdosing at
100% halothane. In affirming the conviction, the CA observed:
On the witness stand, Dr. Vertido made a significant turnaround. He affirmed the findings
and conclusions in his report except for an observation which, to all intents and purposes,
has become the storm center of this dispute. He wanted to correct one piece of information
regarding the dosage of the anesthetic agent administered to the child. He declared that he
made a mistake in reporting a 100% halothane and said that based on the records it
should have been 100% oxygen.
The records he was relying on, as he explains, are the following:
(a) the anesthesia record – A portion of the chart in the record was marked as Exhibit
1-A and 1-B to indicate the administration at intervals of the anesthetic agent.
(b) the clinical abstract – A portion of this record that reads as follows was marked
Exhibit 3A. 3B – Approximately 1 hour and 45 minutes through the operation,
patient was noted to have bradycardia (CR = 70) and ATSO4 0.2 mg was immediately
administered. However, the bradycardia persisted, the inhalational agent was shut
off, and the patient was ventilated with 100% oxygen and another dose of ATSO4 0.2
mg was given. However, the patient did not respond until no cardiac rate can be
auscultated and the surgeons were immediately told to stop the operation. The
patient was put on a supine position and CPR was initiated. Patient was given 1 amp
of epinephrine initially while continuously doing cardiac massage – still with no
266
 cardiac rate appreciated; another ampule of epinephrine was given and after 45 secs,
patient’s vital signs returned to normal. The entire resuscitation lasted approximately
3-5 mins. The surgeons were then told to proceed to the closure and the child’s vital
signs throughout and until the end of surgery were: BP = 110/70; CR = 116/min and
RR = 20-22 cycles/min (on assisted ventilation).
Dr. Vertido points to the crucial passage in the clinical abstract that the patient was
ventilated with 100% oxygen and another dose of ATSO4 when the bradycardia persisted,
but for one reason or another, he read it as 100% halothane. He was asked to read the
anesthesia record on the percentage of the dosage indicated, but he could only sheepishly
note I can’t understand the number. There are no clues in the clinical abstract on the
quantity of the anesthetic agent used. It only contains the information that the anesthetic
plan was to put the patient under general anesthesia using a nonrebreathing system with
halothane as the sole anesthetic agent and that 1 hour and 45 minutes after the operation
began, bradycardia occurred after which the inhalational agent was shut off and the patient
administered with 100% oxygen. It would be apparent that the 100% oxygen that Dr.
Vertido said should be read in lieu of 100% halothane was the pure oxygen introduced after
something went amiss in the operation and the halothane itself was reduced or shut off.
The key question remains – what was the quantity of halothane used before bradycardia set
in?
The implication of Dr. Vertido’s admission is that there was no overdose of the anesthetic
agent, and the accused Dr. Solidum stakes his liberty and reputation on this conclusion.
He made the assurance that he gave his patient the utmost medical care, never leaving the
operating room except for a few minutes to answer the call of nature but leaving behind the
other members of his team Drs. Abella and Razon to monitor the operation. He insisted
that he administered only a point 1% not 100% halothane, receiving corroboration from Dr.
Abella whose initial MA in the record should be enough to show that she assisted in the
operation and was therefore conversant of the things that happened. She revealed that they
were using a machine that closely monitored the concentration of the agent during the
operation.
But most compelling is Dr. Solidum’s interpretation of the anesthesia record itself, as he
takes the bull by the horns, so to speak. In his affidavit, he says, reading from the record,
that the quantity of halothane used in the operation is one percent (1%) delivered at time
intervals of 15 minutes. He studiedly mentions – the concentration of halothane as reflected
in the anesthesia record (Annex D of the complaint-affidavit) is only one percent (1%) – The
numbers indicated in 15 minute increments for halothane is an indication that only 1%
halothane is being delivered to the patient Gerard Gercayo for his entire operation; The
amount of halothane delivered in this case which is only one percent cannot be summated
because halothane is constantly being rapidly eliminated by the body during the entire
operation.
xxxx
In finding the accused guilty, despite these explanations, the RTC argued that the volte-face
of Dr. Vertido on the question of the dosage of the anesthetic used on the child would not
really validate the non-guilt of the anesthesiologist. Led to agree that the halothane used
was not 100% as initially believed, he was nonetheless unaware of the implications of the
change in his testimony. The court observed that Dr. Vertido had described the condition of
the child as hypoxia which is deprivation of oxygen, a diagnosis supported by the results of
267
the CT Scan. All the symptoms attributed to a failing central nervous system such as
stupor, loss of consciousness, decrease in heart rate, loss of usual acuity and abnormal
motor function, are manifestations of this condition or syndrome. But why would there be
deprivation of oxygen if 100% oxygen to 1% halothane was used? Ultimately, to the court,
whether oxygen or halothane was the object of mistake, the detrimental effects of the
operation are incontestable, and they can only be led to one conclusion – if the application
of anesthesia was really closely monitored, the event could not have happened. 34
The Prosecution did not prove the elements of reckless imprudence beyond reasonable
doubt because the circumstances cited by the CA were insufficient to establish that Dr.
Solidum had been guilty of inexcusable lack of precaution in monitoring the administration
of the anesthetic agent to Gerald. The Court aptly explained in Cruz v. Court of
Appeals35 that:
Whether or not a physician has committed an "inexcusable lack of precaution" in the
treatment of his patient is to be determined according to the standard of care observed by
other members of the profession in good standing under similar circumstances bearing in
mind the advanced state of the profession at the time of treatment or the present state of
medical science. In the recent case of Leonila Garcia-Rueda v. Wilfred L. Pacasio, et. al.,
this Court stated that in accepting a case, a doctor in effect represents that, having the
needed training and skill possessed by physicians and surgeons practicing in the same
field, he will employ such training, care and skill in the treatment of his patients. He
therefore has a duty to use at least the same level of care that any other reasonably
competent doctor would use to treat a condition under the same circumstances. It is in this
aspect of medical malpractice that expert testimony is essential to establish not only the
standard of care of the profession but also that the physician's conduct in the treatment
and care falls below such standard. Further, inasmuch as the causes of the injuries
involved in malpractice actions are determinable only in the light of scientific knowledge, it
has been recognized that expert testimony is usually necessary to support the conclusion
as to causation.
xxxx
In litigations involving medical negligence, the plaintiff has the burden of establishing
appellant's negligence and for a reasonable conclusion of negligence, there must be proof of
breach of duty on the part of the surgeon as well as a causal connection of such breach
and the resulting death of his patient. In Chan Lugay v. St Luke's Hospital, Inc., where the
attending physician was absolved of liability for the death of the complainant’s wife and
newborn baby, this Court held that:
"In order that there may be a recovery for an injury, however, it must be shown that the
‘injury for which recovery is sought must be the legitimate consequence of the wrong done;
the connection between the negligence and the injury must be a direct and natural
sequence of events, unbroken by intervening efficient causes.’ In other words, the
negligence must be the proximate cause of the injury. For, ‘negligence, no matter in what it
consists, cannot create a right of action unless it is the proximate cause of the injury
complained of.’ And ‘the proximate cause of an injury is that cause, which, in natural and
continuous sequence, unbroken by any efficient intervening cause, produces the injury,
and without which the result would not have occurred.’"
An action upon medical negligence – whether criminal, civil or administrative – calls for the
plaintiff to prove by competent evidence each of the following four elements, namely: (a) the
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duty owed by the physician to the patient, as created by the physician-patient relationship,
to act in accordance with the specific norms or standards established by his profession; (b)
the breach of the duty by the physician’s failing to act in accordance with the applicable
standard of care; (3) the causation, i.e., there must be a reasonably close and causal
connection between the negligent act or omission and the resulting injury; and (4) the
damages suffered by the patient.36
In the medical profession, specific norms or standards to protect the patient against
unreasonable risk, commonly referred to as standards of care, set the duty of the physician
to act in respect of the patient. Unfortunately, no clear definition of the duty of a particular
physician in a particular case exists. Because most medical malpractice cases are highly
technical, witnesses with special medical qualifications must provide guidance by giving the
knowledge necessary to render a fair and just verdict. As a result, the standard of medical
care of a prudent physician must be determined from expert testimony in most cases; and
in the case of a specialist (like an anesthesiologist), the standard of care by which the
specialist is judged is the care and skill commonly possessed and exercised by similar
specialists under similar circumstances. The specialty standard of care may be higher than
that required of the general practitioner.37
The standard of care is an objective standard by which the conduct of a physician sued for
negligence or malpractice may be measured, and it does not depend, therefore, on any
individual physician’s own knowledge either. In attempting to fix a standard by which a
court may determine whether the physician has properly performed the requisite duty
toward the patient, expert medical testimony from both plaintiff and defense experts is
required. The judge, as the trier of fact, ultimately determines the standard of care, after
listening to the testimony of all medical experts. 38
Here, the Prosecution presented no witnesses with special medical qualifications in
anesthesia to provide guidance to the trial court on what standard of care was applicable. It
would consequently be truly difficult, if not impossible, to determine whether the first three
elements of a negligence and malpractice action were attendant.
Although the Prosecution presented Dr. Benigno Sulit, Jr., an anesthesiologist himself who
served as the Chairman of the Committee on Ethics and Malpractice of the Philippine
Society of Anesthesiologists that investigated the complaint against Dr. Solidum, his
testimony mainly focused on how his Committee had conducted the investigation. 39 Even
then, the report of his Committee was favorable to Dr. Solidum, 40 to wit:
Presented for review by this committee is the case of a 3 year old male who underwent a
pull-thru operation and was administered general anesthesia by a team of anesthesia
residents. The patient, at the time when the surgeons was manipulating the recto-sigmoid
and pulling it down in preparation for the anastomosis, had bradycardia. The
anesthesiologists, sensing that the cause thereof was the triggering of the vago-vagal reflex,
administered atropine to block it but despite the administration of the drug in two doses,
cardiac arrest ensued. As the records show, prompt resuscitative measures were
administered and spontaneous cardiac function re-established in less than five (5) minutes
and that oxygen was continuously being administered throughout, unfortunately, as later
become manifest, patient suffered permanent irreversible brain damage.
In view of the actuations of the anaesthesiologists and the administration of anaesthesia,
the committee find that the same were all in accordance with the universally accepted

269
standards of medical care and there is no evidence of any fault or negligence on the part of
the anaesthesiologists.
Dr. Antonio Vertido, a Senior Medico-Legal Officer of the National Bureau of Investigation,
was also presented as a Prosecution witness, but his testimony concentrated on the results
of the physical examination he had conducted on Gerald, as borne out by the following
portions of his direct examination, to wit:
FISCAL CABARON Doctor, what do you mean by General Anesthetic Agent?
WITNESS General Anesthetic Agent is a substance used in the conduction of Anesthesia
and in this case, halothane was used as a sole anesthetic agent.
xxxx
Q Now under paragraph two of page 1 of your report you mentioned that after one hour and
45 minutes after the operation, the patient experienced a bradycardia or slowing of heart
rate, now as a doctor, would you be able to tell this Honorable Court as to what cause of
the slowing of heart rate as to Gerald Gercayo?
WITNESS Well honestly sir, I cannot give you the reason why there was a bradycardia of
time because is some reason one way or another that might caused bradycardia.
FISCAL CABARON What could be the possible reason?
A Well bradycardia can be caused by anesthetic agent itself and that is a possibility, we’re
talking about possibility here.
Q What other possibility do you have in mind, doctor?
A Well, because it was an operation, anything can happen within that situation.
FISCAL CABARON Now, this representation would like to ask you about the slowing of
heart rate, now what is the immediate cause of the slowing of the heart rate of a person?
WITNESS Well, one of the more practical reason why there is slowing of the heart rate is
when you do a vagal reflex in the neck wherein the vagal receptors are located at the lateral
part of the neck, when you press that, you produce the slowing of the heart rate that
produce bradycardia.
Q I am pro[p]ounding to you another question doctor, what about the deficiency in the
supply of oxygen by the patient, would that also cause the slowing of the heart rate?
A Well that is a possibility sir, I mean not as slowing of the heart rate, if there is a hypoxia
or there is a low oxygen level in the blood, the normal thing for the heart is to pump or to
do not a bradycardia but a … to counter act the Hypoxia that is being experienced by the
patient
(sic).
xxxx
Q Now, you made mention also doctor that the use of general anesthesia using 100%
halothane and other anesthetic medications probably were contributory to the production
of hypoxia.
A Yes, sir in general sir.41
On cross-examination, Dr. Vertido expounded more specifically on his interpretation of the
anesthesia record and the factors that could have caused Gerald to experience bradycardia,
viz:
ATTY. COMIA I noticed in, may I see your report Doctor, page 3, will you kindly read to this
Honorable court your last paragraph and if you will affirm that as if it is correct?
A "The use of General Anesthesia, that is using 100% Halothane probably will be
contributory to the production of Hypoxia and - - - -"
270
ATTY COMIA And do you affirm the figure you mentioned in this Court Doctor?
WITNESS Based on the records, I know the - - -
Q 100%?
A 100% based on the records.
Q I will show you doctor a clinical record. I am a lawyer I am not a doctor but will you
kindly look at this and tell me where is 100%, the word "one hundred" or 1-0-0, will you
kindly look at this Doctor, this Xerox copy if you can show to this Honorable Court and
even to this representation the word "one hundred" or 1-0-0 and then call me.
xxxx
ATTY. COMIA Doctor tell this Honorable Court where is that 100, 1-0-0 and if there is, you
just call me and even the attention of the Presiding Judge of this Court. Okay, you read one
by one.
WITNESS Well, are you only asking 100%, sir?
ATTY. COMIA I’m asking you, just answer my question, did you see there 100% and 100
figures, tell me, yes or no?
WITNESS I’m trying to look at the 100%, there is no 100% there sir.
ATTY. COMIA Okay, that was good, so you Honor please, may we request also temporarily,
because this is just a xerox copy presented by the fiscal, that the percentage here that the
Halothane administered by Dr. Solidum to the patient is 1% only so may we request that
this portion, temporarily your Honor, we are marking this anesthesia record as our Exhibit
1 and then this 1% Halothane also be bracketed and the same be marked as our Exhibit
"1-A".
xxxx
ATTY. COMIA Doctor, my attention was called also when you said that there are so many
factors that contributed to Hypoxia is that correct?
WITNESS Yes, sir.
Q I remember doctor, according to you there are so many factors that contributed to what
you call hypoxia and according to you, when this Gerald suffered hypoxia, there are other
factors that might lead to this Hypoxia at the time of this operation is that correct?
WITNESS The possibility is there, sir.
Q And according to you, it might also be the result of such other, some or it might be due
to operations being conducted by the doctor at the time when the operation is being done
might also contribute to that hypoxia is that correct?
A That is a possibility also.
xxxx
ATTY. COMIA How will you classify now the operation conducted to this Gerald, Doctor?
WITNESS Well, that is a major operation sir.
Q In other words, when you say major operation conducted to this Gerald, there is a
possibility that this Gerald might [be] exposed to some risk is that correct?
A That is a possibility sir.
Q And which according to you that Gerald suffered hypoxia is that correct?
A Yes, sir.
Q And that is one of the risk of that major operation is that correct?
A That is the risk sir.42
At the continuation of his cross-examination, Dr. Vertido maintained that Gerald’s
operation for his imperforate anus, considered a major operation, had exposed him to the
271
risk of suffering the same condition. 43 He then corrected his earlier finding that 100%
halothane had been administered on Gerald by saying that it should be 100% oxygen. 44
Dr. Solidum was criminally charged for "failing to monitor and regulate properly the levels
of anesthesia administered to said Gerald Albert Gercayo and using 100% halothane and
other anesthetic medications."45 However, the foregoing circumstances, taken together, did
not prove beyond reasonable doubt that Dr. Solidum had been recklessly imprudent in
administering the anesthetic agent to Gerald. Indeed, Dr. Vertido’s findings did not
preclude the probability that other factors related to Gerald’s major operation, which could
or could not necessarily be attributed to the administration of the anesthesia, had caused
the hypoxia and had then led Gerald to experience bradycardia. Dr. Vertido revealingly
concluded in his report, instead, that "although the anesthesiologist followed the normal
routine and precautionary procedures, still hypoxia and its corresponding side effects did
occur."46
The existence of the probability about other factors causing the hypoxia has engendered in
the mind of the Court a reasonable doubt as to Dr. Solidum’s guilt, and moves us to acquit
him of the crime of reckless imprudence resulting to serious physical injuries. "A
reasonable doubt of guilt," according to United States v. Youthsey: 47
x x x is a doubt growing reasonably out of evidence or the lack of it. It is not a captious
doubt; not a doubt engendered merely by sympathy for the unfortunate position of the
defendant, or a dislike to accept the responsibility of convicting a fellow man. If, having
weighed the evidence on both sides, you reach the conclusion that the defendant is guilty,
to that degree of certainty as would lead you to act on the faith of it in the most important
and crucial affairs of your life, you may properly convict him. Proof beyond reasonable
doubt is not proof to a mathematical demonstration. It is not proof beyond the possibility of
mistake.
We have to clarify that the acquittal of Dr. Solidum would not immediately exempt him
from civil liability.1âwphi1 But we cannot now find and declare him civilly liable because
the circumstances that have been established here do not present the factual and legal
bases for validly doing so. His acquittal did not derive only from reasonable doubt. There
was really no firm and competent showing how the injury to Gerard had been caused. That
meant that the manner of administration of the anesthesia by Dr. Solidum was not
necessarily the cause of the hypoxia that caused the bradycardia experienced by Gerard.
Consequently, to adjudge Dr. Solidum civilly liable would be to speculate on the cause of
the hypoxia. We are not allowed to do so, for civil liability must not rest on speculation but
on competent evidence.
Liability of Ospital ng Maynila
Although the result now reached has resolved the issue of civil liability, we have to address
the unusual decree of the RTC, as affirmed by the CA, of expressly holding Ospital ng
Maynila civilly liable jointly and severally with Dr. Solidum. The decree was flawed in logic
and in law.
In criminal prosecutions, the civil action for the recovery of civil liability that is deemed
instituted with the criminal action refers only to that arising from the offense charged. 48 It
is puzzling, therefore, how the RTC and the CA could have adjudged Ospital ng Maynila
jointly and severally liable with Dr. Solidum for the damages despite the obvious fact that
Ospital ng Maynila, being an artificial entity, had not been charged along with Dr. Solidum.
The lower courts thereby acted capriciously and whimsically, which rendered their
272
judgment against Ospital ng Maynila void as the product of grave abuse of discretion
amounting to lack of jurisdiction.
Not surprisingly, the flawed decree raises other material concerns that the RTC and the CA
overlooked. We deem it important, then, to express the following observations for the
instruction of the Bench and Bar.
For one, Ospital ng Maynila was not at all a party in the proceedings. Hence, its
fundamental right to be heard was not respected from the outset. The R TC and the CA
should have been alert to this fundamental defect. Verily, no person can be prejudiced by a
ruling rendered in an action or proceeding in which he was not made a party. Such a rule
would enforce the constitutional guarantee of due process of law.
Moreover, Ospital ng Maynila could be held civilly liable only when subsidiary liability
would be properly enforceable pursuant to Article 103 of the Revised Penal Code. But the
subsidiary liability seems far-fetched here. The conditions for subsidiary liability to attach
to Ospital ng Maynila should first be complied with. Firstly, pursuant to Article 103 of the
Revised Penal Code, Ospital ng Maynila must be shown to be a corporation "engaged in any
kind of industry." The term industry means any department or branch of art, occupation or
business, especially one that employs labor and capital, and is engaged in
industry.49 However, Ospital ng Maynila, being a public hospital, was not engaged in
industry conducted for profit but purely in charitable and humanitarian work. 50 Secondly,
assuming that Ospital ng Maynila was engaged in industry for profit, Dr. Solidum must be
shown to be an employee of Ospital ng Maynila acting in the discharge of his duties during
the operation on Gerald. Yet, he definitely was not such employee but a consultant of the
hospital. And, thirdly, assuming that civil liability was adjudged against Dr. Solidum as an
employee (which did not happen here), the execution against him was unsatisfied due to
his being insolvent.
WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES AND
SETS ASIDE the decision promulgated on January 20, 2010; ACQUITS Dr. Fernando P.
Solidum of the crime of reckless imprudence resulting to serious physical injuries; and
MAKES no pronouncement on costs of suit.
SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice
WE CONCUR:

G.R. No. 84516 December 5, 1989

DIONISIO CARPIO, petitioner,
vs.
HON. SERGIO DOROJA, (Presiding Judge, MTC, Branch IV, Zamboanga City) and
EDWIN RAMIREZ Y WEE, respondents.

PARAS, J.:
Before us is a petition to review by certiorari the decision of the Municipal Trial Court of
Zamboanga City, Branch IV, which denied petitioner's motion for subsidiary writ of
execution against the owner-operator of the vehicle which figured in the accident.
The facts of the case are undisputed.
273
Sometime on October 23, 1985, accused-respondent Edwin Ramirez, while driving a
passenger Fuso Jitney owned and operated by Eduardo Toribio, bumped Dionisio Carpio, a
pedestrian crossing the street, as a consequence of which the latter suffered from a
fractured left clavicle as reflected in the medico-legal certificate and sustained injuries
which required medical attention for a period of (3) three months.
An information for Reckless Imprudence Resulting to Serious Physical Injuries was filed
against Edwin Ramirez with the Municipal Trial Court of Zamboanga City, Branch IV. On
January 14, 1987, the accused voluntarily pleaded guilty to a lesser offense and was
accordingly convicted for Reckless Imprudence Resulting to Less Serious Physical Injuries
under an amended information punishable under Article 365 of the Revised Penal Code.
The dispositive portion of the decision handed down on May 27, 1987 reads as follows:
WHEREFORE, finding the accused EDWIN RAMIREZ y WEE guilty as a principal beyond
reasonable doubt of the Amended Information to which he voluntarily pleaded guilty and
appreciating this mitigating circumstance in his favor, hereby sentences him to suffer the
penalty of One (1) month and One (1) day to Two (2) months of Arresto Mayor in its
minimum period. The accused is likewise ordered to indemnify the complainant Dionisio A.
Carpio the amount of P45.00 representing the value of the 1/2 can of tomatoes lost; the
amount of P200.00 which complainant paid to the Zamboanga General Hospital, to pay
complainant the amount of Pl,500.00 as attorney's fees and to pay the cost of this suit. SO
ORDERED. (p. 7, Rollo)
Thereafter, the accused filed an application for probation.
At the early stage of the trial, the private prosecutor manifested his desire to present
evidence to establish the civil liability of either the accused driver or the owner-operator of
the vehicle. Accused's counsel moved that the court summon the owner of the vehicle to
afford the latter a day in court, on the ground that the accused is not only indigent but also
jobless and thus cannot answer any civil liability that may be imposed upon him by the
court. The private prosecutor, however, did not move for the appearance of Eduardo
Toribio.
The civil aspect of the above-quoted decision was appealed by the private prosecutor to the
Regional Trial Court Branch XVI, appellant praying for moral damages in the amount of P
10,000.00, compensatory damages at P6,186.40, and attorney's fees of P 5,000.00. The
appellate court, on January 20, 1988, modified the trial court's decision, granting the
appellant moral damages in the amount of Five Thousand Pesos (P 5,000.00), while
affirming all other civil liabilities.
Thereafter, a writ of execution dated March 10, 1988 was duly served upon the accused but
was, however, returned unsatisfied due to the insolvency of the accused as shown by the
sheriffs return. Thus, complainant moved for a subsidiary writ of execution against the
subsidiary liability of the owner-operator of the vehicle. The same was denied by the trial
court on two grounds, namely, the decision of the appellate court made no mention of the
subsidiary liability of Eduardo Toribio, and the nature of the accident falls under "culpa-
aquiliana" and not culpa-contractual." A motion for reconsideration of the said order was
disallowed for the reason that complainant having failed to raise the matter of subsidiary
liability with the appellate court, said court rendered its decision which has become final
and executory and the trial court has no power to alter or modify such decision.
Hence, the instant petition.

274
Petitioner relies heavily on the case of Pajarito v. Seneris, 87 SCRA 275, which enunciates
that "the subsidiary liability of the owner-operator is fixed by the judgment, because if a
case were to be filed against said operator, the court called upon to act thereto has no other
function than to render a decision based on the indemnity award in the criminal case
without power to amend or modify it even if in his opinion an error has been committed in
the decision." Petitioner maintains that the tenor of the aforesaid decision implies that the
subsidiary liability of the owner-operator may be enforced in the same proceeding and a
separate action is no longer necessary in order to avoid undue delay, notwithstanding the
fact that said employer was not made a party in the criminal action.
It is the theory of respondent that the owner-operator cannot be validly held subsidiarily
liable for the following reasons, namely: (a) the matter of subsidiary liability was not raised
on appeal; (b) contrary to the case of Pajarito v. Seneris, the injuries sustained by the
complainant did not arise from the so-called "culpa-contractual" but from "culpa-
aquiliana"; (c) the judgments of appellate courts may not be altered, modified, or changed
by the court of origin; and (d) said owner was never made a party to the criminal
proceedings.
Thus, the underlying issue raised in this case is; whether or not the subsidiary liability of
the owner-operator may be enforced in the same criminal proceeding against the driver
where the award was given, or in a separate civil action.
The law involved in the instant case is Article 103 in relation to Article 100, both of the
Revised Penal Code, which reads thus:
Art. 103. Subsidiary civil liability of other persons. The subsidiary liability established in
the next preceding article shall apply to employers, teachers, persons, and corporations
engaged in any kind of industry for felonies committed by their servants, pupils, workmen,
apprentices, or employees in the discharge of their duties.
Respondent contends that the case of Pajarito v. Seneris cannot be applied to the present
case, the former being an action involving culpa-contractual, while the latter being one of
culpa-aquiliana. Such a declaration is erroneous. The subsidiary liability in Art. 103 should
be distinguished from the primary liability of employers, which is quasi-delictual in
character as provided in Art. 2180 of the New Civil Code. Under Art. 103, the liability
emanated from a delict. On the other hand, the liability under Art. 2180 is founded on
culpa-aquiliana. The present case is neither an action for culpa-contractual nor for culpa-
aquiliana. This is basically an action to enforce the civil liability arising from crime under
Art. 100 of the Revised Penal Code. In no case can this be regarded as a civil action for the
primary liability of the employer under Art. 2180 of the New Civil Code, i.e., action
for culpa-aquiliana.
In order that an employer may be held subsidiarily liable for the employee's civil liability in
the criminal action, it should be shown (1) that the employer, etc. is engaged in any kind of
industry, (2) that the employee committed the offense in the discharge of his duties and (3)
that he is insolvent (Basa Marketing Corp. v. Bolinao, 117 SCRA 156). The subsidiary
liability of the employer, however, arises only after conviction of the employee in the
criminal action. All these requisites present, the employer becomes ipso facto subsidiarily
liable upon the employee's conviction and upon proof of the latter's insolvency. Needless to
say, the case at bar satisfies all these requirements.
Furthermore, we are not convinced that the owner-operator has been deprived of his day in
court, because the case before us is not one wherein the operator is sued for a primary
275
liability under the Civil Code but one in which the subsidiary civil liability incident to and
dependent upon his employee's criminal negligence is sought to be enforced. Considering
the subsidiary liability imposed upon the employer by law, he is in substance and in effect
a party to the criminal case. Ergo, the employer's subsidiary liability may be determined
and enforced in the criminal case as part of the execution proceedings against the
employee. This Court held in the earlier case of Pajarito v. Seneris, supra, that "The
proceeding for the enforcement of the subsidiary civil liability may be considered as part of
the proceeding for the execution of the judgment. A case in which an execution has been
issued is regarded as still pending so that all proceedings on the execution are proceedings
in the suit. There is no question that the court which rendered the judgment has a general
supervisory control over its process of execution, and this power carries with it the right to
determine every question of fact and law which may be involved in the execution."
The argument that the owner-operator cannot be held subsidiarily liable because the
matter of subsidiary liability was not raised on appeal and in like manner, the appellate
court's decision made no mention of such subsidiary liability is of no moment. As already
discussed, the filing of a separate complaint against the operator for recovery of subsidiary
liability is not necessary since his liability is clear from the decision against the accused.
Such being the case, it is not indispensable for the question of subsidiary liability to be
passed upon by the appellate court. Such subsidiary liability is already implied from the
appellate court's decision. In the recent case of Vda. de Paman v. Seneris, 115 SCRA 709,
this Court reiterated the following pronouncement: "A judgment of conviction sentencing a
defendant employer to pay an indemnity in the absence of any collusion between the
defendant and the offended party, is conclusive upon the employer in an action for the
enforcement of the latter's subsidiary liability not only with regard to the civil liability, but
also with regard to its amount." This being the case, this Court stated in Rotea v. Halili, 109
Phil. 495, "that the court has no other function than to render decision based upon the
indemnity awarded in the criminal case and has no power to amend or modify it even if in
its opinion an error has been committed in the decision. A separate and independent action
is, therefore, unnecessary and would only unduly prolong the agony of the heirs of the
victim."
Finally, the position taken by the respondent appellate court that to grant the motion for
subsidiary writ of execution would in effect be to amend its decision which has already
become final and executory cannot be sustained. Compelling the owner-operator to pay on
the basis of his subsidiary liability does not constitute an amendment of the judgment
because in an action under Art. 103 of the Revised Penal Code, once all the requisites as
earlier discussed are met, the employer becomes ipso facto subsidiarily liable, without need
of a separate action. Such being the case, the subsidiary liability can be enforced in the
same case where the award was given, and this does not constitute an act of amending the
decision. It becomes incumbent upon the court to grant a motion for subsidiary writ of
execution (but only after the employer has been heard), upon conviction of the employee
and after execution is returned unsatisfied due to the employee's insolvency.
WHEREFORE, the order of respondent court disallowing the motion for subsidiary writ of
execution is hereby SET ASIDE. The Court a quo is directed to hear and decide in the same
proceeding the subsidiary liability of the alleged owner-operator of the passenger jitney.
Costs against private respondent.
SO ORDERED.
276
Padilla, Sarmiento and Regalado, JJ., concur.
Melencio-Herrera, J., is on leave.

G.R. No. 158995             September 26, 2006

L.G. FOODS CORPORATION and VICTORINO GABOR, Vice-President and General
Manager, petitioners,
vs.
HON. PHILADELFA B. PAGAPONG-AGRAVIADOR, in her capacity as Presiding Judge of
Regional Trial Court, Branch 43, Bacolod City, and SPS. FLORENTINO and THERESA
VALLEJERA, respondents.
DECISION
GARCIA, J.:
Assailed and sought to be set aside in this petition for review on certiorari is the
Decision1 dated April 25, 2003 of the Court of Appeals (CA), as reiterated in its Resolution
of July 10, 2003,2 in CA-G.R. SP No. 67600, affirming an earlier Order of the Regional Trial
Court (RTC) of Bacolod City, Branch 43, which denied the petitioners' motion to dismiss in
Civil Case No. 99-10845, an action for damages arising from a vehicular accident thereat
instituted by the herein private respondents - the spouses Florentino Vallejera and Theresa
Vallejera - against the petitioners.
The antecedent facts may be briefly stated as follows:
On February 26, 1996, Charles Vallereja, a 7-year old son of the spouses Florentino
Vallejera and Theresa Vallejera, was hit by a Ford Fiera van owned by the petitioners and
driven at the time by their employee, Vincent Norman Yeneza y Ferrer. Charles died as a
result of the accident.
In time, an Information for Reckless Imprudence Resulting to Homicide was filed against the
driver before the Municipal Trial Court in Cities (MTCC), Bacolod City, docketed as
Criminal Case No. 67787, entitled People of the Philippines v. Vincent Norman Yeneza.
Unfortunately, before the trial could be concluded, the accused driver committed suicide,
evidently bothered by conscience and remorse. On account thereof, the MTCC, in its order
of September 30, 1998, dismissed the criminal case.
On June 23, 1999, in the RTC of Bacolod City, the spouses Vallejera filed a complaint 3 for
damages against the petitioners as employers of the deceased driver, basically alleging that
as such employers, they failed to exercise due diligence in the selection and supervision of
their employees. Thereat docketed as Civil Case No. 99-10845, the complaint was raffled to
Branch 43 of the court.
In their Answer with Compulsory Counterclaim,4 the petitioners as defendants denied
liability for the death of the Vallejeras' 7-year old son, claiming that they had exercised the
required due diligence in the selection and supervision of their employees, including the
deceased driver. They thus prayed in their Answer for the dismissal of the complaint for
lack of cause of action on the part of the Vallejera couple.
During pre-trial, the defendant petitioners insisted that their dismissal prayer be resolved.
Hence, the trial court required them to file within ten days a memorandum of authorities
supportive of their position.
Instead, however, of the required memorandum of authorities, the defendant petitioners
filed a Motion to Dismiss, principally arguing that the complaint is basically a "claim for
277
subsidiary liability against an employer" under the provision of Article 103 5 of the Revised
Penal Code. Prescinding therefrom, they contend that there must first be a judgment of
conviction against their driver as a condition sine qua non to hold them liable. Ergo, since
the driver died during the pendency of the criminal action, the sine qua non condition for
their subsidiary liability was not fulfilled, hence the of lack of cause of action on the part of
the plaintiffs. They further argue that since the plaintiffs did not make a reservation to
institute a separate action for damages when the criminal case was filed, the damage suit
in question is thereby deemed instituted with the criminal action. which was already
dismissed.
In an Order dated September 4, 2001, 6 the trial court denied the motion to dismiss for lack
of merit and set the case for pre-trial. With their motion for reconsideration having been
denied by the same court in its subsequent order 7 of September 26, 2001, the petitioners
then went on certiorari to the CA in CA-G.R. SP No. 67600, imputing grave abuse of
discretion on the part of the trial judge in refusing to dismiss the basic complaint for
damages in Civil Case No. 99-10845.
In the herein assailed decision8 dated April 25, 2003, the CA denied the petition and upheld
the trial court. Partly says the CA in its challenged issuance:
xxx       xxx       xxx
It is clear that the complaint neither represents nor implies that the responsibility
charged was the petitioner's subsidiary liability under Art. 103, Revised Penal Code.
As pointed out [by the trial court] in the Order of September 4, 2001,
the complaint does not even allege the basic elements for such a liability, like the
conviction of the accused employee and his insolvency. Truly enough, a civil action to
enforce subsidiary liability separate and distinct from the criminal action is even
unnecessary.
xxx       xxx       xxx
Specifically, Civil Case No. 99-10845 exacts responsibility for fault or negligence
under Art. 2176, Civil Code, which is entirely separate and distinct from the civil
liability arising from negligence under the Revised Penal Code. Verily, therefore, the
liability under Art. 2180, Civil Code, is direct and immediate, and not conditioned
upon prior recourse against the negligent employee or prior showing of the latter's
insolvency. (Underscoring in the original.)
In time, the petitioners moved for a reconsideration but their motion was denied by the CA
in its resolution9 of July 10, 2003. Hence, the petitioners' present recourse on their
submission that the appellate court committed reversible error in upholding the trial
court's denial of their motion to dismiss.
We DENY.
As the Court sees it, the sole issue for resolution is whether the spouses Vallejeras' cause of
action in Civil Case No. 99-10845 is founded on Article 103 of the Revised Penal Code, as
maintained by the petitioners, or derived from Article 2180 10 of the Civil Code, as ruled by
the two courts below.
It thus behooves us to examine the allegations of the complaint for damages in Civil Case
No. 99-10845. That complaint alleged, inter alia, as follows:
xxx       xxx       xxx

278
 3. That defendant [LG Food Corporation] is the registered owner of a Ford Fiera Van
with Plate No. NMS 881 and employer sometime February of 1996 of one Vincent
Norman Yeneza y Ferrer, a salesman of said corporation;
4. That sometime February 26, 1996 at around 2:00 P.M. at Rosario St., Bacolod
City, the minor son of said plaintiffs [now respondents], Charles Vallejera, 7 years
old, was hit and bumped by above-described vehicle then driven by said employee,
Vincent Norman Yeneza y Ferrer;
5. That the mishap was due to the gross fault and negligence of defendant's
employee, who drove said vehicle, recklessly, negligently and at a high speed without
regard to traffic condition and safety of other road users and likewise to the fault and
negligence of the owner employer, herein defendants LG Food Corporation who failed
to exercise due diligence in the selection and supervision of his employee, Vincent
Norman Yeneza y Ferrer;
6. That as a result of said incident, plaintiffs' son suffered multiple body injuries
which led to his untimely demise on that very day;
7. That a criminal case was filed against the defendant's employee, docketed as
Criminal Case No. 67787, (earlier filed as Crim. Case No. 96-17570 before RTC)
before MTC-Branch III, entitled "People v. Yeneza" for "Reckless Imprudence resulting
to Homicide," but the same was dismissed because pending litigation, then remorse-
stricken [accused] committed suicide;
xxx xxx xxx
8. That the injuries and complications as well as the resultant death suffered by the
late minor Charles Vallejera were due to the negligence and imprudence of
defendant's employee;
9. That defendant LG Foods Corporation is civilly liable for the
negligence/imprudence of its employee since it failed to exercise the necessary
diligence required of a good father of the family in the selection and
supervision of his employee, Vincent Norman Yeneza y Ferrer which diligence if
exercised, would have prevented said incident. (Bracketed words and emphasis
ours.)
Nothing in the foregoing allegations suggests, even remotely, that the herein petitioners are
being made to account for their subsidiary liability under Article 103 of the Revised Penal
Code. As correctly pointed out by the trial court in its order of September 4, 2001 denying
the petitioners' Motion to Dismiss, the complaint did not even aver the basic elements for
the subsidiary liability of an employer under Article 103 of the Revised Penal Code, such as
the prior conviction of the driver in the criminal case filed against him nor his insolvency.
Admittedly, the complaint did not explicitly state that plaintiff Vallejeras were suing the
defendant petitioners for damages based on quasi-delict. Clear it is, however, from the
allegations of the complaint that quasi-delict was their choice of remedy against the
petitioners. To stress, the plaintiff spouses alleged in their complaint gross fault and
negligence on the part of the driver and the failure of the petitioners, as employers, to
exercise due diligence in the selection and supervision of their employees. The spouses
further alleged that the petitioners are civilly liable for the negligence/imprudence of their
driver since they failed to exercise the necessary diligence required of a good father of the
family in the selection and supervision of their employees, which diligence, if exercised,

279
could have prevented the vehicular accident that resulted to the death of their 7-year old
son.
Section 2, Rule 2, of the 1997 Rules of Civil Procedure defines cause of action as the "act or
omission by which a party violates the right of another." Such act or omission gives rise to
an obligation which may come from law, contracts, quasi contracts, delicts or quasi-
delicts.11
Corollarily, an act or omission causing damage to another may give rise to two separate
civil liabilities on the part of the offender, i.e., 1) civil liability ex delicto;12 and 2)
independent civil liabilities, such as those (a) not arising from an act or omission
complained of as felony (e.g., culpa contractual or obligations arising from law; 13 the
intentional torts;14 and culpa aquiliana15); or (b) where the injured party is granted a right to
file an action independent and distinct from the criminal action. 16 Either of these two
possible liabilities may be enforced against the offender. 17
Stated otherwise, victims of negligence or their heirs have a choice between an action to
enforce the civil liability arising from culpa criminal under Article 100 of the Revised Penal
Code, and an action for quasi-delict (culpa aquiliana) under Articles 2176 to 2194 of the
Civil Code. If, as here, the action chosen is for quasi-delict, the plaintiff may hold the
employer liable for the negligent act of its employee, subject to the employer's defense of
exercise of the diligence of a good father of the family. On the other hand, if the action
chosen is for culpa criminal, the plaintiff can hold the employer subsidiarily liable only upon
proof of prior conviction of its employee.18
Article 116119 of the Civil Code provides that civil obligation arising from criminal offenses
shall be governed by penal laws subject to the provision of Article 2177 20 and of the
pertinent provision of Chapter 2, Preliminary Title on Human Relation, and of Title XVIII of
this Book, regulating damages. Plainly, Article 2177 provides for the alternative remedies
the plaintiff may choose from in case the obligation has the possibility of arising indirectly
from the delict/crime or directly from quasi-delict/tort. The choice is with the plaintiff who
makes known his cause of action in his initiatory pleading or complaint, 21 and not with the
defendant who can not ask for the dismissal of the plaintiff's cause of action or lack of it
based on the defendant's perception that the plaintiff should have opted to file a claim
under Article 103 of the Revised Penal Code.
Under Article 2180 of the Civil Code, the liability of the employer is direct or immediate. It
is not conditioned upon prior recourse against the negligent employee and a prior showing
of insolvency of such employee.22
Here, the complaint sufficiently alleged that the death of the couple's minor son was caused
by the negligent act of the petitioners' driver; and that the petitioners themselves were
civilly liable for the negligence of their driver for failing "to exercise the necessary diligence
required of a good father of the family in the selection and supervision of [their] employee,
the driver, which diligence, if exercised, would have prevented said accident."
Had the respondent spouses elected to sue the petitioners based on Article 103 of the
Revised Penal Code, they would have alleged that the guilt of the driver had been proven
beyond reasonable doubt; that such accused driver is insolvent; that it is the subsidiary
liability of the defendant petitioners as employers to pay for the damage done by their
employee (driver) based on the principle that every person criminally liable is also civilly
liable.23 Since there was no conviction in the criminal case against the driver, precisely
because death intervened prior to the termination of the criminal proceedings, the spouses'
280
recourse was, therefore, to sue the petitioners for their direct and primary liability based
on quasi-delict.
Besides, it is worthy to note that the petitioners, in their Answer with Compulsory Counter-
Claim,24 repeatedly made mention of Article 2180 of the Civil Code and anchored their
defense on their allegation that "they had exercised due diligence in the selection and
supervision of [their] employees." The Court views this defense as an admission that indeed
the petitioners acknowledged the private respondents' cause of action as one for quasi-
delict under Article 2180 of the Civil Code.
All told, Civil Case No. 99-10845 is a negligence suit brought under Article 2176 - Civil
Code to recover damages primarily from the petitioners as employers responsible for their
negligent driver pursuant to Article 2180 of the Civil Code. The obligation imposed by
Article 2176 is demandable not only for one's own acts or omissions, but also for those of
persons for whom one is responsible. Thus, the employer is liable for damages caused by
his employees and household helpers acting within the scope of their assigned tasks, even
though the former is not engaged in any business or industry.
Citing Maniago v. CA,25 petitioner would argue that Civil Case No. 99-10845 should have
been dismissed for failure of the respondent spouses to make a reservation to institute a
separate civil action for damages when the criminal case against the driver was filed.
The argument is specious.
To start with, the petitioners' reliance on Maniago is obviously misplaced. There, the civil
case was filed while the criminal case against the employee was still pending. Here, the
criminal case against the employee driver was prematurely terminated due to his death.
Precisely, Civil Case No. 99-10845 was filed by the respondent spouses because no remedy
can be obtained by them against the petitioners with the dismissal of the criminal case
against their driver during the pendency thereof.
The circumstance that no reservation to institute a separate civil action for damages was
made when the criminal case was filed is of no moment for the simple reason that the
criminal case was dismissed without any pronouncement having been made therein. In
reality, therefor, it is as if there was no criminal case to speak of in the first place. And for
the petitioners to insist for the conviction of their driver as a condition sine qua non to hold
them liable for damages is to ask for the impossible.
IN VIEW WHEREOF, the instant petition is DENIED for lack of merit.
Costs against the petitioners.
SO ORDERED.
Puno, Chairperson, Sandoval-Gutierrez, Corona, Azcuna, J.J., concur.

Footnotes
1
 Penned by Associate Justice Lucas P. Bersamin with Associate Justices Ruben T.
Reyes (now Presiding Justice) and Elvi John Asuncion, concurring. Rollo, pp. 17-22.
2
 Id. at 23.
3
 Id. at 93-98.
4
 Id. at 85-91.
5
 Article 103. Subsidiary civil liability of other persons. – The subsidiary liability
established in the next preceding article shall also apply to employers, teachers,
persons and corporations engaged in any kind of industry for felonies committed by
281
 their servants, pupils, workmen, apprentices, or employees in the discharge of their
duties.
6
 Rollo, pp. 71-74.
7
 Id. at 65.
8
 Supra note 1.

[G.R. Nos. 79050-51. November 14, 1989.]

PANTRANCO NORTH EXPRESS, INC., Petitioner, v. MARICAR BASCOS BAESA, thru

her personal guardian FRANCISCA O. BASCOS, FE O. ICO, in her behalf and in behalf
of her minor children, namely ERWIN, OLIVE, EDMUNDO and SHARON
ICO, Respondents.

Efren N. Ambrosio & Associates for petitioner PNEI.

Emiliano S. Micu for Respondents.

SYLLABUS

1. CIVIL LAW; DAMAGES; LAST CLEAR CHANCE DOCTRINE; WHEN APPLICABLE. — The
doctrine of last clear chance applies only in a situation where the defendant, having the last
fair chance to avoid the impending harm and failed to do so, becomes liable for all the
consequences of the accident notwithstanding the prior negligence of the plaintiff.

2. ID.; ID.; ID.; CONDITION TO MAKE DOCTRINE APPLICABLE. — In order that the
doctrine of last clear chance may be applied, it must be shown that the person who
allegedly had the last opportunity to avert the accident was aware of the existence of the
peril or with exercise of due care should have been aware of it.

3. ID.; ID.; ID.; NOT APPLICABLE TO PERSON ACTING INSTANTANEOUSLY OR BY

AVAILABLE MEANS. — This doctrine of last chance has no application to a case where a
person is to act instantaneously, and if the injury cannot be avoided by using all means
available after the peril is or should have been discovered.

4. ID.; ID.; PROVISION OF R.A. NO. 4136 RE VEHICLE ENTERING A THROUGH HIGHWAY
OR A STOP INTERSECTION. — Section 43 (c), Article III, Chapter IV of Republic Act No.
1436 cannot apply to case a bar where at the time of the accident, the jeepney had already
crossed the intersection.

5. ID.; ID.; NEGLIGENCE; BURDEN OF PROOF LIES ON THE EMPLOYER. — A finding of

negligence on the part of the driver establishes a presumption that the employer has been
negligent and the latter has the burden of proof that it has exercised due negligence not
only in the selection of its employees but also in adequately supervising their work.

6. ID.; ID.; FAILURE TO PRESENT EVIDENCE TO SUPPORT CLAIM FOR DAMAGES. —

282
Plaintiff’s failure to present documentary evidence to support their claim for damages for
loss of earning capacity of the deceased victim does not bar recovery of the damages, if
such loss may be based sufficiently on their testimonies.

7. ID.; ID.; INDEMNITY FIXED AT P30,000. — The indemnity for the death of a person was
fixed by this Court at (P30,000.00).

DECISION

CORTES, J.:

In this Petition, Pantranco North Express Inc. (PANTRANCO), asks the Court to review the
decision of the Court of Appeals in CA-G.R. No. 05494-95 which affirmed the decisions of
the Court of First Instance of Rosales, Pangasinan in Civil Case No. 561-R and Civil Case
No. 589-R wherein PANTRANCO was ordered to pay damages and attorney’s fees to herein
private respondents.chanrobles virtual lawlibrary

The pertinent fact are as follows:chanrob1es virtual 1aw library

At about 7:00 o’clock in the morning of June 12, 1981, the spouses Ceasar and Marilyn
Baesa and their children Harold Jim, Marcelino and Maricar, together with spouses David
Ico and Fe O. Ico with their son Erwin Ico and seven other persons, were aboard a
passenger jeepney on their way to a picnic at Malalam River, Ilagan, Isabela, to celebrate
the fifth wedding anniversary of Ceasar and Marilyn Baesa.

The group, numbering fifteen (15) persons, rode in the passenger jeepney driven by David
Ico, who was also the registered owner thereof. From Ilagan, Isabela, they proceeded to
Barrio Capayacan to deliver some viands to one Mrs. Bascos and thenceforth to San Felipe,
taking the highway going to Malalam River. Upon reaching the highway, the jeepney turned
right and proceeded to Malalam River at a speed of about 20 kph. While they were
proceeding towards Malalam River, a speeding PANTRANCO bus from Aparri, on its regular
route to Manila, encroached on the jeepney’s lane while negotiating a curve, and collided
with it.

As a result of the accident David Ico, spouses Ceasar Baesa and Marilyn Baesa and their
children, Harold Jim and Marcelino Baesa, died while the rest of the passengers suffered
injuries. The jeepney was extensively damaged. After the accident the driver of the
PANTRANCO Bus, Ambrosio Ramirez, boarded a car and proceeded to Santiago, Isabela.
From that time on up to the present, Ramirez has never been seen and has apparently
remained in hiding.

All the victims and/or their surviving heirs except herein private respondents settled the
case amicably under the "No Fault" insurance coverage of PANTRANCO.
283
Maricar Baesa through her guardian Francisca O. Bascos and Fe O. Ico for herself and for
her minor children, filed separate actions for damages arising from quasi-delict against
PANTRANCO, respectively docketed as Civil Case No. 561-R and 589-R of the Court of First
Instance of Pangasinan.

In its answer, PANTRANCO, aside from pointing to the late David Ico’s alleged negligence as
the proximate cause of the accident, invoked the defense of due diligence in the selection
and supervision of its driver, Ambrosio Ramirez.chanroblesvirtualawlibrary

On July 3, 1984, the CFI of Pangasinan rendered a decision against PANTRANCO awarding
the total amount of Two Million Three Hundred Four Thousand Six Hundred Forty-Seven
(P2,304,647.00) as damages, plus 10% thereof as attorney’s fees and costs to Maricar
Baesa in Civil Case No. 561-R, and the total amount of Six Hundred Fifty Two Thousand
Six Hundred Seventy-Two Pesos (P652,672.00) as damages, plus 10% thereof as attorney’s
fees and costs to Fe Ico and her children in Civil Case No. 589-R. On appeal, the cases were
consolidated and the Court of Appeals modified the decision of the trial court by ordering
PANTRANCO to pay the total amount of One Million One Hundred Eighty-Nine Thousand
Nine Hundred Twenty Seven Pesos (P1,189,927.00) as damages, plus Twenty Thousand
Pesos (P20,000.00) as attorney’s fees to Maricar Baesa, and the total amount of Three
Hundred Forty-Four Thousand Pesos (P344,000.00) plus Ten Thousand Pesos (P10,000.00)
as attorney’s fees to Fe Ico and her children, and to pay the costs in both cases. The
dispositive portion of the assailed decision reads as follows:chanrob1es virtual 1aw library

WHEREFORE, the decision appealed from is hereby modified by ordering the defendant
PANTRANCO North Express, Inc. to pay:chanrob1es virtual 1aw library

I. The plaintiff in Civil Case No. 561-R, Maricar Bascos Baesa, the following
damages:chanrob1es virtual 1aw library

A) As compensatory damages for the death of Ceasar Baesa — P30,000.00;

B) As compensatory damages for the death of Marilyn Baesa — P30,000.00;

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

D) For the loss of earnings of Ceasar Baesa — P630,000.00;

E) For the loss of earnings of Marilyn Bascos Baesa — P375,000.00;

F) For the burial expenses of the deceased Ceasar and Marilyn Baesa — P41,200.00;

G) For hospitalization expenses of Maricar Baesa — P3,727.00;

H) As moral damages — P50,000.00;

284
I) As attorney’s fees — P20,000.00;

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

A) As compensatory damages for the death of David Ico — P30,000.00;

B) For loss of earning capacity of David Ico — P252,000.00;

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

D) As payment for the jeepney — P20,000.00;

E) For the hospitalization of Fe Ico — P12,000.000;

F) And for attorney’s fees — P10,000.00;

and to pay the costs in both cases.

The amount of P25,000 paid to Maricar Bascos Baesa, plaintiff in Civil Case No. 561-R, and
the medical expenses in the sum of P3,273.55, should be deducted from the award in her
favor.chanrobles virtual lawlibrary

All the foregoing amounts herein awarded except the costs shall earn interest at the legal
rate from date of this decision until fully paid. [CA Decision, pp. 14-15; Rollo, pp. 57-58.]

PANTRANCO filed a motion for reconsideration of the Court of Appeal’s decision, but on
June 26, 1987, it denied the same for lack of merit. PANTRANCO then filed the instant
petition for review.
I

Petitioner faults the Court of Appeals for not applying the doctrine of the "last clear chance"
against the jeepney driver. Petitioner claims that under the circumstances of the case, it
was the driver of the passenger jeepney who had the last clear chance to avoid the collision
and was therefore negligent in failing to utilize with reasonable care and competence his
then existing opportunity to avoid the harm.

The doctrine of the last clear chance was defined by this Court in the case of Ong v.
Metropolitan Water District, 104 Phil. 397 (1958), in this wise:chanrob1es virtual 1aw
library

The doctrine of the last clear chance simply, means that the negligence of a claimant does
not preclude a recovery for the negligence of defendant where it appears that the latter, by
exercising reasonable care and prudence, might have avoided injurious consequences to
285
claimant notwithstanding his negligence.

The doctrine applies only in a situation where the plaintiff was guilty of prior or antecedent
negligence but the defendant, who had the last fair chance to avoid the impending harm
and failed to do so, is made liable for all the consequences of the accident notwithstanding
the prior negligence of the plaintiff [Picart v. Smith, 37 Phil. 809 (1918); Glan People’s
Lumber and Hardware, Et. Al. v. Intermediate Appellate Court, Cecilia Alferez Vda. de
Calibo, Et Al., G.R. No. 70493, May 18, 1989]. The subsequent negligence of the defendant
in failing to exercise ordinary care to avoid injury to plaintiff becomes the immediate or
proximate cause of the accident which intervenes between the accident and the more
remote negligence of the plaintiff, thus making the defendant liable to the plaintiff [Picart v.
Smith, supra].

Generally, the last clear chance doctrine is invoked for the purpose of making a defendant
liable to a plaintiff who was guilty of prior or antecedent negligence, although it may also be
raised as a defense to defeat claim for damages.chanrobles lawlibrary : rednad

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

The above contention of petitioner is manifestly devoid of merit.

Contrary to the petitioner’s contention, the doctrine of "last clear chance" finds no
application in this case. For the doctrine to be applicable, it is necessary to show that the
person who allegedly had the last opportunity to avert the accident was aware of the
existence of the peril or should, with exercise of due care, have been aware of it. One
cannot be expected to avoid an accident or injury if he does not know or could not have
known the existence of the peril. In this case, there is nothing to show that the jeepney
driver David Ico knew of the impending danger. When he saw at a distance that the
approaching bus was encroaching on his lane, he did not immediately swerve the jeepney
to the dirt shoulder on his right since he must have assumed that the bus driver will return
the bus to its own lane upon seeing the jeepney approaching from the opposite direction.
As held by this Court in the case of Vda. De Bonifacio v. BLTB, G.R. No. L-26810, August
31, 1970, 34 SCRA 618, a motorist who is properly proceeding on his own side of the
highway is generally entitled to assume that an approaching vehicle coming towards him
on the wrong side, will return to his proper lane of traffic. There was nothing to indicate to
David Ico that the bus could not return to its own lane or was prevented from returning to
the proper lane by anything beyond the control of its driver. Leo Marantan, an alternate
driver of the Pantranco bus who was seated beside the driver Ramirez at the time of the
accident, testified that Ramirez had no choice but to swerve the steering wheel to the left
and encroach on the jeepney’s lane because there was a steep precipice on the right [CA
286
Decision, p. 2; Rollo, p. 45]. However, this is belied by the evidence on record which clearly
shows that there was enough space to swerve the bus back to its own lane without any
danger [CA Decision, p. 7; Rollo, p. 50].

Moreover, both the trial court and the Court of Appeals found that at the time of the
accident the Pantranco bus was speeding towards Manila [CA Decision, p. 2; Rollo, p. 45].
By the time David Ico must have realized that the bus was not returning to its own lane, it
was already too late to swerve the jeepney to his right to prevent an accident. The speed at
which the approaching bus was running prevented David Ico from swerving the jeepney to
the right shoulder of the road in time to avoid the collision. Thus, even assuming that the
jeepney driver perceived the danger a few seconds before the actual collision, he had no
opportunity to avoid it. This Court has held that the last clear chance doctrine "can never
apply where the party charged is required to act instantaneously, and if the injury cannot
be avoided by the application of all means at hand after the peril is or should have been
discovered" [Ong v. Metropolitan Water District, supra].chanrobles.com : virtual law library

Petitioner likewise insists that David Ico was negligent in failing to observe Section 43 (c),
Article III Chapter IV of Republic Act No. 4136 * which provides that the driver of a vehicle
entering a through highway or a stop intersection shall yield the right of way to all vehicles
approaching in either direction on such through highway.

Petitioner’s misplaced reliance on the aforesaid law is readily apparent in this case. The
cited law itself provides that it applies only to vehicles entering a through highway or a stop
intersection. At the time of the accident, the jeepney had already crossed the intersection
and was on its way to Malalam River. Petitioner itself cited Fe Ico’s testimony that the
accident occurred after the jeepney had travelled a distance of about two (2) meters from
the point of intersection [Petition p. 10; Rollo, p. 27]. In fact, even the witness for the
petitioner, Leo Marantan, testified that both vehicles were coming from opposite directions
[CA Decision, p. 7; Rollo, p. 50], clearly indicating that the jeepney had already crossed the
intersection.

Considering the foregoing, the Court finds that the negligence of petitioner’s driver in
encroaching into the lane of the incoming jeepney and in failing to return the bus to its own
lane immediately upon seeing the jeepney coming from the opposite direction was the sole
and proximate cause of the accident without which the collision would not have occurred.
There was no supervening or intervening negligence on the part of the jeepney driver which
would have made the prior negligence of petitioner’s driver a mere remote cause of the
accident.
II

On the issue of its liability as an employer, petitioner claims that it had observed the
diligence of a good father of a family to prevent damage, conformably to the last paragraph
of Article 2180 of the Civil Code. Petitioner adduced evidence to show that in hiring its
drivers, the latter are required to have professional driver’s license and police clearance.
The drivers must also pass written examinations, interviews and practical driving tests, and
287
are required to undergo a six-month training period. Rodrigo San Pedro, petitioner’s
Training Coordinator, testified on petitioner’s policy of conducting regular and continuing
training programs and safety seminars for its drivers, conductors, inspectors and
supervisors at a frequency rate of at least two (2) seminars a month.

On this point, the Court quotes with approval the following findings of the trial court which
was adopted by the Court of Appeals in its challenged decision:chanrob1es virtual 1aw
library

When an injury is caused by the negligence of an employee, there instantly arises a

presumption that the employer has been negligent either in the selection of his employees
or in the supervision over their acts. Although this presumption is only a disputable
presumption which could be overcome by proof of diligence of a good father of a family, this
Court believes that the evidence submitted by the defendant to show that it exercised the
diligence of a good father of a family in the case of Ramirez, as a company driver is far from
sufficient. No support evidence has been adduced. The professional driver’s license of
Ramirez has not been produced. There is no proof that he is between 25 to 38 years old.
There is also no proof as to his educational attainment, his age, his weight and the fact that
he is married or not. Neither are the result of the written test, psychological and physical
test, among other tests, have been submitted in evidence [sic]. His NBI or police clearances
and clearances from previous employment were not marked in evidence. No evidence was
presented that Ramirez actually and really attended the seminars. Vital evidence should
have been the certificate of attendance or certificate of participation or evidence of such
participation like a logbook signed by the trainees when they attended the seminars. If
such records are not available, the testimony of the classmates that Ramirez was their
classmate in said seminar (should have been presented) [CA Decision, pp. 8-9; Rollo, pp.
51-52].chanrobles law library

Petitioner contends that the fact that Ambrosio Ramirez was employed and remained as its
driver only means that he underwent the same rigid selection process and was subjected to
the same strict supervision imposed by petitioner on all applicants and employees. It is
argued by the petitioner that unless proven otherwise, it is presumed that petitioner
observed its usual recruitment procedure and company polices on safety and efficiency
[Petition, p. 20; Rollo, p. 37].

The Court finds the above contention unmeritorious.

The finding of negligence on the part of its driver Ambrosio Ramirez gave rise to the
presumption of negligence on the part of petitioner and the burden of proving that it
exercised due diligence not only in the selection of its employees but also in adequately
supervising their work rests with the petitioner [Lilius v. Manila Railroad Company, 59 Phil.
758 (1934); Umali v. Bacani, G.R. No. L-40570, June 30, 1976, 69 SCRA 623]. Contrary to
petitioner’s claim, there is no presumption that the usual recruitment procedures and
safety standards were observed. The mere issuance of rules and regulations and the
formulation of various company policies on safety, without showing that they are being
complied with, are not sufficient to exempt petitioner from liability arising from the
288
negligence of its employee. It is incumbent upon petitioner to show that in recruiting and
employing the erring driver, the recruitment procedures and company policies on efficiency
and safety were followed. Petitioner failed to do this. Hence, the Court finds no cogent
reason to disturb the finding of both the trial court and the Court of Appeals that the
evidence presented by the petitioner, which consists mainly of the uncorroborated
testimony of its Training Coordinator, is insufficient to overcome the presumption of
negligence against petitioner.cralawnad
III

On the question of damages, petitioner claims that the Court of Appeals erred in fixing the
damages for the loss of earning capacity of the deceased victims. Petitioner assails
respondent court’s findings because no documentary evidence in support thereof, such as
income tax returns, pay-rolls, pay slips or invoices obtained in the usual course of
business, were presented [Petition, p. 22; Rollo, p. 39]. Petitioner argues that the "bare and
self-serving testimonies of the wife of the deceased David Ico and the mother of the
deceased Marilyn Baesa . . . have no probative value to sustain in law the Court of Appeals’
conclusion on the respective earnings of the deceased victims." [Petition, pp. 21-22; Rollo,
pp. 38-39.] It is petitioner’s contention that the evidence presented by the private
respondent does not meet the requirements of clear and satisfactory evidence to prove
actual and compensatory damages.

The Court finds that the Court of Appeals committed no reversible error in fixing the
amount of damages for the loss of earning capacity of the deceased victims. While it is true
that private respondents should have presented documentary evidence to support their
claim for damages for loss of earning capacity of the deceased victims, the absence thereof
does not necessarily bar the recovery of the damages in question. The testimony of Fe Ico
and Francisca Bascos as to the earning capacity of David Ico, and the spouses Baesa,
respectively, are sufficient to establish a basis from which the court can make a fair and
reasonable estimate of the damages for the loss of earning capacity of the three deceased
victims. Moreover, in fixing the damages for loss of earning capacity of a deceased victim,
the court can consider the nature of his occupation, his educational attainment and the
state of his health at the time of death.

In the instant case, David Ico was thirty eight (38) years old at the time of his death in 1981
and was driving his own passenger jeepney. The spouses Ceasar and Marilyn Baesa were
both thirty (30) years old at the time of their death. Ceasar Baesa was a commerce degree
holder and the proprietor of the Cauayan Press, printer of the Cauayan Valley Newspaper
and the Valley Times at Cauayan, Isabela. Marilyn Baesa graduated as a nurse in 1976 and
at the time of her death, was the company nurse, personnel manager, treasurer and
cashier of the Ilagan Press at Ilagan, Isabela. Respondent court duly considered these
factors, together with the uncontradicted testimonies of Fe Ico and Francisca Bascos, in
fixing the amount of damages for the loss of earning capacity of David Ico and the spouses
Baesa.chanrobles.com:cralaw:red

However, it should be pointed out that the Court of Appeals committed error in fixing the
289
compensatory damages for the death of Harold Jim Baesa and Marcelino Baesa.
Respondent court awarded to plaintiff (private respondent) Maricar Baesa Thirty Thousand
Pesos (P30,000.00) as "compensatory damages for the death of Harold Jim Baesa and
Marcelino Baesa." [CA Decision, p. 14; Rollo, 57]. In other words, the Court of Appeals
awarded only Fifteen Thousand Pesos (P15,000.00) as indemnity for the death of Harold
Jim Baesa and another Fifteen Thousand Pesos (P15,000.00) for the death of Marcelino
Baesa. This is clearly erroneous. In the case of People v. de la Fuente, G.R. Nos. 63251-52,
December 29, 1983, 126 SCRA 518, the indemnity for the death of a person was fixed by
this Court at Thirty Thousand Pesos (P30,000.00). Plaintiff Maricar Baesa should therefore
be awarded Sixty Thousand Pesos (P60,000.00) as indemnity for the death of her brothers,
Harold Jim Baesa and Marcelino Baesa or Thirty Thousand Pesos (P30,000.00) for the
death of each brother.

The other items of damages awarded by respondent court which were not challenged by the
petitioner are hereby affirmed.

WHEREFORE, premises considered, the petition is DENIED, and the decision of respondent
Court of Appeals is hereby AFFIRMED with the modification that the amount of
compensatory damages for the death of Harold Jim Baesa and Marcelino Baesa are
increased to Thirty Thousand Pesos (P30,000.00) each.chanrobles law library

SO ORDERED.

Fernan (C.J.), Gutierrez, Jr., Feliciano and Bidin, JJ., concur.

G. R. No. 154278           December 27, 2002

VICTORY LINER, INC. petitioner,
vs.
HEIRS OF ANDRES MALECDAN, respondents.
DECISION
MENDOZA, J.:
This is a petition for review of the decision 1 of the Eighth Division of the Court of Appeals,
which affirmed the decision2 of the Regional Trial Court of Baguio City, Branch 5, in Civil
Case No. 3082-R, ordering petitioner and its driver, Ricardo Joson, Jr., to pay damages to
the heirs of Andres Malecdan, who had been killed after being hit by a bus while attempting
to cross the National Highway in Barangay Nungnungan 2 in Cauayan, Isabela.
The facts of the case are as follows:
Petitioner is a common carrier. Private respondent Elena Malecdan is the widow of the
deceased, while private respondents Veronica, Virginia, Mary Pauline, Arthur, Viola,
Manuel and Valentin Malecdan are their children.
Andres Malecdan was a 75 year-old farmer residing in Barangay Nungnungan 2,
Municipality of Cauayan, Province of Isabela. 3 On July 15, 1994, at around 7:00 p.m.,
while Andres was crossing the National Highway on his way home from the farm, a Dalin
Liner bus on the southbound lane stopped to allow him and his carabao to pass. However,
as Andres was crossing the highway, a bus of petitioner Victory Liner, driven by Ricardo C.
Joson, Jr., bypassed the Dalin bus. In so doing, respondent hit the old man and the
290
carabao on which he was riding. As a result, Andres Malecdan was thrown off the carabao,
while the beast toppled over. 4 The Victory Liner bus sped past the old man, while the Dalin
bus proceeded to its destination without helping him.
The incident was witnessed by Andres Malecdan's neighbor, Virgilio Lorena, who was
resting in a nearby waiting shed after working on his farm. Malecdan sustained a wound on
his left shoulder, from which bone fragments protruded. He was taken by Lorena and
another person to the Cagayan District Hospital where he died a few hours after
arrival.5 The carabao also died soon afterwards.6 Lorena executed a sworn statement before
the police authorities. Subsequently, a criminal complaint for reckless imprudence
resulting in homicide and damage to property was filed against the Victory Liner bus driver
Ricardo Joson, Jr.7
On October 5, 1994, private respondents brought this suit for damages in the Regional
Trial Court, Branch 5, Baguio City, 8 which, in a decision rendered on July 17, 2000, found
the driver guilty of gross negligence in the operation of his vehicle and Victory Liner, Inc.
also guilty of gross negligence in the selection and supervision of Joson, Jr. Petitioner and
its driver were held liable for damages. The dispositive portion of the trial court's decision
reads:
WHEREFORE, judgment is hereby rendered ordering the defendants to pay, jointly and
severally to the plaintiffs the amounts of:
a. P50,000.00 as death indemnity;
b. P88,339.00 for actual damages;
c. P200,000.00 for moral damages;
d. P50,000.00 as exemplary damages;
e. Thirty percent (30%) as attorney's fees of whatever amount that can be collected by
the plaintiff; and
f. The costs of the suit.
The counterclaim of the defendant Victory Liner, Inc. against the plaintiffs and the third-
party complaint of the same defendant against the Zenith Insurance Corporation are
dismissed.
SO ORDERED.9
On appeal, the decision was affirmed by the Court of Appeals, with the modification that
the award of attorney's fees was fixed at P50,000.00.10
Hence, this appeal raising the following issues:
I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE
APPEALED DECISION OF THE REGIONAL TRIAL COURT GRANTING P200,000.00 AS
MORAL DAMAGES WHICH IS DOUBLE THE P100,000.00 AS PRAYED FOR BY THE
PRIVATE RESPONDENTS IN THEIR COMPLAINT AND IN GRANTING ACTUAL DAMAGES
NOT SUPPORTED BY OFFICIAL RECEIPTS AND SPENT WAY BEYOND THE BURIAL OF
THE DECEASED VICTIM.
II. WHETHER OR NOT THE AFFIRMATION BY THE HONORABLE COURT OF APPEALS OF
THE APPEALED DECISION OF THE REGIONAL TRIAL COURT GRANTING THE AWARD OF
MORAL AND EXEMPLARY DAMAGES AND ATTORNEY'S FEES WHICH WERE NOT
PROVED AND CONSIDERING THAT THERE IS NO FINDING OF BAD FAITH AND GROSS
NEGLIGENCE ON THE PART OF THE PETITIONER WAS NOT ESTABLISHED, IS IN
ACCORD WITH LAW AND JURISPRUDENCE.

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III. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING
THE APPEALED DECISION OF THE REGIONAL TRIAL COURT WHICH DISREGARDED
THE APPELLANT'S TESTIMONIAL AND DOCUMENTARY EVIDENCE THAT IT HAS
EXERCISED EXTRAORDINARY DILIGENCE IN THE SELECTION AND SUPERVISION OF
ITS EMPLOYEES, OR STATED DIFFERENTLY, WHETHER OR NOT THE AFFIRMATION BY
THE COURT OF APPEALS OF THE APPEALED DECISION OF THE TRIAL COURT THAT IS
CONTRARY TO LAW AND JURISPRUDENCE CONSTITUTES GRAVE ABUSE AND EXCESS
OF JURISDICTION.11
We find the appealed decision to be in order.
First. Victory Liner, Inc. no longer questions the findings of the Regional Trial Court that
Andres Malecdan was injured as a result of the gross negligence of its driver, Ricardo
Joson, Jr. What petitioner now questions is the finding that it (petitioner) failed to exercise
the diligence of a good father of the family in the selection and supervision of its employee.
Petitioner argues,
With all due respect, the assignment of three inspectors to check and remind the drivers of
petitioner Victory Liner of its policies in a two-and-a-half hour driving distance, the
installation of tachometers to monitor the speed of the bus all throughout the trip, the
periodic monitoring and checking of the trips from one station to another through a trip
ticket from station to station, the regular periodic conducting of safety and defensive
driving [training sessions] for its drivers are concrete and physical proofs of the formulated
operating standards, the implementation and monitoring of the same, designed for the
exercise of due diligence of a good father of a family in the supervision of its employees. 12
It explained that it did not present bus driver Joson, Jr. on the witness stands because he
had been dismissed from the company after the incident, which it found was a breach in
the company regulations. Petitioner blames private respondents for the death of their
father, Andres Malecdan, who was already 75 years old, for allowing him to plough their
field by himself.13
The contention has no merit.
Article 2176 provides:
Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter.
Article 2180 provides for the solidary liability of an employer for the quasi-delict committed
by an employee. The responsibility of employers for the negligence of their employees in the
performance of their duties is primary and, therefore, the injured party may recover from
the employers directly, regardless of the solvency of their employees. 14 The rationale for the
rule on vicarious liability has been explained thus:
What has emerged as the modern justification for vicarious liability is a rule of policy, a
deliberate allocation of a risk. The losses caused by the torts of employees, which as a
practical matter are sure to occur in the conduct of the employer's enterprise, are placed
upon that enterprise itself, as a required cost of doing business. They are placed upon the
employer because, having engaged in an enterprise, which will on the basis of all past
experience involve harm to others through the tort of employees, and sought to profit by it,
it is just that he, rather than the innocent injured plaintiff, should bear them; and because
he is better able to absorb them and to distribute them, through prices, rates or liability
292
insurance, to the public, and so to shift them to society, to the community at large. Added
to this is the makeweight argument that an employer who is held strictly liable is under the
greatest incentive to be careful in the selection, instruction and supervision of his servants,
and to take every precaution to see that the enterprise is conducted safely. 15
Employers may be relieved of responsibility for the negligent acts of their employees acting
within the scope of their assigned task only if they can show that "they observed all the
diligence of a good father of a family to prevent damage." 16 For this purpose, they have the
burden of proving that they have indeed exercised such diligence, both in the selection of
the employee and in the supervision of the performance of his duties. 17
In the selection of prospective employees, employers are required to examine them as to
their qualifications, experience and service records. 18 With respect to the supervision of
employees, employers must formulate standard operating procedures, monitor their
implementation and impose disciplinary measures for breaches thereof. 19 These facts must
be shown by concrete proof, including documentary evidence. 20
In the instant case, petitioner presented the results of Joson, Jr.'s written
examination,21 actual driving tests,22 x-ray examination,23 psychological examination,24 NBI
clearance,25 physical examination,26 hematology examination,27 urinalysis,28 student driver
training,29 shop training,30 birth certificate,31 high school diploma32 and reports from the
General Maintenance Manager and the Personnel Manager showing that he had passed all
the tests and training sessions and was ready to work as a professional driver. 33 However,
as the trial court noted, petitioner did not present proof that Joson, Jr. had nine years of
driving experience.34
Petitioner also presented testimonial evidence that drivers of the company were given
seminars on driving safety at least twice a year. 35 Again, however, as the trial court noted
there is no record of Joson, Jr. ever attending such a seminar. 36 Petitioner likewise failed to
establish the speed of its buses during its daily trips or to submit in evidence the trip
tickets, speed meters and reports of field inspectors. The finding of the trial court that
petitioner's bus was running at a very fast speed when it overtook the Dalin bus and hit the
deceased was not disputed by petitioner. For these reasons, we hold that the trial court did
not err in finding petitioner to be negligent in the supervision of its driver Joson, Jr.
Second. To justify an award of actual damages, there should be proof of the actual amount
of loss incurred in connection with the death, wake or burial of the victim. 37 We cannot take
into account receipts showing expenses incurred some time after the burial of the victim,
such as expenses relating to the 9th day, 40th day and 1st year death anniversaries. 38 In
this case, the trial court awarded P88,339.00 as actual damages. While these were duly
supported by receipts, these included the amount of P5,900.00, the cost of one pig which
had been butchered for the 9th day death anniversary of the deceased. This item cannot be
allowed. We, therefore, reduce the amount of actual damages to P82,439.00.00. The award
of P200,000.00 for moral damages should likewise be reduced. The trial court found that
the wife and children of the deceased underwent "intense moral suffering" as a result of the
latter's death.39 Under Art. 2206 of the Civil Code, the spouse, legitimate children and
illegitimate descendants and ascendants of the deceased may demand moral damages for
mental anguish by reason of the death of the deceased. Under the circumstances of this
case an award of P100,000.00 would be in keeping with the purpose of the law in allowing
moral damages.40

293
On the other hand, the award of P50,000.00 for indemnity is in accordance with current
rulings of the Court.41
Art. 2231 provides that exemplary damages may be recovered in cases involving quasi-
delicts if the defendant acted with gross negligence. Exemplary damages are imposed not to
enrich one party or impoverish another but to serve as a deterrent against or as a negative
incentive to curb socially deleterious actions. 42 In this case, petitioner's driver Joson, Jr.
was grossly negligent in driving at such a high speed along the national highway and
overtaking another vehicle which had stopped to allow a pedestrian to cross. Worse, after
the accident, Joson, Jr. did not stop the bus to help the victim. Under the circumstances,
we believe that the trial court's award of P50,000.00 as exemplary damages is proper.
Finally, private respondents are entitled to attorney's fees. Under Art. 2008 of the Civil
Code, attorney's fees may be recovered when, as in the instant case, exemplary damages
are awarded. In the recent case of Metro Manila Transit Corporation v. Court of
Appeals,43 we held an award of P50,000.00 as attorney's fees to be reasonable. Hence,
private respondents are entitled to attorney's fees in that amount.
WHEREFORE, the decision of the Court of Appeals, dated January 17, 2002, is hereby
AFFIRMED, with the MODIFICATION that petitioner Victory Liner, Inc. is ordered to pay the
following amounts to the respondent heirs of Andres Malecdan:
1. Death indemnity in the amount of Fifty Thousand Pesos (P50,000.00);
2. Actual damages in the amount of Eighty-Two Thousand Four Hundred Thirty-Nine
Pesos (P82,439.00);
3. Moral damages in the amount of One Hundred Thousand Pesos (P100,000.00);
4. Exemplary damages in the amount of Fifty Thousand Pesos (P50,000.00);
5. Attorney's fees in the amount of Fifty Thousand Pesos (P50,000.00); and
6. Costs of suit.
SO ORDERED.
Bellosillo, (Chairman), Quisumbing, Austria-Martinez, and Callejo, Sr., JJ., 

G.R. No. 104408 June 21, 1993

METRO MANILA TRANSIT CORPORATION, petitioner,
vs.
THE COURT OF APPEALS AND NENITA CUSTODIA, respondents.
Office of the Government Corporate Counsel for petitioner.
Renato P. Decena and Restituto Abjero for private respondent.

REGALADO, J.:
This appeal calls for a review of the legal validity and sufficiency of petitioner's invocation of
due diligence in the selection and supervision of employees as its defense against liability
resulting from a vehicular collision. With the facility by which such a defense can be
contrived and our country having reputedly the highest traffic accident rate in its
geographical region, it is indeed high time for us to once again address this matter which
poses not only a litigation issue for the courts but affects the very safety of our streets.
The facts of the case at bar are recounted for us by respondent court, thus —
At about six o'clock in the morning of August 28, 1979, plaintiff-appellant
Nenita Custodio boarded as a paying passenger a public utility jeepney with
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 plate No. D7 305 PUJ Pilipinas 1979, then driven by defendant Agudo Calebag
and owned by his co-defendant Victorino Lamayo, bound for her work at
Dynetics Incorporated located in Bicutan, Taguig, Metro Manila, where she
then worked as a machine operator earning P16.25 a day. While the passenger
jeepney was travelling at (a) fast clip along DBP Avenue, Bicutan, Taguig, Metro
Manila another fast moving vehicle, a Metro Manila Transit Corp. (MMTC, for
short) bus bearing plate no. 3Z 307 PUB (Philippines) "79 driven by defendant
Godofredo C. Leonardo was negotiating Honeydew Road, Bicutan, Taguig,
Metro Manila bound for its terminal at Bicutan. As both vehicles approached
the intersection of DBP Avenue and Honeydew Road they failed to slow down
and slacken their speed; neither did they blow their horns to warn approaching
vehicles. As a consequence, a collision between them occurred, the passenger
jeepney ramming the left side portion of the MMTC bus. The collision impact
caused plaintiff-appellant Nenita Custodio to hit the front windshield of the
passenger jeepney and (she) was thrown out therefrom, falling onto the
pavement unconscious with serious physical injuries. She was brought to the
Medical City Hospital where she regained consciousness only after one (1)
week. Thereat, she was confined for twenty-four (24) days, and as a
consequence, she was unable to work for three and one half months (31/2). 1
A complaint for damages2 was filed by herein private respondent, who being then a minor
was assisted by her parents, against all of therein named defendants following their refusal
to pay the expenses incurred by the former as a result of the collision.
Said defendants denied all the material allegations in the complaint and pointed an
accusing finger at each other as being the party at fault. Further, herein petitioner Metro
Manila Transit Corporation (MMTC), a government-owned corporation and one of the
defendants in the court a quo, along with its driver, Godofredo Leonardo, contrarily averred
in its answer with cross-claim and counterclaim 3 that the MMTC bus was driven in a
prudent and careful manner by driver Leonardo and that it was the passenger jeepney
which was driven recklessly considering that it hit the left middle portion of the MMTC bus,
and that it was defendant Lamayo, the owner of the jeepney and employer of driver
Calebag, who failed to exercise due diligence in the selection and supervision of employees
and should thus be held solidarily liable for damages caused to the MMTC bus through the
fault and negligence of its employees.
Defendant Victorino Lamayo, for his part, alleged in his answer with cross-claim and
counterclaim4 that the damages suffered by therein plaintiff should be borne by defendants
MMTC and its driver, Godofredo Leonardo, because the latter's negligence was the sole and
proximate cause of the accident and that MMTC failed to exercise due diligence in the
selection and supervision of its employees.
By order of the trial court, defendant Calebag was declared in default for failure to file an
answer.5 Thereafter, as no amicable settlement was reached during the pre-trial
conference,6 trial on the merits ensued with the opposing parties presenting their respective
witnesses and documentary evidence.
Herein private respondent Nenita Custodia, along with her parents, were presented as
witnesses for the prosecution. In addition, Dr. Edgardo del Mundo, the attending physician,
testified on the cause, nature and extent of the injuries she sustained as a result of the
vehicular mishap.7 On the other hand, defendant MMTC presented as witnesses Godofredo
295
Leonardo, Christian Bautista and Milagros Garbo. Defendant Lamayo, however, failed to
present any witness.
Milagros Garbo testified that, as a training officer of MMTC, she was in charge of the
selection of the company's bus drivers, conducting for this purpose a series of training
programs and examinations. According to her, new applicants for job openings at MMTC
are preliminarily required to submit certain documents such as National Bureau of
Investigation (NBI) clearance, birth or residence certificate, ID pictures, certificate or
diploma of highest educational attainment, professional driver's license, and work
experience certification. Re-entry applicants, aside from the foregoing requirements, are
additionally supposed to submit company clearance for shortages and damages and
revenue performance for the preceding year. Upon satisfactory compliance with said
requisites, applicants are recommended for and subjected to a Preliminary interview,
followed by a record check to find out whether they are included in the list of undesirable
employees given by other companies.
Thereafter, she continued, if an applicant is found to be acceptable, a final interview by the
Chief Supervisor is scheduled and followed by a training program which consists of
seminars and actual driving and Psycho-physical tests and X-ray examinations. The
seminars, which last for a total of eighteen (18) days, include familiarization with assigned
routes, existing traffic rules and regulations, Constabulary Highway Patrol Group (CHPG)
seminar on defensive driving, preventive maintenance, proper vehicle handling,
interpersonal relationship ,and administrative rules on discipline and on-the-job training.
Upon completion of all the seminars and tests, a final clearance is issued, an employment
contract is executed and the driver is ready to report for duty. 8
MMTC's Transport Supervisor, Christian Bautista, testified that it was his duty to monitor
the daily operation of buses in the field, to countercheck the dispatcher on duty prior to the
operation of the buses in the morning and to see to it that the bus crew follow written
guidelines of the company, which include seeing to it that its employees are in proper
uniform, briefed in traffic rules and regulations before the start of duty, fit to drive and, in
general, follow other rules and regulations of the Bureau of Land Transportation as well as
of the company.9
The reorganized trial court, in its decision of August 1, 1989, 10 found both drivers of the
colliding vehicles concurrently negligent for non-observance of appropriate traffic rules and
regulations and for failure to take the usual precautions when approaching an intersection.
As joint tortfeasors, both drivers, as well as defendant Lamayo, were held solidarily liable
for damages sustained by plaintiff Custodio. Defendant MMTC, on the bases of the evidence
presented was, however, absolved from liability for the accident on the ground that it was
not only careful and diligent in choosing and screening applicants for job openings but was
also strict and diligent in supervising its employees by seeing to it that its employees were
in proper uniforms, briefed in traffic rules and regulations before the start of duty, and that
it checked its employees to determine whether or not they were positive for alcohol and
followed other rules and regulations and guidelines of the Bureau of Land Transportation
and of the company.
The trial court accordingly ruled:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered
dismissing the complaint against the Metro Manila Transit Corporation and

296
 ordering defendants Agudo P. Calebag, Victorino Lamayo and Godofredo C.
Leonardo to pay plaintiffs, jointly and severally, the following:
a) the sum of P10,000.00 by way of medical expenses;
b) the sum of P5,000.00 by way of expenses of litigation;
c) the sum of P15,000.00 by way of moral damages;
d) the sum of P2,672.00 by way of loss of earnings;
e) the sum of P5,000.00 by way of exemplary damages;
f) the sum of P6,000.00 by way of attorney's fees; and
g) costs of suit.
SO ORDERED. 11
Plaintiff's motion to have that portion of the trial court's decision absolving MMTC from
liability reconsidered 12 having been denied for lack of merit, 13 an appeal was filed by her
with respondent appellate court. After consideration of the appropriate pleadings on appeal
and finding the appeal meritorious, the Court of Appeals modified the trial court's decision
by holding MMTC solidarily liable with the other defendants for the damages awarded by
the trial court because of their concurrent negligence, concluding that while there is no
hard and fast rule as to what constitutes sufficient evidence to prove that an employer has
exercised the due diligence required of it in the selection and supervision of its employees,
based on the quantum of evidence adduced the said appellate court was not disposed to
say that MMTC had exercised the diligence required of a good father of a family in the
selection and supervision of its driver, Godofredo Leonardo. 14
The Court of Appeals was resolute in its conclusion and denied the motions for
reconsideration of appellee Custodio and appellant MMTC in a resolution dated February
17, 1982, 15 thus prompting MMTC to file the instant petition invoking the review powers of
this Court over the decision of the Court of Appeals, raising as issues for resolution
whether or not (1) the documentary evidence to support the positive testimonies of
witnesses Garbo and Bautista are still necessary; (2) the testimonies of witnesses Garbo
and Bautista may still be disturbed on appeal; and (3) the evidence presented during the
trial with respect to the proof of due diligence of petitioner MMTC in the selection and
supervision of its employees, particularly driver Leonardo, is sufficient.
Prefatorily, private respondent questions the timeliness of the filing of the petition at bar in
view of the procedural stricture that the timely perfection of an appeal is both a mandatory
and jurisdictional requirement. This is a legitimate concern on the part of private
respondent and presents an opportune occasion to once again clarify this point as there
appears to be some confusion in the application of the rules and interpretative rulings
regarding the computation of reglementary periods at this stage of the proceedings.
The records of this case reveal that the decision of respondent Court of Appeals, dated
October 31, 1991, was received by MMTC on November 18, 1991 16 and it seasonably filed a
motion for the reconsideration thereof on November 28, 1991. 17 Said motion for
reconsideration was denied by respondent court in its resolution dated February 17, 1992,
which in turn was received by MMTC on March 9, 1992. 18 Therefore, it had, pursuant to
Section 1, Rule 45 of the Rules of Court, fifteen (15) days therefrom or up to March 24,
1992 within which to file its petition, for review on certiorari. Anticipating, however, that it
may not be able to file said petition before the lapse of the reglementary period therefor,
MMTC filed a motion on March 19, 1992 for an extension of thirty (30) days to file the
present petition, with proof of service of copies thereof to respondent court and the adverse
297
parties. The Court granted said motion, with the extended period to be counted from the
expiration of the reglementary period. 19 Consequently, private respondent had thirty (30)
days from March 24, 1992 within which to file its petition, or up to April 23, 1992, and the
eventual filing of said petition on April 14, 1992 was well within the period granted by the
Court.
We digress to reiterate, in view of erroneous submissions that we continue to receive, that
in the case of a petition for review on certiorari from a decision rendered by the Court of
Appeals, Section 1, Rule 45 of the Rules of Court, which has long since been clarified
in Lacsamana vs. The Hon. Second Special Cases Division of the Intermediate Appellate
Court, et al.,  20 allows the same to be filed "within fifteen (15) days from notice of judgment
or of the denial of the motion for reconsideration filed in due time, and paying at the same
time to the corresponding docket fee." In other words, in the event a motion for
reconsideration is filed and denied, the period of fifteen (15) days begins to run all over
again from notice of the denial resolution. Otherwise put, if a motion for reconsideration is
filed, the reglementary period within which to appeal the decision of the Court of Appeals to
the Supreme Court is reckoned from the date the party who intends to appeal received the
order denying the motion for reconsideration. 21 Furthermore, a motion for extension of
time to file a petition for review may be filed with this Court within said reglementary
period, paying at the same time the corresponding docket fee.
1. The first two issues raised by petitioner shall be correlatively discussed in view of their
interrelation.
In its present petition, MMTC insists that the oral testimonies of its employees were
presented as witnesses in its behalf sufficiently prove, even without the presentation
documentary evidence, that driver Leonardo had complied with all the hiring and clearance
requirements and had undergone all trainings, tests and examinations preparatory to
actual employment, and that said positive testimonies spell out the rigid procedure for
screening of job applicants and the supervision of its employees in the field. It underscored
the fact that it had indeed complied with the measure of diligence in the selection and
supervision of its employees as enunciated in Campo, et al. vs. Camarote, et al. 22 requiring
an employer, in the exercise of the diligence of a good father of a family, to carefully
examine the applicant for employment as to his qualifications, experience and record
service, and not merely be satisfied with the possession of a professional driver's license.
It goes on to say since the testimonies of these witnesses were allegedly neither discredited
nor impeached by the adverse party, they should be believed and not arbitrarily
disregarded or rejected nor disturbed on appeal. It assiduously argues that inasmuch as
there is no law requiring that facts alleged by petitioner be established by documentary
evidence, the probative force and weight of their testimonies should not be discredited, with
the further note that the lower court having passed upon the relevancy of the oral
testimonies and considered the same as unrebutted, its consideration should no longer be
disturbed on appeal. 23
Private respondent, on the other hand, retorts that the factual findings of respondent court
are conclusive upon the High Court which cannot be burdened with the task of analyzing
and weighing the evidence all over again. 24
At this juncture, it suffices to note that factual findings of the trial court may be reversed
by the Court of Appeals, which is vested by law with the power to review both legal and
factual issues, if on the evidence of record, it appears that the trial court may have been
298
mistaken 25 particularly in the appreciation of evidence, which is within the domain of the
Court of Appeals. 26 The general rule laid down in a plethora of cases is that such findings
of fact by the Court of Appeals are conclusive upon and beyond the power of review of the
Supreme Court. 27 However, it is now well-settled that while the findings of fact of the Court
of Appeals are entitled to great respect, and even finality at times, that rule is not inflexible
and is subject to well established exceptions, to wit: (1) when the conclusion is a finding
grounded entirely on speculation, surmises and conjectures; (2) when the inference made is
manifestly mistaken, absurd or impossible; (3) where there is grave abuse of discretion; (4)
when the judgment is based on a misapprehension of facts; (5) when the findings of fact are
conflicting; (6) when the Court of Appeals, in making its findings, went beyond the issues of
the case and the same are contrary to the admissions of both appellant and appellee; (7)
when the findings of the Court of Appeals are contrary to those of the trial court; (8) when
the findings of fact are conclusions without citation of specific evidence on which they are
based; (9) when the facts set forth in the petition, as well as in the petitioner's main and
reply briefs are not disputed by the respondents and (10) when the findings of fact of the
Court of Appeals are premised on the supposed absence of evidence and are contradicted
by the evidence on record. 28
When as in this case, the findings of the Court of Appeals and the trial court are contrary to
each other, this court may scrutinize the evidence on record, 29 in order to arrive at a
correct finding based thereon. 30
A perusal of the same shows that since there is no dispute as to the finding of concurrent
negligence on the part of the defendant Calebag, the driver of the passenger jeepney, and
co-defendant Leonardo, the bus driver of petitioner MMTC, both of whom were solidarily
held liable with defendant Lamayo, the owner of the jeepney, we are spared the necessity of
determining the sufficiency of evidence establishing the fact of negligence. 31 The contrariety
is in the findings of the two lower courts, and which is the subject of this present
controversy, with regard to the liability of MMTC as employer of one the erring drivers.
The trial court, in absolving MMTC from liability ruled that —
On the question as to whether defendant MMTC was successful in proving its
defense that indeed it had exercised the due diligence of a good father of a
family in the selection and supervision of defendant Leonardo, this Court finds
that based on the evidence presented during the trial, defendant MMTC was
able to prove that it was not only careful and diligent in choosing and screening
applicants for job openings but also strict (and) diligent in supervising its
employees by seeing to it that its employees were in proper uniforms, briefed in
traffic rules and regulations before the start of duty, checked employees to
determine whether they were positive for alcohol and followed other rules and
regulations and guidelines of the Bureau of Land Transportation as well as its
company. Having successfully proven such defense, defendant MMTC
therefore, cannot be held liable for the accident.
Having reached this conclusion, the Court now, holds that defendant MMTC be
totally absolved from liability and that the complaint against it be dismissed. . .
. 32
whereas respondent court was of the opinion that —
It is surprising though that witness Milagros Garbo did not testify nor present
any evidence that defendant-appellee's driver, defendant Godofredo Leonardo
299
 has complied with or has undergone all clearances and trainings she referred
to. The clearances, result of seminars and tests which Godofredo Leonardo
submitted and complied with, if any, were not presented in court despite the
fact that they are obviously in the possession and control of defendant-
appellee. Instead, it resorted to generalities. The Court has ruled that due
diligence in (the) selection and supervision of employee(s) are not proved by
mere testimonies to the effect that its applicant has complied with all the
company requirements before one is admitted as an employee but without
proof thereof. . . .
On the part of Christian Bautista, the transport supervisor of defendant-
appellee, he testified that it is his duty to monitor the operation of buses in the
field; to countercheck the dispatchers' duty prior to the operation of the buses
in the morning; to see to it that bus crew follows written guidelines of the
company (t.s.n., April 29, 1988, pp. 4-5), but when asked to present in court
the alleged written guidelines of the company he merely stated that he brought
with him a "wrong document" and defendant-appellee's counsel asked for
reservation to present such written guidelines in the next hearing but the same
was (sic) never presented in court. 33
A thorough and scrupulous review of the records of this case reveals that the conclusion of
respondent Court of Appeals is more firmly grounded on jurisprudence and amply
supported by the evidence of record than that of the court below.
It is procedurally required for each party in a case to prove his own affirmative assertion by
the degree of evidence required by law. 34 In civil cases, the degree of evidence required of a
party in order to support his claim is preponderance of evidence, or that evidence adduced
by one party which is more conclusive and credible than that of the other party. It is,
therefore, incumbent on the plaintiff who is claiming a right to prove his case. Corollarily,
defendant must likewise prove own allegation to buttress its claim that it is not liable. 35
In fine, the party, whether plaintiff or defendant, who asserts the affirmative of the issue
has the burden of presenting at the trial such amount of evidence required by law to obtain
a favorable judgment. 36 It is entirely within each of the parties discretion, consonant with
the theory of the case it or he seeks to advance and subject to such procedural strategy
followed thereby, to present all available evidence at its or his disposal in the manner which
may be deemed necessary and beneficial to prove its or his position, provided only that the
same shall measure up to the quantum of evidence required by law. In making proof in its
or his case, it is paramount that the best and most complete evidence be formally
entered. 37
Coming now to the case at bar, while there is no rule which requires that testimonial
evidence, to hold sway, must be corroborated by documentary evidence, or even subject
evidence for that matter, inasmuch as the witnesses' testimonies dwelt on mere
generalities, we cannot consider the same as sufficiently persuasive proof that there was
observance of due diligence in the selection and supervision of employees. 38 Petitioner's
attempt to prove its diligentissimi patris familias in the selection and supervision of
employees through oral evidence must fail as it was unable to buttress the same with any
other evidence, object or documentary, which might obviate the apparent biased nature of
the testimony. 39

300
Our view that the evidence for petitioner MMTC falls short of the required evidentiary
quantum as would convincingly and undoubtedly prove its observance of the diligence of a
good father of a family has its precursor in the underlying rationale pronounced in the
earlier case of Central Taxicab Corp. vs. Ex-Meralco Employees Transportation Co., et
al.,  40 set amidst an almost identical factual setting, where we held that:
. . . . This witness spoke of an "affidavit of experience" which a driver-applicant
must accomplish before he is employed by the company, a written "time
schedule" for each bus, and a record of the inspections and thorough checks
pertaining to each bus before it leaves the car barn; yet no attempt was ever
made to present in evidence any of these documents, despite the fact that they
were obviously in the possession and control of the defendant company.
xxx xxx xxx
Albert also testified that he kept records of the preliminary and final tests given
him as well as a record of the qualifications and experience of each of the
drivers of the company. It is rather strange, therefore, that he failed to produce
in court the all important record of Roberto, the driver involved in this case.
The failure of the defendant company to produce in court any "record" or other
documentary proof tending to establish that it had exercised all the diligence of
a good father of a family in the selection and supervision of its drivers and
buses, notwithstanding the calls therefor by both the trial court and the
opposing counsel, argues strongly against its pretensions.
We are fully aware that there is no hard-and-fast rule on the quantum of
evidence needed to prove due observance of all the diligence of a good father of
a family as would constitute a valid defense to the legal presumption of
negligence on the part of an employer or master whose employee has by his
negligence, caused damage to another. . . . (R)educing the testimony of Albert
to its proper proportions, we do not have enough trustworthy evidence left to go
by. We are of the considered opinion, therefore, that the believable evidence on
the degree of care and diligence that has been exercised in the selection and
supervision of Roberto Leon y Salazar, is not legally sufficient to overcome the
presumption of negligence against the defendant company.
Whether or not the diligence of a good father of a family has been observed by petitioner is
a matter of proof which under the circumstances in the case at bar has not been clearly
established. It is not felt by the Court that there is enough evidence on record as would
overturn the presumption of negligence, and for failure to submit all evidence within its
control, assuming the putative existence thereof, petitioner MMTC must suffer the
consequences of its own inaction and indifference.
2. In any event, we do not find the evidence presented by petitioner sufficiently convincing
to prove the diligence of a good father of a family, which for an employer doctrinally
translates into its observance of due diligence in the selection and supervision of its
employees but which mandate, to use an oft-quoted phrase, is more often honored in the
breach than in the observance.
Petitioner attempted to essay in detail the company's procedure for screening job applicants
and supervising its employees in the field, through the testimonies of Milagros Garbo, as its
training officer, and Christian Bautista, as its transport supervisor, both of whom naturally
and expectedly testified for MMTC. It then concluded with its sweeping pontifications that
301
"thus, there is no doubt that considering the nature of the business of petitioner, it would
not let any applicant-drivers to be (sic) admitted without undergoing the rigid selection and
training process with the end (in) view of protecting the public in general and its passengers
in particular; . . . thus, there is no doubt that applicant had fully complied with the said
requirements otherwise Garbo should not have allowed him to undertake the next set of
requirements . . . and the training conducted consisting of seminars and actual driving
tests were satisfactory otherwise he should have not been allowed to drive the subject
vehicle. 41
These statements strike us as both presumptuous and in the nature of petitio principii,
couched in generalities and shorn of any supporting evidence to boost their verity. As
earlier observed, respondent court could not but express surprise, and thereby its
incredulity, that witness Garbo neither testified nor presented any evidence that driver
Leonardo had complied with or had undergone all the clearances and trainings she took
pains to recite and enumerate. The supposed clearances, results of seminars and tests
which Leonardo allegedly submitted and complied with were never presented in court
despite the fact that, if true, then they were obviously in the possession and control of
petitioner. 42
The case at bar is clearly within the coverage of Article 2176 and 2177, in relation to Article
2180, of the Civil Code provisions on quasi-delicts as all the elements thereof are present,
to wit: (1) damages suffered by the plaintiff, (2) fault or negligence of the defendant or some
other person for whose act he must respond, and (3) the connection of cause and effect
between fault or negligence of the defendant and the damages incurred by plaintiff.  43 It is
to be noted that petitioner was originally sued as employer of driver Leonardo under Article
2180, the pertinent parts of which provides that:
The obligation imposed by article 2176 is demandable not only for one's own
acts or omissions, but also for those of persons for whom one is responsible.
xxx xxx xxx
Employers shall be liable for damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even though
the former are not engaged in any business or industry.
xxx xxx xxx
The responsibility treated of in this article shall cease when the persons herein
mentioned prove that they observed all the diligence of a good father of a family
to prevent damage.
The basis of the employer's vicarious liability has been explained under this ratiocination:
The responsibility imposed by this article arises by virtue of a
presumption juris tantum of negligence on the part of the persons made
responsible under the article, derived from their failure to exercise due care
and vigilance over the acts of subordinates to prevent them from causing
damage. Negligence is imputed to them by law, unless they prove the contrary.
Thus, the last paragraph of the article says that such responsibility ceases if is
proved that the persons who might be held responsible under it exercised the
diligence of a good father of a family (diligentissimi patris familias) to prevent
damage. It is clear, therefore, that it is not representation, nor interest, nor
even the necessity of having somebody else answer for the damages caused by
the persons devoid of personality, but it is the non-performance of certain
302
 duties of precaution and prudence imposed upon the persons who become
responsible by civil bond uniting the actor to them, which forms the foundation
of such responsibility. 44
The above rule is, of course, applicable only where there is an employer-employee
relationship, although it is not necessary that the employer be engaged in business or
industry. Whether or not engaged in any business or industry, the employer under Article
2180 is liable for torts committed by his employees within the scope of their assigned tasks.
But, it is necessary first to establish the employment relationship. Once this is done, the
plaintiff must show, to hold the employer liable, that the employee was acting within the
scope of his assigned task when the tort complained of was committed. It is only then that
the defendant, as employer, may find it necessary to interpose the defense of due diligence
in the selection and supervision of employees. 45 The diligence of a good father of a family
required to be observed by employers to prevent damages under Article 2180 refers to due
diligence in the selection and supervision of employees in order to protect the public. 46
With the allegation and subsequent proof of negligence against the defendant driver and of
an employer-employee relation between him and his co-defendant MMTC in this instance,
the case in undoubtedly based on a quasi-delict under Article 2180 47 When the employee
causes damage due to his own negligence while performing his own duties, there arises
the juris tantum presumption that the employer is negligent, 48 rebuttable only by proof of
observance of the diligence of a good father of a family. For failure to rebut such legal
presumption of negligence in the selection and supervision of employees, the employer is
likewise responsible for damages, 49 the basis of the liability being the relationship of pater
familias or on the employer's own negligence. 50
As early as the case of Gutierrez vs. Gutierrez, 51 and thereafter, we have consistently held
that where the injury is due to the concurrent negligence of the drivers of the colliding
vehicles, the drivers and owners of the said vehicles shall be primarily, directly and
solidarily liable for damages and it is immaterial that one action is based on quasi-
delict and the other on culpa contractual, as the solidarily of the obligation is justified by
the very nature thereof. 52
It should be borne in mind that the legal obligation of employers to observe due diligence in
the selection and supervision of employees is not to be considered as an empty play of
words or a mere formalism, as appears to be the fashion of the times, since the non-
observance thereof actually becomes the basis of their vicarious liability under Article 2180.
On the matter of selection of employees, Campo vs. Camarote, supra, lays down this
admonition:
. . . . In order tat the owner of a vehicle may be considered as having exercised
all diligence of a good father of a family, he should not have been satisfied with
the mere possession of a professional driver's license; he should have carefully
examined the applicant for employment as to his qualifications, his experience
and record of service. These steps appellant failed to observe; he has therefore,
failed to exercise all due diligence required of a good father of a family in the
choice or selection of driver.
Due diligence in the supervision of employees, on the other hand, includes the formulation
of suitable rules and regulations for the guidance of employees and the issuance of proper
instructions intended for the protection of the public and persons with whom the employer
has relations through his or its employees and the imposition of necessary disciplinary
303
measures upon employees in case of breach or as may be warranted to ensure the
performance of acts indispensable to the business of and beneficial to their employer. 53 To
this, we add that actual implementation and monitoring of consistent compliance with said
rules should be the constant concern of the employer, acting through dependable
supervisors who should regularly report on their supervisory functions.
In order that the defense of due diligence in the selection and supervision of employees may
be deemed sufficient and plausible, it is not enough to emptily invoke the existence of said
company guidelines and policies on hiring and supervision. As the negligence of the
employee gives rise to the presumption of negligence on the part of the employer, the latter
has the burden of proving that it has been diligent not only in the selection of employees
but also in the actual supervision of their work. The mere allegation of the existence of
hiring procedures and supervisory policies, without anything more, is decidedly not
sufficient to overcome presumption.
We emphatically reiterate our holding, as a warning to all employers, that "(t)he mere
formulation of various company policies on safety without showing that they were being
complied with is not sufficient to exempt petitioner from liability arising from negligence of
its employees. It is incumbent upon petitioner to show that in recruiting and employing the
erring driver the recruitment procedures and company policies on efficiency and safety
were followed." 54 Paying lip-service to these injunctions or merely going through the
motions of compliance therewith will warrant stern sanctions from the Court.
These obligations, imposed by the law and public policy in the interests and for the safety
of the commuting public, herein petitioner failed to perform. Respondent court was
definitely correct in ruling that ". . . due diligence in the selection and supervision of
employee (is) not proved by mere testimonies to the effect that its applicant has complied
with all the company requirements before one is admitted as an employee but without proof
thereof." 55 It is further a distressing commentary on petitioner that it is a government-
owned public utility, maintained by public funds, and organized for the public welfare.
The Court it is necessary to once again stress the following rationale behind these all-
important statutory and jurisprudential mandates, for it has been observed that despite its
pronouncement in Kapalaran Bus Line vs. Coronado, et al., supra, there has been little
improvement in the transport situation in the country:
In requiring the highest possible degree of diligence from common carriers and
creating a presumption of negligence against them, the law compels them to
curb the recklessness of their drivers. While the immediate beneficiaries of the
standard of extraordinary diligence are, of course, the passengers and owners
of the cargo carried by a common carrier, they are not the only persons that
the law seeks to benefit. For if common carriers carefully observe the statutory
standard of extraordinary diligence in respect of their own passengers, they
cannot help but simultaneously benefit pedestrians and the owners and
passengers of other vehicles who are equally entitled to the safe and convenient
use of our roads and highways. The law seeks to stop and prevent the
slaughter and maiming of people (whether passengers or not) and the
destruction of property (whether freight or not) on our highways by buses, the
very size and power of which seem often to inflame the minds of their
drivers. . . .

304
Finally, we believe that respondent court acted in the exercise of sound discretion when it
affirmed the trial court's award, without requiring the payment of interest thereon as an
item of damages just because of delay in the determination thereof, especially since private
respondent did not specifically pray therefor in her complaint. Article 2211 of the Civil Code
provides that in quasi-delicts, interest as a part of the damages may be awarded in the
discretion of the court, and not as a matter of right. We do not perceive that there have
been international dilatory maneuvers or any special circumstances which would justify
that additional award and, consequently, we find no reason to disturb said ruling.
WHEREFORE, the impugned decision of respondent Court of Appeals is hereby AFFIRMED.
SO ORDERED.
Narvasa, C.J. and Nocon, JJ., concur.
Padilla, J., is on leave.

G.R. No. 224186 - SPOUSES EMILIO MANGARON, JR. AND ERLINDA MANGARON,
PETITIONERS, v. HANNA VIA DESIGN & CONSTRUCTION, OWNED AND MANAGED BY
ENGR. JAMES STEPHEN B. CARPE, RESPONDENT

SECOND DIVISION
G.R. No. 224186, September 23, 2019
SPOUSES EMILIO MANGARON, JR. AND ERLINDA MANGARON, PETITIONERS, v.
HANNA VIA DESIGN & CONSTRUCTION, OWNED AND MANAGED BY ENGR. JAMES
STEPHEN B. CARPE, RESPONDENT.
DECISION
REYES, J. JR., J.:
Before the Court is a Petition for Review on Certiorari1 assailing the Decision2 dated October
20, 2015 and the Resolution3 dated April 14, 2016 of the Court of Appeals (CA) in CA-G.R.
SP No. 13 8259.
The Relevant Antecedents

The case stemmed from a complaint for damages under Article 2184 of the Civil Code, in
relation to Article 2180 of the same Code filed by spouses Emilio Mangaron, Jr. and Erlinda
Mangaron (petitioners) against Hanna Via Design and Construction - Deepwell Drilling
Division (respondent), Power Supply and Equipment Parts (Power Supply) and their
company driver, Crestino T. Bosquit (Bosquit). 4

In said complaint, petitioners invoked respondent's vicarious liability for the negligent
driving of Bosquit of an Isuzu Truck with Plate Number PLM 612 (subject vehicle), which
bumped and dragged their vehicle, a Ford Ranger Pick-Up with Plate Number XJZ-830.
Said collision caused serious physical injuries to petitioners, who were confined for a whole
month at the Davao Doctors Hospital in Davao City.5

305
After the petitioners presented their evidence and rested their case, respondent filed a
Motion for Demurrer to Evidence. 6 Among others, respondent questioned the jurisdiction of
the RTC over the case, contending that the complaint is actually a criminal action for
reckless imprudence resulting to physical injuries. Thus, the complaint should have been
filed in Davao City where the vehicular incident happened.

In an Order7 dated May 20, 2014, the Regional Trial Court of Malolos City, Bulacan,
Branch 11 (RTC), denied the motion. The RTC held that the issues raised, that is, the
ownership of the subject vehicle, respondent's working relationship with Bosquit, and its
culpability, are matters of evidence. Moreover, the RTC maintained its jurisdiction over the
case as the case is clearly civil in nature, a complaint for damages.

Respondent filed a Motion for Reconsideration, which was denied in an Order 8 dated
September 26, 2014.

Impugning the jurisdiction of the RTC, respondent filed a Petition for Certiorari before the
CA.

In a Decision9 dated October 20, 2015, the CA upheld the jurisdiction of the RTC as the
complaint spelled out a civil complaint for damages. However, the CA reversed the ruling of
the RTC insofar as the denial of respondent's demurrer to evidence. Ruling that the RTC
committed grave abuse of discretion, the CA opined that the case should have been
dismissed because the registered owner of the Isuzu Truck is Power Supply, and not
respondent. Thus:
WHEREFORE, premises considered, the petition is GRANTED. The Orders dated May 20,
2014 and September 26, 2014 of the Regional Trial Court, Branch 11 (XI), Malolos City,
Bulacan in Civil Case No. 103-M-2011 are hereby REVERSED AND SET ASIDE.

SO ORDERED.
Unsatisfied, petitioners filed a Motion for Reconsideration, which was denied in a
Resolution10 dated April 14, 2016.

Hence, this Petition.

In essence, petitioners assail the ruling of the CA in: (a) giving due course to the Petition
for Certiorari filed by respondent, as the assailed May 20, 2014 Order is an interlocutory
order denying a motion for demurrer to evidence; and (b) setting aside such Order when
there exists sufficient basis for the same.
The Issue

Summarily, the issue in this case is the propriety of the denial of the motion for demurrer
to evidence.
The Court's Ruling

Petitioners argue that the CA erred in giving due course to the Petition for Certiorari, being
the improper remedy.
306
The Court disagrees.

An order denying a demurrer to evidence is an interlocutory order for it does not completely
dispose of a case. As an interlocutory order, the remedy of an appeal is expressly excluded
by Rule 4111 of the Rules of Court. Alternatively, as an exception to the general rule that a
writ of certiorari is not available to challenge interlocutory orders of the trial court, a party
may file a certiorari petition under Rule 65 of the Rules of Court, alleging that the denial is
tainted with grave abuse of discretion amounting to lack or in excess of jurisdiction. 12

As the remedy of certiorari lies, the determination as to whether the instant case falls under
the exception, i.e., whether the trial court's denial of the demurrer to evidence is issued
with grave abuse of discretion, is now subject of this Court's judicial power of review.

A demurrer to evidence is defined as an objection or exception by one of the parties in an

action at law, to the effect that the evidence which his adversary produced is insufficient in
point of law (whether true or not) to make out his case or sustain the issue. 13

After a careful review of the case, the Court agrees with the CA in finding that the denial of
the motion for demurrer to evidence was tainted with grave abuse of discretion. In reversing
and setting aside the May 20, 2014 and September 26, 2014 Orders, the CA essentially
found that the RTC failed to consider the application of the registered owner rule.

In accordance with the law on compulsory motor vehicle registration, this Court has
consistently ruled that, with respect to the public and third persons, the registered owner
of a motor vehicle is directly and primarily responsible for the consequences of its operation
regardless of who the actual vehicle owner might be. 14

In this case, it is undisputed that the registered owner of the subject vehicle is Power
Supply. However, petitioners try to convince this Court to pronounce a ruling moored on a
pragmatic stance, that is, by ruling on respondent's liability based on its admission of its
ownership over the subject vehicle.

On this note, the Court stresses that the registered owner rule is clear and straightforward.
Its rationale is to fix liability on the owner of a motor vehicle involved in an accident by
clear identification through registration, to wit:
Registration is required not to make said registration the operative act by which ownership
in vehicles is transferred, as in land registration cases, because the administrative
proceeding of registration does not bear any essential relation to the contract of sale
between the parties, but to permit the use and operation of the vehicle upon any public
highway (section 5 [a], Act No. 3992, as amended.) The main aim of motor vehicle
registration is to identify the owner so that if any accident happens, or that any damage or
injury is caused by the vehicle on the public highways, responsibility therefore can be fixed
on a definite individual, the registered owner. Instances are numerous where vehicles
running on public highways caused accidents or injuries to pedestrians or other vehicles
without positive identification of the owner or drivers, or with very scant means of
307
identification. It is to forestall these circumstances, so inconvenient or prejudicial to the
public, that the motor vehicle registration is primarily ordained, in the interest of the
determination of persons responsible for damages or injuries caused on public
highways.15 (Citation omitted)
Truly, what the law seeks to prevent is the avoidance of liability in case of accidents to the
detriment of the public. In case an accident occurs, the liability becomes definite and fixed
as against a specific person, so that the victim may be properly indemnified without having
to go through the rigorous and tedious task of trying to identify the owner or driver of the
concerned vehicle.

Thus, the registration of the vehicle's ownership is indispensable in determining imputation

of liability; thus, whoever has his/her name on the Certificate of Registration of the
offending vehicle becomes liable in case of any damage or injury in connection with the
operation of such vehicle inasmuch as the public is concerned. The case of Equitable
Leasing Corporation v. Suyom16 is illustrative:
Regardless of sales made of a motor vehicle, the registered owner is the lawful operator
insofar as the public and third persons are concerned; consequently, it is directly and
primarily responsible for the consequences of its operation. In contemplation of law, the
owner/operator of record is the employer of the driver, the actual operator and employer
being considered as merely its agent, x x x
As between the registered owner and the driver, the former is considered as the employer of
the latter, and is made primarily liable for the tort under Article 2176 in relation with
Article 2180 of the Civil Code. 17

However, the application of the registered owner rule does not serve as a shield of the
offending vehicle's real owner from any liability. The law is not inequitable. Under the
principle of unjust enrichment, the registered owner who shouldered such liability has a
right to be indemnified by means of a cross-claim as against the actual employer of the
negligent driver.18 In this way, the preservation of the rights of the parties concerned would
be upheld while championing the public policy behind the registered owner rule.

WHEREFORE, premises considered, the Petition is hereby DENIED. Accordingly, the

Decision dated October 20, 2015 and the Resolution dated April 14, 2016 of the Court of
Appeals in CA-G.R. SP No. 138259 are AFFIRMED in toto.

SO ORDERED.

G.R. No. 174161               February 18, 2015

R TRANSPORT CORPORATION, Petitioner,
vs.
LUISITO G. YU, Respondent.
DECISION
PERALTA, J.:

308
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking to reverse and set aside the Decision 1 and Resolution,2 dated September 9, 2005
and August 8, 2006, respectively, of the Court of Appeals (CA) in CA-G.R. CV No. 84175.
The antecedent facts are as follows:
At around 8:45 in the morning of December 12, 1993, Loreta J. Yu, after having alighted
from a passenger bus in front of Robinson's Galleria along the north-bound lane of Epifanio
de los Santos Avenue (EDSA), was hit and run over by a bus driven by Antonio P. Gimena,
who was then employed by petitioner R Transport Corporation. Loreta was immediately
rushed to Medical City Hospital where she was pronounced dead on arrival. 3
On February 3, 1994, the husband of the deceased, respondent Luisito G. Yu, filed a
Complaint for damages before the Regional Trial Court (RTC) of Makati City against
petitioner R Transport, Antonio Gimena, and Metro Manila Transport Corporation (MMTC)
for the death of his wife. MMTC denied its liability reasoning that it is merely the registered
owner of the bus involved in the incident, the actual owner, being petitioner R Transport. 4 It
explained that under the Bus Installment Purchase Program of the government, MMTC
merely purchased the subject bus, among several others, for resale to petitioner R
Transport, which will in turn operate the same within Metro Manila. Since it was not
actually operating the bus which killed respondent’s wife, nor was it the employer of the
driver thereof, MMTC alleged that the complaint against it should be dismissed. 5 For its
part, petitioner R Transport alleged that respondent had no cause of action against it for it
had exercised due diligence in the selection and supervision of its employees and drivers
and that its buses are in good condition. Meanwhile, the driver Antonio Gimena was
declared in default for his failure to file an answer to the complaint.
After trial on the merits, wherein the parties presented their respective witnesses and
documentary evidence, the trial court rendered judgment in favor of respondent Yu ruling
that petitioner R Transport failed to prove that it exercised the diligence required of a good
father of a family in the selection and supervision of its driver, who, by its negligence, ran
over the deceased resulting in her death. It also held that MMTC should be held solidarily
liable with petitioner R Transport because it would unduly prejudice a third person who is
a victim of a tort to look beyond the certificate of registration and prove who the actual
owner is in order to enforce a right of action. Thus, the trial court ordered the payment of
damages in its Decision6 dated June 3, 2004, the dispositive portion of which reads:
WHEREFORE, foregoing premises considered, judgment is hereby rendered ordering
defendants Rizal Transport and Metro Manila Transport Corporation to be primarily and
solidarily liable and defendant Antonio Parraba Gimena subsidiarily liable to plaintiff
Luisito Yu as follows: 1. Actual damages in the amount of Php78,357.00 subject to interest
at the legal rate from the filing of the complaint until fully paid;
2. Loss of income in the amount of Php500,000.00;
3. Moral damages in the amount of ₱150,000.00;
4. Exemplary damages in the amount of ₱20,000.00;
5. Attorney’s fees in the amount of ₱10,000.00; and
6. Costs of suit.7
On September 9, 2005, the CA affirmed the Decision of the RTC with modification that
defendant Antonio Gimena is made solidarily liable for the damages caused to respondent.
According to the appellate court, considering that the negligence of Antonio Gimena was
sufficiently proven by the records of the case, and that no evidence of whatever nature was
309
presented by petitioner to support its defense of due diligence in the selection and
supervision of its employees, petitioner, as the employer of Gimena, may be held liable for
the damage caused. The CA noted that the fact that petitioner is not the registered owner of
the bus which caused the death of the victim does not exculpate it from
liability.8 Thereafter, petitioner’s Motion for Reconsideration was further denied by the CA
in its Resolution9 dated August 8, 2006.
Hence, the present petition.
Petitioner essentially invokes the following ground to support its petition:
I.
THE COURT OF APPEALS ERRED IN AFFIRMING THE RULING OF THE REGIONAL TRIAL
COURT FINDING PETITIONER LIABLE FOR THE DAMAGES CAUSED BY THE
NEGLIGENCE OF ITS EMPLOYEE, WHICH WAS NOT SUPPORTED BY THE EVIDENCE ON
RECORD.
Petitioner insists that the CA and the RTC were incorrect in ruling that its driver was
negligent for aside from the mere speculations and uncorroborated testimonies of the police
officers on duty at the time of the accident, no other evidence had been adduced to prove
that its driver was driving in a reckless and imprudent manner. It asserts that contrary to
the findings of the courts below, the bus from which the victim alighted is actually the
proximate cause of the victim’s death for having unloaded its passengers on the lane where
the subject bus was traversing. Moreover, petitioner reiterates its argument that since it is
not the registered owner of the bus which bumped the victim, it cannot be held liable for
the damage caused by the same.
We disagree.
Time and again, it has been ruled that whether a person is negligent or not is a question of
fact which this Court cannot pass upon in a petition for review on certiorari, as its
jurisdiction is limited to reviewing errors of law. 10 This Court is not bound to weigh all over
again the evidence adduced by the parties, particularly where the findings of both the trial
and the appellate courts on the matter of petitioners’ negligence coincide. As a general rule,
therefore, the resolution off actual issues is a function of the trial court, whose findings on
these matters are binding on this Court, more so where these have been affirmed by the
Court of Appeals,11 save for the following exceptional and meritorious circumstances: (1)
when the factual findings of the appellate court and the trial court are contradictory; (2)
when the findings of the trial court are grounded entirely on speculation, surmises or
conjectures; (3) when the lower court’s inference from its factual findings is manifestly
mistaken, absurd or impossible; (4) when there is grave abuse of discretion in the
appreciation of facts; (5) when the findings of the appellate court go beyond the issues of
the case, or fail to notice certain relevant facts which, if properly considered, will justify a
different conclusion; (6) when there is a misappreciation of facts; (7) when the findings of
fact are themselves conflicting; and (8) when the findings of fact are conclusions without
mention of the specific evidence on which they are based, are premised on the absence of
evidence, or are contradicted by evidence on record.12
After a review of the records of the case, we find no cogent reason to reverse the rulings of
the courts below for none of the aforementioned exceptions are present herein. Both the
trial and appellate courts found driver Gimena negligent in hitting and running over the
victim and ruled that his negligence was the proximate cause of her death. Negligence has
been defined as "the failure to observe for the protection of the interests of another person
310
that degree of care, precaution, and vigilance which the circumstances justly demand,
whereby such other person suffers injury." 13 Verily, foreseeability is the fundamental test of
negligence.14 It is the omission to do something which a reasonable man, guided by those
considerations which ordinarily regulate the conduct of human affairs, would do, or the
doing of something which a prudent and reasonable man would not do. 15
In this case, the records show that driver Gimena was clearly running at a reckless speed.
As testified by the police officer on duty at the time of the incident 16 and indicated in the
Autopsy Report,17 not only were the deceased’s clothes ripped off from her body, her brain
even spewed out from her skull and spilled over the road. Indeed, this Court is not
prepared to believe petitioner’s contention that its bus was travelling at a "normal speed" in
preparation for a full stop in view of the fatal injuries sustained by the deceased. Moreover,
the location wherein the deceased was hit and run over further indicates Gimena’s
negligence. As borne by the records, the bus driven by Gimena bumped the deceased in a
loading and unloading area of a commercial center. The fact that he was approaching such
a busy part of EDSA should have already cautioned the driver of the bus. In fact, upon
seeing that a bus has stopped beside his lane should have signalled him to step on his
brakes to slow down for the possibility that said bus was unloading its passengers in the
area. Unfortunately, he did not take the necessary precaution and instead, drove on and
bumped the deceased despite being aware that he was traversing a commercial center
where pedestrians were crossing the street. Ultimately, Gimena should have observed due
diligence of a reasonably prudent man by slackening his speed and proceeding cautiously
while passing the area.
Under Article 218018 of the New Civil Code, employers are liable for the damages caused by
their employees acting within the scope of their assigned tasks. Once negligence on the part
of the employee is established, a presumption instantly arises that the employer was remiss
in the selection and/or supervision of the negligent employee. To avoid liability for the
quasi-delict committed by its employee, it is incumbent upon the employer to rebut this
presumption by presenting adequate and convincing proof that it exercised the care and
diligence of a good father of a family in the selection and supervision of its employees. 19
Unfortunately, however, the records of this case are bereft of any proof showing the exercise
by petitioner of the required diligence. As aptly observed by the CA, no evidence of whatever
nature was ever presented depicting petitioner’s due diligence in the selection and
supervision of its driver, Gimena, despite several opportunities to do so. In fact, in its
petition, apart from denying the negligence of its employee and imputing the same to the
bus from which the victim alighted, petitioner merely reiterates its argument that since it is
not the registered owner of the bus which bumped the victim, it cannot be held liable for
the damage caused by the same. Nowhere was it even remotely alleged that petitioner had
exercised the required diligence in the selection and supervision of its employee. Because of
this failure, petitioner cannot now avoid liability for the quasi-delict committed by its
negligent employee.
At this point, it must be noted that petitioner, in its relentless attempt to evade liability,
cites our rulings in Vargas v. Langcay 20 and Tamayo v. Aquino21 insisting that it should not
be held solidarily liable with MMTC for it is not the registered owner of the bus which killed
the deceased. However, this Court, in Jereos v. Court of Appeals, et al., 22 rejected such
contention in the following wise:

311
Finally, the petitioner, citing the case of Vargas vs. Langcay, contends that it is the
registered owner of the vehicle, rather than the actual owner, who must be jointly and
severally liable with the driver of the passenger vehicle for damages incurred by third
persons as a consequence of injuries or death sustained in the operation of said vehicle.
The contention is devoid of merit. While the Court therein ruled that the registered owner
or operator of a passenger vehicle is jointly and severally liable with the driver of the said
vehicle for damages incurred by passengers or third persons as a consequence of injuries
or death sustained in the operation of the said vehicle, the Court did so to correct the
erroneous findings of the Court of Appeals that the liability of the registered owner or
operator of a passenger vehicle is merely subsidiary, as contemplated in Art. 103 of the
Revised Penal Code. In no case did the Court exempt the actual owner of the passenger
vehicle from liability. On the contrary, it adhered to the rule followed in the cases of Erezo
vs. Jepte, Tamayo vs. Aquino, and De Peralta vs. Mangusang, among others, that the
registered owner or operator has the right to be indemnified by the real or actual owner of
the amount that he may be required to pay as damage for the injury caused.
The right to be indemnified being recognized, recovery by the registered owner or operator
may be made in any form-either by a cross-claim, third-party complaint, or an independent
action. The result is the same.23
Moreover, while We held in Tamayo that the responsibility of the registered owner and
actual operator of a truck which caused the death of its passenger is not solidary, We noted
therein that the same is due to the fact that the action instituted was one for breach of
contract, to wit:
The decision of the Court of Appeals is also attacked insofar as it holds that inasmuch as
the third-party defendant had used the truck on a route not covered by the registered
owner's franchise, both the registered owner and the actual owner and operator should be
considered as joint tortfeasors and should be made liable in accordance with Article 2194
of the Civil Code. This Article is as follows:
Art. 2194. The responsibility of two or more persons who are liable for a quasi-delict is
solidary.1âwphi1 But the action instituted in the case at bar is one for breach of contract,
for failure of the defendant to carry safely the deceased for her destination. The liability for
which he is made responsible, i.e., for the death of the passenger, may not be considered as
arising from a quasi-delict. As the registered owner Tamayo and his transferee Rayos may
not be held guilty of tort or a quasi-delict; their responsibility is not solidary as held by the
Court of Appeals.
The question that poses, therefore, is how should the holder of the certificate of public
convenience, Tamayo, participate with his transferee, operator Rayos, in the damages
recoverable by the heirs of the deceased passenger, if their liability is not that of Joint
tortfeasors in accordance with Article 2194 of the Civil Code. The following considerations
must be borne in mind in determining this question. As Tamayo is the registered owner of
the truck, his responsibility to the public orto any passenger riding in the vehicle or truck
must be direct, for the reasons given in our decision in the case of Erezo vs. Jepte, supra,
as quoted above. But as the transferee, who operated the vehicle when the passenger died,
is the one directly responsible for the accident and death he should in turn be made
responsible to the registered owner for what the latter may have been adjudged to pay. In
operating the truck without transfer thereof having been approved by the Public Service
Commission, the transferee acted merely as agent of the registered owner and should be
312
responsible to him (the registered owner), for any damages that he may cause the latter by
his negligence.24
However, it must be noted that the case at hand does not involve a breach of contract of
carriage, as in Tamayo, but a tort or quasi-delict under Article 2176, 25 in relation to Article
218026 of the New Civil Code. As such, the liability for which petitioner is being made
responsible actually arises not from a pre-existing contractual relation between petitioner
and the deceased, but from a damage caused by the negligence of its employee. Petitioner
cannot, therefore, rely on our ruling in Tamayo and escape its solidary liability for the
liability of the employer for the negligent conduct of its subordinate is direct and primary,
subject only to the defense of due diligence in the selection and supervision of the
employee.27
Indeed, this Court has consistently been of the view that it is for the better protection of the
public for both the owner of record and the actual operator to be adjudged jointly and
severally liable with the driver. 28 As aptly stated by the appellate court, "the principle of
holding the registered owner liable for damages notwithstanding that ownership of the
offending vehicle has already been transferred to another is designed to protect the public
and not as a shield on the part of unscrupulous transferees of the vehicle to take refuge in,
in order to free itself from liability arising from its own negligent act. " 29
Hence, considering that the negligence of driver Gimena was sufficiently proven by the
records of the case, and that no evidence of whatever nature was presented by petitioner to
support its defense of due diligence in the selection and supervision of its employees,
petitioner, as the employer of Gimena, may be held liable for damages arising from the
death of respondent Yu's wife.
WHEREFORE, premises considered, the instant petition is DENIED. The Decision and
Resolution, dated September 9, 2005 and August 8, 2006, respectively, of the Court of
Appeals in CA-G.R. CV No. 84175 are hereby AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:

G.R. No. L-55963 December 1, 1989

SPOUSES JOSE FONTANILLA AND VIRGINIA FONTANILLA, petitioners,
vs.
HONORABLE INOCENCIO D. MALIAMAN and NATIONAL IRRIGATION
ADMINISTRATION, respondents.
G.R. No. L-61045 December 1, 1989
NATIONAL IRRIGATION ADMINISTRATION, appellant,
vs.
SPOUSES JOSE FONTANILLA and VIRGINIA FONTANILLA, appellees.
Cecilio V. Suarez, Jr. for Spouses Fontanilla.
Felicisimo C. Villaflor for NIA.

PARAS, J.:

313
In G.R. No. L-55963, the petition for review on certiorari seeks the affirmance of the
decision dated March 20, 1980 of the then Court of First Instance of Nueva Ecija, Branch
VIII, at San Jose City and its modification with respect to the denial of petitioner's claim for
moral and exemplary damages and attorneys fees.
In G.R. No. 61045, respondent National Irrigation Administration seeks the reversal of the
aforesaid decision of the lower court. The original appeal of this case before the Court of
Appeals was certified to this Court and in the resolution of July 7, 1982, it was docketed
with the aforecited number. And in the resolution of April 3, this case was consolidated
with G.R. No. 55963.
It appears that on August 21, 1976 at about 6:30 P.M., a pickup owned and operated by
respondent National Irrigation Administration, a government agency bearing Plate No. IN-
651, then driven officially by Hugo Garcia, an employee of said agency as its regular driver,
bumped a bicycle ridden by Francisco Fontanilla, son of herein petitioners, and Restituto
Deligo, at Maasin, San Jose City along the Maharlika Highway. As a result of the impact,
Francisco Fontanilla and Restituto Deligo were injured and brought to the San Jose City
Emergency Hospital for treatment. Fontanilla was later transferred to the Cabanatuan
Provincial Hospital where he died.
Garcia was then a regular driver of respondent National Irrigation Administration who, at
the time of the accident, was a licensed professional driver and who qualified for
employment as such regular driver of respondent after having passed the written and oral
examinations on traffic rules and maintenance of vehicles given by National Irrigation
Administration authorities.
The within petition is thus an off-shot of the action (Civil Case No. SJC-56) instituted by
petitioners-spouses on April 17, 1978 against respondent NIA before the then Court of First
Instance of Nueva Ecija, Branch VIII at San Jose City, for damages in connection with the
death of their son resulting from the aforestated accident.
After trial, the trial court rendered judgment on March 20, 1980 which directed respondent
National Irrigation Administration to pay damages (death benefits) and actual expenses to
petitioners. The dispositive portion of the decision reads thus:
. . . . . Judgment is here rendered ordering the defendant National Irrigation
Administration to pay to the heirs of the deceased P12,000.00 for the death of
Francisco Fontanilla; P3,389.00 which the parents of the deceased had spent
for the hospitalization and burial of the deceased Francisco Fontanilla; and to
pay the costs. (Brief for the petitioners spouses Fontanilla, p. 4; Rollo, p. 132)
Respondent National Irrigation Administration filed on April 21, 1980, its motion for
reconsideration of the aforesaid decision which respondent trial court denied in its Order of
June 13, 1980. Respondent National Irrigation Administration thus appealed said decision
to the Court of Appeals (C.A.-G.R. No. 67237- R) where it filed its brief for appellant in
support of its position.
Instead of filing the required brief in the aforecited Court of Appeals case, petitioners filed
the instant petition with this Court.
The sole issue for the resolution of the Court is: Whether or not the award of moral
damages, exemplary damages and attorney's fees is legally proper in a complaint for
damages based on quasi-delict which resulted in the death of the son of herein petitioners.
Petitioners allege:

314
 1. The award of moral damages is specifically allowable. under paragraph 3 of
Article 2206 of the New Civil Code which provides that the spouse, legitimate
and illegitimate descendants and ascendants of the deceased may demand
moral damages for mental anguish by reason of the death of the deceased.
Should moral damages be granted, the award should be made to each of
petitioners-spouses individually and in varying amounts depending upon proof
of mental and depth of intensity of the same, which should not be less than
P50,000.00 for each of them.
2. The decision of the trial court had made an impression that respondent
National Irrigation Administration acted with gross negligence because of the
accident and the subsequent failure of the National Irrigation Administration
personnel including the driver to stop in order to give assistance to the,
victims. Thus, by reason of the gross negligence of respondent, petitioners
become entitled to exemplary damages under Arts. 2231 and 2229 of the New
Civil Code.
3. Petitioners are entitled to an award of attorney's fees, the amount of which
(20%) had been sufficiently established in the hearing of May 23, 1979.
4. This petition has been filed only for the purpose of reviewing the findings of
the lower court upon which the disallowance of moral damages, exemplary
damages and attorney's fees was based and not for the purpose of disturbing
the other findings of fact and conclusions of law.
The Solicitor General, taking up the cudgels for public respondent National Irrigation
Administration, contends thus:
1. The filing of the instant petition is rot proper in view of the appeal taken by
respondent National Irrigation Administration to the Court of Appeals against
the judgment sought to be reviewed. The focal issue raised in respondent's
appeal to the Court of Appeals involves the question as to whether or not the
driver of the vehicle that bumped the victims was negligent in his operation of
said vehicle. It thus becomes necessary that before petitioners' claim for moral
and exemplary damages could be resolved, there should first be a finding of
negligence on the part of respondent's employee-driver. In this regard, the
Solicitor General alleges that the trial court decision does not categorically
contain such finding.
2. The filing of the "Appearance and Urgent Motion For Leave to File Plaintiff-
Appellee's Brief" dated December 28, 1981 by petitioners in the appeal (CA-
G.R. No. 67237-R; and G. R. No.61045) of the respondent National Irrigation
Administration before the Court of Appeals, is an explicit admission of said
petitioners that the herein petition, is not proper. Inconsistent procedures are
manifest because while petitioners question the findings of fact in the Court of
Appeals, they present only the questions of law before this Court which posture
confirms their admission of the facts.
3. The fact that the parties failed to agree on whether or not negligence caused
the vehicular accident involves a question of fact which petitioners should have
brought to the Court of Appeals within the reglementary period. Hence, the
decision of the trial court has become final as to the petitioners and for this
reason alone, the petition should be dismissed.
315
 4. Respondent Judge acted within his jurisdiction, sound discretion and in
conformity with the law.
5. Respondents do not assail petitioners' claim to moral and exemplary
damages by reason of the shock and subsequent illness they suffered because
of the death of their son. Respondent National Irrigation Administration,
however, avers that it cannot be held liable for the damages because it is an
agency of the State performing governmental functions and driver Hugo Garcia
was a regular driver of the vehicle, not a special agent who was performing a
job or act foreign to his usual duties. Hence, the liability for the tortious act
should. not be borne by respondent government agency but by driver Garcia
who should answer for the consequences of his act.
6. Even as the trial court touched on the failure or laxity of respondent
National Irrigation Administration in exercising due diligence in the selection
and supervision of its employee, the matter of due diligence is not an issue in
this case since driver Garcia was not its special agent but a regular driver of
the vehicle.
The sole legal question on whether or not petitioners may be entitled to an award of moral
and exemplary damages and attorney's fees can very well be answered with the application
of Arts. 2176 and 2180 of theNew Civil Code.
Art. 2176 thus provides:
Whoever by act omission causes damage to another, there being fault or
negligence, is obliged to pay for damage done. Such fault or negligence, if there
is no pre-existing cotractual relation between the parties, is called a quasi-
delict and is governed by the provisions of this Chapter
Paragraphs 5 and 6 of Art. 21 80 read as follows:
Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even the
though the former are not engaged in any business or industry.
The State is responsible in like manner when it acts through a special agent.;
but not when the damage has been caused by the official to whom the task
done properly pertains, in which case what is provided in Art. 2176 shall be
applicable.
The liability of the State has two aspects. namely:
1. Its public or governmental aspects where it is liable for the tortious acts of
special agents only.
2. Its private or business aspects (as when it engages in private enterprises)
where it becomes liable as an ordinary employer. (p. 961, Civil Code of the
Philippines; Annotated, Paras; 1986 Ed. ).
In this jurisdiction, the State assumes a limited liability for the damage caused by the
tortious acts or conduct of its special agent.
Under the aforequoted paragrah 6 of Art. 2180, the State has voluntarily assumed liability
for acts done through special agents. The State's agent, if a public official, must not only be
specially commissioned to do a particular task but that such task must be foreign to said
official's usual governmental functions. If the State's agent is not a public official, and is
commissioned to perform non-governmental functions, then the State assumes the role of
an ordinary employer and will be held liable as such for its agent's tort. Where the
316
government commissions a private individual for a special governmental task, it is acting
through a special agent within the meaning of the provision. (Torts and Damages, Sangco,
p. 347, 1984 Ed.)
Certain functions and activities, which can be performed only by the government, are more
or less generally agreed to be "governmental" in character, and so the State is immune from
tort liability. On the other hand, a service which might as well be provided by a private
corporation, and particularly when it collects revenues from it, the function is considered a
"proprietary" one, as to which there may be liability for the torts of agents within the scope
of their employment.
The National Irrigation Administration is an agency of the government exercising
proprietary functions, by express provision of Rep. Act No. 3601. Section 1 of said Act
provides:
Section 1. Name and domicile.-A body corporate is hereby created which shall
be known as the National Irrigation Administration, hereinafter called the NIA
for short, which shall be organized immediately after the approval of this Act. It
shall have its principal seat of business in the City of Manila and shall have
representatives in all provinces for the proper conduct of its business.
Section 2 of said law spells out some of the NIA's proprietary functions. Thus-
Sec. 2. Powers and objectives.-The NIA shall have the following powers and
objectives:
(a) x x x x x x x x x x x x x x x x x x
(b) x x x x x x x x x x x x x x x x x x
(c) To collect from the users of each irrigation system constructed by it such
fees as may be necessary to finance the continuous operation of the system
and reimburse within a certain period not less than twenty-five years cost of
construction thereof; and
(d) To do all such other tthings and to transact all such business as are directly
or indirectly necessary, incidental or conducive to the attainment of the above
objectives.
Indubitably, the NIA is a government corporation with juridical personality and not a mere
agency of the government. Since it is a corporate body performing non-governmental
functions, it now becomes liable for the damage caused by the accident resulting from the
tortious act of its driver-employee. In this particular case, the NIA assumes the
responsibility of an ordinary employer and as such, it becomes answerable for damages.
This assumption of liability, however, is predicated upon the existence of negligence on the
part of respondent NIA. The negligence referred to here is the negligence of supervision.
At this juncture, the matter of due diligence on the part of respondent NIA becomes a
crucial issue in determining its liability since it has been established that respondent is a
government agency performing proprietary functions and as such, it assumes the posture
of an ordinary employer which, under Par. 5 of Art. 2180, is responsible for the damages
caused by its employees provided that it has failed to observe or exercise due diligence in
the selection and supervision of the driver.
It will be noted from the assailed decision of the trial court that "as a result of the impact,
Francisco Fontanilla was thrown to a distance 50 meters away from the point of
impact while Restituto Deligo was thrown a little bit further away. The impact took place

317
almost at the edge of the cemented portion of the road." (Emphasis supplied,) [page 26,
Rollo]
The lower court further declared that "a speeding vehicle coming in contact with a person
causes force and impact upon the vehicle that anyone in the vehicle cannot fail to notice.
As a matter of fact, the impact was so strong as shown by the fact that the  vehicle suffered
dents on the right side of the radiator guard, the hood, the fender and a crack on the radiator
as shown by the investigation report (Exhibit "E"). (Emphasis supplied) [page 29, Rollo]
It should be emphasized that the accident happened along the Maharlika National Road
within the city limits of San Jose City, an urban area. Considering the fact that the victim
was thrown 50 meters away from the point of impact, there is a strong indication that
driver Garcia was driving at a high speed. This is confirmed by the fact that the pick-up
suffered substantial and heavy damage as above-described and the fact that the NIA group
was then "in a hurry to reach the campsite as early as possible", as shown by their not
stopping to find out what they bumped as would have been their normal and initial
reaction.
Evidently, there was negligence in the supervision of the driver for the reason that they
were travelling at a high speed within the city limits and yet the supervisor of the group,
Ely Salonga, failed to caution and make the driver observe the proper and allowed speed
limit within the city. Under the situation, such negligence is further aggravated by their
desire to reach their destination without even checking whether or not the vehicle suffered
damage from the object it bumped, thus showing imprudence and reckelessness on the
part of both the driver and the supervisor in the group.
Significantly, this Court has ruled that even if the employer can prove the diligence in the
selection and supervision (the latter aspect has not been established herein) of the
employee, still if he ratifies the wrongful acts, or take no step to avert further damage, the
employer would still be liable. (Maxion vs. Manila Railroad Co., 44 Phil. 597).
Thus, too, in the case of Vda. de Bonifacio vs. B.L.T. Bus Co. (L-26810, August 31, 1970,
34 SCRA 618), this Court held that a driver should be especially watchful in anticipation of
others who may be using the highway, and his failure to keep a proper look out for reasons
and objects in the line to be traversed constitutes negligence.
Considering the foregoing, respondent NIA is hereby directed to pay herein petitioners-
spouses the amounts of P12,000.00 for the death of Francisco Fontanilla; P3,389.00 for
hospitalization and burial expenses of the aforenamed deceased; P30,000.00 as moral
damages; P8,000.00 as exemplary damages and attorney's fees of 20% of the total award.
SO ORDERED.
Padilla, Sarmiento and Regalado, JJ., concur.
Melencio- Herrera (Chairperson,), J., is on leave.

G.R. No. 71049 May 29, 1987

BERNARDINO JIMENEZ, petitioner,
vs.
CITY OF MANILA and INTERMEDIATE APPELLATE COURT, respondents.

PARAS, J.:

318
This is a petition for review on certiorari of: (1) the decision * of the Intermediate Appellate
Court in AC-G.R. No. 013887-CV Bernardino Jimenez v. Asiatic Integrated Corporation and
City of Manila, reversing the decision ** of the Court of First Instance of Manila, Branch
XXII in Civil Case No. 96390 between the same parties, but only insofar as holding Asiatic
Integrated Corporation solely liable for damages and attorney's fees instead of making the
City of Manila jointly and solidarily liable with it as prayed for by the petitioner and (2) the
resolution of the same Appellate Court denying his Partial Motion for Reconsideration
(Rollo, p. 2).
The dispositive portion of the Intermediate Appellate Court's decision is as follows:
WHEREFORE, the decision appealed from is hereby REVERSED. A new one is
hereby entered ordering the defendant Asiatic Integrated Corporation to pay
the plaintiff P221.90 actual medical expenses, P900.00 for the amount paid for
the operation and management of a school bus, P20,000.00 as moral damages
due to pains, sufferings and sleepless nights and P l0,000.00 as attorney's fees.
SO ORDERED. (p. 20, Rollo)
The findings of respondent Appellate Court are as follows:
The evidence of the plaintiff (petitioner herein) shows that in the morning of August 15,
1974 he, together with his neighbors, went to Sta. Ana public market to buy "bagoong" at
the time when the public market was flooded with ankle deep rainwater. After purchasing
the "bagoong" he turned around to return home but he stepped on an uncovered opening
which could not be seen because of the dirty rainwater, causing a dirty and rusty four- inch
nail, stuck inside the uncovered opening, to pierce the left leg of plaintiff-petitioner
penetrating to a depth of about one and a half inches. After administering first aid
treatment at a nearby drugstore, his companions helped him hobble home. He felt ill and
developed fever and he had to be carried to Dr. Juanita Mascardo. Despite the medicine
administered to him by the latter, his left leg swelled with great pain. He was then rushed
to the Veterans Memorial Hospital where he had to be confined for twenty (20) days due to
high fever and severe pain.
Upon his discharge from the hospital, he had to walk around with crutches for fifteen (15)
days. His injury prevented him from attending to the school buses he is operating. As a
result, he had to engage the services of one Bienvenido Valdez to supervise his business for
an aggregate compensation of nine hundred pesos (P900.00). (Decision, AC-G.R. CV No.
01387, Rollo, pp. 13-20).
Petitioner sued for damages the City of Manila and the Asiatic Integrated Corporation under
whose administration the Sta. Ana Public Market had been placed by virtue of a
Management and Operating Contract (Rollo, p. 47).
The lower court decided in favor of respondents, the dispositive portion of the decision
reading:
WHEREFORE, judgment is hereby rendered in favor of the defendants and
against the plaintiff dismissing the complaint with costs against the plaintiff.
For lack of sufficient evidence, the counterclaims of the defendants are likewise
dismissed. (Decision, Civil Case No. 96390, Rollo, p. 42).
As above stated, on appeal, the Intermediate Appellate Court held the Asiatic Integrated
Corporation liable for damages but absolved respondent City of Manila.
Hence this petition.

319
The lone assignment of error raised in this petition is on whether or not the Intermediate
Appellate Court erred in not ruling that respondent City of Manila should be jointly and
severally liable with Asiatic Integrated Corporation for the injuries petitioner suffered.
In compliance with the resolution of July 1, 1985 of the First Division of this Court (Rollo,
p. 29) respondent City of Manila filed its comment on August 13, 1985 (Rollo, p. 34) while
petitioner filed its reply on August 21, 1985 (Reno, p. 51).
Thereafter, the Court in the resolution of September 11, 1985 (Rollo, p. 62) gave due course
to the petition and required both parties to submit simultaneous memoranda
Petitioner filed his memorandum on October 1, 1985 (Rollo, p. 65) while respondent filed its
memorandum on October 24, 1985 (Rollo, p. 82).
In the resolution of October 13, 1986, this case was transferred to the Second Division of
this Court, the same having been assigned to a member of said Division (Rollo, p. 92).
The petition is impressed with merit.
As correctly found by the Intermediate Appellate Court, there is no doubt that the plaintiff
suffered injuries when he fell into a drainage opening without any cover in the Sta. Ana
Public Market. Defendants do not deny that plaintiff was in fact injured although the
Asiatic Integrated Corporation tries to minimize the extent of the injuries, claiming that it
was only a small puncture and that as a war veteran, plaintiff's hospitalization at the War
Veteran's Hospital was free. (Decision, AC-G.R. CV No. 01387, Rollo, p. 6).
Respondent City of Manila maintains that it cannot be held liable for the injuries sustained
by the petitioner because under the Management and Operating Contract, Asiatic
Integrated Corporation assumed all responsibility for damages which may be suffered by
third persons for any cause attributable to it.
It has also been argued that the City of Manila cannot be held liable under Article 1,
Section 4 of Republic Act No. 409 as amended (Revised Charter of Manila) which provides:
The City shall not be liable or held for damages or injuries to persons or
property arising from the failure of the Mayor, the Municipal Board, or any
other City Officer, to enforce the provisions of this chapter, or any other law or
ordinance, or from negligence of said Mayor, Municipal Board, or any other
officers while enforcing or attempting to enforce said provisions.
This issue has been laid to rest in the case of City of Manila v. Teotico (22 SCRA 269-272
[1968]) where the Supreme Court squarely ruled that Republic Act No. 409 establishes a
general rule regulating the liability of the City of Manila for "damages or injury to persons
or property arising from the failure of city officers" to enforce the provisions of said Act, "or
any other law or ordinance or from negligence" of the City "Mayor, Municipal Board, or
other officers while enforcing or attempting to enforce said provisions."
Upon the other hand, Article 2189 of the Civil Code of the Philippines which provides that:
Provinces, cities and municipalities shall be liable for damages for the death of,
or injuries suffered by any person by reason of defective conditions of roads,
streets, bridges, public buildings and other public works under their control or
supervision.
constitutes a particular prescription making "provinces, cities and municipalities ... liable
for damages for the death of, or injury suffered by any person by reason" — specifically —
"of the defective condition of roads, streets, bridges, public buildings, and other public
works under their control or supervision." In other words, Art. 1, sec. 4, R.A. No. 409 refers
to liability arising from negligence, in general, regardless of the object, thereof, while Article
320
2189 of the Civil Code governs liability due to "defective streets, public buildings and other
public works" in particular and is therefore decisive on this specific case.
In the same suit, the Supreme Court clarified further that under Article 2189 of the Civil
Code, it is not necessary for the liability therein established to attach, that the defective
public works belong to the province, city or municipality from which responsibility is
exacted. What said article requires is that the province, city or municipality has either
"control or supervision" over the public building in question.
In the case at bar, there is no question that the Sta. Ana Public Market, despite the
Management and Operating Contract between respondent City and Asiatic Integrated
Corporation remained under the control of the former.
For one thing, said contract is explicit in this regard, when it provides:
II
That immediately after the execution of this contract, the SECOND PARTY shall
start the painting, cleaning, sanitizing and repair of the public markets and
talipapas and within ninety (90) days thereof, the SECOND PARTY shall submit
a program of improvement, development, rehabilitation and reconstruction of
the city public markets and talipapas subject to prior approval of the FIRST
PARTY. (Rollo, p. 44)
xxx xxx xxx
VI
That all present personnel of the City public markets and talipapas shall be
retained by the SECOND PARTY as long as their services remain satisfactory
and they shall be extended the same rights and privileges as heretofore enjoyed
by them. Provided, however, that the SECOND PARTY shall have the right,
subject to prior approval of the FIRST PARTY to discharge any of the present
employees for cause. (Rollo, p. 45).
VII
That the SECOND PARTY may from time to time be required by the FIRST
PARTY, or his duly authorized representative or representatives, to report, on
the activities and operation of the City public markets and talipapas and the
facilities and conveniences installed therein, particularly as to their cost of
construction, operation and maintenance in connection with the stipulations
contained in this Contract. (lbid)
The fact of supervision and control of the City over subject public market was admitted by
Mayor Ramon Bagatsing in his letter to Secretary of Finance Cesar Virata which reads:
These cases arose from the controversy over the Management and Operating
Contract entered into on December 28, 1972 by and between the City of Manila
and the Asiatic Integrated Corporation, whereby in consideration of a fixed
service fee, the City hired the services of the said corporation to undertake the
physical management, maintenance, rehabilitation and development of the
City's public markets and' Talipapas' subject to the control and supervision of
the City.
xxx xxx xxx
It is believed that there is nothing incongruous in the exercise of these powers
vis-a-vis the existence of the contract, inasmuch as the City retains the power

321
 of supervision and control over its public markets and talipapas under the terms
of the contract. (Exhibit "7-A") (Emphasis supplied.) (Rollo, p. 75).
In fact, the City of Manila employed a market master for the Sta. Ana Public Market whose
primary duty is to take direct supervision and control of that particular market, more
specifically, to check the safety of the place for the public.
Thus the Asst. Chief of the Market Division and Deputy Market Administrator of the City of
Manila testified as follows:
Court This market master is an employee of the City of Manila?
Mr. Ymson Yes, Your Honor.
Q What are his functions?
A Direct supervision and control over the market area assigned to
him."(T.s.n.,pp. 41-42, Hearing of May 20, 1977.)
xxx xxx xxx
Court As far as you know there is or is there any specific employee
assigned with the task of seeing to it that the Sta. Ana Market is
safe for the public?
Mr. Ymson Actually, as I stated, Your Honor, that the Sta. Ana has
its own market master. The primary duty of that market master is
to make the direct supervision and control of that particular
market, the check or verifying whether the place is safe for public
safety is vested in the market master. (T.s.n., pp. 2425, Hearing of
July 27, 1977.) (Emphasis supplied.) (Rollo, p. 76).
Finally, Section 30 (g) of the Local Tax Code as amended, provides:
The treasurer shall exercise direct and immediate supervision administration
and control over public markets and the personnel thereof, including those
whose duties concern the maintenance and upkeep of the market and
ordinances and other pertinent rules and regulations. (Emphasis supplied.)
(Rollo, p. 76)
The contention of respondent City of Manila that petitioner should not have ventured to go
to Sta. Ana Public Market during a stormy weather is indeed untenable. As observed by
respondent Court of Appeals, it is an error for the trial court to attribute the negligence to
herein petitioner. More specifically stated, the findings of appellate court are as follows:
... The trial court even chastised the plaintiff for going to market on a rainy day
just to buy bagoong. A customer in a store has the right to assume that the
owner will comply with his duty to keep the premises safe for customers. If he
ventures to the store on the basis of such assumption and is injured because
the owner did not comply with his duty, no negligence can be imputed to the
customer. (Decision, AC-G. R. CV No. 01387, Rollo, p. 19).
As a defense against liability on the basis of a quasi-delict, one must have exercised the
diligence of a good father of a family. (Art. 1173 of the Civil Code).
There is no argument that it is the duty of the City of Manila to exercise reasonable care to
keep the public market reasonably safe for people frequenting the place for their marketing
needs.
While it may be conceded that the fulfillment of such duties is extremely difficult during
storms and floods, it must however, be admitted that ordinary precautions could have been

322
taken during good weather to minimize the dangers to life and limb under those difficult
circumstances.
For instance, the drainage hole could have been placed under the stalls instead of on the
passage ways. Even more important is the fact, that the City should have seen to it that the
openings were covered. Sadly, the evidence indicates that long before petitioner fell into the
opening, it was already uncovered, and five (5) months after the incident happened, the
opening was still uncovered. (Rollo, pp. 57; 59). Moreover, while there are findings that
during floods the vendors remove the iron grills to hasten the flow of water (Decision, AC-
G.R. CV No. 0 1387; Rollo, p. 17), there is no showing that such practice has ever been
prohibited, much less penalized by the City of Manila. Neither was it shown that any sign
had been placed thereabouts to warn passersby of the impending danger.
To recapitulate, it appears evident that the City of Manila is likewise liable for damages
under Article 2189 of the Civil Code, respondent City having retained control and
supervision over the Sta. Ana Public Market and as tort-feasor under Article 2176 of the
Civil Code on quasi-delicts
Petitioner had the right to assume that there were no openings in the middle of the
passageways and if any, that they were adequately covered. Had the opening been covered,
petitioner could not have fallen into it. Thus the negligence of the City of Manila is the
proximate cause of the injury suffered, the City is therefore liable for the injury suffered by
the peti- 4 petitioner.
Respondent City of Manila and Asiatic Integrated Corporation being joint tort-feasors are
solidarily liable under Article 2194 of the Civil Code.
PREMISES CONSIDERED, the decision of the Court of Appeals is hereby MODIFIED,
making the City of Manila and the Asiatic Integrated Corporation solidarily liable to pay the
plaintiff P221.90 actual medical expenses, P900.00 for the amount paid for the operation
and management of the school bus, P20,000.00 as moral damages due to pain, sufferings
and sleepless nights and P10,000.00 as attorney's fees.
SO ORDERED.
Fernan (Chairman), Gutierrez, Jr., Padilla, Bidin and Cortes JJ., concur.

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

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

TEEHANKEE, J.:
An appeal in forma pauperis on pure questions of law from a decision of the Court of First
Instance of Manila. .

323
Plaintiffs-appellants as parents of their sixteen-year old son, Dominador Palisoc, and a
student in automotive mechanics at the Manila Technical Institute, Quezon Boulevard,
Manila, had filed on May 19, 1966, the action below for damages arising from the death on
March 10, 1966 of their son at the hands of a fellow student, defendant Virgilio L. Daffon,
at the laboratory room of the said Institute. .
Defendants, per the trial court's decision, are: "(T)he defendant Antonio C. Brillantes, at the
time when the incident which gave rise to his action occurred was a member of the Board
of Directors of the institute; 1 the defendant Teodosio Valenton, the president thereof; the
defendant Santiago M. Quibulue, instructor of the class to which the deceased belonged;
and the defendant Virgilio L. Daffon, a fellow student of the deceased. At the beginning the
Manila Technical Institute was a single proprietorship, but lately on August 2, 1962, it was
duly incorporated."
The facts that led to the tragic death of plaintiffs' son were thus narrated by the trial court:
"(T)he deceased Dominador Palisoc and the defendant Virgilio L. Daffon were classmates,
and on the afternoon of March 10, 1966, between two and three o'clock, they, together with
another classmate Desiderio Cruz were in the laboratory room located on the ground floor.
At that time the classes were in recess. Desiderio Cruz and Virgilio L. Daffon were working
on a machine while Dominador Palisoc was merely looking on at them. Daffon made a
remark to the effect that Palisoc was acting like a foreman. Because of this remark Palisoc
slapped slightly Daffon on the face. Daffon, in retaliation, gave Palisoc a strong flat blow on
the face, which was followed by other fist blows on the stomach. Palisoc retreated
apparently to avoid the fist blows, but Daffon followed him and both exchanged blows until
Palisoc stumbled on an engine block which caused him to fall face downward. Palisoc
became pale and fainted. First aid was administered to him but he was not revived, so he
was immediately taken to a hospital. He never regained consciousness; finally he died. The
foregoing is the substance of the testimony of Desiderio Cruz, the lone witness to the
incident."
The trial court expressly gave credence to this version of the incident, as testified to by the
lone eyewitness, Desiderio Cruz, a classmate of the protagonists, as that of a disinterested
witness who "has no motive or reason to testify one way or another in favor of any party"
and rejected the self-exculpatory version of defendant Daffon denying that he had inflicted
any fist blows on the deceased. .
With the postmortem findings of Dr. Angelo Singian of the Manila Police Department who
performed the autopsy re "Cause of death: shock due to traumatic fracture of theribs (6th
and 7th, left, contusion of the pancreas and stomach with intra-gastric hemorrhage and
slight subarachnoid hemorrhage on the brain," and his testimony that these internal
injuries of the deceased were caused "probably by strong fist blows," the trial court found
defendant Daffon liable for the quasi delict under Article 2176 of the Civil Code.3 It held
that "(T)he act, therefore, of the accused Daffon in giving the deceased strong fistblows in
the stomach which ruptured his internal organs and caused his death falls within the
purview of this article of the Code."4
The trial court, however, absolved from liability the three other defendants-officials of the
Manila Technical Institute, in this wise:
... Their liabilities are based on the provisions of Article 2180 of the New Civil
Code which reads:
Art. 2180. ... .
324
 Lastly, teachers or heads of establishments of arts and trades shall
be liable for damages caused by their pupils and students and
apprentices, so long as they remain in their custody.
In the opinion of the Court, this article of the Code is not applicable to the case
at bar, since this contemplates the situation where the control or influence of
the teachers and heads of school establishments over the conduct and actions
by the pupil supersedes those of the parents.
CIVIL LAW: DAMAGES ART 2180. NEW CIVIL CODE
CONSTRUED: — The clause "so long as they remain in their
custody" contained in Article 2180 of the new civil code
contemplated a situation where the pupil lives and boards with the
teacher, such that the control or influence on the pupil supersedes
those of the parents. In those circumstances the control or
influence over the conduct and actions of the pupil as well as the
responsibilities for their sort would pass from the father and
mother to the teachers. (Ciriaco L. Mercado, Petitioner vs. the
Court of Appeals, Manuel Quisumbing, Jr., et al., respondents,
G.R. No. L-14862, May 30, 1960).5
There is no evidence that the accused Daffon lived and boarded with his
teacher or the other defendant officials of the school. These defendants cannot
therefore be made responsible for the tort of the defendant Daffon.
Judgment was therefore rendered by the trial court as follows:
1. Sentencing the defendant Virgilio L. Daffon to pay the plaintiffs as heirs of
the deceased Dominador Palisoc (a) P6,000.00 for the death of Dominador
Palisoc; (b) P3,375.00 for actual and compensatory expenses; (c) P5,000.00 for
moral damages; (d) P10,000.00 for loss of earning power, considering that the
deceased was only between sixteen and seventeen years, and in good health
when he died, and (e) P2,000.00 for attorney's fee, plus the costs of this
action. .
2. Absolving the other defendants. .
3. Dismissing the defendants' counterclaim for lack of merit.
Plaintiffs' appeal raises the principal legal question that under the factual findings of the
trial court, which are now beyond review, the trial court erred in absolving the defendants-
school officials instead of holding them jointly and severally liable as tortfeasors, with
defendant Daffon, for the damages awarded them as a result of their son's death. The Court
finds the appeal, in the main, to be meritorious. .
1. The lower court absolved defendants-school officials on the ground that the provisions of
Article 2180, Civil Code, which expressly hold "teachers or heads of establishments of arts
and trades ... liable for damages caused by their pupils and students and apprentices, so
long as they remain in their custody," are not applicable to to the case at bar, since "there
is no evidence that the accused Daffon [who inflicted the fatal fistblows] 6 lived and boarded
with his teacher or the other defendants-officials of the school. These defendants cannot
therefore be made responsible for the tort of the defendant Daffon."
The lower court based its legal conclusion expressly on the Court's dictum in Mercado vs.
Court of Appeals,7 that "(I)t would seem that the clause "so long as they remain in their
custody," contemplates a situation where the pupil lives and boards with the teacher, such
325
that the control, direction and influence on the pupil supersedes those of the parents. In
these circumstances the control or influence over the conduct and actions of the pupil
would pass from the father and mother to the teacher; and so would the responsibility for
the torts of the pupil. Such a situation does not appear in the case at bar; the pupils
appear to go to school during school hours and go back to their homes with their parents
after school is over." This dictum had been made in rejecting therein petitioner father's
contention that his minor son's school, Lourdes Catholic School at Kanlaon, Quezon City
[which was not a party to the case] should be held responsible, rather than him as father,
for the moral damages of P2,000.00 adjudged against him for the physical injury inflicted
by his son on a classmate. [A cut on the right cheek with a piece of razor which costs only
P50.00 by way of medical expenses to treat and cure, since the wound left no scar.] The
moral damages award was after all set aside by the Court on the ground that none of the
specific cases provided in Article 2219, Civil Code, for awarding moral damages had been
established, petitioner's son being only nine years old and not having been shown to have
"acted with discernment" in inflicting the injuries on his classmate. .
The dictum in Mercado was based in turn on another dictum in the earlier case of Exconde
vs. Capuno,8 where the only issue involved as expressly stated in the decision, was whether
the therein defendant-father could be civilly liable for damages resulting from a death
caused in a motor vehicle accident driven unauthorizedly and negligently by his minor son,
(which issue was resolved adversely against the father). Nevertheless, the dictum in such
earlier case that "It is true that under the law abovequoted, teachers or directors of arts
and trades are liable for any damage caused by their pupils or apprentices while they are
under their custody, but this provision only applies to an institution of arts and trades and
not to any academic educational institution" was expressly cited and quoted in Mercado. .
2. The case at bar was instituted directly against the school officials and squarely raises the
issue of liability of teachers and heads of schools under Article 2180, Civil Code, for
damages caused by their pupils and students against fellow students on the school
premises. Here, the parents of the student at fault, defendant Daffon, are not involved,
since Daffon was already of age at the time of the tragic incident. There is no question,
either, that the school involved is a non-academic school, 9 the Manila Technical Institute
being admittedly a technical vocational and industrial school. .
The Court holds that under the cited codal article, defendants head and teacher of the
Manila Technical Institute (defendants Valenton and Quibulue, respectively) are liable
jointly and severally for damages to plaintiffs-appellants for the death of the latter's minor
son at the hands of defendant Daffon at the school's laboratory room. No liability attaches
to defendant Brillantes as a mere member of the school's board of directors. The school
itself cannot be held similarly liable, since it has not been properly impleaded as party
defendant. While plaintiffs sought to so implead it, by impleading improperly defendant
Brillantes, its former single proprietor, the lower court found that it had been incorporated
since August 2, 1962, and therefore the school itself, as thus incorporated, should have
been brought in as party defendant. Plaintiffs failed to do so, notwithstanding that
Brillantes and his co-defendants in their reply to plaintiffs' request for admission had
expressly manifested and made of record that "defendant Antonio C. Brillantes is not the
registered owner/head of the "Manila Technical Institute" which is now a corporation and is
not owned by any individual person."10

326
3. The rationale of such liability of school heads and teachers for the tortious acts of their
pupils and students, so long as they remain in their custody, is that they stand, to a
certain extent, as to their pupils and students, in loco parentis and are called upon to
"exercise reasonable supervision over the conduct of the child." 11 This is expressly provided
for in Articles 349, 350 and 352 of the Civil Code. 12 In the law of torts, the governing
principle is that the protective custody of the school heads and teachers is mandatorily
substituted for that of the parents, and hence, it becomes their obligation as well as that of
the school itself to provide proper supervision of the students' activities during the whole
time that they are at attendance in the school, including recess time, as well as to take the
necessary precautions to protect the students in their custody from dangers and hazards
that would reasonably be anticipated, including injuries that some student themselves may
inflict willfully or through negligence on their fellow students. .
4. As tersely summarized by Mr. Justice J.B.L. Reyes in his dissenting opinion in Exconde,
"the basis of the presumption of negligence of Art. 1903 [now 2180] is some culpa in
vigilando that the parents, teachers, etc. are supposed to have incurred in the exercise of
their authority" 13 and "where the parent places the child under the effective authority of
the teacher, the latter, and not the parent, should be the one answerable for the torts
committed while under his custody, for the very reason that the parent is not supposed to
interfere with the discipline of the school nor with the authority and supervision of the
teacher while the child is under instruction." The school itself, likewise, has to respond for
the fault or negligence of its school head and teachers under the same cited article. 14
5. The lower court therefore erred in law in absolving defendants-school officials on the
ground that they could be held liable under Article 2180, Civil Code, only if the student
who inflicted the fatal fistblows on his classmate and victim "lived and boarded with his
teacher or the other defendants officials of the school." As stated above, the phrase used in
the cited article — "so long as (the students) remain in their custody" means the protective
and supervisory custody that the school and its heads and teachers exercise over the
pupils and students for as long as they are at attendance in the school, including recess
time. There is nothing in the law that requires that for such liability to attach the pupil or
student who commits the tortious act must live and board in the school, as erroneously
held by the lower court, and the dicta in Mercado (as well as in Exconde) on which it relied,
must now be deemed to have been set aside by the present decision. .
6. Defendants Valenton and Quibulue as president and teacher-in-charge of the school
must therefore be held jointly and severally liable for the quasi-delict of their co-defendant
Daffon in the latter's having caused the death of his classmate, the deceased Dominador
Palisoc. The unfortunate death resulting from the fight between the protagonists-students
could have been avoided, had said defendants but complied with their duty of providing
adequate supervision over the activities of the students in the school premises to protect
their students from harm, whether at the hands of fellow students or other parties. At any
rate, the law holds them liable unless they relieve themselves of such liability, in
compliance with the last paragraph of Article 2180, Civil Code, by "(proving) that they
observed all the diligence of a good father of a family to prevent damage." In the light of the
factual findings of the lower court's decision, said defendants failed to prove such
exemption from liability. .
7. Plaintiffs-appellees' contention that the award of P6,000.00 as indemnity for the death of
their son should be increased to P12,000.00 as set by the Court in People vs. Pantoja,15 and
327
observed in all death indemnity cases thereafter is well taken. The Court, in Pantoja, after
noting the decline in the purchasing power of the Philippine peso, had expressed its
"considered opinion that the amount of award of compensatory damages for death caused
by a crime or quasi-delict should now be P12,000.00." The Court thereby adjusted the
minimum amount of "compensatory damages for death caused by a crime or quasi-delict"
as per Article 2206, Civil Code, from the old stated minimum of P3,000.00 to P12,000.00,
which amount is to be awarded "even though there may have been mitigating
circumstances" pursuant to the express provisions of said codal article. .
8. Plaintiffs-appellees' other claims on appeal that the lower court should have awarded
exemplary damages and imposed legal interest on the total damages awarded, besides
increasing the award of attorney's fees all concern matters that are left by law to the
discretion of the trial court and the Court has not been shown any error or abuse in the
exercise of such discretion on the part of the trial court. 16 Decisive here is the touchstone
provision of Article 2231, Civil Code, that "In quasi-delicts, exemplary damages may be
granted if the defendant acted with gross negligence." No gross negligence on the part of
defendants was found by the trial court to warrant the imposition of exemplary damages,
as well as of interest and increased attorney's fees, and the Court has not been shown in
this appeal any compelling reason to disturb such finding. .
ACCORDINGLY, the judgment appealed from is modified so as to provide as follows: .
1. Sentencing the defendants Virgilio L. Daffon, TeodosioV. Valenton and Santiago M.
Quibulue jointly and severally to pay plaintiffs as heirs of the deceased Dominador Palisoc
(a) P12,000.00 for the death of Dominador Palisoc; (b) P3,375.00 for actual and
compensatory expenses; (c) P5,000.00 for moral, damages; (d) P10,000.00 for loss of
earning power and (e) P2,000.00 for attorney's fee, plus the costs of this action in both
instances; 2. absolving defendant Antonio C. Brillantes from the complaint; and 3.
dismissing defendants' counterclaims. .
Concepcion, C.J., Villamor and Makasiar, JJ., concur. .
Dizon, J., took no part. .
REYES, J.B.L., J., concurring: .
I concur with the opinion of Mr. Justice Teehankee but would like to clarify that the
argument of the dissenting opinion of the effect that the responsibility of teachers and
school officers under Articles 2180 should be limited to pupils who are minors (below the
age of majority) is not in accord with the plain text of the law. Article 2180 of the Civil Code
of the Philippines is to the following effect: .
The obligation imposed by article 2176 is demandable not only for one's own
acts or omissions, but also for those of persons for whom one is responsible. .
The father and, in case of his death or incapacity, the mother, are responsible
for the damages caused by the minor children who live in their company. .
Guardians are liable for damages caused by the minors or incapacitated
persons who are under their authority and live in their company. .
The owners and managers of an establishment or enterprise are likewise
responsible for damages caused by their employees in the service of the
branches in which the latter are employed or on the occasion of their functions.
.

328
 Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even though
the former are not engaged in any business or industry. .
The State is responsible in like manner when it acts through a special agent;
but not when the damage has been caused by the official to whom the task
done properly pertains, in which case what is provided in article 2176 shall be
applicable. .
Lastly, teachers or heads of establishments of arts and trades shall be liable for
damages caused by their pupils and students or apprentices, so long as they
remain in their custody.
The responsibility treated of in this article shall cease when the persons herein
mentioned prove that they observe all the diligence of a good father of a family
to prevent damages.
Examination of the article shows that where the responsibility prescribed therein is limited
to illegal acts during minority, the article expressly so provides, as in the case of the
parents and of the guardians. It is natural to expect that if the law had intended to
similarly restrict the civil responsibility of the other categories of persons enumerated in the
article, it would have expressly so stated. The fact that it has not done so indicates an
intent that the liability be not restricted to the case of persons under age. Further, it is not
without significance that the teachers and heads of scholarly establishments are not
grouped with parents and guardians but ranged with owners and managers of enterprises,
employers and the state, as to whom no reason is discernible to imply that they should
answer only for minors. .
Giorgi, in his well-known "Teoria de las Obligaciones en el Derecho Moderno", Volume 5,
page 404, No. 272 (Sp. Ed.), after noting the split among commentators on the point it
issue, observes with considerable cogency that —
272. Ante esta variedad de opiniones, ninguna de las cuales se funds en
argumentos merecedores de seria ponderacion, no es facil tomar un partido.
Esto no obstante, debiendo manisfestar nuestra opinion, nos acercamos a la de
los que no estiman necesaria la menor edad del discipulo o del aprendiz;
porque si el aforismo ubi voluit dixit, ubi noluit tacuit, no es siempre argumento
seguro para interpreter la ley, es infalible cuanto se refiere a una misma
disposicion relative a varios casos. Y tal es el art. 1.153. Lo que haya
establecido important poco si, elevandones a los principios de razon, puede
dudarse de la oportunidad de semajante diferencia; porque la voluntad cierta
del legislador prevalece in iure condito a cualquier otra consideracion. Por otra
parte, si bien se considera, no puede parecer extrano o absurdo el suponer que
un discipulo y un aprendiz, aunque mayores de edad, acepten voluntariamente
la entera vigilancia de su preceptor mientras dura la educacion. Ni parece
dudoso desde el momento que los artesanos y los preceptores deben, al par de
los padres, responder civilmente de los daños comitidos por sus discipulos,
aun cuando estos esten faltos de discernimiento.
Similarly, Planiol-Ripert, in their "Droit Civil Pratique," Volume VI, No. 635 (Spanish
version), say that —
635. Personas de quien responde. — Si bien la responsibilidad del maestro es
originalmente una estension de la de los padres (1), el art. 1384 no especifica
329
 que los alumnos y aprendices han de ser menores de edad, por lo que la
presuncion de culpa funcionara aun cuando sean mayores (2); pero, la
vigilancia no tendra que ser ejercida en iguales terminos. Aun respecto a los
menores variara segun la edad, extremo que tendra que ternese en ceunta a los
fines de apreciar si el maestro ha podido impedir el acto nocivo o no. .
I submit, finally, that while in the case of parents and guardians, their authority and
supervision over the children and wards end by law upon the latter reaching majority age,
the authority and custodial supervision over pupils exist regardless of the age of the latter.
A student over twenty-one, by enrolling and attending a school, places himself under the
custodial supervision and disciplinary authority of the school authorities, which is the
basis of the latter's correlative responsibility for his torts, committed while under such
authority. Of course, the teachers' control is not as plenary as when the student is a minor;
but that circumstance can only affect the decree of the responsibility but cannot negate the
existence thereof. It is only a factor to be appreciated in determining whether or not the
defendant has exercised due diligence in endeavoring to prevent the injury, as prescribed in
the last paragraph of Article 2180. .
Barredo, J., concurs.
 
 
 
Separate Opinions
 
MAKALINTAL, J., dissenting:
I vote to affirm the decision appealed from. I see no reason to depart from the doctrine laid
down by this Court in Mercado v. Court of Appeals, 108 Phil. 414, where the clause "so long
as they remain in their custody" used in Article 2180 of the Civil Code was construed as
referring to a "situation where the pupil lives and boards with the teacher, such that the
(latter's) control, direction and influence on the pupil supersedes those of the parents." I
think it is highly unrealistic and conducive to unjust results, considering the size of the
enrollment in many of our educational institutions, academic and non-academic, as well as
the temper, attitudes and often destructive activism of the students, to hold their teachers
and/or the administrative heads of the schools directly liable for torts committed by them.
When even the school authorities find themselves besieged, beleaguered and attacked, and
unable to impose the traditional disciplinary measures formerly recognized as available to
them, such as suspension or outright expulsion of the offending students, it flies in the face
of logic and reality to consider such students, merely from the fact of enrollment and class
attendance, as "in the custody" of the teachers or school heads within the meaning of the
statute, and to hold the latter liable unless they can prove that they have exercised "all the
diligence of a good father of the family to prevent damage." Article 2180, if applied as
appellants construe it, would be bad law. It would demand responsibility without
commensurate authority, rendering teachers and school heads open to damage suits for
causes beyond their power to control. Present conditions being what they are, I believe the
restrictive interpretation of the aforesaid provision enunciated in Mercado should be
maintained. .
With particular reference to the case at bar, one other factor constrains me to dissent. The
opinion of the majority states: "Here, the parents of the student at fault, defendant Daffon,
330
are not involved, since Daffon was already of age at the time of the tragic incident." This
statement is of course in accordance with Article 2180, which says that "the father and, in
case of his death or incapacity, the mother, are responsible for the damages caused by the
minor children who live in their company." Note that for parental responsibility to arise the
children must be minors who live in their company. If, as stated also in the opinion of the
majority, "the rationale of (the) liability of school heads and teachers for the tortious acts of
their pupils and students, so long as they remain in their custody, is that they stand, to a
certain extent, as to their pupils and students, in loco parentis and are called upon to
exercise reasonable supervision over the conduct of the child," then it stands to reason that
(1) the clause "so long as they remain in their custody" as used in reference to teachers and
school heads should be equated with the phrase "who live in their company" as used in
reference to parents; and (2) that just as parents are not responsible for damages caused by
their children who are no longer minors, so should teachers and school heads be exempt
from liability for the tortious acts of their students in the same age category. I find no
justification, either in the law itself or in justice and equity, to make a substitute parent
liable where the real parent would be free from liability. .
Zaldivar, Castro and Fernando, JJ., concur.
 
 
 
Separate Opinions
MAKALINTAL, J., dissenting:
I vote to affirm the decision appealed from. I see no reason to depart from the doctrine laid
down by this Court in Mercado v. Court of Appeals, 108 Phil. 414, where the clause "so long
as they remain in their custody" used in Article 2180 of the Civil Code was construed as
referring to a "situation where the pupil lives and boards with the teacher, such that the
(latter's) control, direction and influence on the pupil supersedes those of the parents." I
think it is highly unrealistic and conducive to unjust results, considering the size of the
enrollment in many of our educational institutions, academic and non-academic, as well as
the temper, attitudes and often destructive activism of the students, to hold their teachers
and/or the administrative heads of the schools directly liable for torts committed by them.
When even the school authorities find themselves besieged, beleaguered and attacked, and
unable to impose the traditional disciplinary measures formerly recognized as available to
them, such as suspension or outright expulsion of the offending students, it flies in the face
of logic and reality to consider such students, merely from the fact of enrollment and class
attendance, as "in the custody" of the teachers or school heads within the meaning of the
statute, and to hold the latter liable unless they can prove that they have exercised "all the
diligence of a good father of the family to prevent damage." Article 2180, if applied as
appellants construe it, would be bad law. It would demand responsibility without
commensurate authority, rendering teachers and school heads open to damage suits for
causes beyond their power to control. Present conditions being what they are, I believe the
restrictive interpretation of the aforesaid provision enunciated in Mercado should be
maintained. .
With particular reference to the case at bar, one other factor constrains me to dissent. The
opinion of the majority states: "Here, the parents of the student at fault, defendant Daffon,
are not involved, since Daffon was already of age at the time of the tragic incident." This
331
statement is of course in accordance with Article 2180, which says that "the father and, in
case of his death or incapacity, the mother, are responsible for the damages caused by the
minor children who live in their company." Note that for parental responsibility to arise the
children must be minors who live in their company. If, as stated also in the opinion of the
majority, "the rationale of (the) liability of school heads and teachers for the tortious acts of
their pupils and students, so long as they remain in their custody, is that they stand, to a
certain extent, as to their pupils and students, in loco parentis and are called upon to
exercise reasonable supervision over the conduct of the child," then it stands to reason that
(1) the clause "so long as they remain in their custody" as used in reference to teachers and
school heads should be equated with the phrase "who live in their company" as used in
reference to parents; and (2) that just as parents are not responsible for damages caused by
their children who are no longer minors, so should teachers and school heads be exempt
from liability for the tortious acts of their students in the same age category. I find no
justification, either in the law itself or in justice and equity, to make a substitute parent
liable where the real parent would be free from liability. .
Zaldivar, Castro and Fernando, JJ., concur.

G.R. No. L-47745 April 15, 1988

JOSE S. AMADORA, LORETA A. AMADORA, JOSE A. AMADORA JR., NORMA A. YLAYA
PANTALEON A. AMADORA, JOSE A. AMADORA III, LUCY A. AMADORA, ROSALINDA A.
AMADORA, PERFECTO A. AMADORA, SERREC A. AMADORA, VICENTE A. AMADORA
and MARIA TISCALINA A. AMADORA, petitioners
vs.
HONORABLE COURT OF APPEALS, COLEGIO DE SAN JOSE-RECOLETOS, VICTOR
LLUCH SERGIO P. DLMASO JR., CELESTINO DICON, ANIANO ABELLANA, PABLITO
DAFFON thru his parents and natural guardians, MR. and MRS. NICANOR GUMBAN,
and ROLANDO VALENCIA, thru his guardian, A. FRANCISCO ALONSO, respondents.
Jose S. Amadora & Associates for petitioners.
Padilla Law Office for respondents.

CRUZ, J.:
Like any prospective graduate, Alfredo Amadora was looking forward to the commencement
exercises where he would ascend the stage and in the presence of his relatives and friends
receive his high school diploma. These ceremonies were scheduled on April 16, 1972. As it
turned out, though, fate would intervene and deny him that awaited experience. On April
13, 1972, while they were in the auditorium of their school, the Colegio de San Jose-
Recoletos, a classmate, Pablito Damon, fired a gun that mortally hit Alfredo, ending all his
expectations and his life as well. The victim was only seventeen years old. 1
Daffon was convicted of homicide thru reckless imprudence . 2 Additionally, the herein
petitioners, as the victim's parents, filed a civil action for damages under Article 2180 of the
Civil Code against the Colegio de San Jose-Recoletos, its rector the high school principal,
the dean of boys, and the physics teacher, together with Daffon and two other students,
through their respective parents. The complaint against the students was later dropped.
After trial, the Court of First Instance of Cebu held the remaining defendants liable to the
plaintiffs in the sum of P294,984.00, representing death compensation, loss of earning
332
capacity, costs of litigation, funeral expenses, moral damages, exemplary damages, and
attorney's fees .3 On appeal to the respondent court, however, the decision was reversed
and all the defendants were completely absolved .4
In its decision, which is now the subject of this petition for certiorari under Rule 45 of the
Rules of Court, the respondent court found that Article 2180 was not applicable as the
Colegio de San Jose-Recoletos was not a school of arts and trades but an academic
institution of learning. It also held that the students were not in the custody of the school
at the time of the incident as the semester had already ended, that there was no clear
identification of the fatal gun and that in any event the defendant, had exercised the
necessary diligence in preventing the injury. 5
The basic undisputed facts are that Alfredo Amadora went to the San Jose-Recoletos on
April 13, 1972, and while in its auditorium was shot to death by Pablito Daffon, a
classmate. On the implications and consequences of these facts, the parties sharply
disagree.
The petitioners contend that their son was in the school to show his physics experiment as
a prerequisite to his graduation; hence, he was then under the custody of the private
respondents. The private respondents submit that Alfredo Amadora had gone to the school
only for the purpose of submitting his physics report and that he was no longer in their
custody because the semester had already ended.
There is also the question of the identity of the gun used which the petitioners consider
important because of an earlier incident which they claim underscores the negligence of the
school and at least one of the private respondents. It is not denied by the respondents that
on April 7, 1972, Sergio Damaso, Jr., the dean of boys, confiscated from Jose Gumban an
unlicensed pistol but later returned it to him without making a report to the principal or
taking any further action . 6 As Gumban was one of the companions of Daffon when the
latter fired the gun that killed Alfredo, the petitioners contend that this was the same pistol
that had been confiscated from Gumban and that their son would not have been killed if it
had not been returned by Damaso. The respondents say, however, that there is no proof
that the gun was the same firearm that killed Alfredo.
Resolution of all these disagreements will depend on the interpretation of Article 2180
which, as it happens, is invoked by both parties in support of their conflicting positions.
The pertinent part of this article reads as follows:
Lastly, teachers or heads of establishments of arts and trades shall be liable for
damages caused by their pupils and students or apprentices so long as they
remain in their custody.
Three cases have so far been decided by the Court in connection with the above-quoted
provision, to wit: Exconde v. Capuno 7 Mercado v. Court of Appeals, 8 and Palisoc v.
Brillantes. 9 These will be briefly reviewed in this opinion for a better resolution of the case
at bar.
In the Exconde Case, Dante Capuno, a student of the Balintawak Elementary School and a
Boy Scout, attended a Rizal Day parade on instructions of the city school supervisor. After
the parade, the boy boarded a jeep, took over its wheel and drove it so recklessly that it
turned turtle, resulting in the death of two of its passengers. Dante was found guilty of
double homicide with reckless imprudence. In the separate civil action flied against them,
his father was held solidarily liable with him in damages under Article 1903 (now Article
2180) of the Civil Code for the tort committed by the 15-year old boy.
333
This decision, which was penned by Justice Bautista Angelo on June 29,1957, exculpated
the school in an obiter dictum (as it was not a party to the case) on the ground that it was
riot a school of arts and trades. Justice J.B.L. Reyes, with whom Justices Sabino Padilla
and Alex Reyes concurred, dissented, arguing that it was the school authorities who should
be held liable Liability under this rule, he said, was imposed on (1) teachers in general; and
(2) heads of schools of arts and trades in particular. The modifying clause "of
establishments of arts and trades" should apply only to "heads" and not "teachers."
Exconde was reiterated in the Mercado Case, and with an elaboration. A student cut a
classmate with a razor blade during recess time at the Lourdes Catholic School in Quezon
City, and the parents of the victim sued the culprits parents for damages. Through Justice
Labrador, the Court declared in another obiter (as the school itself had also not been sued
that the school was not liable because it was not an establishment of arts and trades.
Moreover, the custody requirement had not been proved as this "contemplates a situation
where the student lives and boards with the teacher, such that the control, direction and
influences on the pupil supersede those of the parents." Justice J.B.L. Reyes did not take
part but the other members of the court concurred in this decision promulgated on May 30,
1960.
In Palisoc vs. Brillantes, decided on October 4, 1971, a 16-year old student was killed by a
classmate with fist blows in the laboratory of the Manila Technical Institute. Although the
wrongdoer — who was already of age — was not boarding in the school, the head thereof
and the teacher in charge were held solidarily liable with him. The Court declared through
Justice Teehankee:
The phrase used in the cited article — "so long as (the students) remain in their
custody" — means the protective and supervisory custody that the school and
its heads and teachers exercise over the pupils and students for as long as they
are at attendance in the school, including recess time. There is nothing in the
law that requires that for such liability to attach, the pupil or student who
commits the tortious act must live and board in the school, as erroneously held
by the lower court, and the dicta in Mercado (as well as in Exconde) on which it
relied, must now be deemed to have been set aside by the present decision.
This decision was concurred in by five other members, 10 including Justice J.B.L. Reyes,
who stressed, in answer to the dissenting opinion, that even students already of age were
covered by the provision since they were equally in the custody of the school and subject to
its discipline. Dissenting with three others, 11 Justice Makalintal was for retaining the
custody interpretation in Mercado and submitted that the rule should apply only to torts
committed by students not yet of age as the school would be acting only in loco parentis.
In a footnote, Justice Teehankee said he agreed with Justice Reyes' dissent in the Exconde
Case but added that "since the school involved at bar is a non-academic school, the
question as to the applicability of the cited codal provision to academic institutions will
have to await another case wherein it may properly be raised."
This is the case.
Unlike in Exconde and Mercado, the Colegio de San Jose-Recoletos has been directly
impleaded and is sought to be held liable under Article 2180; and unlike in Palisoc, it is not
a school of arts and trades but an academic institution of learning. The parties herein have
also directly raised the question of whether or not Article 2180 covers even establishments

334
which are technically not schools of arts and trades, and, if so, when the offending student
is supposed to be "in its custody."
After an exhaustive examination of the problem, the Court has come to the conclusion that
the provision in question should apply to all schools, academic as well as non-academic.
Where the school is academic rather than technical or vocational in nature, responsibility
for the tort committed by the student will attach to the teacher in charge of such student,
following the first part of the provision. This is the general rule. In the case of
establishments of arts and trades, it is the head thereof, and only he, who shall be held
liable as an exception to the general rule. In other words, teachers in general shall be liable
for the acts of their students except where the school is technical in nature, in which case
it is the head thereof who shall be answerable. Following the canon of reddendo singula
singulis "teachers" should apply to the words "pupils and students" and "heads of
establishments of arts and trades" to the word "apprentices."
The Court thus conforms to the dissenting opinion expressed by Justice J.B.L. Reyes in
Exconde where he said in part:
I can see no sound reason for limiting Art. 1903 of the Old Civil Code to
teachers of arts and trades and not to academic ones. What substantial
difference is there between them insofar as concerns the proper supervision
and vice over their pupils? It cannot be seriously contended that an academic
teacher is exempt from the duty of watching that his pupils do not commit a
tort to the detriment of third Persons, so long as they are in a position to
exercise authority and Supervision over the pupil. In my opinion, in the phrase
"teachers or heads of establishments of arts and trades" used in Art. 1903 of
the old Civil Code, the words "arts and trades" does not qualify "teachers" but
only "heads of establishments." The phrase is only an updated version of the
equivalent terms "preceptores y artesanos" used in the Italian and French Civil
Codes.
If, as conceded by all commentators, the basis of the presumption of negligence
of Art. 1903 in some culpa in vigilando that the parents, teachers, etc. are
supposed to have incurred in the exercise of their authority, it would seem
clear that where the parent places the child under the effective authority of the
teacher, the latter, and not the parent, should be the one answerable for the
torts committed while under his custody, for the very reason/that the parent is
not supposed to interfere with the discipline of the school nor with the
authority and supervision of the teacher while the child is under instruction.
And if there is no authority, there can be no responsibility.
There is really no substantial distinction between the academic and the non-academic
schools insofar as torts committed by their students are concerned. The same vigilance is
expected from the teacher over the students under his control and supervision, whatever
the nature of the school where he is teaching. The suggestion in the Exconde and Mercado
Cases is that the provision would make the teacher or even the head of the school of arts
and trades liable for an injury caused by any student in its custody but if that same tort
were committed in an academic school, no liability would attach to the teacher or the
school head. All other circumstances being the same, the teacher or the head of the
academic school would be absolved whereas the teacher and the head of the non-academic
school would be held liable, and simply because the latter is a school of arts and trades.
335
The Court cannot see why different degrees of vigilance should be exercised by the school
authorities on the basis only of the nature of their respective schools. There does not seem
to be any plausible reason for relaxing that vigilance simply because the school is academic
in nature and for increasing such vigilance where the school is non-academic. Notably, the
injury subject of liability is caused by the student and not by the school itself nor is it a
result of the operations of the school or its equipment. The injury contemplated may be
caused by any student regardless of the school where he is registered. The teacher certainly
should not be able to excuse himself by simply showing that he is teaching in an academic
school where, on the other hand, the head would be held liable if the school were non-
academic.
These questions, though, may be asked: If the teacher of the academic school is to be held
answerable for the torts committed by his students, why is it the head of the school only
who is held liable where the injury is caused in a school of arts and trades? And in the case
of the academic or non- technical school, why not apply the rule also to the head thereof
instead of imposing the liability only on the teacher?
The reason for the disparity can be traced to the fact that historically the head of the school
of arts and trades exercised a closer tutelage over his pupils than the head of the academic
school. The old schools of arts and trades were engaged in the training of
artisans apprenticed to their master who personally and directly instructed them on the
technique and secrets of their craft. The head of the school of arts and trades was such a
master and so was personally involved in the task of teaching his students, who usually
even boarded with him and so came under his constant control, supervision and influence.
By contrast, the head of the academic school was not as involved with his students and
exercised only administrative duties over the teachers who were the persons directly
dealing with the students. The head of the academic school had then (as now) only a
vicarious relationship with the students. Consequently, while he could not be directly
faulted for the acts of the students, the head of the school of arts and trades, because of his
closer ties with them, could be so blamed.
It is conceded that the distinction no longer obtains at present in view of the expansion of
the schools of arts and trades, the consequent increase in their enrollment, and the
corresponding diminution of the direct and personal contract of their heads with the
students. Article 2180, however, remains unchanged. In its present state, the provision
must be interpreted by the Court according to its clear and original mandate until the
legislature, taking into account the charges in the situation subject to be regulated, sees fit
to enact the necessary amendment.
The other matter to be resolved is the duration of the responsibility of the teacher or the
head of the school of arts and trades over the students. Is such responsibility co-extensive
with the period when the student is actually undergoing studies during the school term, as
contended by the respondents and impliedly admitted by the petitioners themselves?
From a reading of the provision under examination, it is clear that while the custody
requirement, to repeat Palisoc v. Brillantes, does not mean that the student must be
boarding with the school authorities, it does signify that the student should be within the
control and under the influence of the school authorities at the time of the occurrence of
the injury. This does not necessarily mean that such, custody be co-terminous with the
semester, beginning with the start of classes and ending upon the close thereof, and
excluding the time before or after such period, such as the period of registration, and in the
336
case of graduating students, the period before the commencement exercises. In the view of
the Court, the student is in the custody of the school authorities as long as he is under the
control and influence of the school and within its premises, whether the semester has not
yet begun or has already ended.
It is too tenuous to argue that the student comes under the discipline of the school only
upon the start of classes notwithstanding that before that day he has already registered
and thus placed himself under its rules. Neither should such discipline be deemed ended
upon the last day of classes notwithstanding that there may still be certain requisites to be
satisfied for completion of the course, such as submission of reports, term papers,
clearances and the like. During such periods, the student is still subject to the disciplinary
authority of the school and cannot consider himself released altogether from observance of
its rules.
As long as it can be shown that the student is in the school premises in pursuance of a
legitimate student objective, in the exercise of a legitimate student right, and even in the
enjoyment of a legitimate student right, and even in the enjoyment of a legitimate student
privilege, the responsibility of the school authorities over the student continues. Indeed,
even if the student should be doing nothing more than relaxing in the campus in the
company of his classmates and friends and enjoying the ambience and atmosphere of the
school, he is still within the custody and subject to the discipline of the school authorities
under the provisions of Article 2180.
During all these occasions, it is obviously the teacher-in-charge who must answer for his
students' torts, in practically the same way that the parents are responsible for the child
when he is in their custody. The teacher-in-charge is the one designated by the dean,
principal, or other administrative superior to exercise supervision over the pupils in the
specific classes or sections to which they are assigned. It is not necessary that at the time
of the injury, the teacher be physically present and in a position to prevent it. Custody does
not connote immediate and actual physical control but refers more to the influence exerted
on the child and the discipline instilled in him as a result of such influence. Thus, for the
injuries caused by the student, the teacher and not the parent shag be held responsible if
the tort was committed within the premises of the school at any time when its authority
could be validly exercised over him.
In any event, it should be noted that the liability imposed by this article is supposed to fall
directly on the teacher or the head of the school of arts and trades and not on the school
itself. If at all, the school, whatever its nature, may be held to answer for the acts of its
teachers or even of the head thereof under the general principle of respondeat superior, but
then it may exculpate itself from liability by proof that it had exercised the diligence of
a bonus paterfamilias.
Such defense is, of course, also available to the teacher or the head of the school of arts
and trades directly held to answer for the tort committed by the student. As long as the
defendant can show that he had taken the necessary precautions to prevent the injury
complained of, he can exonerate himself from the liability imposed by Article 2180, which
also states that:
The responsibility treated of in this article shall cease when the Persons herein
mentioned prove that they observed all the diligence of a good father of a family
to prevent damages.

337
In this connection, it should be observed that the teacher will be held liable not only when
he is acting in loco parentis for the law does not require that the offending student be of
minority age. Unlike the parent, who wig be liable only if his child is still a minor, the
teacher is held answerable by the law for the act of the student under him regardless of the
student's age. Thus, in the Palisoc Case, liability attached to the teacher and the head of
the technical school although the wrongdoer was already of age. In this sense, Article 2180
treats the parent more favorably than the teacher.
The Court is not unmindful of the apprehensions expressed by Justice Makalintal in his
dissenting opinion in Palisoc that the school may be unduly exposed to liability under this
article in view of the increasing activism among the students that is likely to cause violence
and resulting injuries in the school premises. That is a valid fear, to be sure. Nevertheless,
it should be repeated that, under the present ruling, it is not the school that will be held
directly liable. Moreover, the defense of due diligence is available to it in case it is sought to
be held answerable as principal for the acts or omission of its head or the teacher in its
employ.
The school can show that it exercised proper measures in selecting the head or its teachers
and the appropriate supervision over them in the custody and instruction of the pupils
pursuant to its rules and regulations for the maintenance of discipline among them. In
almost all cases now, in fact, these measures are effected through the assistance of an
adequate security force to help the teacher physically enforce those rules upon the
students. Ms should bolster the claim of the school that it has taken adequate steps to
prevent any injury that may be committed by its students.
A fortiori, the teacher himself may invoke this defense as it would otherwise be unfair to
hold him directly answerable for the damage caused by his students as long as they are in
the school premises and presumably under his influence. In this respect, the Court is
disposed not to expect from the teacher the same measure of responsibility imposed on the
parent for their influence over the child is not equal in degree. Obviously, the parent can
expect more obedience from the child because the latter's dependence on him is greater
than on the teacher. It need not be stressed that such dependence includes the child's
support and sustenance whereas submission to the teacher's influence, besides being
coterminous with the period of custody is usually enforced only because of the students'
desire to pass the course. The parent can instill more las discipline on the child than the
teacher and so should be held to a greater accountability than the teacher for the tort
committed by the child.
And if it is also considered that under the article in question, the teacher or the head of the
school of arts and trades is responsible for the damage caused by the student or apprentice
even if he is already of age — and therefore less tractable than the minor — then there
should all the more be justification to require from the school authorities less
accountability as long as they can prove reasonable diligence in preventing the injury. After
all, if the parent himself is no longer liable for the student's acts because he has reached
majority age and so is no longer under the former's control, there is then all the more
reason for leniency in assessing the teacher's responsibility for the acts of the student.
Applying the foregoing considerations, the Court has arrived at the following conclusions:
1. At the time Alfredo Amadora was fatally shot, he was still in the custody of the
authorities of Colegio de San Jose-Recoletos notwithstanding that the fourth year classes
had formally ended. It was immaterial if he was in the school auditorium to finish his
338
physics experiment or merely to submit his physics report for what is important is that he
was there for a legitimate purpose. As previously observed, even the mere savoring of the
company of his friends in the premises of the school is a legitimate purpose that would
have also brought him in the custody of the school authorities.
2. The rector, the high school principal and the dean of boys cannot be held liable because
none of them was the teacher-in-charge as previously defined. Each of them was exercising
only a general authority over the student body and not the direct control and influence
exerted by the teacher placed in charge of particular classes or sections and thus
immediately involved in its discipline. The evidence of the parties does not disclose who the
teacher-in-charge of the offending student was. The mere fact that Alfredo Amadora had
gone to school that day in connection with his physics report did not necessarily make the
physics teacher, respondent Celestino Dicon, the teacher-in-charge of Alfredo's killer.
3. At any rate, assuming that he was the teacher-in-charge, there is no showing that Dicon
was negligent in enforcing discipline upon Daffon or that he had waived observance of the
rules and regulations of the school or condoned their non-observance. His absence when
the tragedy happened cannot be considered against him because he was not supposed or
required to report to school on that day. And while it is true that the offending student was
still in the custody of the teacher-in-charge even if the latter was physically absent when
the tort was committed, it has not been established that it was caused by his laxness in
enforcing discipline upon the student. On the contrary, the private respondents have
proved that they had exercised due diligence, through the enforcement of the school
regulations, in maintaining that discipline.
4. In the absence of a teacher-in-charge, it is probably the dean of boys who should be held
liable especially in view of the unrefuted evidence that he had earlier confiscated an
unlicensed gun from one of the students and returned the same later to him without taking
disciplinary action or reporting the matter to higher authorities. While this was clearly
negligence on his part, for which he deserves sanctions from the school, it does not
necessarily link him to the shooting of Amador as it has not been shown that he
confiscated and returned pistol was the gun that killed the petitioners' son.
5. Finally, as previously observed, the Colegio de San Jose-Recoletos cannot be held
directly liable under the article because only the teacher or the head of the school of arts
and trades is made responsible for the damage caused by the student or apprentice.
Neither can it be held to answer for the tort committed by any of the other private
respondents for none of them has been found to have been charged with the custody of the
offending student or has been remiss in the discharge of his duties in connection with such
custody.
In sum, the Court finds under the facts as disclosed by the record and in the light of the
principles herein announced that none of the respondents is liable for the injury inflicted
by Pablito Damon on Alfredo Amadora that resulted in the latter's death at the auditorium
of the Colegio de San Jose-Recoletos on April 13, 1972. While we deeply sympathize with
the petitioners over the loss of their son under the tragic circumstances here related, we
nevertheless are unable to extend them the material relief they seek, as a balm to their
grief, under the law they have invoked.
WHEREFORE, the petition is DENIED, without any pronouncement as to costs. It is so
ordered.

339
Yap, Narvasa, Paras, Feliciano, Gancayco, Bidin, Sarmiento, Cortes and Griño-Aquino, JJ.,
concur.
Fernan, Padilla and Teehankee, C.J., JJ, took no part.
 
 
 
Separate Opinions
 
MELENCIO-HERRERA, J., concurring and dissenting:
I concur, except with respect to the restricted meaning given the term "teacher" in Article
2180 of the Civil Code as "teacher-in-charge." This would limit liability to occasions where
there are classes under the immediate charge of a teacher, which does not seem to be the
intendment of the law.
As I understand it, the philosophy of the law is that whoever stands in loco parentis will
have the same duties and obligations as parents whenever in such a standing. Those
persons are mandatorily held liable for the tortious acts of pupils and students so long as
the latter remain in their custody, meaning their protective and supervisory custody.
Thus Article 349 of the Civil Code enumerates the persons who stand in loco parentis and
thereby exercise substitute parental authority:
Art. 349 The following persons shall exercise substitute parental authority:
xxx xxx xxx
2) Teachers and professors
xxx xxx xxx
4) Directors of trade establishments, with regard to apprentices;'
Article 352 of the Civil Code further provides:
Art. 362. The relations between teacher and pupil, professor and student, are
fixed by government regulations and those of each school or institution....
But even such rules and regulations as may be fixed can not contravene the concept of
substitute parental authority.
The rationale of liability of school heads and teachers for the tortious acts of their pupils
was explained in Palisoc vs. Brillantes (41 SCRA 548), thus:
The protective custody of the school heads and teachers is mandatorily
substituted for that of the parents, and hence, it becomes their obligation as
well as that of the school itself to provide proper supervision of the students'
activities during the whole time that they are at attendance in the
school, including recess time, as well as to take the necessary precautions to
protect the students in their custody from dangers and hazards that would
reasonably be anticipated, including injuries that some students themselves
may inflict wilfully or through negligence on their fellow students. (Emphasis
supplied)
Of course, as provided for in the same Article 2180, the responsibility treated of shall cease
when the persons mentioned prove that they observed all the diligence of a good father of a
family to prevent damage.
And while a school is, admittedly, not directly liable since Article 2180 speaks only of
teachers and schools heads, yet, by virtue of the same provision, the school, as their
employer, may be held liable for the failure of its teachers or school heads to perform their
340
mandatory legal duties as substitute parents (Sangco, Philippine Law on Torts & Damages,
1978 ed., p. 201). Again, the school may exculpate itself from liability by proving that it had
exercised the diligence of a good father of the family.
Art. 2180. x x x
Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even though
the former are not engaged in any business or industry.
xxx xxx xxx
Parenthetically, from the enumeration in Article 349 of the Civil Code, supra, it is apparent
that the Code Commission had already segregated the classification of "teachers and
professors" vis-a-vis their pupils, from "directors of trade establishments, with regard to
their apprentices."
GUTIERREZ, JR., J., concurring:
I concur in the Court's opinion so carefully analyzed and crafted by Justice Isagani A. Cruz.
However, I would like to stress the need for a major amendment to, if not a complete
scrapping of, Article 2180 of the Civil Code insofar as it refers to teachers or heads of
establishments of arts and trades in relation to pupils and students or apprentices. The
seventh paragraph of Art. 2180 is a relic of the past and contemplates a situation long gone
and out of date. In a Palisoc v. Brillantes (41 SCRA 548) situation, it is bound to result in
mischief and injustice.
First, we no longer have masters and apprentices toiling in schools of arts and trades.
Students in "technological" colleges and universities are no different from students in
liberal arts or professional schools. Apprentices now work in regular shops and factories
and their relationship to the employer is covered by laws governing the employment
relationship and not by laws governing the teacher—student relationship.
Second, except for kindergarten, elementary, and perhaps early high school students,
teachers are often no longer objects of veneration who are given the respect due to
substitute parents. Many students in their late teens or early adult years view some
teachers as part of a bourgeois or reactionary group whose advice on behaviour,
deportment, and other non-academic matters is not only resented but actively rejected.
It ,seems most unfair to hold teachers liable on a presumption juris tantum of negligence for
acts of students even under circumstances where strictly speaking there could be no in loco
parentis relationship. Why do teachers have to prove the contrary of negligence to be freed
from solidary liability for the acts f bomb-throwing or pistol packing students who would
just as soon hurt them as they would other members of the so-called-establishment.
The ordinary rules on quasi-delicta should apply to teachers and schools of whatever
nature insofar as grown up students are concerned. The provision of Art. 2180 of the Civil
Code involved in this case has outlived its purpose. The Court cannot make law. It can only
apply the law with its imperfections. However, the Court can suggest that such a law
should be amended or repealed.
 
 
Separate Opinions
MELENCIO-HERRERA, J., concurring and dissenting:
I concur, except with respect to the restricted meaning given the term "teacher" in Article
2180 of the Civil Code as "teacher-in-charge." This would limit liability to occasions where
341
there are classes under the immediate charge of a teacher, which does not seem to be the
intendment of the law.
As I understand it, the philosophy of the law is that whoever stands in loco parentis will
have the same duties and obligations as parents whenever in such a standing. Those
persons are mandatorily held liable for the tortious acts of pupils and students so long as
the latter remain in their custody, meaning their protective and supervisory custody.
Thus Article 349 of the Civil Code enumerates the persons who stand in loco parentis and
thereby exercise substitute parental authority:
Art. 349 The following persons shall exercise substitute parental authority:
xxx xxx xxx
2) Teachers and professors
xxx xxx xxx
4) Directors of trade establishments, with regard to apprentices;'
Article 352 of the Civil Code further provides:
Art. 362. The relations between teacher and pupil, professor and student, are
fixed by government regulations and those of each school or institution....
But even such rules and regulations as may be fixed can not contravene the concept of
substitute parental authority.
The rationale of liability of school heads and teachers for the tortious acts of their pupils
was explained in Palisoc vs. Brillantes (41 SCRA 548), thus:
The protective custody of the school heads and teachers is mandatorily
substituted for that of the parents, and hence, it becomes their obligation as
well as that of the school itself to provide proper supervision of the students'
activities during the whole time that they are at attendance in the
school, including recess time, as well as to take the necessary precautions to
protect the students in their custody from dangers and hazards that would
reasonably be anticipated, including injuries that some students themselves
may inflict wilfully or through negligence on their fellow students. (Emphasis
supplied)
Of course, as provided for in the same Article 2180, the responsibility treated of shall cease
when the persons mentioned prove that they observed all the diligence of a good father of a
family to prevent damage.
And while a school is, admittedly, not directly liable since Article 2180 speaks only of
teachers and schools heads, yet, by virtue of the same provision, the school, as their
employer, may be held liable for the failure of its teachers or school heads to perform their
mandatory legal duties as substitute parents (Sangco, Philippine Law on Torts & Damages,
1978 ed., p. 201). Again, the school may exculpate itself from liability by proving that it had
exercised the diligence of a good father of the family.
Art. 2180. x x x
Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even though
the former are not engaged in any business or industry.
x x x           x x x          x x x
Parenthetically, from the enumeration in Article 349 of the Civil Code, supra, it is apparent
that the Code Commission had already segregated the classification of "teachers and

342
professors" vis-a-vis their pupils, from "directors of trade establishments, with regard to
their apprentices."
GUTIERREZ, JR., J., concurring:
I concur in the Court's opinion so carefully analyzed and crafted by Justice Isagani A. Cruz.
However, I would like to stress the need for a major amendment to, if not a complete
scrapping of, Article 2180 of the Civil Code insofar as it refers to teachers or heads of
establishments of arts and trades in relation to pupils and students or apprentices. The
seventh paragraph of Art. 2180 is a relic of the past and contemplates a situation long gone
and out of date. In a Palisoc v. Brillantes (41 SCRA 548) situation, it is bound to result in
mischief and injustice.
First, we no longer have masters and apprentices toiling in schools of arts and trades.
Students in "technological" colleges and universities are no different from students in
liberal arts or professional schools. Apprentices now work in regular shops and factories
and their relationship to the employer is covered by laws governing the employment
relationship and not by laws governing the teacher—student relationship.
Second, except for kindergarten, elementary, and perhaps early high school students,
teachers are often no longer objects of veneration who are given the respect due to
substitute parents. Many students in their late teens or early adult years view some
teachers as part of a bourgeois or reactionary group whose advice on behaviour,
deportment, and other non-academic matters is not only resented but actively rejected.
It ,seems most unfair to hold teachers liable on a presumption juris tantum of negligence for
acts of students even under circumstances where strictly speaking there could be no in loco
parentis relationship. Why do teachers have to prove the contrary of negligence to be freed
from solidary liability for the acts f bomb-throwing or pistol packing students who would
just as soon hurt them as they would other members of the so-called-establishment.
The ordinary rules on quasi-delicta should apply to teachers and schools of whatever
nature insofar as grown up students are concerned. The provision of Art. 2180 of the Civil
Code involved in this case has outlived its purpose. The Court cannot make law. It can only
apply the law with its imperfections. However, the Court can suggest that such a law
should be amended or repealed.

G.R. No. 143363               February 6, 2002

ST. MARY'S ACADEMY, petitioner,
vs.
WILLIAM CARPITANOS and LUCIA S. CARPITANOS, GUADA DANIEL, JAMES DANIEL
II, JAMES DANIEL, SR., and  VIVENCIO VILLANUEVA, respondents.
DECISION
PARDO, J.:
The Case
The case is an appeal via certiorari from the decision1 of the Court of Appeals as well as the
resolution denying reconsideration, holding petitioner liable for damages arising from an
accident that resulted in the death of a student who had joined a campaign to visit the
public schools in Dipolog City to solicit enrollment.
The Facts
The facts, as found by the Court of Appeals, are as follows:
343
"Claiming damages for the death of their only son, Sherwin Carpitanos, spouses William
Carpitanos and Lucia Carpitanos filed on June 9, 1995 a case against James Daniel II and
his parents, James Daniel Sr. and Guada Daniel, the vehicle owner, Vivencio Villanueva
and St. Mary’s Academy before the Regional Trial Court of Dipolog City.
"On 20 February 1997, Branch 6 of the Regional Trial Court of Dipolog City rendered its
decision the dispositive portion of which reads as follows:
"‘WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in the following
manner:
1. Defendant St. Mary’s Academy of Dipolog City, is hereby ordered to pay plaintiffs William
Carpitanos and Luisa Carpitanos, the following sums of money:
a. FIFTY THOUSAND PESOS (P50,000.00) indemnity for the loss of life of Sherwin S.
Carpitanos;
b. FORTY THOUSAND PESOS (P40,000.00) actual damages incurred by plaintiffs for burial
and related expenses;
c. TEN THOUSAND PESOS (P10,000.00) for attorney’s fees;
d. FIVE HUNDRED THOUSAND PESOS (P500,000.00) for moral damages; and to pay costs.
2. Their liability being only subsidiary, defendants James Daniel, Sr. and Guada Daniel are
hereby ordered to pay herein plaintiffs the amount of damages above-stated in the event of
insolvency of principal obligor St. Mary’s Academy of Dipolog City;
3. Defendant James Daniel II, being a minor at the time of the commission of the tort and
who was under special parental authority of defendant St. Mary’s Academy, is ABSOLVED
from paying the above-stated damages, same being adjudged against defendants St. Mary’s
Academy, and subsidiarily, against his parents;
4. Defendant Vivencio Villanueva is hereby ABSOLVED of any liability. His counterclaim
not being in order as earlier discussed in this decision, is hereby DISMISSED.
IT IS SO ORDERED."’ (Decision, pp. 32-33; Records, pp. 205-206)."
"From the records it appears that from 13 to 20 February 1995, defendant-appellant St.
Mary’s Academy of Dipolog City conducted an enrollment drive for the school year 1995-
1996. A facet of the enrollment campaign was the visitation of schools from where
prospective enrollees were studying. As a student of St. Mary’s Academy, Sherwin
Carpitanos was part of the campaigning group. Accordingly, on the fateful day, Sherwin,
along with other high school students were riding in a Mitsubishi jeep owned by defendant
Vivencio Villanueva on their way to Larayan Elementary School, Larayan, Dapitan City. The
jeep was driven by James Daniel II then 15 years old and a student of the same school.
Allegedly, the latter drove the jeep in a reckless manner and as a result the jeep turned
turtle.
"Sherwin Carpitanos died as a result of the injuries he sustained from the accident." 2
In due time, petitioner St. Mary’s academy appealed the decision to the Court of Appeals. 3
On February 29, 2000, the Court of Appeals promulgated a decision reducing the actual
damages to P25,000.00 but otherwise affirming the decision a quo, in toto.4
On February 29, 2000, petitioner St. Mary’s Academy filed a motion for reconsideration of
the decision. However, on May 22, 2000, the Court of Appeals denied the motion. 5
Hence, this appeal.6
The Issues
1) Whether the Court of Appeals erred in holding the petitioner liable for damages for
the death of Sherwin Carpitanos.
344
 2) Whether the Court of Appeals erred in affirming the award of moral damages
against the petitioner.
The Court’s Ruling
We reverse the decision of the Court of Appeals.
The Court of Appeals held petitioner St. Mary’s Academy liable for the death of Sherwin
Carpitanos under Articles 218 7 and 2198 of the Family Code, pointing out that petitioner
was negligent in allowing a minor to drive and in not having a teacher accompany the
minor students in the jeep.
Under Article 218 of the Family Code, the following shall have special parental authority
over a minor child while under their supervision, instruction or custody: (1) the school, its
administrators and teachers; or (2) the individual, entity or institution engaged in child
care. This special parental authority and responsibility applies to all authorized activities,
whether inside or outside the premises of the school, entity or institution. Thus, such
authority and responsibility applies to field trips, excursions and other affairs of the pupils
and students outside the school premises whenever authorized by the school or its
teachers.9
Under Article 219 of the Family Code, if the person under custody is a minor, those
exercising special parental authority are principally and solidarily liable for damages
caused by the acts or omissions of the unemancipated minor while under their supervision,
instruction, or custody.10
However, for petitioner to be liable, there must be a finding that the act or omission
considered as negligent was the proximate cause of the injury caused because the
negligence must have a causal connection to the accident. 11
"In order that there may be a recovery for an injury, however, it must be shown that the
‘injury for which recovery is sought must be the legitimate consequence of the wrong done;
the connection between the negligence and the injury must be a direct and natural
sequence of events, unbroken by intervening efficient causes.’ In other words, the
negligence must be the proximate cause of the injury. For, ‘negligence, no matter in what it
consists, cannot create a right of action unless it is the proximate cause of the injury
complained of.’ And ‘the proximate cause of an injury is that cause, which, in natural and
continuous sequence, unbroken by any efficient intervening cause, produces the injury,
and without which the result would not have occurred.’" 12
In this case, the respondents failed to show that the negligence of petitioner was the
proximate cause of the death of the victim.
Respondents Daniel spouses and Villanueva admitted that the immediate cause of the
accident was not the negligence of petitioner or the reckless driving of James Daniel II, but
the detachment of the steering wheel guide of the jeep.
In their comment to the petition, respondents Daniel spouses and Villanueva admitted the
documentary exhibits establishing that the cause of the accident was the detachment of the
steering wheel guide of the jeep. Hence, the cause of the accident was not the recklessness
of James Daniel II but the mechanical defect in the jeep of Vivencio Villanueva.
Respondents, including the spouses Carpitanos, parents of the deceased Sherwin
Carpitanos, did not dispute the report and testimony of the traffic investigator who stated
that the cause of the accident was the detachment of the steering wheel guide that caused
the jeep to turn turtle.

345
Significantly, respondents did not present any evidence to show that the proximate cause of
the accident was the negligence of the school authorities, or the reckless driving of James
Daniel II. Hence, the respondents’ reliance on Article 219 of the Family Code that "those
given the authority and responsibility under the preceding Article shall be principally and
solidarily liable for damages caused by acts or omissions of the unemancipated minor" was
unfounded.
Further, there was no evidence that petitioner school allowed the minor James Daniel II to
drive the jeep of respondent Vivencio Villanueva. It was Ched Villanueva, grandson of
respondent Vivencio Villanueva, who had possession and control of the jeep. He was driving
the vehicle and he allowed James Daniel II, a minor, to drive the jeep at the time of the
accident.
Hence, liability for the accident, whether caused by the negligence of the minor driver or
mechanical detachment of the steering wheel guide of the jeep, must be pinned on the
minor’s parents primarily. The negligence of petitioner St. Mary’s Academy was only a
remote cause of the accident. Between the remote cause and the injury, there intervened
the negligence of the minor’s parents or the detachment of the steering wheel guide of the
jeep.
"The proximate cause of an injury is that cause, which, in natural and continuous
sequence, unbroken by any efficient intervening cause, produces the injury, and without
which the result would not have occurred." 13
Considering that the negligence of the minor driver or the detachment of the steering wheel
guide of the jeep owned by respondent Villanueva was an event over which petitioner St.
Mary’s Academy had no control, and which was the proximate cause of the accident,
petitioner may not be held liable for the death resulting from such accident.
Consequently, we find that petitioner likewise cannot be held liable for moral damages in
the amount of P500,000.00 awarded by the trial court and affirmed by the Court of
Appeals.
Though incapable of pecuniary computation, moral damages may be recovered if they are
the proximate result of the defendant’s wrongful act or omission. 14 In this case, the
proximate cause of the accident was not attributable to petitioner.
For the reason that petitioner was not directly liable for the accident, the decision of the
Court of Appeals ordering petitioner to pay death indemnity to respondent Carpitanos must
be deleted. Moreover, the grant of attorney’s fees as part of damages is the exception rather
than the rule.15 The power of the court to award attorney’s fees under Article 2208 of the
Civil Code demands factual, legal and equitable justification. 16 Thus, the grant of attorney’s
fees against the petitioner is likewise deleted.
Incidentally, there was no question that the registered owner of the vehicle was respondent
Villanueva. He never denied and in fact admitted this fact.1âwphi1 We have held that the
registered owner of any vehicle, even if not used for public service, would primarily be
responsible to the public or to third persons for injuries caused the latter while the vehicle
was being driven on the highways or streets." 17 Hence, with the overwhelming evidence
presented by petitioner and the respondent Daniel spouses that the accident occurred
because of the detachment of the steering wheel guide of the jeep, it is not the school, but
the registered owner of the vehicle who shall be held responsible for damages for the death
of Sherwin Carpitanos.
The Fallo
346
WHEREFORE, the Court REVERSES and SETS ASIDE the decision of the Court of
Appeals18 and that of the trial court. 19 The Court remands the case to the trial court for
determination of the liability of defendants, excluding petitioner St. Mary’s Academy,
Dipolog City.
No costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Kapunan, and Ynares-Santiago, JJ., concur.
Puno, J., in the result.

G.R. No. 132344           February 17, 2000

UNIVERSITY OF THE EAST, petitioner,
vs.
ROMEO A. JADER, respondent.
YNARES-SANTIAGO, J.:
May an educational institution be held liable for damages for misleading a student into
believing that the latter had satisfied all the requirements for graduation when such is not
the case? This is the issue in the instant petition for review premised on the following
undisputed facts as summarized by the trial court and adopted by the Court of Appeals
(CA),1 to wit:
Plaintiff was enrolled in the defendants' College of Law from 1984 up to 1988. In the
first semester of his last year (School year 1987-1988), he failed to take the regular
final examination in Practice Court I for which he was given an incomplete grade
(Exhibits "2", also Exhibit "H"). He enrolled for the second semester as fourth year law
student (Exhibit "A") and on February 1, 1988 he filed an application for the removal
of the incomplete grade given him by Professor Carlos Ortega (Exhibits "H-2", also
Exhibit "2") which was approved by Dean Celedonio Tiongson after payment of the
required fee. He took the examination on March 28, 1988. On May 30, 1988,
Professor Carlos Ortega submitted his grade. It was a grade of five (5). (Exhibits "H-
4", also Exhibits "2-L", "2-N").1âwphi1.nêt
In the meantime, the Dean and the Faculty Members of the College of Law met to
deliberate on who among the fourth year students should be allowed to graduate. The
plaintiff's name appeared in the Tentative List of Candidates for graduation for the
Degree of Bachelor of Laws (LL.B) as of Second Semester (1987-1988) with the
following annotation:
JADER ROMEO A.
Def. Conflict of Laws — x-1-87-88, Practice Court I Inc., 1-87-88 C-1 to submit
transcript with S.O. (Exhibits "3", "3-C-1", "3-C-2").
The 35th Investitures & Commencement Ceremonies for the candidates of Bachelor
of Laws was scheduled on the 16th of April 1988 at 3:00 o'clock in the afternoon, and
in the invitation for that occasion the name of the plaintiff appeared as one of the
candidates. (Exhibits "B", "B-6", "B-6-A"). At the foot of the list of the names of the
candidates there appeared however the following annotation:
This is a tentative list Degrees will be conferred upon these candidates who
satisfactorily complete requirements as stated in the University Bulletin and as
approved of the Department of Education, Culture and Sports (Exhibit "B-7-
A").
347
 The plaintiff attended the investiture ceremonies at F. dela Cruz Quadrangle, U.E.,
Recto Campus, during the program of which he went up the stage when his name
was called, escorted by her (sic) mother and his eldest brother who assisted in
placing the Hood, and his Tassel was turned from left to right, and he was thereafter
handed by Dean Celedonio a rolled white sheet of paper symbolical of the Law
Diploma. His relatives took pictures of the occasion (Exhibits "C" to "C-6", "D-3" to
"D-11").
He tendered a blow-out that evening which was attended by neighbors, friends and
relatives who wished him good luck in the forthcoming bar examination. There were
pictures taken too during the blow-out (Exhibits "D" to "D-1").
He thereafter prepared himself for the bar examination. He took a leave of absence
without pay from his job from April 20, 1988 to September 30, 1988 (Exhibit "G") and
enrolled at the pre-bar review class in Far Eastern University. (Exhibits "F" to "F-2").
Having learned of the deficiency he dropped his review class and was not able to take
the bar examination.2
Consequently, respondent sued petitioner for damages alleging that he suffered moral
shock, mental anguish, serious anxiety, besmirched reputation, wounded feelings and
sleepless nights when he was not able to take the 1988 bar examinations arising from the
latter's negligence. He prayed for an award of moral and exemplary damages, unrealized
income, attorney's fees, and costs of suit.
In its answer with counterclaim, petitioner denied liability arguing mainly that it never led
respondent to believe that he completed the requirements for a Bachelor of Laws degree
when his name was included in the tentative list of graduating students. After trial, the
lower court rendered judgment as follows:
WHEREFORE, in view of the foregoing judgment is hereby rendered in favor of the
plaintiff and against the defendant ordering the latter to pay plaintiff the sum of
THIRTY FIVE THOUSAND FOUR HUNDRED SEVENTY PESOS (P35,470.00) with
legal rate of interest from the filing of the complaint until fully paid, the amount of
FIVE THOUSAND PESOS (P5,000.00) as attorney's fees and the cost of suit.
Defendant's counterclaim is, for lack of merit, hereby dismissed.
SO ORDERED.3
which on appeal by both parties was affirmed by the Court of Appeals (CA) with
modification. The dispositive portion of the CA decision reads:
WHEREFORE, in the light of the foregoing, the lower Court's Decision is hereby
AFFIRMED with the MODIFICATION that defendant-appellee, in addition to the sum
adjudged by the lower court in favor of plaintiff-appellant, is also ORDERED to pay
plaintiff-appellant the amount of FIFTY THOUSAND (P50,000.00) PESOS for moral
damages. Costs against defendant-appellee.
SO ORDERED.4
Upon the denial of its motion for reconsideration, petitioner UE elevated the case to this
Court on a petition for review under Rule 45 of the Rules of Court, arguing that it has no
liability to respondent Romeo A. Jader, considering that the proximate and immediate
cause of the alleged damages incurred by the latter arose out of his own negligence in not
verifying from the professor concerned the result of his removal exam.
The petition lacks merit.

348
When a student is enrolled in any educational or learning institution, a contract of
education is entered into between said institution and the student. The professors, teachers
or instructors hired by the school are considered merely as agents and administrators
tasked to perform the school's commitment under the contract. Since the contracting
parties are the school and the student, the latter is not duty-bound to deal with the
former's agents, such as the professors with respect to the status or result of his grades,
although nothing prevents either professors or students from sharing with each other such
information. The Court takes judicial notice of the traditional practice in educational
institutions wherein the professor directly furnishes his/her students their grades. It is the
contractual obligation of the school to timely inform and furnish sufficient notice and
information to each and every student as to whether he or she had already complied with
all the requirements for the conferment of a degree or whether they would be included
among those who will graduate. Although commencement exercises are but a formal
ceremony, it nonetheless is not an ordinary occasion, since such ceremony is the
educational institution's way of announcing to the whole world that the students included
in the list of those who will be conferred a degree during the baccalaureate ceremony have
satisfied all the requirements for such degree. Prior or subsequent to the ceremony, the
school has the obligation to promptly inform the student of any problem involving the
latter's grades and performance and also most importantly, of the procedures for remedying
the same.
Petitioner, in belatedly informing respondent of the result of the removal examination,
particularly at a time when he had already commenced preparing for the bar exams, cannot
be said to have acted in good faith. Absence of good faith must be sufficiently established
for a successful prosecution by the aggrieved party in a suit for abuse of right under Article
19 of the Civil Code. Good faith connotes an honest intention to abstain from taking undue
advantage of another, even though the forms and technicalities of the law, together with the
absence of all information or belief of facts, would render the transaction
unconscientious.5 It is the school that has access to those information and it is only the
school that can compel its professors to act and comply with its rules, regulations and
policies with respect to the computation and the prompt submission of grades. Students do
not exercise control, much less influence, over the way an educational institution should
run its affairs, particularly in disciplining its professors and teachers and ensuring their
compliance with the school's rules and orders. Being the party that hired them, it is the
school that exercises general supervision and exclusive control over the professors with
respect to the submission of reports involving the students' standing. Exclusive control
means that no other person or entity had any control over the instrumentality which
caused the damage or injury.6
The college dean is the senior officer responsible for the operation of an academic program,
enforcement of rules and regulations, and the supervision of faculty and student
services.7 He must see to it that his own professors and teachers, regardless of their status
or position outside of the university, must comply with the rules set by the latter. The
negligent act of a professor who fails to observe the rules of the school, for instance by not
promptly submitting a student's grade, is not only imputable to the professor but is an act
of the school, being his employer.
Considering further, that the institution of learning involved herein is a university which is
engaged in legal education, it should have practiced what it inculcates in its students, more
349
specifically the principle of good dealings enshrined in Articles 19 and 20 of the Civil Code
which states:
Art. 19. Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.
Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to
another, shall indemnify the latter for the same.
Art. 19 was intended to expand the concept of torts by granting adequate legal remedy for
the untold number of moral wrongs which is impossible for human foresight to provide
specifically in statutory law.8 In civilized society, men must be able to assume that others
will do them no intended injury — that others will commit no internal aggressions upon
them; that their fellowmen, when they act affirmatively will do so with due care which the
ordinary understanding and moral sense of the community exacts and that those with
whom they deal in the general course of society will act in good faith. The ultimate thing in
the theory of liability is justifiable reliance under conditions of civilized society. 9 Schools
and professors cannot just take students for granted and be indifferent to them, for without
the latter, the former are useless.
Educational institutions are duty-bound to inform the students of their academic status
and not wait for the latter to inquire from the former. The conscious indifference of a
person to the rights or welfare of the person/persons who may be affected by his act or
omission can support a claim for damages. 10 Want of care to the conscious disregard of civil
obligations coupled with a conscious knowledge of the cause naturally calculated to
produce them would make the erring party liable. 11 Petitioner ought to have known that
time was of the essence in the performance of its obligation to inform respondent of his
grade. It cannot feign ignorance that respondent will not prepare himself for the bar exams
since that is precisely the immediate concern after graduation of an LL.B. graduate. It failed
to act seasonably. Petitioner cannot just give out its student's grades at any time because a
student has to comply with certain deadlines set by the Supreme Court on the submission
of requirements for taking the bar. Petitioner's liability arose from its failure to promptly
inform respondent of the result of an examination and in misleading the latter into
believing that he had satisfied all requirements for the course. Worth quoting is the
following disquisition of the respondent court:
It is apparent from the testimony of Dean Tiongson that defendant-appellee
University had been informed during the deliberation that the professor in Practice
Court I gave plaintiff-appellant a failing grade. Yet, defendant-appellee still did not
inform plaintiff-appellant of his failure to complete the requirements for the degree
nor did they remove his name from the tentative list of candidates for graduation.
Worse, defendant-appellee university, despite the knowledge that plaintiff-appellant
failed in Practice Court I, again included plaintiff-appellant's name in the "tentative
list of candidates for graduation which was prepared after the deliberation and which
became the basis for the commencement rites program. Dean Tiongson reasons out
that plaintiff-appellant's name was allowed to remain in the tentative list of
candidates for graduation in the hope that the latter would still be able to remedy the
situation in the remaining few days before graduation day. Dean Tiongson, however,
did not explain how plaintiff appellant Jader could have done something to complete
his deficiency if defendant-appellee university did not exert any effort to inform
plaintiff-appellant of his failing grade in Practice Court I. 12
350
Petitioner cannot pass on its blame to the professors to justify its own negligence that led to
the delayed relay of information to respondent. When one of two innocent parties must
suffer, he through whose agency the loss occurred must bear it. 13 The modern tendency is
to grant indemnity for damages in cases where there is abuse of right, even when the act is
not illicit.14 If mere fault or negligence in one's acts can make him liable for damages for
injury caused thereby, with more reason should abuse or bad faith make him liable. A
person should be protected only when he acts in the legitimate exercise of his right, that is,
when he acts with prudence and in good faith, but not when he acts with negligence or
abuse.15
However, while petitioner was guilty of negligence and thus liable to respondent for the
latter's actual damages, we hold that respondent should not have been awarded moral
damages. We do not agree with the Court of Appeals' findings that respondent suffered
shock, trauma and pain when he was informed that he could not graduate and will not be
allowed to take the bar examinations. At the very least, it behooved on respondent to verify
for himself whether he has completed all necessary requirements to be eligible for the bar
examinations. As a senior law student, respondent should have been responsible enough to
ensure that all his affairs, specifically those pertaining to his academic achievement, are in
order. Given these considerations, we fail to see how respondent could have suffered untold
embarrassment in attending the graduation rites, enrolling in the bar review classes and
not being able to take the bar exams. If respondent was indeed humiliated by his failure to
take the bar, he brought this upon himself by not verifying if he has satisfied all the
requirements including his school records, before preparing himself for the bar
examination. Certainly, taking the bar examinations does not only entail a mental
preparation on the subjects thereof; there are also prerequisites of documentation and
submission of requirements which the prospective examinee must meet.
WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED with
MODIFICATION. Petitioner is ORDERED to PAY respondent the sum of Thirty-five
Thousand Four Hundred Seventy Pesos (P35,470.00), with legal interest of 6% per
annum computed from the date of filing of the complaint until fully paid; the amount of
Five Thousand Pesos (P5,000.00) as attorney's fees; and the costs of the suit. The award of
moral damages is DELEIED.1âwphi1.nêt
SO ORDERED.
Davide, Jr., C.J., Kapunan and Pardo, JJ., concur.
Puno, J., took no part.

G.R. No. 74431 November 6, 1989

PURITA MIRANDA VESTIL and AGUSTIN VESTIL, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, DAVID UY and TERESITA UY, respondents.
Pablo P. Garcia for petitioners.
Roberto R. Palmares for private respondents.

CRUZ, J.:
Little Theness Tan Uy was dead at the age of three. Her parents said she died because she
was bitten by a dog of the petitioners, but the latter denied this, claiming they had nothing
351
to do with the dog. The Uys sued the Vestils, who were sustained by the trial court. On
appeal, the decision of the court a quo was reversed in favor of the Uys. The Vestils are now
before us. They ask us to set aside the judgment of the respondent court and to reinstate
that of the trial court.
On July 29, 1915, Theness was bitten by a dog while she was playing with a child of the
petitioners in the house of the late Vicente Miranda, the father of Purita Vestil, at F. Ramos
Street in Cebu City. She was rushed to the Cebu General Hospital, where she was treated
for "multiple lacerated wounds on the forehead" 1 and administered an anti-rabies vaccine
by Dr. Antonio Tautjo. She was discharged after nine days but was readmitted one week
later due to "vomiting of saliva." 2 The following day, on August 15, 1975, the child died.
The cause of death was certified as broncho-pneumonia. 3
Seven months later, the Uys sued for damages, alleging that the Vestils were liable to them
as the possessors of "Andoy," the dog that bit and eventually killed their daughter. The
Vestils rejected the charge, insisting that the dog belonged to the deceased Vicente
Miranda, that it was a tame animal, and that in any case no one had witnessed it bite
Theness. After trial, Judge Jose R. Ramolete of the Court of First Instance of Cebu
sustained the defendants and dismissed the complaint. 4
The respondent court arrived at a different conclusion when the case was appealed. 5 It
found that the Vestils were in possession of the house and the dog and so should be
responsible under Article 2183 of the Civil Code for the injuries caused by the dog. It also
held that the child had died as a result of the dog bites and not for causes independent
thereof as submitted by the appellees. Accordingly, the Vestils were ordered to pay the Uys
damages in the amount of P30,000.00 for the death of Theness, P12,000.00 for medical
and hospitalization expenses, and P2,000.00 as attorney's fees.
In the proceedings now before us, Purita Vestil insists that she is not the owner of the
house or of the dog left by her father as his estate has not yet been partitioned and there
are other heirs to the property. Pursuing the logic of the Uys, she claims, even her sister
living in Canada would be held responsible for the acts of the dog simply because she is
one of Miranda's heirs. However, that is hardly the point. What must be determined is the
possession of the dog that admittedly was staying in the house in question, regardless of
the ownership of the dog or of the house.
Article 2183 reads as follows:
The possessor of an animal or whoever may make use of the same is
responsible for the damage which it may cause, although it may escape or be
lost. 'This responsibility shall cease only in case the damages should come
from force majeure from the fault of the person who has suffered damage.
Thus, in Afialda v. Hisole, 6 a person hired as caretaker of a carabao gored him to death
and his heirs thereupon sued the owner of the animal for damages. The complaint was
dismissed on the ground that it was the caretaker's duty to prevent the carabao from
causing injury to any one, including himself.
Purita Vestil's testimony that she was not in possession of Miranda's house is hardly
credible. She said that the occupants of the house left by her father were related to him
("one way or the other") and maintained themselves out of a common fund or by some kind
of arrangement (on which, however, she did not elaborate ). 7 She mentioned as many as
ten of such relatives who had stayed in the house at one time or another although they did
not appear to be close kin.8 She at least implied that they did not pay any rent, presumably
352
because of their relation with Vicente Miranda notwithstanding that she herself did not
seem to know them very well.
There is contrary evidence that the occupants of the house, were boarders (or more of
boarders than relatives) who paid the petitioners for providing them with meals and
accommodations. It also appears that Purita Vestil had hired a maid, Dolores Jumao-as,
who did the cooking and cleaning in the said house for its occupants. 9 Her mother, Pacita,
who was a nursemaid of Purita herself, categorically declared that the petitioners were
maintaining boarders in the house where Theness was bitten by a dog. 10 Another witness,
Marcial Lao, testified that he was indeed a boarder and that the Vestils were maintaining
the house for business purposes. 11 And although Purita denied paying the water bills for
the house, the private respondents submitted documentary evidence of her application for
water connection with the Cebu Water District, which strongly suggested that she was
administering the house in question. 12
While it is true that she is not really the owner of the house, which was still part of Vicente
Miranda's estate, there is no doubt that she and her husband were its possessors at the
time of the incident in question. She was the only heir residing in Cebu City and the most
logical person to take care of the property, which was only six kilometers from her own
house. 13 Moreover, there is evidence showing that she and her family regularly went to the
house, once or twice weekly, according to at least one witness, 14 and used it virtually as a
second house. Interestingly, her own daughter was playing in the house with Theness when
the little girl was bitten by the dog. 15 The dog itself remained in the house even after the
death of Vicente Miranda in 1973 and until 1975, when the incident in question occurred.
It is also noteworthy that the petitioners offered to assist the Uys with their hospitalization
expenses although Purita said she knew them only casually. 16
The petitioners also argue that even assuming that they were the possessors of the dog that
bit Theness there was no clear showing that she died as a result thereof. On the contrary,
the death certificate 17 declared that she died of broncho-pneumonia, which had nothing to
do with the dog bites for which she had been previously hospitalized. The Court need not
involve itself in an extended scientific discussion of the causal connection between the dog
bites and the certified cause of death except to note that, first, Theness developed
hydrophobia, a symptom of rabies, as a result of the dog bites, and second, that asphyxia
broncho-pneumonia, which ultimately caused her death, was a complication of rabies. That
Theness became afraid of water after she was bitten by the dog is established by the
following testimony of Dr. Tautjo:
COURT: I think there was mention of rabies in the report in the second
admission?
A: Now, the child was continuously vomiting just before I referred to Dr. Co
earlier in the morning and then the father, because the child was asking for
water, the father tried to give the child water and this child went under the
bed, she did not like to drink the water and there was fright in her eyeballs. For
this reason, because I was in danger there was rabies, I called Dr. Co.
Q: In other words, the child had hydrophobia?
A: Yes, sir. 18
As for the link between rabies and broncho-pneumonia, the doctor had the following to say
under oath:

353
 A: Now, as 1 said before, broncho-pneumonia can result from physical,
chemical and bacterial means. ... It can be the result of infection, now, so if you
have any other disease which can lower your resistance you can also get
pneumonia.
xxx xxx xxx
Q: Would you say that a person who has rabies may die of complication which
is broncho-pneumonia?
A: Yes.
Q: For the record, I am manifesting that this book shown the witness is know
as CURRENT DIANOSIS & TREATMENT, 1968 by Henry Brainerd, Sheldon
Margen and Milton Chaton. Now, I invite your attention, doctor, to page 751 of
this book under the title "Rabies." There is on this page, "Prognosis" as a result
of rabies and it says: Once the symptoms, have appeared death inevitably
occurs after 2-3 days as a result of cardiac or respiratory failure or generalized
paralysis. After a positive diagnosis of rabies or after a bite by a suspected
animal if the animal cannot be observed or if the bite is on the head, give
rabies vaccine (duck embryo). Do you believe in this statement?
A: Yes.
Q: Would you say therefore that persons who have rabies may die of
respiratory failure which leave in the form of bronco-pneumonia?
A: Broncho-pneumonia can be a complication of rabies. 19
On the strength of the foregoing testimony, the Court finds that the link between the dog
bites and the certified cause of death has beep satisfactorily established. We also reiterate
our ruling in Sison v. Sun Life Assurance Company of Canada, 20 that the death certificate is
not conclusive proof of the cause of death but only of the fact of death. Indeed, the evidence
of the child's hydrophobia is sufficient to convince us that she died because she was bitten
by the dog even if the death certificate stated a different cause of death. The petitioner's
contention that they could not be expected to exercise remote control of the dog is not
acceptable. In fact, Article 2183 of the Civil Code holds the possessor liable even if the
animal should "escape or be lost" and so be removed from his control. And it does not
matter either that, as the petitioners also contend, the dog was tame and was merely
provoked by the child into biting her. The law does not speak only of vicious animals but
covers even tame ones as long as they cause injury. As for the alleged provocation, the
petitioners forget that Theness was only three years old at the time she was attacked and
can hardly be faulted for whatever she might have done to the animal.
It is worth observing that the above defenses of the petitioners are an implied rejection of
their original posture that there was no proof that it was the dog in their father's house that
bit Theness.
According to Manresa the obligation imposed by Article 2183 of the Civil Code is not based
on the negligence or on the presumed lack of vigilance of the possessor or user of the
animal causing the damage. It is based on natural equity and on the principle of social
interest that he who possesses animals for his utility, pleasure or service must answer for
the damage which such animal may cause. 21
We sustain the findings of the Court of Appeals and approve the monetary awards except
only as to the medical and hospitalization expenses, which are reduced to P2,026.69, as
prayed for in the complaint. While there is no recompense that can bring back to the
354
private respondents the child they have lost, their pain should at least be assuaged by the
civil damages to which they are entitled.
WHEREFORE, the challenged decision is AFFIRMED as above modified. The petition is
DENIED, with costs against the petitioners. It is so ordered.
Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.
 

G.R. No. L-2789            February 27, 1906

WILLIAM JOHNSON, plaintiff-appellee,
vs.
CIRILO DAVID, defendant-appellant.
Gabriel and Borbon for appellant.
Bishop and O'Brien for appellee.
JOHNSON, J.:
This was an action commenced in the court of the justice of the peace of the city of Manila,
by the plaintiff, to recover damages of the defendant resulting from the alleged negligence of
the defendant. After hearing the evidence adduced during the trial of said cause, the said
justice rendered a decision in favor of the plaintiff for the sum of $175, gold. From this
decision the defendant appealed to the Court of First Instance of the city of Manila. The
cause was tried de novo in the Court of First Instance, and after hearing the evidence in
said cause, the judge of that court rendered a decision in favor of the plaintiff for the sum
of P300, Philippine currency. This decision was rendered on the 15th day of July, 1904. To
this decision the defendant excepted and on the 16th day of July, 1904, presented a motion
for a new trial, basing said motion upon the fact that the judgment was contrary to law.
It appears from the records that the said decision rendered by the judge of the Court of
First Instance of the city of Manila was rendered upon a default in the appearance of the
defendant. Later, upon the 11th day of October, 1904, the said judge vacated the judgment
rendered upon the 15th day of July, 1904, and ordered a new trial. The record does not
disclose whether or not an exception was taken to this order of the judge annulling said
sentence.
The new trial so ordered was celebrated upon the 25th of January, 1905. At the
commencement of this new trial in the Court of First Instance the attorneys for the
defendant filed a motion to strike out and declare null and void said order of the court of
the 11th of October, 1904, for the reason that said order was made without authority for
the same and without a hearing by or notice to the said defendant; that said order was
made without legal or sufficient reasons and without authority of law; that said order was
made at a subsequent term of court from that in which the said judgment was rendered.
This motion was overruled. No exception having been made to the order of the judge
annulling the sentence of the 15th of July, 1904, in due time, the same can not be
considered here.
After hearing the evidence adduced during the second trial in the Court of First Instance,
the judge rendered a decision in favor of the plaintiff and against the defendant for the sum
of P250, Philippine currency, and for the costs. This decision was rendered on the 22nd of
January, 1905. To this decision the defendant excepted and on the 5th day of February of
the same year presented a motion for a new trial basing the same on the ground that the
355
decision was contrary to law and the evidence adduced during the trial of said cause. The
motion for a new trial was denied. The defendant then presented his bill of exceptions.
The following facts were proven during the second trial in the Court of First Instance:
On the 13th of November, 1903, the plaintiff was riding a bicycle and was passing over the
bridge in front of the Binondo Church in the city of Manila and while proceeding at a slow
rate of speed down the incline from the bridge toward Calle San Fernando and being on the
north side of said bridge he was run into by defendant's carriage drawn by one horse and
driven by the cochero of the defendant; that the said cochero was driving the said horse
faster than was reasonable or allowable; that the plaintiff rung the bell of his bicycle to
attract the attention of the defendant's cochero; that the plaintiff was unable to stop for the
reason that other carriages were coming behind him on the incline of the approach to said
bridge; that the plaintiff was riding on his bicycle on the left path of the bridge, as required
by the ordinance; that defendant's cochero made a detour with the horse and carriage and
attempted to approach said bridge upon the left side in a diagonal direction; that
reasonable care was not taken by defendant's cochero in driving or approaching the said
bridge, by reason of which lack of care he collided with the plaintiff and threw the latter to
the ground; that defendant's cochero was negligent and careless in driving defendant's
vehicle, that this caused the collision, and as the result of said collision plaintiff's bicycle
was greatly damaged and practically destroyed, being run over by the horse and carriage
after being dashed to the ground; that the plaintiff was thrown upon his head and
shoulders upon the ground; that one shoulder was injured to such an extent that he was
unable to perform manual labor for one month thereafter; that the plaintiff was, at the
time, employed in the Quartermaster's Department of the United States Army, receiving a
salary of $90, United States currency, per month, and that he was deprived of this salary
during the period that he was unable to perform labor; that the damage done to the bicycle
equaled to sum of $35, United States currency; that the defendant was not present in the
carriage at the time the accident happened.
The question presented by these facts is, Is the owner of a carriage driven by his cochero,
liable for injuries growing out of the negligence of said cochero, in the absence of such
owner?
No evidence was adduced during the trial of said cause to show that the defendant had
been negligent in the employment of the cochero or that he had any knowledge that
such cochero was incompetent of the general negligent character of said cochero, if such
existed. Can the negligent acts of a cochero in driving the carriage of his master be
attributed to the owner of the horse and carriage, in the absence of such owner and
master?
Chapter 2 of title 16, book 4, of the Civil Code contains the provisions under which persons
shall be liable for acts of negligence, which negligence does not amount to a crime. Article
1902 of said chapter provides that "a person who by an act or omission causes damages to
another when there is a fault or negligence, shall be obliged to repair the damage so done."
This article, it will be seen, relates to the liability of a person who himself is guilty of
negligence. Articles 1903 to 1910 of the same chapter attempt to enumerate the conditions
under which a person is liable not for his own negligence, but for injuries occasioned by the
negligence of others.
It would seem, from an examination of these various provisions, that the obligation to
respond for the negligent acts of another was limited to the particular cases mentioned; in
356
other words, we are of the opinion and so hold that it was the intention of the legislature in
enacting said chapter 2 to enumerate all of the persons for whose negligent acts third
persons are responsible. Article 1902 provides when a person himself is liable for
negligence. Articles 1903, 1904, 1905, 1906, 1907, 1908, and 1910 provide when a person
shall be liable for injuries caused, not by his own negligence but by the negligence of other
persons or things.
Article 1905 provides that the possessor of an animal, or the one who uses the same, is
liable for the damages it may cause, even when said animal shall escape from him or stray.
No complaint, however, is made here that the injuries caused by the negligence of
the cochero were caused by the animal belonging to the defendant. This section might,
under certain conditions, render either the owner of the animal or the one using it liable for
damages. These sections do not include a liability on the part of the plaintiff for injuries
resulting from acts of negligence such as are complained of in the present cause. The
defendant not having contributed in any way to the injury complained of, he is in no wise
responsible for the same. The judgment of the lower court is therefore hereby reversed.
After the expiration of twenty days let judgment be entered in accordance herewith, and the
case remanded to the lower court for execution. So ordered.
Arellano, C.J., Torres, Mapa, Carson, and Willard, JJ., concur.

G.R. No. 156037             May 28, 2007

MERCURY DRUG CORPORATION, Petitioner,
vs.
SEBASTIAN M. BAKING, Respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
For our resolution is the instant Petition for Review on Certiorari 1 assailing the
Decision2 dated May 30, 2002 and Resolution dated November 5, 2002 of the Court of
Appeals in CA-G.R. CV No. 57435, entitled "Sebastian M. Baking, plaintiff-appellee, versus
Mercury Drug Co. Inc., defendant-appellant."
The facts are:
On November 25, 1993, Sebastian M. Baking, respondent, went to the clinic of Dr. Cesar
Sy for a medical check-up. On the following day, after undergoing an ECG, blood, and
hematology examinations and urinalysis, Dr. Sy found that respondent’s blood sugar and
triglyceride were above normal levels. Dr. Sy then gave respondent two medical
prescriptions – Diamicron for his blood sugar and Benalize tablets for his triglyceride.
Respondent then proceeded to petitioner Mercury Drug Corporation (Alabang Branch) to
buy the prescribed medicines. However, the saleslady misread the prescription for
Diamicron as a prescription for Dormicum. Thus, what was sold to respondent was
Dormicum, a potent sleeping tablet.
Unaware that what was given to him was the wrong medicine, respondent took one pill of
Dormicum on three consecutive days –November 6, 1993 at 9:00 p.m., November 7 at 6:00
a.m., and November 8 at 7:30 a.m.
On November 8 or on the third day he took the medicine, respondent figured in a vehicular
accident. The car he was driving collided with the car of one Josie Peralta. Respondent fell
asleep while driving. He could not remember anything about the collision nor felt its
impact.
357
Suspecting that the tablet he took may have a bearing on his physical and mental state at
the time of the collision, respondent returned to Dr. Sy’s clinic. Upon being shown the
medicine, Dr. Sy was shocked to find that what was sold to respondent was Dormicum,
instead of the prescribed Diamicron.
Thus, on April 14, 1994, respondent filed with the Regional Trial Court (RTC), Branch 80 of
Quezon City a complaint for damages against petitioner, docketed as Civil Case No. Q-94-
20193.
After hearing, the trial court rendered its Decision dated March 18, 1997 in favor of
respondent, thus:
WHEREFORE, premises considered, by preponderance of evidence, the Court hereby
renders judgment in favor of the plaintiff and against the defendant ordering the latter to
pay mitigated damages as follows:
1. ₱250,000.00 as moral damages;
2. ₱20,000.00 as attorney’s fees and litigation expenses;
3. plus ½% of the cost of the suit.
SO ORDERED.
On appeal, the Court of Appeals, in its Decision, affirmed in toto the RTC judgment.
Petitioner filed a motion for reconsideration but it was denied in a Resolution dated
November 5, 2002.
Hence, this petition.
Petitioner contends that the Decision of the Court of Appeals is not in accord with law or
prevailing jurisprudence.
Respondent, on the other hand, maintains that the petition lacks merit and, therefore,
should be denied.
The issues for our resolution are:
1. Whether petitioner was negligent, and if so, whether such negligence was the
proximate cause of respondent’s accident; and
2. Whether the award of moral damages, attorney’s fees, litigation expenses, and cost
of the suit is justified.
Article 2176 of the New Civil Code provides:
Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.
To sustain a claim based on the above provision, the following requisites must concur: (a)
damage suffered by the plaintiff; (b) fault or negligence of the defendant; and, (c) connection
of cause and effect between the fault or negligence of the defendant and the damage
incurred by the plaintiff.3
There is no dispute that respondent suffered damages.
It is generally recognized that the drugstore business is imbued with public interest. The
health and safety of the people will be put into jeopardy if drugstore employees will not
exercise the highest degree of care and diligence in selling medicines. Inasmuch as the
matter of negligence is a question of fact, we defer to the findings of the trial court affirmed
by the Court of Appeals.
Obviously, petitioner’s employee was grossly negligent in selling to respondent Dormicum,
instead of the prescribed Diamicron. Considering that a fatal mistake could be a matter of
358
life and death for a buying patient, the said employee should have been very cautious in
dispensing medicines. She should have verified whether the medicine she gave respondent
was indeed the one prescribed by his physician. The care required must be commensurate
with the danger involved, and the skill employed must correspond with the superior
knowledge of the business which the law demands.41awphi1.nét
Petitioner contends that the proximate cause of the accident was respondent’s negligence in
driving his car.
We disagree.
Proximate cause is defined as any cause that produces injury in a natural and continuous
sequence, unbroken by any efficient intervening cause, such that the result would not have
occurred otherwise. Proximate cause is determined from the facts of each case, upon a
combined consideration of logic, common sense, policy, and precedent. 5
Here, the vehicular accident could not have occurred had petitioner’s employee been careful
in reading Dr. Sy’s prescription. Without the potent effects of Dormicum, a sleeping tablet,
it was unlikely that respondent would fall asleep while driving his car, resulting in a
collision.
Complementing Article 2176 is Article 2180 of the same Code which states:
ART. 2180. The obligation imposed by Article 2176 is demandable not only for one’s own
acts or omissions, but also for those of persons for whom one is responsible.
xxx
The owners and managers of an establishment or enterprise are likewise responsible for
damages caused by their employees in the service of the branches in which the latter are
employed or on the occasion of their functions.
Employers shall be liable for the damages caused by their employees and household
helpers acting within the scope of their assigned tasks, even though the former are not
engaged in any business or industry.
xxx
The responsibility treated of in this article shall cease when the persons herein mentioned
prove that they observed the diligence of a good father of a family to prevent damage.
It is thus clear that the employer of a negligent employee is liable for the damages caused
by the latter. When an injury is caused by the negligence of an employee, there instantly
arises a presumption of the law that there has been negligence on the part of the employer,
either in the selection of his employee or in the supervision over him, after such selection.
The presumption, however, may be rebutted by a clear showing on the part of the employer
that he has exercised the care and diligence of a good father of a family in the selection and
supervision of his employee.6 Here, petitioner's failure to prove that it exercised the due
diligence of a good father of a family in the selection and supervision of its employee will
make it solidarily liable for damages caused by the latter.
As regards the award of moral damages, we hold the same to be in order. Moral damages
may be awarded whenever the defendant’s wrongful act or omission is the proximate cause
of the plaintiff’s physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury in the
cases specified or analogous to those provided in Article 2219 of the Civil Code. 7
Respondent has adequately established the factual basis for the award of moral damages
when he testified that he suffered mental anguish and anxiety as a result of the accident
caused by the negligence of petitioner’s employee.
359
There is no hard-and-fast rule in determining what would be a fair and reasonable amount
of moral damages, since each case must be governed by its own peculiar facts. However, it
must be commensurate to the loss or injury suffered. 8 Taking into consideration the
attending circumstances here, we are convinced that the amount awarded by the trial court
is exorbitant. Thus, we reduce the amount of moral damages from ₱250,000.00 to
₱50,000.00 only.
In addition, we also deem it necessary to award exemplary damages. Article 2229 allows the
grant of exemplary damages by way of example or correction for the public good. As
mentioned earlier, the drugstore business is affected with public interest. Petitioner should
have exerted utmost diligence in the selection and supervision of its employees. On the part
of the employee concerned, she should have been extremely cautious in dispensing
pharmaceutical products. Due to the sensitive nature of its business, petitioner must at all
times maintain a high level of meticulousness. Therefore, an award of exemplary damages
in the amount of ₱25,000.00 is in order.1awphi1.nét
On the matter of attorney’s fees and expenses of litigation, it is settled that the reasons or
grounds for the award thereof must be set forth in the decision of the court. 9 Since the trial
court’s decision did not give the basis of the award, the same must be deleted. In Vibram
Manufacturing Corporation v. Manila Electric Company,10 we held:
Likewise, the award for attorney’s fees and litigation expenses should be deleted. Well-
enshrined is that "an award for attorney’s fees must be stated in the text of the court’s
decision and not in the dispositive portion only" (Consolidated Bank and Trust Corporation
(Solidbank) v. Court of Appeals, 246 SCRA 193 [1995] and Keng Hua Paper Products, Inc. v.
Court of Appeals, 286 SCRA 257 [1998]). This is also true with the litigation expenses where
the body of the decision discussed nothing for its basis.
WHEREFORE, we DENY the petition. The challenged Decision and Resolution of the Court
of Appeals in CA-G.R. CV No. 57435 are AFFIRMED with modification in the sense that (a)
the award of moral damages to respondent is reduced from ₱250,000.00 to ₱50,000.00; (b)
petitioner is likewise ordered to pay said respondent exemplary damages in the amount of
₱25,000.00; and (c) the award of attorney’s fees and litigation expenses is deleted.
Costs against petitioner.
SO ORDERED.
ANGELINA SANDOVAL-GUTIERREZ
Associate Justice
WE CONCUR:

G.R. No. L-13851             July 27, 1960

DEOGRACIAS F. MALONZO, petitioner,
vs.
GREGORIA T. GALANG and FRANCISCO GALANG, respondents.
Felixberto V. Castillo for petitioner.
F.M. Ejercito for respondents.
REYES, J.B.L., J.:
On October 5, 1946, Gregoria T. Galang, wife of Francisco G. Galang, received from
Deogracias T. Malonzo a loan of P5,000.00 under a check which Gregoria cashed at the
drawee bank National City bank of New York, Manila.
360
Subsequently, on April 17, 1947, the Rehabilitation Finance Corporation loaned to
Francisco G. Galang a check in the sum of P14,968.00 drawn against the Philippine
National Bank, Galang endorsed the check to Deogracias F. Malonzo, who cashed it on
April 25, 1947. Out of the proceeds of the check, P10,000.00 was applied to the payment of
the share and participation of Francisco Galang in a fishing venture with Malonzo. The
balance of P4,968.00, together with P32.00 delivered in cash to Malonzo, paid off, according
to Galang, the loan of P5,000.00 extended by the former to Galang's wife on October 5,
1946. However, Malonzo alleged that he returned said amount of P4,968.00 to Galang,
partly in cash (P1,000.00) and partly in check for P3,968.00 dated May 19, 1947, made
payable to Gregoria T. Galang and drawn against the Philippine Trust Co.
Claiming that the P5,000.00 loan obtained from him by Gregoria T. Galang on October 5,
1946, had remained unpaid, Malonzo sued the Galang spouses on August 27, 1955 for the
payment thereof, plus interests and attorney's fees (C.C. No. 27303, CFI of Manila).
The trial court refused to believe Malonzo's version that the loan in question had not yet
been paid; held that the same had already been liquidated as claimed by the defendant
spouses; and found the check for P3,968.00 delivered by Malonzo to Gregoria T. Galang on
May 19, 1947 had nothing to do with said loan and was in payment of another loan which
she extended to Malonzo just a few days before the check was issued. The lower court also
found that the complaint was clearly unfounded, dismissed the same, and sentenced
Malonzo to pay the Galang spouses under their counterclaim P500.00 compensatory and
moral damages, and P1,000.00 attorney's fees..
On appeal to the Court of Appeals by Malonzo, the judgment of the court a quo was
affirmed in toto. From this decision, Malonzo appealed to this Court, urging that there was
no legal basis for the award to respondents of compensatory and moral damages, and of
attorney's fees.
As to attorney's fees, the award is correct and proper, in view of the finding of the trial court
and of the Court of Appeals that petitioner's action against respondents is clearly
unfounded, since Article 2208, par. (4), of the New Civil Code authorizes the recovery of
attorney's fees "in case of a clearly unfounded civil action or proceeding against the
plaintiff". This provision applies equally in favor of a defendant under a counterclaim for
attorney's fees (as in this case), considering that a counterclaim is a complaint by the
defendant against the original plaintiff (Pongos vs. Hidalgo Enterprises, Inc., et al., 84 Phil.,
499; 47 Off. Gaz., [2] 733), wherein the defendant is the plaintiff and the original plaintiff
the defendant.
In regard to other items of compensatory damages supposedly suffered by respondents (i.e.,
in addition to attorney's fees and costs that are also included in the concept of actual or
compensatory damages): assuming that they are recoverable in this case under the theory
that petitioner's having filed a clearly unfounded suit against respondents constitutes a tort
against the latter that makes the former "liable for all damages which are the natural and
probable consequences of the act or omission complained of" (Art. 2202, New Code), these
damages can not, however, be presumed, but must be duly proved (Art. 2199). Neither the
trial court nor the Court of Appeals has pointed out any specific facts which afford a basis
for measuring whatever compensatory or actual damages over and above attorney's fees
and costs that respondents had suffered. Upon the other hand, the award of compensatory
damages to respondents was merged by the trial court in a round sum (P500.00) that also
included moral damages, showing that this amount was not what respondents had proved
361
to have suffered, but simply what the court believed to be reasonably due to them for
having been made to defend what the two courts found to be a clearly unfounded suit. For
this reason, we do not think the award of compensatory damages to respondents should be
allowed.
Finally, with respect to moral damages, we are inclined to agree with petitioner that these
damages are not recoverable herein, notwithstanding the finding of the trial court and the
Court of Appeals that his complaint against respondents was clearly unfounded or
unreasonable. It will be observed that unlike compensatory or actual damages which are
generally recoverable in tort cases as long as there is satisfactory proof thereof (Art. 2202),
the Code has chosen to enumerate the cases in which moral damages may be recovered
(Art. 2219). A like enumeration is made in regard (Art. 2208). But the two enumerations
differ in the case of a clearly unfounded suit, which is expressly mentioned in Art. 2208
(par. 4), as justifying for award of attorney's fees, but is not included in the enumeration of
Art. 2219 in respect to moral damages. It is true that Art. 2219 also provides that moral
damages may be awarded in "analogous cases" to those enumerated, but we do not think
the Code intended "a clearly unfounded civil action or proceedings" to be one of these
analogous cases wherein moral damages may be recovered, or it would have expressly
mentioned it in Art. 2219, as it did in Art. 2208; or else incorporated in Art. 2208 by
reference in Art. 2219. Besides, Art. 2219 specifically mentions "quasi-delicts causing
physical injuries", as an instance when moral damages may be allowed, thereby implying
that all other quasi-delicts not resulting in physical injuries are excluded (Strebel vs.
Figueras, 96 Phil., 321), excepting, of course, the special torts referred to in Art. 309 (par.
9, Art. 2219) and in Arts. 21, 26, 27, 28, 29, 30, 32, 34 and 35 on the chapter on human
relations (par. 10, Art. 2219).
Furthermore, while no proof of pecuniary loss is necessary in order that moral damages
may be awarded, the amount of indemnity being left to the discretion of the court (Art.
2216), it is, nevertheless, essential that the claimant satisfactorily prove the existence of
the factual basis of the damage (Art. 2217) and its causal relation to defendant's acts. This
is so because moral damages, though incapable of pecuniary estimation, are in the category
of an award designed to compensate the claimant for actual injury suffered and not to
impose a penalty on the wrongdoer (Algara vs. Sandejas, 27 Phil., 284). The trial court and
the Court of Appeals both seem to be of the opinion that the mere fact that respondent were
sued without any legal foundation entitled them to an award of moral damages, hence they
made no definite finding as to what the supposed moral damages suffered consist of. Such
a conclusion would make of moral damages a penalty, which they are not, rather than a
compensation for actual injury suffered, which they are intended to be. Moral damages, in
other words, are not corrective or exemplary damages.
The foregoing discussion makes it unnecessary to further dwell on the other points raised
by the appeal.
Wherefore, the decision appealed from is modified in the sense that the award of
compensatory and moral damages to respondents is eliminated, but is affirmed in all other
respects. No costs.
Padilla, Montemayor, Bautista Angelo, Labrador, Concepcion, Barrera, and Gutierrez David,
JJ., concur.

362
G.R. No. 209359, October 17, 2018
METROHEIGHTS SUBDIVISION HOMEOWNERS ASSOCIATION, INC., Petitioner, v. CMS
CONSTRUCTION AND DEVELOPMENT CORPORATION, TOMASITO T. CRUZ, TITA F.
CRUZ, SIMONETTE F. CRUZ, ANGEL T. CRUZ, ERNESTO T. CRUZ AND
METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM (MWSS), Respondents.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court,
seeking to reverse and set aside the Decision 1 and the Resolution2 of the Court of Appeals
(CA), dated October 10, 2012 and September 30, 2013, respectively, in CA-G.R. CV No.
89085.
On June 29, 1992, petitioner Metroheights Subdivision Homeowners Association, Inc. filed
with the Regional Trial Court (RTC) 3 of Quezon City a complaint4 for damages with prayer
for a temporary restraining order and/or writ of preliminary injunction and writ of
preliminary mandatory injunction against respondents CMS Construction and
Development Corporation (CMS Construction), Tomasito Cruz, Tita Cruz, Simonette Cruz,
Angel Cruz, Ernesto Cruz (the Cruzes), and Metropolitan Waterworks and Sewerage System
(MWSS).
Petitioner alleged, among others, that it sought the assistance of respondent MWSS to
address the insufficient supply of water in its subdivision to which the latter advised the
improvement and upgrading of its private internal water distribution lines, foremost of
which was the transfer or change in the location of its tapping source and the change in
size of its water service line from the old line tapped at Sanville Subdivision to a new
tapping source on Visayas Avenue, Quezon City; that on November 16, 1990, petitioner
entered into a contract with respondent MWSS for the new water service connection, and
respondent MWSS awarded the project to a contractor which implemented the same, the
cost of which was solely shouldered by contribution from petitioner's members amounting
to P190,000.00, inclusive of labor, materials, and respondent MWSS' fees and charges; and
that since then, there was already sufficient and strong water pressure twenty-four (24)
hours a day in the petitioner's subdivision.
However, sometime in April 1992, respondent CMS Construction made diggings and
excavations, and started to lay water pipes along Fisheries Street and Morning Star Drive in
Sanville Subdivision, Quezon City, petitioner's neighboring subdivision; that in the process,
respondent CMS Construction, with the knowledge and consent of respondent MWSS but
without petitioner's knowledge and consent, unilaterally cut-off and disconnected the
latter's new and separate water service connection on Visayas Avenue; that on May 28,
1992, petitioner's members were waterless, which lasted for three (3) days, and that
petitioner's polyvinyl chloride (PVC) pipes and radius elbow, valued at around P30,000.00,
were stolen by respondent CMS Construction's workers; that when petitioner's officers
discovered the illegal cutting of the water connection on May 30, 1992, they immediately
complained to the respondents and demanded for the restoration of their water line; that
respondent CMS Construction only made a temporary reconnection with the use of a 2-
inch rubber hose to the new water line it constructed at Sanville Subdivision; and that
despite petitioner's verbal and written demands, respondents have failed to restore
petitioner's water line connection in its original state and to return the missing PVC pipes
and radius elbow.
363
In its Answer with Counterclaim, respondent MWSS averred, among others, that on August
16, 1991, it entered into a contract with respondent CMS Construction for the mainlaying
and rehabilitation of the existing water main and appurtenances, and the
installation/replacement of water service connection at Sanville Subdivision, Quezon City;
that in connection with the said undertaking, it necessitated the creek crossing of a 150
mm cast iron pipe to be placed alongside the bridge situated along Morning Star Drive in
Quezon City; that alongside the said bridge, there existed two pipes with casings, one of
which was owned by petitioner; that it designed the placing of the 150 mm cast iron pipe
alongside the above-stated bridge and the design included the interconnection of the two
existing pipes; that the aforementioned interconnection features the use of split tap tees,
one of which was for the 100 mm pipe allegedly owned by petitioner; and that the
infrastructure project aimed to improve the water pressure of eight (8) subdivisions in
Tandang Sora which included Metroheights Subdivision.
On the other hand, respondents CMS Construction and the Cruzes claimed that they were
awarded by respondent MWSS a contract for the latter's Manila Water Supply
Rehabilitation Project II, covering the Tandang Sora area, to provide an improved and
equitable water distribution to eight (8) subdivisions located therein; that its proposed
working drawings had been reviewed and approved by respondent MWSS; that it is not true
that it started laying water pipes along the Morning Star Drive water pipeline by
unilaterally cutting off and disconnecting petitioner's existing water pipeline measuring
100-mm (4-inches) in diameter along the said creek as the same was replaced with a PVC
water pipe measuring 150-mm in diameter; that the alleged cutting off, disconnection and
replacement of petitioner's pipeline bigger in diameter took only three to four hours, and
the resumption of the water flow after replacement could not have rendered the
homeowners waterless for three (3) days; and that the officers and engineers of petitioner
were previously consulted on the rehabilitation project.
On March 30, 1999, the RTC rendered a Decision, 5 the dispositive portion of which
provides:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff.
Defendants are hereby ordered to jointly and severally pay plaintiff the sum of:
1. P190,000.00 as and by way of actual damages;
2. P100,000.00 as and by way of nominal damages;
3. P100,000.00 as and by way of exemplary damages;
4. P50,000.00 as and by way of attorney's fees; and
5. The costs of this [s]uit.
SO ORDERED[.]6
The RTC found, among others, that respondents did not have the authority to simply cut,
disconnect and transfer petitioner's water supply with impunity, without notice to or
without getting its consent; and that respondents acted in concert and in bad faith, which
made them jointly and severally liable for damages.
Respondent MWSS filed its notice of appeal while respondents CMS Construction and the
Cruzes filed a motion for new trial which the RTC granted.
On May 18, 2006, the RTC issued a Decision 7 which affirmed its earlier Decision dated
March 30, 1999.
The RTC found that respondents' claim of damnum absque injuria was not tenable. Under
the principle of damnum absque injuria, the legitimate exercise of a person's right, even if it
364
causes loss to another, does not automatically result in an actionable injury and the law
does not prescribe a remedy for the loss. However, this principle admits of exception as
when there is an abuse of a person's right. The exercise of one's right should be done in a
manner that will not cause injustice to another. Since water is a basic necessity, the lack
thereof not only caused inconvenience but posed health concerns as well. Notice to
petitioner of the interruption of the water supply should have been made prior to the
implementation of the project.
Respondents' motion for reconsideration was denied.
Respondents filed their appeal with the CA. On October 10, 2012, the CA issued its
assailed decision, the decretal portion of which reads:
WHEREFORE, the appeal is GRANTED. The Decision dated May 18, 2006, as well as the
Decision dated March 30, 1999 of the Regional Trial Court of Quezon City are REVERSED
and SET ASIDE. The complaint below is hereby DISMISSED for lack of merit.8
The CA found that the respondents' rehabilitation project was not undertaken without any
notice at all; that respondents' actions were merely consequential to the exercise of their
rights and obligations to manage and maintain the water supply system, an exercise which
includes water rehabilitation and improvement within the area, pursuant to a prior
agreement for the water supply system; and that the alleged abuse of right was not
sufficiently established.
Petitioner's motion for reconsideration was denied by the CA in a Resolution dated
September 30, 2013.
Hence, this petition for review on certiorari filed by petitioner, raising the following issues:
WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT THERE WAS
PRIOR NOTICE UPON THE PETITIONER OF THE REHABILITATION PROJECT BEFORE IT
WAS UNDERTAKEN BY THE RESPONDENTS;
WHETHER OR NOT THE COURT OF APPEALS CANNOT BE HELD LIABLE UNDER
ARTICLE 19 OF THE CIVIL CODE;
WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT THE ABUSE OF
RIGHT OF THE RESPONDENTS WAS NOT SUFFICIENTLY ESTABLISHED;
WHETHER OR NOT THE COURT OF APPEALS ERRED IN DISMISSING THE COMPLAINT
AND ABSOLVING RESPONDENTS OF ANY CIVIL LIABILITY IN FAVOR OF THE
PETITIONER.9
The issue for resolution is whether the respondents should be held liable for damages for
the cutting off, disconnection and transfer of petitioner's existing separate water service
connection on Visayas Avenue without the latter's knowledge and consent which also
resulted in petitioner's subdivision being waterless.
To begin with, to address the perennial problem of insufficient supply of water in
Metroheights Subdivision, petitioner had filed its application for transfer location of
tapping/change size of the water service connection on Visayas Avenue with respondent
MWSS, which the latter approved and implemented; thus, petitioner had uninterrupted
water supply. On August 16, 1991, respondent MWSS entered into a contract with
respondent CMS Construction for the mainlaying and rehabilitation of existing water main
and appurtenances, and the installation/replacement of water service connection at
Sanville Subdivision, Quezon City. In the process, petitioner's existing water service
connection on Visayas Avenue was cut-off, disconnected and transferred by respondents,
and petitioner's homeowners experienced loss of water supply for three (3) days.
365
The RTC found respondents liable for damages on the basis of abuse of right under Article
19 of the New Civil Code, giving credence to petitioner's claim that there was no notice to it
prior to the implementation of respondents' project. The CA reversed the RTC and found
that there was no abuse of right committed by the respondents, as the project was not
undertaken without notice to petitioner.
We reverse the CA.
Article 19 of the New Civil Code deals with the principle of abuse of rights, thus:
Art. 19. Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.
"The principle of abuse of rights x x x departs from the classical theory that 'he who uses a
right injures no one.' The modern tendency is to depart from the classical and traditional
theory, and to grant indemnity for damages in cases where there is an abuse of rights, even
when the act is not illicit."10
"Article 19 [of the New Civil Code] was intended to expand the concept of torts by granting
adequate legal remedy for the untold number of moral wrongs which is impossible for
human foresight to provide[,] specifically in statutory law. If mere fault or negligence in
one's acts can make him liable for damages for injury caused thereby, with more reason
should abuse or bad faith make him liable. The absence of good faith is essential to abuse
of right. Good faith is an honest intention to abstain from taking any unconscientious
advantage of another, even through the forms or technicalities of the law, together with an
absence of all information or belief of fact which would render the transaction
unconscientious. In business relations, it means good faith as understood by men of
affairs."11
"While Article 19 [of the New Civil Code] may have been intended as a mere declaration of
principle, the 'cardinal law on human conduct' expressed in said article has given rise to
certain rules, e.g. that where a person exercises his rights but does so arbitrarily or
unjustly or performs his duties in a manner that is not in keeping with honesty and good
faith, he opens himself to liability. The elements of an abuse of rights under Article 19 are:
(1) there is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of
prejudicing or injuring another."12
Here, it was admitted by Engr. Victor Cariaga, 13 an MWSS consultant, and Mr. Tomasito
Cruz,14 respondent CMS Construction's President, that petitioner has its own pipeline or
source of water coming from Visayas Avenue. Respondents also admitted that because of
the rehabilitation project they were undertaking, petitioner's water pipeline, measuring 100
mm in diameter along the side of the creek, was replaced with a PVC plastic pipe 150 mm
in diameter; and that petitioner's water line had to be transferred, and in the process of
transferring, petitioner's existing water line had to be cut off. Considering that respondents
would disconnect and change petitioner's existing water line tapped from Visayas Avenue to
another tapping source, good faith and prudence dictate that petitioner should be informed
or notified of such actions, as respondents admitted that prior notice to affected areas is a
standard operating procedure. More so, petitioner's members had spent their own money to
pay for their existing water connection on Visayas Avenue to address the perennial problem
of the lack of water supply in their area.
The CA found that the rehabilitation project was not undertaken without notice to
petitioner, which was contrary to the RTC's finding that there was no notice given to
petitioner. The matter of whether there was notice to petitioner is factual. It is elementary
366
that a question of fact is not appropriate for a petition for review on certiorari under Rule
45 of the Rules of Court. The parties may raise only questions of law because the Supreme
Court is not a trier of facts. However, we may review the findings of fact by the CA when
they are contrary to those of the trial court, as in this case. 15
In finding that there was notice given by the respondents to petitioner, the CA relied on the
testimonies of Tomasito Cruz, President of respondent CMS Construction, that prior to the
actual implementation of the project, permissions from the Office of the City Engineer and
the affected homeowners' associations were sought; and that of Engr. Victor Cariaga,
consultant of respondent MWSS, saying that it is an operating procedure to give letters to
the homeowners, as well as to the barangays affected, notifying them of the objective of the
project and requesting for meetings.
Notably, however, the CA failed to consider that Tomasito Cruz testified during his cross-
examination that there was no notice to petitioner coming from their company, to wit:
Q: Now, do I get from you that CMS or any of its officers including you did not personally
give a written notice to the plaintiff prior to the implementation of this water rehab
project?
   
A: Our company...that is not our responsibility. Because the one who owns the project is
MWSS and they are the ones who asked for permission.
 
ATTY. REYES, JR.: Okay.
   
Q: In other words, you agree with me that there is no such notice coming from your
party CMS? There is no such notice?
   
A: From our company, none, sir.
   
Q: Now, is it your assumption that there was such a notice given by MWSS?
   
A: From what I know there was a notice. In fact, there was even a meeting, sir.
   
Q: Did you happen to see a copy of this written notice from the MWSS?
   
A: No, sir.
   
Q: Since 1992, when the contract was awarded and then later implemented up to this

367
 present time, did you ever have an occasion to go to MWSS and ask for a copy of that
alleged written notice to the plaintiff?
   
A: I did not ask for that, sir. Because from what I know, because there was a meeting,
there was already an agreement.
   
Q: In short, Mr. witness at present you cannot produce any documentary proof of that
allege[d] notice coming from MWSS?
   
A: None, sir.16
The alleged meetings, claimed by Tomasito Cruz to have taken place to show that petitioner
had already been notified of the rehabilitation project, were not substantiated at all. Even
Engr. Cariaga's assertion that it is an operating procedure to give letters to the
homeowners, as well as the barangays affected, regarding the objective of the project and
calling for meetings was not also established by any documentary evidence. It is, therefore,
established that there was no notice, not even a generalized notice, given by respondents to
petitioner regarding the rehabilitation project.
In Manila Gas Corporation v. Court of Appeals, 17 we held:
What is peculiar in the stand of Defendant is that while it would insist on the giving of
notices and warnings, it did not have any competent and sufficient evidence to prove the
same. Demands in open were made by Plaintiff counsel whether Defendant could show any
written evidence showing that notices and warnings were sent to Plaintiff. Not a single piece
of evidence was produced. Normally, if a notice is refused, then the original and its copies
would still be in the hands of the public utility concerned. In the instant case, it has to be
repeated, not a single copy, original or duplicate, triplicate, etc. of any notice to pay or
warning of disconnection was produced in court. The court cannot believe that Defendant,
as what the testimonies of its witnesses would like to impress upon this Court, conducts its
business that way. Defendant is a big business concern and it cannot be said that it treats
its business as a joke. Its personnel should realize this, for only with such an awareness
can they respond faithfully to their responsibilities as members of a big business enterprise
imbued with public interest over which the Philippine Government is concerned. 18
In fact, it was only after petitioner's officer investigated the reason behind the loss of water
supply in their subdivision that it was learned that their existing line was cut-off and
transferred by respondents. Also, it was only when petitioner's officer went to the office of
respondent CMS Construction and complained about the loss of water supply in their
subdivision that petitioner's homeowners' water line was temporarily reconnected with a 2-
inch rubber hose. The testimony of respondent CMS Construction's President revealed this
matter on cross-examination, to wit:
COURT: So, you are saying Mr. witness that you visited [the] site on the very day when
the officers of the association came to your office and complained that they have
no water?

368
   
A: Yes, Your HONOR.
 
ATTY. REYES, JR.: Okay.
   
Q: And you claimed that you went to the site on the same day, you saw that there
was already a connection of the water supply line of the plaintiff to the new line
that you installed and you claimed that there was water on the line but it
cannot reach plaintiff?
   
A: Yes, sir.
 
ATTY. REYES, JR.: Okay.
   
Q: Was the connection between the water line system of plaintiff to the new line
that you installed at that time when you visited through a temporary rubber
hose?
   
A: The reason why we put the rubber hose just like in electricity it is like a
"jumper". Because of their complaint that they had no water. That was the idea
of the project engineer of MWSS, sir.
   
xxxx
   
Q: Therefore, it is correct to say that without the temporary connection made
through a rubber hose there would be no water for the plaintiff since the time of
disconnection?
   
A: Well, sir, it did not help.
   
xxxx
   
Q: So, in short, you are claiming that whether or not the connection was made

369
 there was no water, is that what you are claiming?
   
A: There was water, but it was weak flow.19
Clearly, had petitioner's officer not complained about the water service interruption in their
subdivision and the rubber hose connection was not made to temporarily fix petitioner's
concern, petitioner's homeowners would have continuously suffered loss of water service.
Notably, respondents admitted in their respective Comments that the inconvenience of the
temporary stoppage of water supply in petitioner's area was highly inevitable in the process
of changing petitioner's water pipe size crossing the bridge up to Visayas Avenue where the
tapping source is connected. Notwithstanding, respondents proceeded with the cutting off
and disconnection of petitioner's water connection without the latter's consent and
notification thereby causing prejudice or injury to the petitioner's members because of the
unexpected water loss for three (3) days. Respondents' actions were done in total disregard
of the standards set by Article 19 of the New Civil Code which entitles petitioner to
damages.
In MWSS v. Act Theater, Inc.,20 we held that petitioner's act of cutting off respondents' water
service connection without prior notice was arbitrary, injurious and prejudicial to the latter,
justifying the award of damages under Article 19 of the New Civil Code, thus:
When a right is exercised in a manner which discards these norms (set under Art. 19)
resulting in damage to another, a legal wrong is committed for which actor can be held
accountable. In this case, the petitioner failed to act with justice and give the respondent
what is due to it when the petitioner unceremoniously cut off the respondent's water
service connection. As correctly found by the appellate court:
While it is true that MWSS had sent a notice of investigation to plaintiff-appellee prior to
the disconnection of the latter's water services, this was done only a few hours before the
actual disconnection. Upon receipt of the notice and in order to ascertain the matter, Act
sent its assistant manager Teodulo Gumalid, Jr. to the MWSS office but he was treated
badly on the flimsy excuse that he had no authority to represent Act. Act's water services
were cut at midnight of the day following the apprehension of the employees. Clearly, the
plaintiff-appellee was denied due process when it was deprived of the water services. As a
consequence thereof, Act had to contract another source to provide water for a number of
days. Plaintiff-appellee was also compelled to deposit with MWSS the sum of P200,000.00
for the restoration of their water services. 21
We do not agree with the CA's finding that respondents' actions were merely consequential
to the exercise of their rights and obligations to manage and maintain the water supply
system. "Having the right should not be confused with the manner by which such right is
to be exercised."22 Article 19 of the New Civil Code sets the standard in the exercise of one's
rights and in the performance of one's duties, i.e., he must act with justice, give everyone
his due, and observe honesty and good faith. "The exercise of a right ends when the right
disappears, and it disappears when it is abused, especially to the prejudice of others. The
mask of a right without the spirit of justice which gives it life is repugnant to the modem
concept of social law."23 Here it was established, as shown by the above discussions, that
respondents indeed abused their right.
We find that respondents MWSS and CMS Construction should be held liable for damages
to petitioner but not the Cruzes who are the directors and stockholders of respondent CMS
370
Construction. Section 31 of the Corporation Code is the governing law on personal liability
of officers for the debts of the corporation, to wit:
Sec. 31. Liability of directors, trustees or officers. — Directors or trustees who willfully and
knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty
of gross negligence or bad faith in directing the affairs of the corporation or acquire any
personal or pecuniary interest in conflict with their duty as such directors or trustees shall
be liable jointly and severally for all damages resulting therefrom suffered by the
corporation, its stockholders or members and other persons.
We find that petitioner failed to show that the Cruzes committed any of those above-quoted
acts to make them personally liable.
Petitioner is entitled to the award of actual damages. Petitioner alleged that it had spent
P190,000.00 for the transfer location of tapping/change size of the water service
connection, which was unilaterally cut off, disconnected and transferred by respondents.
However, only the amount of P161,541.85 was duly proved by the checks, which petitioner
had paid to their contractor, thus, such amount should be awarded. "Actual or
compensatory damages cannot be presumed, but must be duly proved, and proved with a
reasonable degree of certainty."24
Petitioner is also entitled to the award of exemplary damages in the amount of
P100,000.00. Exemplary damages may be imposed by way of example or correction for the
public good. We also award the amount of P50,000.00 as attorney's fees as petitioner was
compelled to litigate to protect its interest by reason of the unjustified act of respondents.
We find no basis to award nominal damages since there is an award of actual damages.
"Nominal damages cannot co-exist with actual or compensatory damages." 25
Finally, in line with prevailing jurisprudence, legal interest at the rate of 6% per annum is
imposed on the monetary awards computed from the finality of this Decision until full
payment.26
WHEREFORE, the petition for review on certiorari is GRANTED. The Decision dated
October 10, 2012 and the Resolution dated September 30, 2013 of the Court of Appeals in
CA-G.R. CV No. 89085 are hereby REVERSED and SET ASIDE. The Decisions, dated
March 30, 1999 and May 18, 2006, of the Regional Trial Court, Branch 77, of Quezon City
are hereby AFFIRMED with MODIFICATION.
Thus, as modified, the Decision dated March 30, 1999 of the Regional Trial Court is as
follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff
Metroheights Subdivision Homeowners Association, Inc. Defendants Metropolitan
Waterworks and Sewerage System and CMS Construction and Development Corporation
are hereby ordered to jointly and severally pay plaintiff the sum of:
(a) P161,541.85 as and by way of actual damages;
(b) P100,000.00 as and by way of exemplary damages;
(c) P50,000.00 as and by way of attorney's fees; and
(d) The costs of this suit.
All damages awarded shall earn interest at the rate of six percent (6%) per annum from the
date of finality of this Decision until fully paid.
SO ORDERED.
Leonen, J. Reyes, Jr., and Hernando, JJ., concur.
Gesmundo, J., on vacation leave.
371
G.R. No. 132344           February 17, 2000
UNIVERSITY OF THE EAST, petitioner,
vs.
ROMEO A. JADER, respondent.
YNARES-SANTIAGO, J.:
May an educational institution be held liable for damages for misleading a student into
believing that the latter had satisfied all the requirements for graduation when such is not
the case? This is the issue in the instant petition for review premised on the following
undisputed facts as summarized by the trial court and adopted by the Court of Appeals
(CA),1 to wit:
Plaintiff was enrolled in the defendants' College of Law from 1984 up to 1988. In the
first semester of his last year (School year 1987-1988), he failed to take the regular
final examination in Practice Court I for which he was given an incomplete grade
(Exhibits "2", also Exhibit "H"). He enrolled for the second semester as fourth year law
student (Exhibit "A") and on February 1, 1988 he filed an application for the removal
of the incomplete grade given him by Professor Carlos Ortega (Exhibits "H-2", also
Exhibit "2") which was approved by Dean Celedonio Tiongson after payment of the
required fee. He took the examination on March 28, 1988. On May 30, 1988,
Professor Carlos Ortega submitted his grade. It was a grade of five (5). (Exhibits "H-
4", also Exhibits "2-L", "2-N").1âwphi1.nêt
In the meantime, the Dean and the Faculty Members of the College of Law met to
deliberate on who among the fourth year students should be allowed to graduate. The
plaintiff's name appeared in the Tentative List of Candidates for graduation for the
Degree of Bachelor of Laws (LL.B) as of Second Semester (1987-1988) with the
following annotation:
JADER ROMEO A.
Def. Conflict of Laws — x-1-87-88, Practice Court I Inc., 1-87-88 C-1 to submit
transcript with S.O. (Exhibits "3", "3-C-1", "3-C-2").
The 35th Investitures & Commencement Ceremonies for the candidates of Bachelor
of Laws was scheduled on the 16th of April 1988 at 3:00 o'clock in the afternoon, and
in the invitation for that occasion the name of the plaintiff appeared as one of the
candidates. (Exhibits "B", "B-6", "B-6-A"). At the foot of the list of the names of the
candidates there appeared however the following annotation:
This is a tentative list Degrees will be conferred upon these candidates who
satisfactorily complete requirements as stated in the University Bulletin and as
approved of the Department of Education, Culture and Sports (Exhibit "B-7-
A").
The plaintiff attended the investiture ceremonies at F. dela Cruz Quadrangle, U.E.,
Recto Campus, during the program of which he went up the stage when his name
was called, escorted by her (sic) mother and his eldest brother who assisted in
placing the Hood, and his Tassel was turned from left to right, and he was thereafter
handed by Dean Celedonio a rolled white sheet of paper symbolical of the Law
Diploma. His relatives took pictures of the occasion (Exhibits "C" to "C-6", "D-3" to
"D-11").
372
 He tendered a blow-out that evening which was attended by neighbors, friends and
relatives who wished him good luck in the forthcoming bar examination. There were
pictures taken too during the blow-out (Exhibits "D" to "D-1").
He thereafter prepared himself for the bar examination. He took a leave of absence
without pay from his job from April 20, 1988 to September 30, 1988 (Exhibit "G") and
enrolled at the pre-bar review class in Far Eastern University. (Exhibits "F" to "F-2").
Having learned of the deficiency he dropped his review class and was not able to take
the bar examination.2
Consequently, respondent sued petitioner for damages alleging that he suffered moral
shock, mental anguish, serious anxiety, besmirched reputation, wounded feelings and
sleepless nights when he was not able to take the 1988 bar examinations arising from the
latter's negligence. He prayed for an award of moral and exemplary damages, unrealized
income, attorney's fees, and costs of suit.
In its answer with counterclaim, petitioner denied liability arguing mainly that it never led
respondent to believe that he completed the requirements for a Bachelor of Laws degree
when his name was included in the tentative list of graduating students. After trial, the
lower court rendered judgment as follows:
WHEREFORE, in view of the foregoing judgment is hereby rendered in favor of the
plaintiff and against the defendant ordering the latter to pay plaintiff the sum of
THIRTY FIVE THOUSAND FOUR HUNDRED SEVENTY PESOS (P35,470.00) with
legal rate of interest from the filing of the complaint until fully paid, the amount of
FIVE THOUSAND PESOS (P5,000.00) as attorney's fees and the cost of suit.
Defendant's counterclaim is, for lack of merit, hereby dismissed.
SO ORDERED.3
which on appeal by both parties was affirmed by the Court of Appeals (CA) with
modification. The dispositive portion of the CA decision reads:
WHEREFORE, in the light of the foregoing, the lower Court's Decision is hereby
AFFIRMED with the MODIFICATION that defendant-appellee, in addition to the sum
adjudged by the lower court in favor of plaintiff-appellant, is also ORDERED to pay
plaintiff-appellant the amount of FIFTY THOUSAND (P50,000.00) PESOS for moral
damages. Costs against defendant-appellee.
SO ORDERED.4
Upon the denial of its motion for reconsideration, petitioner UE elevated the case to this
Court on a petition for review under Rule 45 of the Rules of Court, arguing that it has no
liability to respondent Romeo A. Jader, considering that the proximate and immediate
cause of the alleged damages incurred by the latter arose out of his own negligence in not
verifying from the professor concerned the result of his removal exam.
The petition lacks merit.
When a student is enrolled in any educational or learning institution, a contract of
education is entered into between said institution and the student. The professors, teachers
or instructors hired by the school are considered merely as agents and administrators
tasked to perform the school's commitment under the contract. Since the contracting
parties are the school and the student, the latter is not duty-bound to deal with the
former's agents, such as the professors with respect to the status or result of his grades,
although nothing prevents either professors or students from sharing with each other such
information. The Court takes judicial notice of the traditional practice in educational
373
institutions wherein the professor directly furnishes his/her students their grades. It is the
contractual obligation of the school to timely inform and furnish sufficient notice and
information to each and every student as to whether he or she had already complied with
all the requirements for the conferment of a degree or whether they would be included
among those who will graduate. Although commencement exercises are but a formal
ceremony, it nonetheless is not an ordinary occasion, since such ceremony is the
educational institution's way of announcing to the whole world that the students included
in the list of those who will be conferred a degree during the baccalaureate ceremony have
satisfied all the requirements for such degree. Prior or subsequent to the ceremony, the
school has the obligation to promptly inform the student of any problem involving the
latter's grades and performance and also most importantly, of the procedures for remedying
the same.
Petitioner, in belatedly informing respondent of the result of the removal examination,
particularly at a time when he had already commenced preparing for the bar exams, cannot
be said to have acted in good faith. Absence of good faith must be sufficiently established
for a successful prosecution by the aggrieved party in a suit for abuse of right under Article
19 of the Civil Code. Good faith connotes an honest intention to abstain from taking undue
advantage of another, even though the forms and technicalities of the law, together with the
absence of all information or belief of facts, would render the transaction
unconscientious.5 It is the school that has access to those information and it is only the
school that can compel its professors to act and comply with its rules, regulations and
policies with respect to the computation and the prompt submission of grades. Students do
not exercise control, much less influence, over the way an educational institution should
run its affairs, particularly in disciplining its professors and teachers and ensuring their
compliance with the school's rules and orders. Being the party that hired them, it is the
school that exercises general supervision and exclusive control over the professors with
respect to the submission of reports involving the students' standing. Exclusive control
means that no other person or entity had any control over the instrumentality which
caused the damage or injury.6
The college dean is the senior officer responsible for the operation of an academic program,
enforcement of rules and regulations, and the supervision of faculty and student
services.7 He must see to it that his own professors and teachers, regardless of their status
or position outside of the university, must comply with the rules set by the latter. The
negligent act of a professor who fails to observe the rules of the school, for instance by not
promptly submitting a student's grade, is not only imputable to the professor but is an act
of the school, being his employer.
Considering further, that the institution of learning involved herein is a university which is
engaged in legal education, it should have practiced what it inculcates in its students, more
specifically the principle of good dealings enshrined in Articles 19 and 20 of the Civil Code
which states:
Art. 19. Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.
Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to
another, shall indemnify the latter for the same.
Art. 19 was intended to expand the concept of torts by granting adequate legal remedy for
the untold number of moral wrongs which is impossible for human foresight to provide
374
specifically in statutory law.8 In civilized society, men must be able to assume that others
will do them no intended injury — that others will commit no internal aggressions upon
them; that their fellowmen, when they act affirmatively will do so with due care which the
ordinary understanding and moral sense of the community exacts and that those with
whom they deal in the general course of society will act in good faith. The ultimate thing in
the theory of liability is justifiable reliance under conditions of civilized society. 9 Schools
and professors cannot just take students for granted and be indifferent to them, for without
the latter, the former are useless.
Educational institutions are duty-bound to inform the students of their academic status
and not wait for the latter to inquire from the former. The conscious indifference of a
person to the rights or welfare of the person/persons who may be affected by his act or
omission can support a claim for damages. 10 Want of care to the conscious disregard of civil
obligations coupled with a conscious knowledge of the cause naturally calculated to
produce them would make the erring party liable. 11 Petitioner ought to have known that
time was of the essence in the performance of its obligation to inform respondent of his
grade. It cannot feign ignorance that respondent will not prepare himself for the bar exams
since that is precisely the immediate concern after graduation of an LL.B. graduate. It failed
to act seasonably. Petitioner cannot just give out its student's grades at any time because a
student has to comply with certain deadlines set by the Supreme Court on the submission
of requirements for taking the bar. Petitioner's liability arose from its failure to promptly
inform respondent of the result of an examination and in misleading the latter into
believing that he had satisfied all requirements for the course. Worth quoting is the
following disquisition of the respondent court:
It is apparent from the testimony of Dean Tiongson that defendant-appellee
University had been informed during the deliberation that the professor in Practice
Court I gave plaintiff-appellant a failing grade. Yet, defendant-appellee still did not
inform plaintiff-appellant of his failure to complete the requirements for the degree
nor did they remove his name from the tentative list of candidates for graduation.
Worse, defendant-appellee university, despite the knowledge that plaintiff-appellant
failed in Practice Court I, again included plaintiff-appellant's name in the "tentative
list of candidates for graduation which was prepared after the deliberation and which
became the basis for the commencement rites program. Dean Tiongson reasons out
that plaintiff-appellant's name was allowed to remain in the tentative list of
candidates for graduation in the hope that the latter would still be able to remedy the
situation in the remaining few days before graduation day. Dean Tiongson, however,
did not explain how plaintiff appellant Jader could have done something to complete
his deficiency if defendant-appellee university did not exert any effort to inform
plaintiff-appellant of his failing grade in Practice Court I. 12
Petitioner cannot pass on its blame to the professors to justify its own negligence that led to
the delayed relay of information to respondent. When one of two innocent parties must
suffer, he through whose agency the loss occurred must bear it. 13 The modern tendency is
to grant indemnity for damages in cases where there is abuse of right, even when the act is
not illicit.14 If mere fault or negligence in one's acts can make him liable for damages for
injury caused thereby, with more reason should abuse or bad faith make him liable. A
person should be protected only when he acts in the legitimate exercise of his right, that is,

375
when he acts with prudence and in good faith, but not when he acts with negligence or
abuse.15
However, while petitioner was guilty of negligence and thus liable to respondent for the
latter's actual damages, we hold that respondent should not have been awarded moral
damages. We do not agree with the Court of Appeals' findings that respondent suffered
shock, trauma and pain when he was informed that he could not graduate and will not be
allowed to take the bar examinations. At the very least, it behooved on respondent to verify
for himself whether he has completed all necessary requirements to be eligible for the bar
examinations. As a senior law student, respondent should have been responsible enough to
ensure that all his affairs, specifically those pertaining to his academic achievement, are in
order. Given these considerations, we fail to see how respondent could have suffered untold
embarrassment in attending the graduation rites, enrolling in the bar review classes and
not being able to take the bar exams. If respondent was indeed humiliated by his failure to
take the bar, he brought this upon himself by not verifying if he has satisfied all the
requirements including his school records, before preparing himself for the bar
examination. Certainly, taking the bar examinations does not only entail a mental
preparation on the subjects thereof; there are also prerequisites of documentation and
submission of requirements which the prospective examinee must meet.
WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED with
MODIFICATION. Petitioner is ORDERED to PAY respondent the sum of Thirty-five
Thousand Four Hundred Seventy Pesos (P35,470.00), with legal interest of 6% per
annum computed from the date of filing of the complaint until fully paid; the amount of
Five Thousand Pesos (P5,000.00) as attorney's fees; and the costs of the suit. The award of
moral damages is DELEIED.1âwphi1.nêt
SO ORDERED.
Davide, Jr., C.J., Kapunan and Pardo, JJ., concur.
Puno, J., took no part.

G.R. No. 130547               October 3, 2000

LEAH ALESNA REYES, ROSE NAHDJA, JOHNNY, and minors LLOYD and KRISTINE,
all surnamed REYES, represented by their mother, LEAH ALESNA REYES, petitioners,
vs.
SISTERS OF MERCY HOSPITAL, SISTER ROSE PALACIO, DR. MARVIE BLANES, and
DR. MARLYN RICO, respondents.
DECISION
MENDOZA, J.:
This is a petition for review of the decision 1 of the Court of Appeals in CA-G.R. CV No.
36551 affirming the decision of the Regional Trial Court, Branch IX, Cebu City which
dismissed a complaint for damages filed by petitioners against respondents.
The facts are as follows:
Petitioner Leah Alesna Reyes is the wife of the late Jorge Reyes. The other petitioners,
namely, Rose Nahdja, Johnny, Lloyd, and Kristine, all surnamed Reyes, were their children.
Five days before his death on January 8, 1987, Jorge had been suffering from a recurring
fever with chills. After he failed to get relief from some home medication he was taking,
which consisted of analgesic, antipyretic, and antibiotics, he decided to see the doctor.
376
On January 8, 1987, he was taken to the Mercy Community Clinic by his wife. He was
attended to by respondent Dr. Marlyn Rico, resident physician and admitting physician on
duty, who gave Jorge a physical examination and took his medical history. She noted that
at the time of his admission, Jorge was conscious, ambulatory, oriented, coherent, and
with respiratory distress.2 Typhoid fever was then prevalent in the locality, as the clinic had
been getting from 15 to 20 cases of typhoid per month. 3 Suspecting that Jorge could be
suffering from this disease, Dr. Rico ordered a Widal Test, a standard test for typhoid fever,
to be performed on Jorge. Blood count, routine urinalysis, stool examination, and malarial
smear were also made.4 After about an hour, the medical technician submitted the results
of the test from which Dr. Rico concluded that Jorge was positive for typhoid fever. As her
shift was only up to 5:00 p.m., Dr. Rico indorsed Jorge to respondent Dr. Marvie Blanes.
Dr. Marvie Blanes attended to Jorge at around six in the evening. She also took Jorge’s
history and gave him a physical examination. Like Dr. Rico, her impression was that Jorge
had typhoid fever. Antibiotics being the accepted treatment for typhoid fever, she ordered
that a compatibility test with the antibiotic chloromycetin be done on Jorge. Said test was
administered by nurse Josephine Pagente who also gave the patient a dose of triglobe. As
she did not observe any adverse reaction by the patient to chloromycetin, Dr. Blanes
ordered the first five hundred milligrams of said antibiotic to be administered on Jorge at
around 9:00 p.m. A second dose was administered on Jorge about three hours later just
before midnight.
At around 1:00 a.m. of January 9, 1987, Dr. Blanes was called as Jorge’s temperature rose
to 41°C. The patient also experienced chills and exhibited respiratory distress, nausea,
vomiting, and convulsions. Dr. Blanes put him under oxygen, used a suction machine, and
administered hydrocortisone, temporarily easing the patient’s convulsions. When he
regained consciousness, the patient was asked by Dr. Blanes whether he had a previous
heart ailment or had suffered from chest pains in the past. Jorge replied he did not. 5 After
about 15 minutes, however, Jorge again started to vomit, showed restlessness, and his
convulsions returned. Dr. Blanes re-applied the emergency measures taken before and, in
addition, valium was administered. Jorge, however, did not respond to the treatment and
slipped into cyanosis, a bluish or purplish discoloration of the skin or mucous membrane
due to deficient oxygenation of the blood. At around 2:00 a.m., Jorge died. He was forty
years old. The cause of his death was "Ventricular Arrythemia Secondary to Hyperpyrexia
and typhoid fever."
On June 3, 1987, petitioners filed before the Regional Trial Court of Cebu City a
complaint6 for damages against respondents Sisters of Mercy, Sister Rose Palacio, Dr.
Marvie Blanes, Dr. Marlyn Rico, and nurse Josephine Pagente. On September 24, 1987,
petitioners amended their complaint to implead respondent Mercy Community Clinic as
additional defendant and to drop the name of Josephine Pagente as defendant since she
was no longer connected with respondent hospital. Their principal contention was that
Jorge did not die of typhoid fever. 7 Instead, his death was due to the wrongful
administration of chloromycetin. They contended that had respondent doctors exercised
due care and diligence, they would not have recommended and rushed the performance of
the Widal Test, hastily concluded that Jorge was suffering from typhoid fever, and
administered chloromycetin without first conducting sufficient tests on the patient’s
compatibility with said drug. They charged respondent clinic and its directress, Sister Rose

377
Palacio, with negligence in failing to provide adequate facilities and in hiring negligent
doctors and nurses.8
Respondents denied the charges. During the pre-trial conference, the parties agreed to limit
the issues on the following: (1) whether the death of Jorge Reyes was due to or caused by
the negligence, carelessness, imprudence, and lack of skill or foresight on the part of
defendants; (2) whether respondent Mercy Community Clinic was negligent in the hiring of
its employees; and (3) whether either party was entitled to damages. The case was then
heard by the trial court during which, in addition to the testimonies of the parties, the
testimonies of doctors as expert witnesses were presented.
Petitioners offered the testimony of Dr. Apolinar Vacalares, Chief Pathologist at the
Northern Mindanao Training Hospital, Cagayan de Oro City. On January 9, 1987, Dr.
Vacalares performed an autopsy on Jorge Reyes to determine the cause of his death.
However, he did not open the skull to examine the brain. His findings 9 showed that the
gastro-intestinal tract was normal and without any ulceration or enlargement of the
nodules. Dr. Vacalares testified that Jorge did not die of typhoid fever. He also stated that
he had not seen a patient die of typhoid fever within five days from the onset of the disease.
For their part, respondents offered the testimonies of Dr. Peter Gotiong and Dr. Ibarra
Panopio. Dr. Gotiong is a diplomate in internal medicine whose expertise is microbiology
and infectious diseases. He is also a consultant at the Cebu City Medical Center and an
associate professor of medicine at the South Western University College of Medicine in
Cebu City. He had treated over a thousand cases of typhoid patients. According to Dr.
Gotiong, the patient’s history and positive Widal Test results ratio of 1:320 would make him
suspect that the patient had typhoid fever. As to Dr. Vacalares’ observation regarding the
absence of ulceration in Jorge’s gastro-intestinal tract, Dr. Gotiong said that such
hyperplasia in the intestines of a typhoid victim may be microscopic. He noted that since
the toxic effect of typhoid fever may lead to meningitis, Dr. Vacalares’ autopsy should have
included an examination of the brain.10
The other doctor presented was Dr. Ibarra Panopio, a member of the American Board of
Pathology, examiner of the Philippine Board of Pathology from 1978 to 1991, fellow of the
Philippine Society of Pathologist, associate professor of the Cebu Institute of Medicine, and
chief pathologist of the Andres Soriano Jr. Memorial Hospital in Toledo City. Dr. Panopio
stated that although he was partial to the use of the culture test for its greater reliability in
the diagnosis of typhoid fever, the Widal Test may also be used. Like Dr. Gotiong, he agreed
that the 1:320 ratio in Jorge’s case was already the maximum by which a conclusion of
typhoid fever may be made. No additional information may be deduced from a higher
dilution.11 He said that Dr. Vacalares’ autopsy on Jorge was incomplete and thus
inconclusive.
On September 12, 1991, the trial court rendered its decision absolving respondents from
the charges of negligence and dismissing petitioners’ action for damages. The trial court
likewise dismissed respondents’ counterclaim, holding that, in seeking damages from
respondents, petitioners were impelled by the honest belief that Jorge’s death was due to
the latter’s negligence.
Petitioners brought the matter to the Court of Appeals. On July 31, 1997, the Court of
Appeals affirmed the decision of the trial court.
Hence this petition.
Petitioners raise the following assignment of errors:
378
 I. THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR
WHEN IT RULED THAT THE DOCTRINE OF RES IPSA LOQUITUR IS NOT
APPLICABLE IN THE INSTANT CASE.
II. THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR
WHEN IT MADE AN UNFOUNDED ASSUMPTION THAT THE LEVEL OF MEDICAL
PRACTICE IS LOWER IN ILIGAN CITY.
III. THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED FOR
A LESSER STANDARD OF CARE AND DEGREE OF DILIGENCE FOR MEDICAL
PRACTICE IN ILIGAN CITY WHEN IT APPRECIATE[D] NO DOCTOR’S NEGLIGENCE
IN THE TREATMENT OF JORGE REYES.
Petitioner’s action is for medical malpractice. This is a particular form of negligence which
consists in the failure of a physician or surgeon to apply to his practice of medicine that
degree of care and skill which is ordinarily employed by the profession generally, under
similar conditions, and in like surrounding circumstances. 12 In order to successfully pursue
such a claim, a patient must prove that the physician or surgeon either failed to do
something which a reasonably prudent physician or surgeon would have done, or that he
or she did something that a reasonably prudent physician or surgeon would not have done,
and that the failure or action caused injury to the patient. 13 There are thus four elements
involved in medical negligence cases, namely: duty, breach, injury, and proximate
causation.
In the present case, there is no doubt that a physician-patient relationship existed between
respondent doctors and Jorge Reyes. Respondents were thus duty-bound to use at least the
same level of care that any reasonably competent doctor would use to treat a condition
under the same circumstances. It is breach of this duty which constitutes actionable
malpractice.14 As to this aspect of medical malpractice, the determination of the reasonable
level of care and the breach thereof, expert testimony is essential. Inasmuch as the causes
of the injuries involved in malpractice actions are determinable only in the light of scientific
knowledge, it has been recognized that expert testimony is usually necessary to support the
conclusion as to causation.15
Res Ipsa Loquitur
There is a case when expert testimony may be dispensed with, and that is under the
doctrine of res ipsa loquitur. As held in Ramos v. Court of Appeals:16
Although generally, expert medical testimony is relied upon in malpractice suits to prove
that a physician has done a negligent act or that he has deviated from the standard
medical procedure, when the doctrine of res ipsa loquitor is availed by the plaintiff, the need
for expert medical testimony is dispensed with because the injury itself provides the proof
of negligence. The reason is that the general rule on the necessity of expert testimony
applies only to such matters clearly within the domain of medical science, and not to
matters that are within the common knowledge of mankind which may be testified to by
anyone familiar with the facts. Ordinarily, only physicians and surgeons of skill and
experience are competent to testify as to whether a patient has been treated or operated
upon with a reasonable degree of skill and care. However, testimony as to the statements
and acts of physicians and surgeons, external appearances, and manifest conditions which
are observable by any one may be given by non-expert witnesses. Hence, in cases where
the res ipsa loquitur is applicable, the court is permitted to find a physician negligent upon
proper proof of injury to the patient, without the aid of expert testimony, where the court
379
from its fund of common knowledge can determine the proper standard of care. Where
common knowledge and experience teach that a resulting injury would not have occurred
to the patient if due care had been exercised, an inference of negligence may be drawn
giving rise to an application of the doctrine of  res ipsa loquitur without medical evidence,
which is ordinarily required to show not only what occurred but how and why it occurred.
When the doctrine is appropriate, all that the patient must do is prove a nexus between the
particular act or omission complained of and the injury sustained while under the custody
and management of the defendant without need to produce expert medical testimony to
establish the standard of care. Resort to res ipsa loquitor is allowed because there is no
other way, under usual and ordinary conditions, by which the patient can obtain redress
for injury suffered by him.
Thus, courts of other jurisdictions have applied the doctrine in the following situations:
leaving of a foreign object in the body of the patient after an operation, injuries sustained
on a healthy part of the body which was not under, or in the area, of treatment, removal of
the wrong part of the body when another part was intended, knocking out a tooth while a
patient’s jaw was under anesthetic for the removal of his tonsils, and loss of an eye while
the patient was under the influence of anesthetic, during or following an operation for
appendicitis, among others.17
Petitioners asserted in the Court of Appeals that the doctrine of res ipsa loquitur applies to
the present case because Jorge Reyes was merely experiencing fever and chills for five days
and was fully conscious, coherent, and ambulant when he went to the hospital. Yet, he
died after only ten hours from the time of his admission.
This contention was rejected by the appellate court.
Petitioners now contend that all requisites for the application of res ipsa loquitur were
present, namely: (1) the accident was of a kind which does not ordinarily occur unless
someone is negligent; (2) the instrumentality or agency which caused the injury was under
the exclusive control of the person in charge; and (3) the injury suffered must not have
been due to any voluntary action or contribution of the person injured. 18
The contention is without merit. We agree with the ruling of the Court of Appeals. In
the Ramos case, the question was whether a surgeon, an anesthesiologist, and a hospital
should be made liable for the comatose condition of a patient scheduled for
cholecystectomy.19 In that case, the patient was given anesthesia prior to her operation.
Noting that the patient was neurologically sound at the time of her operation, the Court
applied the doctrine of res ipsa loquitur as mental brain damage does not normally occur
in a gallblader operation in the absence of negligence of the anesthesiologist. Taking
judicial notice that anesthesia procedures had become so common that even an ordinary
person could tell if it was administered properly, we allowed the testimony of a witness who
was not an expert. In this case, while it is true that the patient died just a few hours after
professional medical assistance was rendered, there is really nothing unusual or
extraordinary about his death. Prior to his admission, the patient already had recurring
fevers and chills for five days unrelieved by the analgesic, antipyretic, and antibiotics given
him by his wife. This shows that he had been suffering from a serious illness and
professional medical help came too late for him.
Respondents alleged failure to observe due care was not immediately apparent to a layman
so as to justify application of res ipsa loquitur. The question required expert opinion on the
alleged breach by respondents of the standard of care required by the circumstances.
380
Furthermore, on the issue of the correctness of her diagnosis, no presumption of negligence
can be applied to Dr. Marlyn Rico.As held in Ramos:
. . . . Res ipsa loquitur is not a rigid or ordinary doctrine to be perfunctorily used but a rule
to be cautiously applied, depending upon the circumstances of each case. It is generally
restricted to situations in malpractice cases where a layman is able to say, as a matter of
common knowledge and observation, that the consequences of professional care were not
as such as would ordinarily have followed if due care had been exercised . A distinction
must be made between the failure to secure results, and the occurrence of something more
unusual and not ordinarily found if the service or treatment rendered followed the usual
procedure of those skilled in that particular practice. It must be conceded that the doctrine
of res ipsa loquitur  can have no application in a suit against a physician or a surgeon
which involves the merits of a diagnosis or of a scientific treatment. The physician or
surgeon is not required at his peril to explain why any particular diagnosis was not correct,
or why any particular scientific treatment did not produce the desired result.20
Specific Acts of Negligence
We turn to the question whether petitioners have established specific acts of negligence
allegedly committed by respondent doctors.
Petitioners contend that: (1) Dr. Marlyn Rico hastily and erroneously relied upon the Widal
test, diagnosed Jorge’s illness as typhoid fever, and immediately prescribed the
administration of the antibiotic chloromycetin; 21 and (2) Dr. Marvie Blanes erred in ordering
the administration of the second dose of 500 milligrams of chloromycetin barely three
hours after the first was given.22 Petitioners presented the testimony of Dr. Apolinar
Vacalares, Chief Pathologist of the Northern Mindanao Training Hospital, Cagayan de Oro
City, who performed an autopsy on the body of Jorge Reyes. Dr. Vacalares testified that,
based on his findings during the autopsy, Jorge Reyes did not die of typhoid fever but of
shock undetermined, which could be due to allergic reaction or chloromycetin overdose. We
are not persuaded.
First. While petitioners presented Dr. Apolinar Vacalares as an expert witness, we do not
find him to be so as he is not a specialist on infectious diseases like typhoid fever.
Furthermore, although he may have had extensive experience in performing autopsies, he
admitted that he had yet to do one on the body of a typhoid victim at the time he conducted
the postmortem on Jorge Reyes. It is also plain from his testimony that he has treated only
about three cases of typhoid fever. Thus, he testified that: 23
ATTY. PASCUAL:
Q Why? Have you not testified earlier that you have never seen a patient who died of
typhoid fever?
A In autopsy. But, that was when I was a resident physician yet.
Q But you have not performed an autopsy of a patient who died of typhoid fever?
A I have not seen one.
Q And you testified that you have never seen a patient who died of typhoid fever within five
days?
A I have not seen one.
Q How many typhoid fever cases had you seen while you were in the general practice of
medicine?
A In our case we had no widal test that time so we cannot consider that the typhoid fever is
like this and like that. And the widal test does not specify the time of the typhoid fever.
381
Q The question is: how many typhoid fever cases had you seen in your general practice
regardless of the cases now you practice?
A I had only seen three cases.
Q And that was way back in 1964?
A Way back after my training in UP.
Q Clinically?
A Way back before my training.
He is thus not qualified to prove that Dr. Marlyn Rico erred in her diagnosis. Both lower
courts were therefore correct in discarding his testimony, which is really inadmissible.
In Ramos, the defendants presented the testimony of a pulmonologist to prove that brain
injury was due to oxygen deprivation after the patient had bronchospasms 24 triggered by
her allergic response to a drug, 25 and not due to faulty intubation by the anesthesiologist.
As the issue was whether the intubation was properly performed by an anesthesiologist, we
rejected the opinion of the pulmonologist on the ground that he was not: (1) an
anesthesiologist who could enlighten the court about anesthesia practice, procedure, and
their complications; nor (2) an allergologist who could properly advance expert opinion on
allergic mediated processes; nor (3) a pharmacologist who could explain the pharmacologic
and toxic effects of the drug allegedly responsible for the bronchospasms.
Second. On the other hand, the two doctors presented by respondents clearly were experts
on the subject. They vouched for the correctness of Dr. Marlyn Rico’s diagnosis. Dr. Peter
Gotiong, a diplomate whose specialization is infectious diseases and microbiology and an
associate professor at the Southwestern University College of Medicine and the Gullas
College of Medicine, testified that he has already treated over a thousand cases of typhoid
fever.26 According to him, when a case of typhoid fever is suspected, the Widal test is
normally used,27 and if the 1:320 results of the Widal test on Jorge Reyes had been
presented to him along with the patient’s history, his impression would also be that the
patient was suffering from typhoid fever. 28 As to the treatment of the disease, he stated that
chloromycetin was the drug of choice. 29 He also explained that despite the measures taken
by respondent doctors and the intravenous administration of two doses of chloromycetin,
complications of the disease could not be discounted. His testimony is as follows: 30
ATTY. PASCUAL:
Q If with that count with the test of positive for 1 is to 320, what treatment if any would be
given?
A If those are the findings that would be presented to me, the first thing I would consider
would be typhoid fever.
Q And presently what are the treatments commonly used?
A Drug of choice of chloramphenical.
Q Doctor, if given the same patient and after you have administered chloramphenical about
3 1/2 hours later, the patient associated with chills, temperature - 41 oC, what could
possibly come to your mind?
A Well, when it is change in the clinical finding, you have to think of complication.
Q And what will you consider on the complication of typhoid?
A One must first understand that typhoid fever is toximia. The problem is complications are
caused by toxins produced by the bacteria . . . whether you have suffered complications to
think of -- heart toxic myocardities; then you can consider a toxic meningitis and other
complications and perforations and bleeding in the ilium.
382
Q Even that 40-year old married patient who received medication of chloromycetin of 500
milligrams intravenous, after the skin test, and received a second dose of chloromycetin of
500 miligrams, 3 hours later, the patient developed chills . . . rise in temperature to 41 oC,
and then about 40 minutes later the temperature rose to 100 oF, cardiac rate of 150 per
minute who appeared to be coherent, restless, nauseating, with seizures: what significance
could you attach to these clinical changes?
A I would then think of toxemia, which was toxic meningitis and probably a toxic
meningitis because of the high cardiac rate.
Q Even if the same patient who, after having given intramuscular valium, became
conscious and coherent about 20 minutes later, have seizure and cyanosis and rolling of
eyeballs and vomitting . . . and death: what significance would you attach to this
development?
A We are probably dealing with typhoid to meningitis.
Q In such case, Doctor, what finding if any could you expect on the post-mortem
examination?
A No, the finding would be more on the meninges or covering of the brain.
Q And in order to see those changes would it require opening the skull?
A Yes.
As regards Dr. Vacalares’ finding during the autopsy that the deceased’s gastro-intestinal
tract was normal, Dr. Rico explained that, while hyperplasia 31 in the payer’s patches or
layers of the small intestines is present in typhoid fever, the same may not always be
grossly visible and a microscope was needed to see the texture of the cells. 32
Respondents also presented the testimony of Dr. Ibarra T. Panopio who is a member of the
Philippine and American Board of Pathology, an examiner of the Philippine Board of
Pathology, and chief pathologist at the MetroCebu Community Hospital, Perpetual Succor
Hospital, and the Andres Soriano Jr. Memorial Medical Center. He stated that, as a clinical
pathologist, he recognized that the Widal test is used for typhoid patients, although he did
not encourage its use because a single test would only give a presumption necessitating
that the test be repeated, becoming more conclusive at the second and third weeks of the
disease.33 He corroborated Dr. Gotiong’s testimony that the danger with typhoid fever is
really the possible complications which could develop like perforation, hemorrhage, as well
as liver and cerebral complications. 34 As regards the 1:320 results of the Widal test on Jorge
Reyes, Dr. Panopio stated that no additional information could be obtained from a higher
ratio.35 He also agreed with Dr. Gotiong that hyperplasia in the payer’s patches may be
microscopic.36
Indeed, the standard contemplated is not what is actually the average merit among all
known practitioners from the best to the worst and from the most to the least experienced,
but the reasonable average merit among the ordinarily good physicians. 37 Here, Dr. Marlyn
Rico did not depart from the reasonable standard recommended by the experts as she in
fact observed the due care required under the circumstances. Though the Widal test is not
conclusive, it remains a standard diagnostic test for typhoid fever and, in the present case,
greater accuracy through repeated testing was rendered unobtainable by the early death of
the patient. The results of the Widal test and the patient’s history of fever with chills for five
days, taken with the fact that typhoid fever was then prevalent as indicated by the fact that
the clinic had been getting about 15 to 20 typhoid cases a month, were sufficient to give
upon any doctor of reasonable skill the impression that Jorge Reyes had typhoid fever.
383
Dr. Rico was also justified in recommending the administration of the drug chloromycetin,
the drug of choice for typhoid fever. The burden of proving that Jorge Reyes was suffering
from any other illness rested with the petitioners. As they failed to present expert opinion
on this, preponderant evidence to support their contention is clearly absent.
Third. Petitioners contend that respondent Dr. Marvie Blanes, who took over from Dr. Rico,
was negligent in ordering the intravenous administration of two doses of 500 milligrams of
chloromycetin at an interval of less than three hours. Petitioners claim that Jorge Reyes
died of anaphylactic shock 38 or possibly from overdose as the second dose should have been
administered five to six hours after the first, per instruction of Dr. Marlyn Rico. As held by
the Court of Appeals, however:
That chloromycetin was likewise a proper prescription is best established by medical
authority. Wilson, et. al., in Harrison’s Principle of Internal Medicine, 12th ed. write that
chlorampenicol (which is the generic of chloromycetin) is the drug of choice for typhoid
fever and that no drug has yet proven better in promoting a favorable clinical response.
"Chlorampenicol (Chloromycetin) is specifically indicated for bacterial meningitis, typhoid
fever, rickettsial infections, bacteriodes infections, etc." (PIMS Annual, 1994, p. 211) The
dosage likewise including the first administration of five hundred milligrams (500 mg.) at
around nine o’clock in the evening and the second dose at around 11:30 the same night was
still within medically acceptable limits, since the recommended dose of chloromycetin is one
(1) gram every six (6) hours. (cf. Pediatric Drug Handbook, 1st Ed., Philippine Pediatric
Society, Committee on Therapeutics and Toxicology, 1996). The intravenous route is
likewise correct. (Mansser, O’Nick, Pharmacology and Therapeutics) Even if the test was not
administered by the physician-on-duty, the evidence introduced that it was Dra. Blanes
who interpreted the results remain uncontroverted. (Decision, pp. 16-17) Once more, this
Court rejects any claim of professional negligence in this regard.
....
As regards anaphylactic shock, the usual way of guarding against it prior to the
administration of a drug, is the skin test of which, however, it has been observed: "Skin
testing with haptenic drugs is generally not reliable. Certain drugs cause nonspecific
histamine release, producing a weal-and-flare reaction in normal individuals. Immunologic
activation of mast cells requires a polyvalent allergen, so a negative skin test to a univalent
haptenic drug does not rule out anaphylactic sensitivity to that drug." (Terr, "Anaphylaxis
and Urticaria" in Basic and Clinical Immunology, p. 349) What all this means legally is that
even if the deceased suffered from an anaphylactic shock, this, of itself, would not yet
establish the negligence of the appellee-physicians for all that the law requires of them is
that they perform the standard tests and perform standard procedures. The law cannot
require them to predict every possible reaction to all drugs administered. The onus
probandi was on the appellants to establish, before the trial court, that the appellee-
physicians ignored standard medical procedure, prescribed and administered medication
with recklessness and exhibited an absence of the competence and skills expected of
general practitioners similarly situated.39
Fourth. Petitioners correctly observe that the medical profession is one which, like the
business of a common carrier, is affected with public interest. Moreover, they assert that
since the law imposes upon common carriers the duty of observing extraordinary diligence
in the vigilance over the goods and for the safety of the passengers, 40 physicians and
surgeons should have the same duty toward their patients. 41 They also contend that the
384
Court of Appeals erred when it allegedly assumed that the level of medical practice is lower
in Iligan City, thereby reducing the standard of care and degree of diligence required from
physicians and surgeons in Iligan City.
The standard of extraordinary diligence is peculiar to common carriers. The Civil Code
provides:
Art. 1733. Common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence in the vigilance over the goods and for
the safety of the passengers transported by them, according to the circumstances of each
case. . . .
The practice of medicine is a profession engaged in only by qualified individuals.1âwphi1 It
is a right earned through years of education, training, and by first obtaining a license from
the state through professional board examinations. Such license may, at any time and for
cause, be revoked by the government. In addition to state regulation, the conduct of doctors
is also strictly governed by the Hippocratic Oath, an ancient code of discipline and ethical
rules which doctors have imposed upon themselves in recognition and acceptance of their
great responsibility to society. Given these safeguards, there is no need to expressly require
of doctors the observance of "extraordinary" diligence. As it is now, the practice of medicine
is already conditioned upon the highest degree of diligence. And, as we have already noted,
the standard contemplated for doctors is simply the reasonable average merit among
ordinarily good physicians. That is reasonable diligence for doctors or, as the Court of
Appeals called it, the reasonable "skill and competence . . . that a physician in the same or
similar locality . . . should apply."
WHEREFORE, the instant petition is DENIED and the decision of the Court of Appeals is
AFFIRMED.
SO ORDERED.
Bellosillo, (Chairman), Quisumbing, Buena, and De Leon, Jr., JJ., concur.

G.R. No. 118141 September 5, 1997

LEONILA GARCIA-RUEDA, petitioner,
vs.
WILFRED L. PASCASIO, RAUL R. ARNAU, ABELARDO L. APORTADERA JR., Honorable
CONRADO M. VASQUEZ, all of the Office of the Ombudsman; JESUS F. GUERRERO,
PORFIRIO MACARAEG, and GREGORIO A. ARIZALA, all of the Office of the City
Prosecutor, Manila, respondents.

ROMERO, J.:
May this Court review the findings of the Office of the Ombudsman? The general rule
has been enunciated in Ocampo v. Ombudsman1 which states:
In the exercise of its investigative power, this Court has consistently held
that courts will not interfere with the discretion of the fiscal or the
Ombudsman to determine the specificity and adequacy of the averments
of the offense charged. He may dismiss the complaint forthwith if he finds
it to be insufficient in form and substance or if he otherwise finds no
ground to continue with the inquiry; or he may proceed with the
investigation of the complaint if, in his view, it is in due and proper form.
385
Does the instant case warrant a departure from the foregoing general rule? When a
patient dies soon after surgery under circumstances which indicate that the
attending surgeon and anaesthesiologist may have been guilty of negligence but upon
their being charged, a series of nine prosecutors toss the responsibility of conducting
a preliminary investigation to each other with contradictory recommendations,
"ping-pong" style, perhaps the distraught widow is not to be blamed if she finally
decides to accuse the City Prosecutors at the end of the line for partiality under the
Anti-Graft and Corrupt Practices Act. Nor may she be entirely faulted for finally filing
a petition before this Court against the Ombudsman for grave abuse of discretion in
dismissing her complaint against said City Prosecutors on the ground of lack of
evidence. Much as we sympathize with the bereaved widow, however, this Court is of
the opinion that the general rule still finds application in instant case. In other
words, the respondent Ombudsman did not commit grave abuse of discretion in
deciding against filing the necessary information against public respondents of the
Office of the City Prosecutor.
The following facts are borne out by the records.
Florencio V. Rueda, husband of petitioner Leonila Garcia-Rueda, underwent surgical
operation at the UST hospital for the removal of a stone blocking his ureter. He was
attended by Dr. Domingo Antonio, Jr. who was the surgeon, while Dr. Erlinda
Balatbat-Reyes was the anaesthesiologist. Six hours after the surgery, however,
Florencio died of complications of "unknown cause," according to officials of the UST
Hospital.2
Not satisfied with the findings of the hospital, petitioner requested the National Bureau of
Investigation (NBI) to conduct an autopsy on her husband's body. Consequently, the NBI
ruled that Florencio's death was due to lack of care by the attending physician in
administering anaesthesia. Pursuant to its findings, the NBI recommended that Dr.
Domingo Antonio and Dr. Erlinda Balatbat-Reyes be charged for Homicide through
Reckless Imprudence before the Office of the City Prosecutor.
During the preliminary investigation, what transpired was a confounding series of events
which we shall try to disentangle. The case was initially assigned to Prosecutor Antonio M.
Israel, who had to inhibit himself because he was related to the counsel of one of the
doctors. As a result, the case was re-raffled to Prosecutor Norberto G. Leono who was,
however, disqualified on motion of the petitioner since he disregarded prevailing laws and
jurisprudence regarding preliminary investigation. The case was then referred to Prosecutor
Ramon O. Carisma, who issued a resolution recommending that only Dr. Reyes be held
criminally liable and that the complaint against Dr. Antonio be dismissed.
The case took another perplexing turn when Assistant City Prosecutor Josefina Santos
Sioson, in the "interest of justice and peace of mind of the parties," recommended that the
case be re-raffled on the ground that Prosecutor Carisma was partial to the petitioner.
Thus, the case was transferred to Prosecutor Leoncia R. Dimagiba, where a volte
face occurred again with the endorsement that the complaint against Dr. Reyes be
dismissed and instead, a corresponding information be filed against Dr. Antonio. Petitioner
filed a motion for reconsideration, questioning the findings of Prosecutor Dimagiba.
Pending the resolution of petitioner's motion for reconsideration regarding Prosecutor
Dimagiba's resolution, the investigative "pingpong" continued when the case was again
assigned to another prosecutor, Eudoxia T. Gualberto, who recommended that Dr. Reyes be
386
included in the criminal information of Homicide through Reckless Imprudence. While the
recommendation of Prosecutor Gualberto was pending, the case was transferred to Senior
State Prosecutor Gregorio A. Arizala, who resolved to exonerate Dr. Reyes from any
wrongdoing, a resolution which was approved by both City Prosecutor Porfirio G. Macaraeg
and City Prosecutor Jesus F. Guerrero.
Aggrieved, petitioner filed graft charges specifically for violation of Section 3(e) of Republic
Act No. 30193 against Prosecutors Guerrero, Macaraeg, and Arizala for manifest partiality
in favor of Dr. Reyes before the Office of the Ombudsman. However, on July 11, 1994, the
Ombudsman issued the assailed resolution dismissing the complaint for lack of evidence.
In fine, petitioner assails the exercise of the discretionary power of the Ombudsman to
review the recommendations of the government prosecutors and to approve and disapprove
the same. Petitioner faults the Ombudsman for, allegedly in grave abuse of discretion,
refusing to find that there exists probable cause to hold public respondent City Prosecutors
liable for violation of Section 3(e) of R.A. No. 3019.
Preliminarily, the powers and functions of the Ombudsman have generally been categorized
into the following: investigatory powers, prosecutory power, public assistance function,
authority to inquire and obtain information, and function to adopt, institute and implement
preventive measures.4
As protector of the people, the Office of the Ombudsman has the power, function and duty
"to act promptly on complaints filed in any form or manner against public officials" and "to
investigate any act or omission of any public official when such act or omission appears to
be illegal, unjust, improper or inefficient." 5
While the Ombudsman has the full discretion to determine whether or not a criminal case
should be filed, this Court is not precluded from reviewing the Ombudsman's action when
there is an abuse of discretion, in which case Rule 65 of the Rules of Court may
exceptionally be invoked pursuant to Section I, Article VIII of the 1987 Constitution. 6
In this regard, "grave abuse of discretion" has been defined as "where a power is exercised
in an arbitrary or despotic manner by reason of passion or personal hostility so patent and
gross as to amount to evasion of positive duty or virtual refusal to perform a duty enjoined
by, or in contemplation of law.7
From a procedural standpoint, it is certainly odd why the successive transfers from one
prosecutor to another were not sufficiently explained in the Resolution of the Ombudsman.
Being the proper investigating authority with respect to misfeasance, non-feasance and
malfeasance of public officials, the Ombudsmans should have been more vigilant and
assiduous in determining the reasons behind the "buckpassing" to ensure that no
irregularity took place.
Whether such transfers were due to any outside pressure or ulterior motive is a matter of
evidence. One would have expected the Ombudsman, however, to inquire into what could
hardly qualify as "standard operating procedure," given the surrounding circumstances of
the case.
While it is true that a preliminary investigation is essentially inquisitorial, and is often the
only means to discover who may be charged with a crime, its function is merely to
determine the existence of probable cause. 8 Probable cause has been defined as "the
existence of such fact and circumstances as would excite the belief, in a reasonable mind,
acting on the facts within the knowledge of the prosecution, that the person charged was
guilty of the crime for which he was prosecuted." 9
387
"Probable cause is a reasonable ground of presumption that a matter is, or may be, well
founded, such a state of facts in the mind of the prosecutor as would lead a person of
ordinary caution and prudence to believe, or entertain an honest or strong suspicion, that a
thing is so." The term does not mean actual and positive cause nor does it import absolute
certainty. It is merely based on opinion and reasonable belief. Thus, a finding of probable
cause does not require an inquiry into whether there is sufficient evidence to procure a
conviction. It is enough that it is believed that the act or omission complained of
constitutes the offense charged. Precisely, there is a trial for the reception of evidence of the
prosecution in support of the charge. 10
In the instant case, no less than the NBI pronounced after conducting an autopsy that
there was indeed negligence on the part of the attending physicians in administering the
anaesthesia. 11 The fact of want of competence or diligence is evidentiary in nature, the
veracity of which can best be passed upon after a full-blown trial for it is virtually
impossible to ascertain the merits of a medical negligence case without extensive
investigation, research, evaluation and consultations with medical experts. Clearly, the City
Prosecutors are not in a competent position to pass judgment on such a technical matter,
especially when there are conflicting evidence and findings. The bases of a party's
accusation and defenses are better ventilated at the trial proper than at the preliminary
investigation.
A word on medical malpractice or negligence cases.
In its simplest terms, the type of lawsuit which has been called medical
malpractice or, more appropriately, medical negligence, is that type of claim
which a victim has available to him or her to redress a wrong committed by a
medical professional which has caused bodily harm.
In order to successfully pursue such a claim, a patient must prove that a
health care provider, in most cases a physician, either failed to do something
which a reasonably prudent health care provider would have done, or that he
or she did something that a reasonably prudent provider would not have done;
and that that failure or action caused injury to the patient. 12
Hence, there are four elements involved in medical negligence cases: duty, breach, injury
and proximate causation.
Evidently, when the victim employed the services of Dr. Antonio and Dr. Reyes, a
physician-patient relationship was created. In accepting the case, Dr. Antonio and Dr.
Reyes in effect represented that, having the needed training and skill possessed by
physicians and surgeons practicing in the same field, they will employ such training, care
and skill in the treatment of their patients. 13 They have a duty to use at least the same
level of care that any other reasonably competent doctor would use to treat a condition
under the same circumstances. The breach of these professional duties of skill and care, or
their improper performance, by a physician surgeon whereby the patient is injured in body
or in health, constitutes actionable malpractice. 14 Consequently, in the event that any
injury results to the patient from want of due care or skill during the operation, the
surgeons may be held answerable in damages for negligence. 15
Moreover, in malpractice or negligence cases involving the administration of anaesthesia,
the necessity of expert testimony and the availability of the charge of res ipsa loquitur to the
plaintiff; have been applied in actions against anaesthesiologists to hold the defendant
liable for the death or injury of a patient under excessive or improper
388
anaesthesia. 16 Essentially, it requires two-pronged evidence: evidence as to the recognized
standards of the medical community in the particular kind of case, and a showing that the
physician in question negligently departed from this standard in his treatment. 17
Another element in medical negligence cases is causation which is divided into two
inquiries: whether the doctor's actions in fact caused the harm to the patient and whether
these were the proximate cause of the patient's
injury. 18 Indeed here, a causal connection is discernible from the occurrence of the victim's
death after the negligent act of the anaesthesiologist in administering the anesthesia, a fact
which, if confirmed, should warrant the filing of the appropriate criminal case. To be sure,
the allegation of negligence is not entirely baseless. Moreover, the NBI deduced that the
attending surgeons did not conduct the necessary interview of the patient prior to the
operation. It appears that the cause of the death of the victim could have been averted had
the proper drug been applied to cope with the symptoms of malignant hyperthermia. Also,
we cannot ignore the fact that an antidote was readily available to counteract whatever
deleterious effect the anaesthesia might produce. 19 Why these precautionary measures
were disregarded must be sufficiently explained.
The City Prosecutors were charged with violating Section 3(e) of the Anti-Graft and Corrupt
Practices Act which requires the following facts:
1. The accused is a public officer discharging administrative or official
functions or private persons charged in conspiracy with them;
2. The public officer committed the prohibited act during the performance of
his official duty or in relation to his public position;
3. The public officer acted with manifest partiality, evident bad faith or gross,
inexcusable negligence; and
4. His action caused undue injury to the Government or any private party, or
gave any party any unwarranted benefit, advantage or preference to such
parties. 20
Why did the complainant, petitioner in instant case, elect to charge respondents under the
above law?
While a party who feels himself aggrieved is at liberty to choose the appropriate "weapon
from the armory," it is with no little surprise that this Court views the choice made by the
complainant widow.
To our mind, the better and more logical remedy under the circumstances would have been
to appeal the resolution of the City Prosecutors dismissing the criminal complaint to the
Secretary of Justice under the Department of Justice's Order No. 223, 21 otherwise known
as the "1993 Revised Rules on Appeals From Resolutions In Preliminary
Investigations/Reinvestigations," as amended by Department Order No. 359, Section 1 of
which provides:
Sec. 1. What May Be Appealed. — Only resolutions of the Chief State
Prosecutor/Regional State Prosecutor/Provincial or City Prosecutor dismissing
a criminal complaint may be the subject of an appeal to the Secretary of
Justice except as otherwise provided in Section 4 hereof.
What action may the Secretary of Justice take on the appeal? Section 9 of Order No. 223
states: "The Secretary of Justice may reverse, affirm or modify the appealed resolution." On
the other hand, "He may motu proprio or on motion of the appellee, dismiss outright the
appeal on specified grounds." 22
389
In exercising his discretion under the circumstances, the Ombudsman acted within his
power and authority in dismissing the complaint against the Prosecutors and this Court
will not interfere with the same.
WHEREFORE, in view of the foregoing, the instant petition is DISMISSED, without
prejudice to the filing of an appeal by the petitioner with the Secretary of Justice assailing
the dismissal of her criminal complaint by the respondent City Prosecutors. No costs.
SO ORDERED.
Regalado, Puno, Mendoza and Torres, Jr., JJ., concur.

G.R. No. 165279               June 7, 2011

DR. RUBI LI, Petitioner,
vs.
SPOUSES REYNALDO and LINA SOLIMAN, as parents/heirs of deceased Angelica
Soliman, Respondents.
DECISION
VILLARAMA, JR., J.:
Challenged in this petition for review on certiorari is the Decision 1 dated June 15, 2004 as
well as the Resolution2 dated September 1, 2004 of the Court of Appeals (CA) in CA-G.R. CV
No. 58013 which modified the Decision 3 dated September 5, 1997 of the Regional Trial
Court of Legazpi City, Branch 8 in Civil Case No. 8904.
The factual antecedents:
On July 7, 1993, respondents’ 11-year old daughter, Angelica Soliman, underwent a biopsy
of the mass located in her lower extremity at the St. Luke’s Medical Center (SLMC). Results
showed that Angelica was suffering from osteosarcoma, osteoblastic type, 4 a high-grade
(highly malignant) cancer of the bone which usually afflicts teenage children. Following this
diagnosis and as primary intervention, Angelica’s right leg was amputated by Dr. Jaime
Tamayo in order to remove the tumor. As adjuvant treatment to eliminate any remaining
cancer cells, and hence minimize the chances of recurrence and prevent the disease from
spreading to other parts of the patient’s body (metastasis), chemotherapy was suggested by
Dr. Tamayo. Dr. Tamayo referred Angelica to another doctor at SLMC, herein petitioner Dr.
Rubi Li, a medical oncologist.
On August 18, 1993, Angelica was admitted to SLMC. However, she died on September 1,
1993, just eleven (11) days after the (intravenous) administration of the first cycle of the
chemotherapy regimen. Because SLMC refused to release a death certificate without full
payment of their hospital bill, respondents brought the cadaver of Angelica to the Philippine
National Police (PNP) Crime Laboratory at Camp Crame for post-mortem examination. The
Medico-Legal Report issued by said institution indicated the cause of death as
"Hypovolemic shock secondary to multiple organ hemorrhages and Disseminated
Intravascular Coagulation."5
On the other hand, the Certificate of Death 6 issued by SLMC stated the cause of death as
follows:
Immediate cause : a. Osteosarcoma, Status Post AKA
Antecedent cause : b. (above knee amputation)
Underlying cause : c. Status Post Chemotherapy

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On February 21, 1994, respondents filed a damage suit 7 against petitioner, Dr. Leo
Marbella, Mr. Jose Ledesma, a certain Dr. Arriete and SLMC. Respondents charged them
with negligence and disregard of Angelica’s safety, health and welfare by their careless
administration of the chemotherapy drugs, their failure to observe the essential precautions
in detecting early the symptoms of fatal blood platelet decrease and stopping early on the
chemotherapy, which bleeding led to hypovolemic shock that caused Angelica’s untimely
demise. Further, it was specifically averred that petitioner assured the respondents that
Angelica would recover in view of 95% chance of healing with chemotherapy ("Magiging
normal na ang anak nyo basta ma-chemo. 95% ang healing") and when asked regarding
the side effects, petitioner mentioned only slight vomiting, hair loss and weakness
("Magsusuka ng kaunti. Malulugas ang buhok. Manghihina"). Respondents thus claimed
that they would not have given their consent to chemotherapy had petitioner not falsely
assured them of its side effects.
In her answer,8 petitioner denied having been negligent in administering the chemotherapy
drugs to Angelica and asserted that she had fully explained to respondents how the
chemotherapy will affect not only the cancer cells but also the patient’s normal body parts,
including the lowering of white and red blood cells and platelets. She claimed that what
happened to Angelica can be attributed to malignant tumor cells possibly left behind after
surgery. Few as they may be, these have the capacity to compete for nutrients such that
the body becomes so weak structurally (cachexia) and functionally in the form of lower
resistance of the body to combat infection. Such infection becomes uncontrollable and
triggers a chain of events (sepsis or septicemia) that may lead to bleeding in the form of
Disseminated Intravascular Coagulation (DIC), as what the autopsy report showed in the
case of Angelica.
Since the medical records of Angelica were not produced in court, the trial and appellate
courts had to rely on testimonial evidence, principally the declarations of petitioner and
respondents themselves. The following chronology of events was gathered:
On July 23, 1993, petitioner saw the respondents at the hospital after Angelica’s surgery
and discussed with them Angelica’s condition. Petitioner told respondents that Angelica
should be given two to three weeks to recover from the operation before starting
chemotherapy. Respondents were apprehensive due to financial constraints as Reynaldo
earns only from ₱70,000.00 to ₱150,000.00 a year from his jewelry and watch repairing
business.9 Petitioner, however, assured them not to worry about her professional fee and
told them to just save up for the medicines to be used.
Petitioner claimed that she explained to respondents that even when a tumor is removed,
there are still small lesions undetectable to the naked eye, and that adjuvant chemotherapy
is needed to clean out the small lesions in order to lessen the chance of the cancer to recur.
She did not give the respondents any assurance that chemotherapy will cure Angelica’s
cancer. During these consultations with respondents, she explained the following side
effects of chemotherapy treatment to respondents: (1) falling hair; (2) nausea and vomiting;
(3) loss of appetite; (4) low count of white blood cells [WBC], red blood cells [RBC] and
platelets; (5) possible sterility due to the effects on Angelica’s ovary; (6) damage to the heart
and kidneys; and (7) darkening of the skin especially when exposed to sunlight. She
actually talked with respondents four times, once at the hospital after the surgery, twice at
her clinic and the fourth time when Angelica’s mother called her through long
distance.10 This was disputed by respondents who countered that petitioner gave them
391
assurance that there is 95% chance of healing for Angelica if she undergoes chemotherapy
and that the only side effects were nausea, vomiting and hair loss. 11 Those were the only
side-effects of chemotherapy treatment mentioned by petitioner.12
On July 27, 1993, SLMC discharged Angelica, with instruction from petitioner that she be
readmitted after two or three weeks for the chemotherapy.
On August 18, 1993, respondents brought Angelica to SLMC for chemotherapy, bringing
with them the results of the laboratory tests requested by petitioner: Angelica’s chest x-ray,
ultrasound of the liver, creatinine and complete liver function tests. 13 Petitioner proceeded
with the chemotherapy by first administering hydration fluids to Angelica. 14
The following day, August 19, petitioner began administering three chemotherapy drugs –
Cisplatin,15 Doxorubicin16 and Cosmegen17 – intravenously. Petitioner was supposedly
assisted by her trainees Dr. Leo Marbella 18 and Dr. Grace Arriete.19 In his testimony, Dr.
Marbella denied having any participation in administering the said chemotherapy drugs. 20
On the second day of chemotherapy, August 20, respondents noticed reddish discoloration
on Angelica’s face.21 They asked petitioner about it, but she merely quipped, "Wala yan.
Epekto ng gamot."22 Petitioner recalled noticing the skin rashes on the nose and cheek area
of Angelica. At that moment, she entertained the possibility that Angelica also had systemic
lupus and consulted Dr. Victoria Abesamis on the matter. 23
On the third day of chemotherapy, August 21, Angelica had difficulty breathing and was
thus provided with oxygen inhalation apparatus. This time, the reddish discoloration on
Angelica’s face had extended to her neck, but petitioner dismissed it again as merely the
effect of medicines.24 Petitioner testified that she did not see any discoloration on Angelica’s
face, nor did she notice any difficulty in the child’s breathing. She claimed that Angelica
merely complained of nausea and was given ice chips.251avvphi1
On August 22, 1993, at around ten o’clock in the morning, upon seeing that their child
could not anymore bear the pain, respondents pleaded with petitioner to stop the
chemotherapy. Petitioner supposedly replied: "Dapat 15 Cosmegen pa iyan. Okay, let’s
observe. If pwede na, bigyan uli ng chemo." At this point, respondents asked petitioner’s
permission to bring their child home. Later in the evening, Angelica passed black stool and
reddish urine.26 Petitioner countered that there was no record of blackening of stools but
only an episode of loose bowel movement (LBM). Petitioner also testified that what Angelica
complained of was carpo-pedal spasm, not convulsion or epileptic attack, as respondents
call it (petitioner described it in the vernacular as "naninigas ang kamay at paa"). She then
requested for a serum calcium determination and stopped the chemotherapy. When
Angelica was given calcium gluconate, the spasm and numbness subsided. 27
The following day, August 23, petitioner yielded to respondents’ request to take Angelica
home. But prior to discharging Angelica, petitioner requested for a repeat serum calcium
determination and explained to respondents that the chemotherapy will be temporarily
stopped while she observes Angelica’s muscle twitching and serum calcium level. Take-
home medicines were also prescribed for Angelica, with instructions to respondents that
the serum calcium test will have to be repeated after seven days. Petitioner told
respondents that she will see Angelica again after two weeks, but respondents can see her
anytime if any immediate problem arises.28
However, Angelica remained in confinement because while still in the premises of SLMC,
her "convulsions" returned and she also had LBM. Angelica was given oxygen and
administration of calcium continued. 29
392
The next day, August 24, respondents claimed that Angelica still suffered from convulsions.
They also noticed that she had a fever and had difficulty breathing. 30 Petitioner insisted it
was carpo-pedal spasm, not convulsions. She verified that at around 4:50 that afternoon,
Angelica developed difficulty in breathing and had fever. She then requested for an
electrocardiogram analysis, and infused calcium gluconate on the patient at a "stat dose."
She further ordered that Angelica be given Bactrim, 31 a synthetic antibacterial combination
drug,32 to combat any infection on the child’s body.33
By August 26, Angelica was bleeding through the mouth. Respondents also saw blood on
her anus and urine. When Lina asked petitioner what was happening to her daughter,
petitioner replied, "Bagsak ang platelets ng anak mo." Four units of platelet concentrates
were then transfused to Angelica. Petitioner prescribed Solucortef. Considering that
Angelica’s fever was high and her white blood cell count was low, petitioner prescribed
Leucomax. About four to eight bags of blood, consisting of packed red blood cells, fresh
whole blood, or platelet concentrate, were transfused to Angelica. For two days (August 27
to 28), Angelica continued bleeding, but petitioner claimed it was lesser in amount and in
frequency. Petitioner also denied that there were gadgets attached to Angelica at that
time.34
On August 29, Angelica developed ulcers in her mouth, which petitioner said were blood
clots that should not be removed. Respondents claimed that Angelica passed about half a
liter of blood through her anus at around seven o’clock that evening, which petitioner
likewise denied.
On August 30, Angelica continued bleeding. She was restless as endotracheal and
nasogastric tubes were inserted into her weakened body. An aspiration of the nasogastric
tube inserted to Angelica also revealed a bloody content. Angelica was given more platelet
concentrate and fresh whole blood, which petitioner claimed improved her condition.
Petitioner told Angelica not to remove the endotracheal tube because this may induce
further bleeding.35 She was also transferred to the intensive care unit to avoid infection.
The next day, respondents claimed that Angelica became hysterical, vomited blood and her
body turned black. Part of Angelica’s skin was also noted to be shredding by just rubbing
cotton on it. Angelica was so restless she removed those gadgets attached to her, saying
"Ayaw ko na"; there were tears in her eyes and she kept turning her head. Observing her
daughter to be at the point of death, Lina asked for a doctor but the latter could not answer
her anymore.36 At this time, the attending physician was Dr. Marbella who was shaking his
head saying that Angelica’s platelets were down and respondents should pray for their
daughter. Reynaldo claimed that he was introduced to a pediatrician who took over his
daughter’s case, Dr. Abesamis who also told him to pray for his daughter. Angelica
continued to have difficulty in her breathing and blood was being suctioned from her
stomach. A nurse was posted inside Angelica’s room to assist her breathing and at one
point they had to revive Angelica by pumping her chest. Thereafter, Reynaldo claimed that
Angelica already experienced difficulty in urinating and her bowel consisted of blood-like
fluid. Angelica requested for an electric fan as she was in pain. Hospital staff attempted to
take blood samples from Angelica but were unsuccessful because they could not even
locate her vein. Angelica asked for a fruit but when it was given to her, she only smelled it.
At this time, Reynaldo claimed he could not find either petitioner or Dr. Marbella. That
night, Angelica became hysterical and started removing those gadgets attached to her. At
three o’clock in the morning of September 1, a priest came and they prayed before Angelica
393
expired. Petitioner finally came back and supposedly told respondents that there was
"malfunction" or bogged-down machine.37
By petitioner’s own account, Angelica was merely irritable that day (August 31). Petitioner
noted though that Angelica’s skin was indeed sloughing off. 38 She stressed that at 9:30 in
the evening, Angelica pulled out her endotracheal tube. 39 On September 1, exactly two
weeks after being admitted at SLMC for chemotherapy, Angelica died. 40 The cause of death,
according to petitioner, was septicemia, or overwhelming infection, which caused Angelica’s
other organs to fail.41 Petitioner attributed this to the patient’s poor defense mechanism
brought about by the cancer itself.42
While he was seeking the release of Angelica’s cadaver from SLMC, Reynaldo claimed that
petitioner acted arrogantly and called him names. He was asked to sign a promissory note
as he did not have cash to pay the hospital bill.43
Respondents also presented as witnesses Dr. Jesusa Nieves-Vergara, Medico-Legal Officer
of the PNP-Crime Laboratory who conducted the autopsy on Angelica’s cadaver, and Dr.
Melinda Vergara Balmaceda who is a Medical Specialist employed at the Department of
Health (DOH) Operations and Management Services.
Testifying on the findings stated in her medico-legal report, Dr. Vergara noted the following:
(1) there were fluids recovered from the abdominal cavity, which is not normal, and was
due to hemorrhagic shock secondary to bleeding; (2) there was hemorrhage at the left side
of the heart; (3) bleeding at the upper portion of and areas adjacent to, the esophagus; (4)
lungs were heavy with bleeding at the back and lower portion, due to accumulation of
fluids; (4) yellowish discoloration of the liver; (5) kidneys showed appearance of facial shock
on account of hemorrhages; and (6) reddishness on external surface of the spleen. All these
were the end result of "hypovolemic shock secondary to multiple organ hemorrhages and
disseminated intravascular coagulation." Dr. Vergara opined that this can be attributed to
the chemical agents in the drugs given to the victim, which caused platelet reduction
resulting to bleeding sufficient to cause the victim’s death. The time lapse for the
production of DIC in the case of Angelica (from the time of diagnosis of sarcoma) was too
short, considering the survival rate of about 3 years. The witness conceded that the victim
will also die of osteosarcoma even with amputation or chemotherapy, but in this case
Angelica’s death was not caused by osteosarcoma. Dr. Vergara admitted that she is not a
pathologist but her statements were based on the opinion of an oncologist whom she had
interviewed. This oncologist supposedly said that if the victim already had DIC prior to the
chemotherapy, the hospital staff could have detected it. 44
On her part, Dr. Balmaceda declared that it is the physician’s duty to inform and explain to
the patient or his relatives every known side effect of the procedure or therapeutic agents to
be administered, before securing the consent of the patient or his relatives to such
procedure or therapy. The physician thus bases his assurance to the patient on his
personal assessment of the patient’s condition and his knowledge of the general effects of
the agents or procedure that will be allowed on the patient. Dr. Balmaceda stressed that
the patient or relatives must be informed of all known side effects based on studies and
observations, even if such will aggravate the patient’s condition. 45
Dr. Jaime Tamayo, the orthopaedic surgeon who operated on Angelica’s lower extremity,
testified for the defendants. He explained that in case of malignant tumors, there is no
guarantee that the ablation or removal of the amputated part will completely cure the
cancer. Thus, surgery is not enough. The mortality rate of osteosarcoma at the time of
394
modern chemotherapy and early diagnosis still remains at 80% to 90%. Usually, deaths
occur from metastasis, or spread of the cancer to other vital organs like the liver, causing
systemic complications. The modes of therapy available are the removal of the primary
source of the cancerous growth and then the residual cancer cells or metastasis should be
treated with chemotherapy. Dr. Tamayo further explained that patients with osteosarcoma
have poor defense mechanism due to the cancer cells in the blood stream. In the case of
Angelica, he had previously explained to her parents that after the surgical procedure,
chemotherapy is imperative so that metastasis of these cancer cells will hopefully be
addressed. He referred the patient to petitioner because he felt that petitioner is a
competent oncologist. Considering that this type of cancer is very aggressive and will
metastasize early, it will cause the demise of the patient should there be no early
intervention (in this case, the patient developed sepsis which caused her death). Cancer
cells in the blood cannot be seen by the naked eye nor detected through bone scan. On
cross-examination, Dr. Tamayo stated that of the more than 50 child patients who had
osteogenic sarcoma he had handled, he thought that probably all of them died within six
months from amputation because he did not see them anymore after follow-up; it is either
they died or had seen another doctor.46
In dismissing the complaint, the trial court held that petitioner was not liable for damages
as she observed the best known procedures and employed her highest skill and knowledge
in the administration of chemotherapy drugs on Angelica but despite all efforts said patient
died. It cited the testimony of Dr. Tamayo who testified that he considered petitioner one of
the most proficient in the treatment of cancer and that the patient in this case was afflicted
with a very aggressive type of cancer necessitating chemotherapy as adjuvant treatment.
Using the standard of negligence laid down in Picart v. Smith, 47 the trial court declared that
petitioner has taken the necessary precaution against the adverse effect of chemotherapy
on the patient, adding that a wrong decision is not by itself negligence. Respondents were
ordered to pay their unpaid hospital bill in the amount of ₱139,064.43.48
Respondents appealed to the CA which, while concurring with the trial court’s finding that
there was no negligence committed by the petitioner in the administration of chemotherapy
treatment to Angelica, found that petitioner as her attending physician failed to fully
explain to the respondents all the known side effects of chemotherapy. The appellate court
stressed that since the respondents have been told of only three side effects of
chemotherapy, they readily consented thereto. Had petitioner made known to respondents
those other side effects which gravely affected their child -- such as carpo-pedal spasm,
sepsis, decrease in the blood platelet count, bleeding, infections and eventual death --
respondents could have decided differently or adopted a different course of action which
could have delayed or prevented the early death of their child.
The CA thus declared:
Plaintiffs-appellants’ child was suffering from a malignant disease. The attending physician
recommended that she undergo chemotherapy treatment after surgery in order to increase
her chances of survival. Appellants consented to the chemotherapy treatment because they
believed in Dr. Rubi Li’s representation that the deceased would have a strong chance of
survival after chemotherapy and also because of the representation of appellee Dr. Rubi Li
that there were only three possible side-effects of the treatment. However, all sorts of
painful side-effects resulted from the treatment including the premature death of Angelica.
The appellants were clearly and totally unaware of these other side-effects which
395
manifested only during the chemotherapy treatment. This was shown by the fact that every
time a problem would take place regarding Angelica’s condition (like an unexpected side-
effect manifesting itself), they would immediately seek explanation from Dr. Rubi Li. Surely,
those unexpected side-effects culminating in the loss of a love[d] one caused the appellants
so much trouble, pain and suffering.
On this point therefore, [w]e find defendant-appellee Dr. Rubi Li negligent which would
entitle plaintiffs-appellants to their claim for damages.
xxxx
WHEREFORE, the instant appeal is hereby GRANTED. Accordingly, the assailed decision is
hereby modified to the extent that defendant-appellee Dr. Rubi Li is ordered to pay the
plaintiffs-appellants the following amounts:
1. Actual damages of P139,064.43, plus P9,828.00 for funeral expenses;
2. Moral damages of P200,000.00;
3. Exemplary damages of P50,000.00;
4. Attorney’s fee of P30,000.00.
SO ORDERED.49 (Emphasis supplied.)
Petitioner filed a motion for partial reconsideration which the appellate court denied.
Hence, this petition.
Petitioner assails the CA in finding her guilty of negligence in not explaining to the
respondents all the possible side effects of the chemotherapy on their child, and in holding
her liable for actual, moral and exemplary damages and attorney’s fees. Petitioner
emphasized that she was not negligent in the pre-chemotherapy procedures and in the
administration of chemotherapy treatment to Angelica.
On her supposed non-disclosure of all possible side effects of chemotherapy, including
death, petitioner argues that it was foolhardy to imagine her to be all-knowing/omnipotent.
While the theoretical side effects of chemotherapy were explained by her to the
respondents, as these should be known to a competent doctor, petitioner cannot possibly
predict how a particular patient’s genetic make-up, state of mind, general health and body
constitution would respond to the treatment. These are obviously dependent on too many
known, unknown and immeasurable variables, thus requiring that Angelica be, as she was,
constantly and closely monitored during the treatment. Petitioner asserts that she did
everything within her professional competence to attend to the medical needs of Angelica.
Citing numerous trainings, distinctions and achievements in her field and her current
position as co-director for clinical affairs of the Medical Oncology, Department of Medicine
of SLMC, petitioner contends that in the absence of any clear showing or proof, she cannot
be charged with negligence in not informing the respondents all the side effects of
chemotherapy or in the pre-treatment procedures done on Angelica.
As to the cause of death, petitioner insists that Angelica did not die of platelet depletion but
of sepsis which is a complication of the cancer itself. Sepsis itself leads to bleeding and
death. She explains that the response rate to chemotherapy of patients with osteosarcoma
is high, so much so that survival rate is favorable to the patient. Petitioner then points to
some probable consequences if Angelica had not undergone chemotherapy. Thus, without
chemotherapy, other medicines and supportive treatment, the patient might have died the
next day because of massive infection, or the cancer cells might have spread to the brain
and brought the patient into a coma, or into the lungs that the patient could have been
hooked to a respirator, or into her kidneys that she would have to undergo dialysis. Indeed,
396
respondents could have spent as much because of these complications. The patient would
have been deprived of the chance to survive the ailment, of any hope for life and her
"quality of life" surely compromised. Since she had not been shown to be at fault, petitioner
maintains that the CA erred in holding her liable for the damages suffered by the
respondents.50
The issue to be resolved is whether the petitioner can be held liable for failure to fully
disclose serious side effects to the parents of the child patient who died while undergoing
chemotherapy, despite the absence of finding that petitioner was negligent in administering
the said treatment.
The petition is meritorious.
The type of lawsuit which has been called medical malpractice or, more appropriately,
medical negligence, is that type of claim which a victim has available to him or her to
redress a wrong committed by a medical professional which has caused bodily harm. In
order to successfully pursue such a claim, a patient must prove that a health care provider,
in most cases a physician, either failed to do something which a reasonably prudent health
care provider would have done, or that he or she did something that a reasonably prudent
provider would not have done; and that that failure or action caused injury to the patient. 51
This Court has recognized that medical negligence cases are best proved by opinions of
expert witnesses belonging in the same general neighborhood and in the same general line
of practice as defendant physician or surgeon. The deference of courts to the expert opinion
of qualified physicians stems from the former’s realization that the latter possess unusual
technical skills which laymen in most instances are incapable of intelligently evaluating,
hence the indispensability of expert testimonies.52
In this case, both the trial and appellate courts concurred in finding that the alleged
negligence of petitioner in the administration of chemotherapy drugs to respondents’ child
was not proven considering that Drs. Vergara and Balmaceda, not being oncologists or
cancer specialists, were not qualified to give expert opinion as to whether petitioner’s lack
of skill, knowledge and professional competence in failing to observe the standard of care in
her line of practice was the proximate cause of the patient’s death. Furthermore,
respondents’ case was not at all helped by the non-production of medical records by the
hospital (only the biopsy result and medical bills were submitted to the court).
Nevertheless, the CA found petitioner liable for her failure to inform the respondents on all
possible side effects of chemotherapy before securing their consent to the said treatment.
The doctrine of informed consent within the context of physician-patient relationships goes
far back into English common law. As early as 1767, doctors were charged with the tort of
"battery" (i.e., an unauthorized physical contact with a patient) if they had not gained the
consent of their patients prior to performing a surgery or procedure. In the United States,
the seminal case was Schoendorff v. Society of New York Hospital 53 which involved
unwanted treatment performed by a doctor. Justice Benjamin Cardozo’s oft-quoted opinion
upheld the basic right of a patient to give consent to any medical procedure or treatment:
"Every human being of adult years and sound mind has a right to determine what shall be
done with his own body; and a surgeon who performs an operation without his patient’s
consent, commits an assault, for which he is liable in damages." 54 From a purely ethical
norm, informed consent evolved into a general principle of law that a physician has a duty
to disclose what a reasonably prudent physician in the medical community in the exercise
of reasonable care would disclose to his patient as to whatever grave risks of injury might
397
be incurred from a proposed course of treatment, so that a patient, exercising ordinary care
for his own welfare, and faced with a choice of undergoing the proposed treatment, or
alternative treatment, or none at all, may intelligently exercise his judgment by reasonably
balancing the probable risks against the probable benefits. 55
Subsequently, in Canterbury v. Spence 56 the court observed that the duty to disclose
should not be limited to medical usage as to arrogate the decision on revelation to the
physician alone. Thus, respect for the patient’s right of self-determination on particular
therapy demands a standard set by law for physicians rather than one which physicians
may or may not impose upon themselves. 57 The scope of disclosure is premised on the fact
that patients ordinarily are persons unlearned in the medical sciences. Proficiency in
diagnosis and therapy is not the full measure of a physician’s responsibility. It is also his
duty to warn of the dangers lurking in the proposed treatment and to impart information
which the patient has every right to expect. Indeed, the patient’s reliance upon the
physician is a trust of the kind which traditionally has exacted obligations beyond those
associated with armslength transactions. 58 The physician is not expected to give the patient
a short medical education, the disclosure rule only requires of him a reasonable
explanation, which means generally informing the patient in nontechnical terms as to what
is at stake; the therapy alternatives open to him, the goals expectably to be achieved, and
the risks that may ensue from particular treatment or no treatment. 59 As to the issue of
demonstrating what risks are considered material necessitating disclosure, it was held that
experts are unnecessary to a showing of the materiality of a risk to a patient’s decision on
treatment, or to the reasonably, expectable effect of risk disclosure on the decision. Such
unrevealed risk that should have been made known must further materialize, for otherwise
the omission, however unpardonable, is without legal consequence. And, as in malpractice
actions generally, there must be a causal relationship between the physician’s failure to
divulge and damage to the patient.60
Reiterating the foregoing considerations, Cobbs v. Grant 61 deemed it as integral part of
physician’s overall obligation to patient, the duty of reasonable disclosure of available
choices with respect to proposed therapy and of dangers inherently and potentially involved
in each. However, the physician is not obliged to discuss relatively minor risks inherent in
common procedures when it is common knowledge that such risks inherent in procedure of
very low incidence. Cited as exceptions to the rule that the patient should not be denied the
opportunity to weigh the risks of surgery or treatment are emergency cases where it is
evident he cannot evaluate data, and where the patient is a child or incompetent. 62 The
court thus concluded that the patient’s right of self-decision can only be effectively
exercised if the patient possesses adequate information to enable him in making an
intelligent choice. The scope of the physician’s communications to the patient, then must
be measured by the patient’s need, and that need is whatever information is material to the
decision. The test therefore for determining whether a potential peril must be divulged is its
materiality to the patient’s decision.63
Cobbs v. Grant further reiterated the pronouncement in Canterbury v. Spence that for
liability of the physician for failure to inform patient, there must be causal relationship
between physician’s failure to inform and the injury to patient and such connection arises
only if it is established that, had revelation been made, consent to treatment would not
have been given.

398
There are four essential elements a plaintiff must prove in a malpractice action based upon
the doctrine of informed consent: "(1) the physician had a duty to disclose material risks;
(2) he failed to disclose or inadequately disclosed those risks; (3) as a direct and proximate
result of the failure to disclose, the patient consented to treatment she otherwise would not
have consented to; and (4) plaintiff was injured by the proposed treatment." The gravamen
in an informed consent case requires the plaintiff to "point to significant undisclosed
information relating to the treatment which would have altered her decision to undergo it. 64
Examining the evidence on record, we hold that there was adequate disclosure of material
risks inherent in the chemotherapy procedure performed with the consent of Angelica’s
parents. Respondents could not have been unaware in the course of initial treatment and
amputation of Angelica’s lower extremity, that her immune system was already weak on
account of the malignant tumor in her knee. When petitioner informed the respondents
beforehand of the side effects of chemotherapy which includes lowered counts of white and
red blood cells, decrease in blood platelets, possible kidney or heart damage and skin
darkening, there is reasonable expectation on the part of the doctor that the respondents
understood very well that the severity of these side effects will not be the same for all
patients undergoing the procedure. In other words, by the nature of the disease itself, each
patient’s reaction to the chemical agents even with pre-treatment laboratory tests cannot be
precisely determined by the physician. That death can possibly result from complications of
the treatment or the underlying cancer itself, immediately or sometime after the
administration of chemotherapy drugs, is a risk that cannot be ruled out, as with most
other major medical procedures, but such conclusion can be reasonably drawn from the
general side effects of chemotherapy already disclosed.
As a physician, petitioner can reasonably expect the respondents to have considered the
variables in the recommended treatment for their daughter afflicted with a life-threatening
illness. On the other hand, it is difficult to give credence to respondents’ claim that
petitioner told them of 95% chance of recovery for their daughter, as it was unlikely for
doctors like petitioner who were dealing with grave conditions such as cancer to have
falsely assured patients of chemotherapy’s success rate. Besides, informed consent laws in
other countries generally require only a reasonable explanation of potential harms, so
specific disclosures such as statistical data, may not be legally necessary. 65
The element of ethical duty to disclose material risks in the proposed medical treatment
cannot thus be reduced to one simplistic formula applicable in all instances. Further, in a
medical malpractice action based on lack of informed consent, "the plaintiff must prove
both the duty and the breach of that duty through expert testimony. 66 Such expert
testimony must show the customary standard of care of physicians in the same practice as
that of the defendant doctor.67
In this case, the testimony of Dr. Balmaceda who is not an oncologist but a Medical
Specialist of the DOH’s Operational and Management Services charged with receiving
complaints against hospitals, does not qualify as expert testimony to establish the standard
of care in obtaining consent for chemotherapy treatment. In the absence of expert
testimony in this regard, the Court feels hesitant in defining the scope of mandatory
disclosure in cases of malpractice based on lack of informed consent, much less set a
standard of disclosure that, even in foreign jurisdictions, has been noted to be an evolving
one.

399
As society has grappled with the juxtaposition between personal autonomy and the medical
profession's intrinsic impetus to cure, the law defining "adequate" disclosure has
undergone a dynamic evolution. A standard once guided solely by the ruminations of
physicians is now dependent on what a reasonable person in the patient’s position regards
as significant. This change in perspective is especially important as medical breakthroughs
move practitioners to the cutting edge of technology, ever encountering new and heretofore
unimagined treatments for currently incurable diseases or ailments. An adaptable standard
is needed to account for this constant progression. Reasonableness analyses permeate our
legal system for the very reason that they are determined by social norms, expanding and
contracting with the ebb and flow of societal evolution.
As we progress toward the twenty-first century, we now realize that the legal standard of
disclosure is not subject to construction as a categorical imperative. Whatever formulae or
processes we adopt are only useful as a foundational starting point; the particular quality
or quantity of disclosure will remain inextricably bound by the facts of each case.
Nevertheless, juries that ultimately determine whether a physician properly informed a
patient are inevitably guided by what they perceive as the common expectation of the
medical consumer—"a reasonable person in the patient’s position when deciding to accept
or reject a recommended medical procedure."68 (Emphasis supplied.)
WHEREFORE, the petition for review on certiorari is GRANTED. The Decision dated June
15, 2004 and the Resolution dated September 1, 2004 of the Court of Appeals in CA-G.R.
CV No. 58013 are SET ASIDE.
The Decision dated September 5, 1997 of the Regional Trial Court of Legazpi City, Branch
8, in Civil Case No. 8904 is REINSTATED and UPHELD.
No costs.
SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice

G.R. No. 124354 December 29, 1999

ROGELIO E. RAMOS and ERLINDA RAMOS, in their own behalf and as natural
guardians of the minors, ROMMEL RAMOS, ROY RODERICK RAMOS and RON
RAYMOND RAMOS, petitioners,
vs.
COURT OF APPEALS, DELOS SANTOS MEDICAL CENTER, DR. ORLINO HOSAKA and
DRA. PERFECTA GUTIERREZ, respondents.
 
KAPUNAN, J.:
The Hippocratic Oath mandates physicians to give primordial consideration to the health
and welfare of their patients. If a doctor fails to live up to this precept, he is made
accountable for his acts. A mistake, through gross negligence or incompetence or plain
human error, may spell the difference between life and death. In this sense, the doctor
plays God on his patient's fate. 1
In the case at bar, the Court is called upon to rule whether a surgeon, an anesthesiologist
and a hospital should be made liable for the unfortunate comatose condition of a patient
scheduled for cholecystectomy. 2
400
Petitioners seek the reversal of the decision 3 of the Court of Appeals, dated 29 May 1995,
which overturned the decision 4 of the Regional Trial Court, dated 30 January 1992, finding
private respondents liable for damages arising from negligence in the performance of their
professional duties towards petitioner Erlinda Ramos resulting in her comatose condition.
The antecedent facts as summarized by the trial court are reproduced hereunder:
Plaintiff Erlinda Ramos was, until the afternoon of June 17, 1985, a 47-year
old (Exh. "A") robust woman (TSN, October 19, 1989, p. 10). Except for
occasional complaints of discomfort due to pains allegedly caused by the
presence of a stone in her gall bladder (TSN, January 13, 1988, pp. 4-5), she
was as normal as any other woman. Married to Rogelio E. Ramos, an executive
of Philippine Long Distance Telephone Company, she has three children whose
names are Rommel Ramos, Roy Roderick Ramos and Ron Raymond Ramos
(TSN, October 19, 1989, pp. 5-6).
Because the discomforts somehow interfered with her normal ways, she sought
professional advice. She was advised to undergo an operation for the removal of
a stone in her gall bladder (TSN, January 13, 1988, p. 5). She underwent a
series of examinations which included blood and urine tests (Exhs. "A" and "C")
which indicated she was fit for surgery.
Through the intercession of a mutual friend, Dr. Buenviaje (TSN, January 13,
1988, p. 7), she and her husband Rogelio met for the first time Dr. Orlino
Hozaka (should be Hosaka; see TSN, February 20, 1990, p. 3), one of the
defendants in this case, on June 10, 1985. They agreed that their date at the
operating table at the DLSMC (another defendant), would be on June 17, 1985
at 9:00 A.M.. Dr. Hosaka decided that she should undergo a "cholecystectomy"
operation after examining the documents (findings from the Capitol Medical
Center, FEU Hospital and DLSMC) presented to him. Rogelio E. Ramos,
however, asked Dr. Hosaka to look for a good anesthesiologist. Dr. Hosaka, in
turn, assured Rogelio that he will get a good anesthesiologist. Dr. Hosaka
charged a fee of P16,000.00, which was to include the anesthesiologist's fee
and which was to be paid after the operation (TSN, October 19, 1989, pp. 14-
15, 22-23, 31-33; TSN, February 27, 1990, p. 13; and TSN, November 9, 1989,
pp. 3-4, 10, 17).
A day before the scheduled date of operation, she was admitted at one of the
rooms of the DLSMC, located along E. Rodriguez Avenue, Quezon City (TSN,
October 19,1989, p. 11).
At around 7:30 A.M. of June 17, 1985 and while still in her room, she was
prepared for the operation by the hospital staff. Her sister-in-law, Herminda
Cruz, who was the Dean of the College of Nursing at the Capitol Medical
Center, was also there for moral support. She reiterated her previous request
for Herminda to be with her even during the operation. After praying, she was
given injections. Her hands were held by Herminda as they went down from her
room to the operating room (TSN, January 13, 1988, pp. 9-11). Her husband,
Rogelio, was also with her (TSN, October 19, 1989, p. 18). At the operating
room, Herminda saw about two or three nurses and Dr. Perfecta Gutierrez, the
other defendant, who was to administer anesthesia. Although not a member of
the hospital staff, Herminda introduced herself as Dean of the College of
401
Nursing at the Capitol Medical Center who was to provide moral support to the
patient, to them. Herminda was allowed to stay inside the operating room.
At around 9:30 A.M., Dr. Gutierrez reached a nearby phone to look for Dr.
Hosaka who was not yet in (TSN, January 13, 1988, pp. 11-12). Dr. Gutierrez
thereafter informed Herminda Cruz about the prospect of a delay in the arrival
of Dr. Hosaka. Herminda then went back to the patient who asked, "Mindy,
wala pa ba ang Doctor"? The former replied, "Huwag kang mag-alaala, darating
na iyon" (Ibid.).
Thereafter, Herminda went out of the operating room and informed the
patient's husband, Rogelio, that the doctor was not yet around (id., p. 13).
When she returned to the operating room, the patient told her, "Mindy, inip na
inip na ako, ikuha mo ako ng ibang Doctor." So, she went out again and told
Rogelio about what the patient said (id., p. 15). Thereafter, she returned to the
operating room.
At around 10:00 A.M., Rogelio E. Ramos was "already dying [and] waiting for
the arrival of the doctor" even as he did his best to find somebody who will
allow him to pull out his wife from the operating room (TSN, October 19, 1989,
pp. 19-20). He also thought of the feeling of his wife, who was inside the
operating room waiting for the doctor to arrive (ibid.). At almost 12:00 noon, he
met Dr. Garcia who remarked that he (Dr. Garcia) was also tired of waiting for
Dr. Hosaka to arrive (id., p. 21). While talking to Dr. Garcia at around 12:10
P.M., he came to know that Dr. Hosaka arrived as a nurse remarked,
"Nandiyan na si Dr. Hosaka, dumating na raw." Upon hearing those words, he
went down to the lobby and waited for the operation to be completed (id., pp.
16, 29-30).
At about 12:15 P.M., Herminda Cruz, who was inside the operating room with
the patient, heard somebody say that "Dr. Hosaka is already here." She then
saw people inside the operating room "moving, doing this and that, [and]
preparing the patient for the operation" (TSN, January 13, 1988, p. 16). As she
held the hand of Erlinda Ramos, she then saw Dr. Gutierrez intubating the
hapless patient. She thereafter heard Dr. Gutierrez say, "ang hirap ma-intubate
nito, mali yata ang pagkakapasok. O lumalaki ang tiyan" (id., p. 17). Because
of the remarks of Dra. Gutierrez, she focused her attention on what Dr.
Gutierrez was doing. She thereafter noticed bluish discoloration of the nailbeds
of the left hand of the hapless Erlinda even as Dr. Hosaka approached her. She
then heard Dr. Hosaka issue an order for someone to call Dr. Calderon,
another anesthesiologist (id., p. 19). After Dr. Calderon arrived at the operating
room, she saw this anesthesiologist trying to intubate the patient. The patient's
nailbed became bluish and the patient was placed in a trendelenburg position
— a position where the head of the patient is placed in a position lower than
her feet which is an indication that there is a decrease of blood supply to the
patient's brain (Id., pp. 19-20). Immediately thereafter, she went out of the
operating room, and she told Rogelio E. Ramos "that something wrong was . . .
happening" (Ibid.). Dr. Calderon was then able to intubate the patient (TSN,
July 25, 1991, p. 9).

402
 Meanwhile, Rogelio, who was outside the operating room, saw a respiratory
machine being rushed towards the door of the operating room. He also saw
several doctors rushing towards the operating room. When informed by
Herminda Cruz that something wrong was happening, he told her (Herminda)
to be back with the patient inside the operating room (TSN, October 19, 1989,
pp. 25-28).
Herminda Cruz immediately rushed back, and saw that the patient was still in
trendelenburg position (TSN, January 13, 1988, p. 20). At almost 3:00 P.M. of
that fateful day, she saw the patient taken to the Intensive Care Unit (ICU).
About two days thereafter, Rogelio E. Ramos was able to talk to Dr. Hosaka.
The latter informed the former that something went wrong during the
intubation. Reacting to what was told to him, Rogelio reminded the doctor that
the condition of his wife would not have happened, had he (Dr. Hosaka) looked
for a good anesthesiologist (TSN, October 19, 1989, p. 31).
Doctors Gutierrez and Hosaka were also asked by the hospital to explain what
happened to the patient. The doctors explained that the patient had
bronchospasm (TSN, November 15, 1990, pp. 26-27).
Erlinda Ramos stayed at the ICU for a month. About four months thereafter or
on November 15, 1985, the patient was released from the hospital.
During the whole period of her confinement, she incurred hospital bills
amounting to P93,542.25 which is the subject of a promissory note and
affidavit of undertaking executed by Rogelio E. Ramos in favor of DLSMC. Since
that fateful afternoon of June 17, 1985, she has been in a comatose condition.
She cannot do anything. She cannot move any part of her body. She cannot see
or hear. She is living on mechanical means. She suffered brain damage as a
result of the absence of oxygen in her brain for four to five minutes (TSN,
November 9, 1989, pp. 21-22). After being discharged from the hospital, she
has been staying in their residence, still needing constant medical attention,
with her husband Rogelio incurring a monthly expense ranging from P8,000.00
to P10,000.00 (TSN, October 19, 1989, pp. 32-34). She was also diagnosed to
be suffering from "diffuse cerebral parenchymal damage" (Exh. "G"; see
also TSN, December 21, 1989,
p. 6). 5
Thus, on 8 January 1986, petitioners filed a civil case 6 for damages with the Regional Trial
Court of Quezon City against herein private respondents alleging negligence in the
management and care of Erlinda Ramos.
During the trial, both parties presented evidence as to the possible cause of Erlinda's
injury. Plaintiff presented the testimonies of Dean Herminda Cruz and Dr. Mariano Gavino
to prove that the sustained by Erlinda was due to lack of oxygen in her brain caused by the
faulty management of her airway by private respondents during the anesthesia phase. On
the other hand, private respondents primarily relied on the expert testimony of Dr. Eduardo
Jamora, a pulmonologist, to the effect that the cause of brain damage was Erlinda's allergic
reaction to the anesthetic agent, Thiopental Sodium (Pentothal).
After considering the evidence from both sides, the Regional Trial Court rendered judgment
in favor of petitioners, to wit:

403
After evaluating the evidence as shown in the finding of facts set forth earlier,
and applying the aforecited provisions of law and jurisprudence to the case at
bar, this Court finds and so holds that defendants are liable to plaintiffs for
damages. The defendants were guilty of, at the very least, negligence in the
performance of their duty to plaintiff-patient Erlinda Ramos.
On the part of Dr. Perfecta Gutierrez, this Court finds that she omitted to
exercise reasonable care in not only intubating the patient, but also in not
repeating the administration of atropine (TSN, August 20, 1991, pp. 5-10),
without due regard to the fact that the patient was inside the operating room
for almost three (3) hours. For after she committed a mistake in intubating
[the] patient, the patient's nailbed became bluish and the patient, thereafter,
was placed in trendelenburg position, because of the decrease of blood supply
to the patient's brain. The evidence further shows that the hapless patient
suffered brain damage because of the absence of oxygen in her (patient's) brain
for approximately four to five minutes which, in turn, caused the patient to
become comatose.
On the part of Dr. Orlino Hosaka, this Court finds that he is liable for the acts
of Dr. Perfecta Gutierrez whom he had chosen to administer anesthesia on the
patient as part of his obligation to provide the patient a good anesthesiologist',
and for arriving for the scheduled operation almost three (3) hours late.
On the part of DLSMC (the hospital), this Court finds that it is liable for the
acts of negligence of the doctors in their "practice of medicine" in the operating
room. Moreover, the hospital is liable for failing through its responsible
officials, to cancel the scheduled operation after Dr. Hosaka inexcusably failed
to arrive on time.
In having held thus, this Court rejects the defense raised by defendants that
they have acted with due care and prudence in rendering medical services to
plaintiff-patient. For if the patient was properly intubated as claimed by them,
the patient would not have become comatose. And, the fact that another
anesthesiologist was called to try to intubate the patient after her (the patient's)
nailbed turned bluish, belie their claim. Furthermore, the defendants should
have rescheduled the operation to a later date. This, they should have done, if
defendants acted with due care and prudence as the patient's case was an
elective, not an emergency case.
x x x           x x x          x x x
WHEREFORE, and in view of the foregoing, judgment is rendered in favor of
the plaintiffs and against the defendants. Accordingly, the latter are ordered to
pay, jointly and severally, the former the following sums of money, to wit:
1) the sum of P8,000.00 as actual monthly expenses for the
plaintiff Erlinda Ramos reckoned from November 15, 1985 or in
the total sum of P632,000.00 as of April 15, 1992, subject to its
being updated;
2) the sum of P100,000.00 as reasonable attorney's fees;
3) the sum of P800,000.00 by way of moral damages and the
further sum of P200,000,00 by way of exemplary damages; and,
4) the costs of the suit.
404
 SO ORDERED. 7
Private respondents seasonably interposed an appeal to the Court of Appeals. The appellate
court rendered a Decision, dated 29 May 1995, reversing the findings of the trial court. The
decretal portion of the decision of the appellate court reads:
WHEREFORE, for the foregoing premises the appealed decision is hereby
REVERSED, and the complaint below against the appellants is hereby ordered
DISMISSED. The counterclaim of appellant De Los Santos Medical Center is
GRANTED but only insofar as appellees are hereby ordered to pay the unpaid
hospital bills amounting to P93,542.25, plus legal interest for justice must be
tempered with mercy.
SO ORDERED. 8
The decision of the Court of Appeals was received on 9 June 1995 by petitioner Rogelio
Ramos who was mistakenly addressed as "Atty. Rogelio Ramos." No copy of the decision,
however, was sent nor received by the Coronel Law Office, then counsel on record of
petitioners. Rogelio referred the decision of the appellate court to a new lawyer, Atty. Ligsay,
only on 20 June 1995, or four (4) days before the expiration of the reglementary period for
filing a motion for reconsideration. On the same day, Atty. Ligsay, filed with the appellate
court a motion for extension of time to file a motion for reconsideration. The motion for
reconsideration was submitted on 4 July 1995. However, the appellate court denied the
motion for extension of time in its Resolution dated 25 July 1995. 9 Meanwhile, petitioners
engaged the services of another counsel, Atty. Sillano, to replace Atty. Ligsay. Atty. Sillano
filed on 7 August 1995 a motion to admit the motion for reconsideration contending that
the period to file the appropriate pleading on the assailed decision had not yet commenced
to run as the Division Clerk of Court of the Court of Appeals had not yet served a copy
thereof to the counsel on record. Despite this explanation, the appellate court still denied
the motion to admit the motion for reconsideration of petitioners in its Resolution, dated 29
March 1996, primarily on the ground that the fifteen-day (15) period for filing a motion for
reconsideration had already expired, to wit:
We said in our Resolution on July 25, 1995, that the filing of a Motion for
Reconsideration cannot be extended; precisely, the Motion for Extension (Rollo,
p. 12) was denied. It is, on the other hand, admitted in the latter Motion that
plaintiffs/appellees received a copy of the decision as early as June 9, 1995.
Computation wise, the period to file a Motion for Reconsideration expired on
June 24. The Motion for Reconsideration, in turn, was received by the Court of
Appeals already on July 4, necessarily, the 15-day period already passed. For
that alone, the latter should be denied.
Even assuming admissibility of the Motion for the Reconsideration, but after
considering the Comment/Opposition, the former, for lack of merit, is hereby
DENIED.
SO ORDERED. 10
A copy of the above resolution was received by Atty. Sillano on 11 April 1996. The next day,
or on 12 April 1996, Atty. Sillano filed before this Court a motion for extension of time to
file the present petition for certiorari under Rule 45. The Court granted the motion for
extension of time and gave petitioners additional thirty (30) days after the expiration of the
fifteen-day (15) period counted from the receipt of the resolution of the Court of Appeals

405
within which to submit the petition. The due date fell on 27 May 1996. The petition was
filed on 9 May 1996, well within the extended period given by the Court.
Petitioners assail the decision of the Court of Appeals on the following grounds:
I
IN PUTTING MUCH RELIANCE ON THE TESTIMONIES OF RESPONDENTS
DRA. GUTIERREZ, DRA. CALDERON AND DR. JAMORA;
II
IN FINDING THAT THE NEGLIGENCE OF THE RESPONDENTS DID NOT
CAUSE THE UNFORTUNATE COMATOSE CONDITION OF PETITIONER
ERLINDA RAMOS;
III
IN NOT APPLYING THE DOCTRINE OF RES IPSA LOQUITUR. 11
Before we discuss the merits of the case, we shall first dispose of the procedural issue on
the timeliness of the petition in relation to the motion for reconsideration filed by
petitioners with the Court of Appeals. In their
Comment, 12 private respondents contend that the petition should not be given due course
since the motion for reconsideration of the petitioners on the decision of the Court of
Appeals was validly dismissed by the appellate court for having been filed beyond the
reglementary period. We do not agree.
A careful review of the records reveals that the reason behind the delay in filing the motion
for reconsideration is attributable to the fact that the decision of the Court of Appeals was
not sent to then counsel on record of petitioners, the Coronel Law Office. In fact, a copy of
the decision of the appellate court was instead sent to and received by petitioner Rogelio
Ramos on 9 June 1995 wherein he was mistakenly addressed as Atty. Rogelio Ramos.
Based on the other communications received by petitioner Rogelio Ramos, the appellate
court apparently mistook him for the counsel on record. Thus, no copy of the decision of
the counsel on record. Petitioner, not being a lawyer and unaware of the prescriptive period
for filing a motion for reconsideration, referred the same to a legal counsel only on 20 June
1995.
It is elementary that when a party is represented by counsel, all notices should be sent to
the party's lawyer at his given address. With a few exceptions, notice to a litigant without
notice to his counsel on record is no notice at all. In the present case, since a copy of the
decision of the appellate court was not sent to the counsel on record of petitioner, there can
be no sufficient notice to speak of. Hence, the delay in the filing of the motion for
reconsideration cannot be taken against petitioner. Moreover, since the Court of Appeals
already issued a second Resolution, dated 29 March 1996, which superseded the earlier
resolution issued on 25 July 1995, and denied the motion for reconsideration of petitioner,
we believed that the receipt of the former should be considered in determining the
timeliness of the filing of the present petition. Based on this, the petition before us was
submitted on time.
After resolving the foregoing procedural issue, we shall now look into the merits of the case.
For a more logical presentation of the discussion we shall first consider the issue on the
applicability of the doctrine of res ipsa loquitur to the instant case. Thereafter, the first two
assigned errors shall be tackled in relation to the res ipsa loquitur doctrine.
Res ipsa loquitur is a Latin phrase which literally means "the thing or the transaction
speaks for itself." The phrase "res ipsa loquitur'' is a maxim for the rule that the fact of the
406
occurrence of an injury, taken with the surrounding circumstances, may permit an
inference or raise a presumption of negligence, or make out a plaintiff's prima facie case,
and present a question of fact for defendant to meet with an explanation. 13 Where the thing
which caused the injury complained of is shown to be under the management of the
defendant or his servants and the accident is such as in ordinary course of things does not
happen if those who have its management or control use proper care, it affords reasonable
evidence, in the absence of explanation by the defendant, that the accident arose from or
was caused by the defendant's want of care. 14
The doctrine of res ipsa loquitur is simply a recognition of the postulate that, as a matter of
common knowledge and experience, the very nature of certain types of occurrences may
justify an inference of negligence on the part of the person who controls the instrumentality
causing the injury in the absence of some explanation by the defendant who is charged
with negligence. 15 It is grounded in the superior logic of ordinary human experience and on
the basis of such experience or common knowledge, negligence may be deduced from the
mere occurrence of the accident itself. 16 Hence, res ipsa loquitur is applied in conjunction
with the doctrine of common knowledge.
However, much has been said that res ipsa loquitur is not a rule of substantive law and, as
such, does not create or constitute an independent or separate ground of
liability. 17 Instead, it is considered as merely evidentiary or in the nature of a procedural
rule. 18 It is regarded as a mode of proof, or a mere procedural of convenience since it
furnishes a substitute for, and relieves a plaintiff of, the burden of producing specific proof
of negligence. 19 In other words, mere invocation and application of the doctrine does not
dispense with the requirement of proof of negligence. It is simply a step in the process of
such proof, permitting the plaintiff to present along with the proof of the accident, enough
of the attending circumstances to invoke the doctrine, creating an inference or presumption
of negligence, and to thereby place on the defendant the burden of going forward with the
proof. 20 Still, before resort to the doctrine may be allowed, the following requisites must be
satisfactorily shown:
1. The accident is of a kind which ordinarily does not occur in the
absence of someone's negligence;
2. It is caused by an instrumentality within the exclusive control of
the defendant or defendants; and
3. The possibility of contributing conduct which would make the
plaintiff responsible is eliminated. 21
In the above requisites, the fundamental element is the "control of instrumentality" which
caused the damage. 22 Such element of control must be shown to be within the dominion of
the defendant. In order to have the benefit of the rule, a plaintiff, in addition to proving
injury or damage, must show a situation where it is applicable, and must establish that the
essential elements of the doctrine were present in a particular incident. 23
Medical malpractice 24 cases do not escape the application of this doctrine. Thus, res ipsa
loquitur has been applied when the circumstances attendant upon the harm are themselves
of such a character as to justify an inference of negligence as the cause of that harm. 25 The
application of res ipsa loquitur in medical negligence cases presents a question of law since
it is a judicial function to determine whether a certain set of circumstances does, as a
matter of law, permit a given inference. 26

407
Although generally, expert medical testimony is relied upon in malpractice suits to prove
that a physician has done a negligent act or that he has deviated from the standard
medical procedure, when the doctrine of res ipsa loquitur is availed by the plaintiff, the need
for expert medical testimony is dispensed with because the injury itself provides the proof
of negligence. 27 The reason is that the general rule on the necessity of expert testimony
applies only to such matters clearly within the domain of medical science, and not to
matters that are within the common knowledge of mankind which may be testified to by
anyone familiar with the facts. 28 Ordinarily, only physicians and surgeons of skill and
experience are competent to testify as to whether a patient has been treated or operated
upon with a reasonable degree of skill and care. However, testimony as to the statements
and acts of physicians and surgeons, external appearances, and manifest conditions which
are observable by any one may be given by non-expert witnesses. 29 Hence, in cases where
the res ipsa loquitur is applicable, the court is permitted to find a physician negligent upon
proper proof of injury to the patient, without the aid of expert testimony, where the court
from its fund of common knowledge can determine the proper standard of care. 30 Where
common knowledge and experience teach that a resulting injury would not have occurred
to the patient if due care had been exercised, an inference of negligence may be drawn
giving rise to an application of the doctrine of res ipsa loquitur without medical evidence,
which is ordinarily required to show not only what occurred but how and why it
occurred. 31 When the doctrine is appropriate, all that the patient must do is prove a nexus
between the particular act or omission complained of and the injury sustained while under
the custody and management of the defendant without need to produce expert medical
testimony to establish the standard of care. Resort to res ipsa loquitur is allowed because
there is no other way, under usual and ordinary conditions, by which the patient can
obtain redress for injury suffered by him.
Thus, courts of other jurisdictions have applied the doctrine in the following situations:
leaving of a foreign object in the body of the patient after an operation, 32 injuries sustained
on a healthy part of the body which was not under, or in the area, of treatment, 33 removal
of the wrong part of the body when another part was intended, 34 knocking out a tooth
while a patient's jaw was under anesthetic for the removal of his tonsils, 35 and loss of an
eye while the patient plaintiff was under the influence of anesthetic, during or following an
operation for appendicitis, 36 among others.
Nevertheless, despite the fact that the scope of res ipsa loquitur has been measurably
enlarged, it does not automatically apply to all cases of medical negligence as to
mechanically shift the burden of proof to the defendant to show that he is not guilty of the
ascribed negligence. Res ipsa loquitur is not a rigid or ordinary doctrine to be perfunctorily
used but a rule to be cautiously applied, depending upon the circumstances of each case. It
is generally restricted to situations in malpractice cases where a layman is able to say, as a
matter of common knowledge and observation, that the consequences of professional care
were not as such as would ordinarily have followed if due care had been
exercised. 37 A distinction must be made between the failure to secure results, and the
occurrence of something more unusual and not ordinarily found if the service or treatment
rendered followed the usual procedure of those skilled in that particular practice. It must
be conceded that the doctrine of res ipsa loquitur can have no application in a suit against a
physician or surgeon which involves the merits of a diagnosis or of a scientific
treatment. 38 The physician or surgeon is not required at his peril to explain why any
408
particular diagnosis was not correct, or why any particular scientific treatment did not
produce the desired result. 39 Thus, res ipsa loquitur is not available in a malpractice suit if
the only showing is that the desired result of an operation or treatment was not
accomplished. 40 The real question, therefore, is whether or not in the process of the
operation any extraordinary incident or unusual event outside of the routine performance
occurred which is beyond the regular scope of customary professional activity in such
operations, which, if unexplained would themselves reasonably speak to the average man
as the negligent cause or causes of the untoward consequence. 41 If there was such
extraneous interventions, the doctrine of res ipsa loquitur may be utilized and the
defendant is called upon to explain the matter, by evidence of exculpation, if he could. 42
We find the doctrine of res ipsa loquitur appropriate in the case at bar. As will hereinafter
be explained, the damage sustained by Erlinda in her brain prior to a scheduled gall
bladder operation presents a case for the application of res ipsa loquitur.
A case strikingly similar to the one before us is Voss vs. Bridwell, 43 where the Kansas
Supreme Court in applying the res ipsa loquitur stated:
The plaintiff herein submitted himself for a mastoid operation and delivered his
person over to the care, custody and control of his physician who had complete
and exclusive control over him, but the operation was never performed. At the
time of submission he was neurologically sound and physically fit in mind and
body, but he suffered irreparable damage and injury rendering him decerebrate
and totally incapacitated. The injury was one which does not ordinarily occur
in the process of a mastoid operation or in the absence of negligence in the
administration of an anesthetic, and in the use and employment of an
endoctracheal tube. Ordinarily a person being put under anesthesia is not
rendered decerebrate as a consequence of administering such anesthesia in the
absence of negligence. Upon these facts and under these circumstances a
layman would be able to say, as a matter of common knowledge and
observation, that the consequences of professional treatment were not as such
as would ordinarily have followed if due care had been exercised.
Here the plaintiff could not have been guilty of contributory negligence because
he was under the influence of anesthetics and unconscious, and the
circumstances are such that the true explanation of event is more accessible to
the defendants than to the plaintiff for they had the exclusive control of the
instrumentalities of anesthesia.
Upon all the facts, conditions and circumstances alleged in Count II it is held
that a cause of action is stated under the doctrine of res ipsa loquitur. 44
Indeed, the principles enunciated in the aforequoted case apply with equal force here. In
the present case, Erlinda submitted herself for cholecystectomy and expected a routine
general surgery to be performed on her gall bladder. On that fateful day she delivered her
person over to the care, custody and control of private respondents who exercised complete
and exclusive control over her. At the time of submission, Erlinda was neurologically sound
and, except for a few minor discomforts, was likewise physically fit in mind and body.
However, during the administration of anesthesia and prior to the performance of
cholecystectomy she suffered irreparable damage to her brain. Thus, without undergoing
surgery, she went out of the operating room already decerebrate and totally incapacitated.
Obviously, brain damage, which Erlinda sustained, is an injury which does not normally
409
occur in the process of a gall bladder operation. In fact, this kind of situation does not in
the absence of negligence of someone in the administration of anesthesia and in the use of
endotracheal tube. Normally, a person being put under anesthesia is not rendered
decerebrate as a consequence of administering such anesthesia if the proper procedure was
followed. Furthermore, the instruments used in the administration of anesthesia, including
the endotracheal tube, were all under the exclusive control of private respondents, who are
the physicians-in-charge. Likewise, petitioner Erlinda could not have been guilty of
contributory negligence because she was under the influence of anesthetics which rendered
her unconscious.
Considering that a sound and unaffected member of the body (the brain) is injured or
destroyed while the patient is unconscious and under the immediate and exclusive control
of the physicians, we hold that a practical administration of justice dictates the application
of res ipsa loquitur. Upon these facts and under these circumstances the Court would be
able to say, as a matter of common knowledge and observation, if negligence attended the
management and care of the patient. Moreover, the liability of the physicians and the
hospital in this case is not predicated upon an alleged failure to secure the desired results
of an operation nor on an alleged lack of skill in the diagnosis or treatment as in fact no
operation or treatment was ever performed on Erlinda. Thus, upon all these initial
determination a case is made out for the application of the doctrine of res ipsa loquitur.
Nonetheless, in holding that res ipsa loquitur is available to the present case we are not
saying that the doctrine is applicable in any and all cases where injury occurs to a patient
while under anesthesia, or to any and all anesthesia cases. Each case must be viewed in its
own light and scrutinized in order to be within the res ipsa loquitur coverage.
Having in mind the applicability of the res ipsa loquitur doctrine and the presumption of
negligence allowed therein, the Court now comes to the issue of whether the Court of
Appeals erred in finding that private respondents were not negligent in the care of Erlinda
during the anesthesia phase of the operation and, if in the affirmative, whether the alleged
negligence was the proximate cause of Erlinda's comatose condition. Corollary thereto, we
shall also determine if the Court of Appeals erred in relying on the testimonies of the
witnesses for the private respondents.
In sustaining the position of private respondents, the Court of Appeals relied on the
testimonies of Dra. Gutierrez, Dra. Calderon and Dr. Jamora. In giving weight to the
testimony of Dra. Gutierrez, the Court of Appeals rationalized that she was candid enough
to admit that she experienced some difficulty in the endotracheal intubation 45 of the
patient and thus, cannot be said to be covering her negligence with falsehood. The
appellate court likewise opined that private respondents were able to show that the brain
damage sustained by Erlinda was not caused by the alleged faulty intubation but was due
to the allergic reaction of the patient to the drug Thiopental Sodium (Pentothal), a short-
acting barbiturate, as testified on by their expert witness, Dr. Jamora. On the other hand,
the appellate court rejected the testimony of Dean Herminda Cruz offered in favor of
petitioners that the cause of the brain injury was traceable to the wrongful insertion of the
tube since the latter, being a nurse, was allegedly not knowledgeable in the process of
intubation. In so holding, the appellate court returned a verdict in favor of respondents
physicians and hospital and absolved them of any liability towards Erlinda and her family.

410
We disagree with the findings of the Court of Appeals. We hold that private respondents
were unable to disprove the presumption of negligence on their part in the care of Erlinda
and their negligence was the proximate cause of her piteous condition.
In the instant case, the records are helpful in furnishing not only the logical scientific
evidence of the pathogenesis of the injury but also in providing the Court the legal nexus
upon which liability is based. As will be shown hereinafter, private respondents' own
testimonies which are reflected in the transcript of stenographic notes are replete of
signposts indicative of their negligence in the care and management of Erlinda.
With regard to Dra. Gutierrez, we find her negligent in the care of Erlinda during the
anesthesia phase. As borne by the records, respondent Dra. Gutierrez failed to properly
intubate the patient. This fact was attested to by Prof. Herminda Cruz, Dean of the Capitol
Medical Center School of Nursing and petitioner's sister-in-law, who was in the operating
room right beside the patient when the tragic event occurred. Witness Cruz testified to this
effect:
ATTY. PAJARES:
Q: In particular, what did Dra. Perfecta Gutierrez do, if any on the
patient?
A: In particular, I could see that she was intubating the patient.
Q: Do you know what happened to that intubation process
administered by Dra. Gutierrez?
ATTY. ALCERA:
She will be incompetent Your Honor.
COURT:
Witness may answer if she knows.
A: As have said, I was with the patient, I was beside the stretcher
holding the left hand of the patient and all of a sudden heard some
remarks coming from Dra. Perfecta Gutierrez herself. She was
saying "Ang hirap ma-intubate nito, mali yata ang pagkakapasok.
O lumalaki ang tiyan.
x x x           x x x          x x x
ATTY. PAJARES:
Q: From whom did you hear those words "lumalaki ang tiyan"?
A: From Dra. Perfecta Gutierrez.
x x x           x x x          x x x
Q: After hearing the phrase "lumalaki ang tiyan," what did you
notice on the person of the patient?
A: I notice (sic) some bluish discoloration on the nailbeds of the left
hand where I was at.
Q: Where was Dr. Orlino Ho[s]aka then at that particular time?
A: I saw him approaching the patient during that time.
Q: When he approached the patient, what did he do, if any?
A: He made an order to call on the anesthesiologist in the person of
Dr. Calderon.
Q: Did Dr. Calderon, upon being called, arrive inside the operating
room?
A: Yes sir.
411
 Q: What did [s]he do, if any?
A: [S]he tried to intubate the patient.
Q: What happened to the patient?
A: When Dr. Calderon try (sic) to intubate the patient, after a while
the patient's nailbed became bluish and I saw the patient was
placed in trendelenburg position.
x x x           x x x          x x x
Q: Do you know the reason why the patient was placed in that
trendelenburg position?
A: As far as I know, when a patient is in that position, there is a
decrease of blood supply to the brain. 46
x x x           x x x          x x x
The appellate court, however, disbelieved Dean Cruz's testimony in the trial court by
declaring that:
A perusal of the standard nursing curriculum in our country will show that
intubation is not taught as part of nursing procedures and techniques. Indeed,
we take judicial notice of the fact that nurses do not, and cannot, intubate.
Even on the assumption that she is fully capable of determining whether or not
a patient is properly intubated, witness Herminda Cruz, admittedly, did not
peep into the throat of the patient. (TSN, July 25, 1991, p. 13). More
importantly, there is no evidence that she ever auscultated the patient or that
she conducted any type of examination to check if the endotracheal tube was
in its proper place, and to determine the condition of the heart, lungs, and
other organs. Thus, witness Cruz's categorical statements that appellant Dra.
Gutierrez failed to intubate the appellee Erlinda Ramos and that it was Dra.
Calderon who succeeded in doing so clearly suffer from lack of sufficient
factual bases. 47
In other words, what the Court of Appeals is trying to impress is that being a nurse, and
considered a layman in the process of intubation, witness Cruz is not competent to testify
on whether or not the intubation was a success.
We do not agree with the above reasoning of the appellate court. Although witness Cruz is
not an anesthesiologist, she can very well testify upon matters on which she is capable of
observing such as, the statements and acts of the physician and surgeon, external
appearances, and manifest conditions which are observable by any one. 48 This is precisely
allowed under the doctrine of res ipsa loquitur where the testimony of expert witnesses is
not required. It is the accepted rule that expert testimony is not necessary for the proof of
negligence in non-technical matters or those of which an ordinary person may be expected
to have knowledge, or where the lack of skill or want of care is so obvious as to render
expert testimony unnecessary. 49 We take judicial notice of the fact that anesthesia
procedures have become so common, that even an ordinary person can tell if it was
administered properly. As such, it would not be too difficult to tell if the tube was properly
inserted. This kind of observation, we believe, does not require a medical degree to be
acceptable.
At any rate, without doubt, petitioner's witness, an experienced clinical nurse whose long
experience and scholarship led to her appointment as Dean of the Capitol Medical Center
School at Nursing, was fully capable of determining whether or not the intubation was a
412
success. She had extensive clinical experience starting as a staff nurse in Chicago, Illinois;
staff nurse and clinical instructor in a teaching hospital, the FEU-NRMF; Dean of the
Laguna College of Nursing in San Pablo City; and then Dean of the Capitol Medical Center
School of Nursing. 50 Reviewing witness Cruz' statements, we find that the same were
delivered in a straightforward manner, with the kind of detail, clarity, consistency and
spontaneity which would have been difficult to fabricate. With her clinical background as a
nurse, the Court is satisfied that she was able to demonstrate through her testimony what
truly transpired on that fateful day.
Most of all, her testimony was affirmed by no less than respondent Dra. Gutierrez who
admitted that she experienced difficulty in inserting the tube into Erlinda's trachea, to wit:
ATTY. LIGSAY:
Q: In this particular case, Doctora, while you were intubating at
your first attempt (sic), you did not immediately see the trachea?
DRA. GUTIERREZ:
A: Yes sir.
Q: Did you pull away the tube immediately?
A: You do not pull the . . .
Q: Did you or did you not?
A: I did not pull the tube.
Q: When you said "mahirap yata ito," what were you referring to?
A: "Mahirap yata itong i-intubate," that was the patient.
Q: So, you found some difficulty in inserting the tube?
A: Yes, because of (sic) my first attempt, I did not see right away. 51
Curiously in the case at bar, respondent Dra. Gutierrez made the haphazard defense that
she encountered hardship in the insertion of the tube in the trachea of Erlinda because it
was positioned more anteriorly (slightly deviated from the normal anatomy of a
person) 52 making it harder to locate and, since Erlinda is obese and has a short neck and
protruding teeth, it made intubation even more difficult.
The argument does not convince us. If this was indeed observed, private respondents
adduced no evidence demonstrating that they proceeded to make a thorough assessment of
Erlinda's airway, prior to the induction of anesthesia, even if this would mean postponing
the procedure. From their testimonies, it appears that the observation was made only as an
afterthought, as a means of defense.
The pre-operative evaluation of a patient prior to the administration of anesthesia is
universally observed to lessen the possibility of anesthetic accidents. Pre-operative
evaluation and preparation for anesthesia begins when the anesthesiologist reviews the
patient's medical records and visits with the patient, traditionally, the day before elective
surgery. 53 It includes taking the patient's medical history, review of current drug therapy,
physical examination and interpretation of laboratory data. 54 The physical examination
performed by the anesthesiologist is directed primarily toward the central nervous system,
cardiovascular system, lungs and upper airway. 55 A thorough analysis of the patient's
airway normally involves investigating the following: cervical spine mobility,
temporomandibular mobility, prominent central incisors, diseased or artificial teeth, ability
to visualize uvula and the thyromental distance. 56 Thus, physical characteristics of the
patient's upper airway that could make tracheal intubation difficult should be
studied. 57 Where the need arises, as when initial assessment indicates possible problems
413
(such as the alleged short neck and protruding teeth of Erlinda) a thorough examination of
the patient's airway would go a long way towards decreasing patient morbidity and
mortality.
In the case at bar, respondent Dra. Gutierrez admitted that she saw Erlinda for the first
time on the day of the operation itself, on 17 June 1985. Before this date, no prior
consultations with, or pre-operative evaluation of Erlinda was done by her. Until the day of
the operation, respondent Dra. Gutierrez was unaware of the physiological make-up and
needs of Erlinda. She was likewise not properly informed of the possible difficulties she
would face during the administration of anesthesia to Erlinda. Respondent Dra. Gutierrez'
act of seeing her patient for the first time only an hour before the scheduled operative
procedure was, therefore, an act of exceptional negligence and professional irresponsibility.
The measures cautioning prudence and vigilance in dealing with human lives lie at the core
of the physician's centuries-old Hippocratic Oath. Her failure to follow this medical
procedure is, therefore, a clear indicia of her negligence.
Respondent Dra. Gutierrez, however, attempts to gloss over this omission by playing
around with the trial court's ignorance of clinical procedure, hoping that she could get
away with it. Respondent Dra. Gutierrez tried to muddle the difference between an elective
surgery and an emergency surgery just so her failure to perform the required pre-operative
evaluation would escape unnoticed. In her testimony she asserted:
ATTY. LIGSAY:
Q: Would you agree, Doctor, that it is good medical practice to see
the patient a day before so you can introduce yourself to establish
good doctor-patient relationship and gain the trust and confidence
of the patient?
DRA. GUTIERREZ:
A: As I said in my previous statement, it depends on the operative
procedure of the anesthesiologist and in my case, with elective
cases and normal cardio-pulmonary clearance like that, I usually
don't do it except on emergency and on cases that have an
abnormalities (sic). 58
However, the exact opposite is true. In an emergency procedure, there is hardly enough
time available for the fastidious demands of pre-operative procedure so that an
anesthesiologist is able to see the patient only a few minutes before surgery, if at all.
Elective procedures, on the other hand, are operative procedures that can wait for days,
weeks or even months. Hence, in these cases, the anesthesiologist possesses the luxury of
time to be at the patient's beside to do a proper interview and clinical evaluation. There is
ample time to explain the method of anesthesia, the drugs to be used, and their possible
hazards for purposes of informed consent. Usually, the pre-operative assessment is
conducted at least one day before the intended surgery, when the patient is relaxed and
cooperative.
Erlinda's case was elective and this was known to respondent Dra. Gutierrez. Thus, she
had all the time to make a thorough evaluation of Erlinda's case prior to the operation and
prepare her for anesthesia. However, she never saw the patient at the bedside. She herself
admitted that she had seen petitioner only in the operating room, and only on the actual
date of the cholecystectomy. She negligently failed to take advantage of this important
opportunity. As such, her attempt to exculpate herself must fail.
414
Having established that respondent Dra. Gutierrez failed to perform pre-operative
evaluation of the patient which, in turn, resulted to a wrongful intubation, we now
determine if the faulty intubation is truly the proximate cause of Erlinda's comatose
condition.
Private respondents repeatedly hammered the view that the cerebral anoxia which led to
Erlinda's coma was due to bronchospasm 59 mediated by her allergic response to the drug,
Thiopental Sodium, introduced into her system. Towards this end, they presented Dr.
Jamora, a Fellow of the Philippine College of Physicians and Diplomate of the Philippine
Specialty Board of Internal Medicine, who advanced private respondents' theory that the
oxygen deprivation which led to anoxic encephalopathy, 60 was due to an unpredictable
drug reaction to the short-acting barbiturate. We find the theory of private respondents
unacceptable.
First of all, Dr. Jamora cannot be considered an authority in the field of anesthesiology
simply because he is not an anesthesiologist. Since Dr. Jamora is a pulmonologist, he
could not have been capable of properly enlightening the court about anesthesia practice
and procedure and their complications. Dr. Jamora is likewise not an allergologist and
could not therefore properly advance expert opinion on allergic-mediated processes.
Moreover, he is not a pharmacologist and, as such, could not have been capable, as an
expert would, of explaining to the court the pharmacologic and toxic effects of the supposed
culprit, Thiopental Sodium (Pentothal).
The inappropriateness and absurdity of accepting Dr. Jamora's testimony as an expert
witness in the anesthetic practice of Pentothal administration is further supported by his
own admission that he formulated his opinions on the drug not from the practical
experience gained by a specialist or expert in the administration and use of Sodium
Pentothal on patients, but only from reading certain references, to wit:
ATTY. LIGSAY:
Q: In your line of expertise on pulmonology, did you have any
occasion to use pentothal as a method of management?
DR. JAMORA:
A: We do it in conjunction with the anesthesiologist when they
have to intubate our patient.
Q: But not in particular when you practice pulmonology?
A: No.
Q: In other words, your knowledge about pentothal is based only
on what you have read from books and not by your own personal
application of the medicine pentothal?
A: Based on my personal experience also on pentothal.
Q: How many times have you used pentothal?
A: They used it on me. I went into bronchospasm during my
appendectomy.
Q: And because they have used it on you and on account of your
own personal experience you feel that you can testify on pentothal
here with medical authority?
A: No. That is why I used references to support my claims. 61
An anesthetic accident caused by a rare drug-induced bronchospasm properly falls within
the fields of anesthesia, internal medicine-allergy, and clinical pharmacology. The resulting
415
anoxic encephalopathy belongs to the field of neurology. While admittedly, many
bronchospastic-mediated pulmonary diseases are within the expertise of pulmonary
medicine, Dr. Jamora's field, the anesthetic drug-induced, allergic mediated bronchospasm
alleged in this case is within the disciplines of anesthesiology, allergology and
pharmacology. On the basis of the foregoing transcript, in which the pulmonologist himself
admitted that he could not testify about the drug with medical authority, it is clear that the
appellate court erred in giving weight to Dr. Jamora's testimony as an expert in the
administration of Thiopental Sodium.
The provision in the rules of evidence 62 regarding expert witnesses states:
Sec. 49. Opinion of expert witness. — The opinion of a witness on a matter
requiring special knowledge, skill, experience or training which he is shown to
possess, may be received in evidence.
Generally, to qualify as an expert witness, one must have acquired special knowledge of the
subject matter about which he or she is to testify, either by the study of recognized
authorities on the subject or by practical experience. 63 Clearly, Dr. Jamora does not qualify
as an expert witness based on the above standard since he lacks the necessary knowledge,
skill, and training in the field of anesthesiology. Oddly, apart from submitting testimony
from a specialist in the wrong field, private respondents' intentionally avoided providing
testimony by competent and independent experts in the proper areas.
Moreover, private respondents' theory, that Thiopental Sodium may have produced
Erlinda's coma by triggering an allergic mediated response, has no support in evidence. No
evidence of stridor, skin reactions, or wheezing — some of the more common accompanying
signs of an allergic reaction — appears on record. No laboratory data were ever presented to
the court.
In any case, private respondents themselves admit that Thiopental induced, allergic-
mediated bronchospasm happens only very rarely. If courts were to accept private
respondents' hypothesis without supporting medical proof, and against the weight of
available evidence, then every anesthetic accident would be an act of God. Evidently, the
Thiopental-allergy theory vigorously asserted by private respondents was a mere
afterthought. Such an explanation was advanced in order to advanced in order to absolve
them of any and all responsibility for the patient's condition.
In view of the evidence at hand, we are inclined to believe petitioners' stand that it was the
faulty intubation which was the proximate cause of Erlinda's comatose condition.
Proximate cause has been defined as that which, in natural and continuous sequence,
unbroken by any efficient intervening cause, produces injury, and without which the result
would not have occurred. 64 An injury or damage is proximately caused by an act or a
failure to act, whenever it appears from the evidence in the case, that the act or omission
played a substantial part in bringing about or actually causing the injury or damage; and
that the injury or damage was either a direct result or a reasonably probable consequence
of the act or omission. 65 It is the dominant, moving or producing cause.
Applying the above definition in relation to the evidence at hand, faulty intubation is
undeniably the proximate cause which triggered the chain of events leading to Erlinda's
brain damage and, ultimately, her comatosed condition.
Private respondents themselves admitted in their testimony that the first intubation was a
failure. This fact was likewise observed by witness Cruz when she heard respondent Dra.
Gutierrez remarked, "Ang hirap ma-intubate nito, mali yata ang pagkakapasok. O lumalaki
416
ang tiyan." Thereafter, witness Cruz noticed abdominal distention on the body of Erlinda.
The development of abdominal distention, together with respiratory embarrassment
indicates that the endotracheal tube entered the esophagus instead of the respiratory tree.
In other words, instead of the intended endotracheal intubation what actually took place
was an esophageal intubation. During intubation, such distention indicates that air has
entered the gastrointestinal tract through the esophagus instead of the lungs through the
trachea. Entry into the esophagus would certainly cause some delay in oxygen delivery into
the lungs as the tube which carries oxygen is in the wrong place. That abdominal
distention had been observed during the first intubation suggests that the length of time
utilized in inserting the endotracheal tube (up to the time the tube was withdrawn for the
second attempt) was fairly significant. Due to the delay in the delivery of oxygen in her
lungs Erlinda showed signs of cyanosis. 66 As stated in the testimony of Dr. Hosaka, the
lack of oxygen became apparent only after he noticed that the nailbeds of Erlinda were
already blue. 67 However, private respondents contend that a second intubation was
executed on Erlinda and this one was successfully done. We do not think so. No evidence
exists on record, beyond private respondents' bare claims, which supports the contention
that the second intubation was successful. Assuming that the endotracheal tube finally
found its way into the proper orifice of the trachea, the same gave no guarantee of oxygen
delivery, the hallmark of a successful intubation. In fact, cyanosis was again observed
immediately after the second intubation. Proceeding from this event (cyanosis), it could not
be claimed, as private respondents insist, that the second intubation was accomplished.
Even granting that the tube was successfully inserted during the second attempt, it was
obviously too late. As aptly explained by the trial court, Erlinda already suffered brain
damage as a result of the inadequate oxygenation of her brain for about four to five
minutes. 68
The above conclusion is not without basis. Scientific studies point out that intubation
problems are responsible for one-third (1/3) of deaths and serious injuries associated with
anesthesia. 69 Nevertheless, ninety-eight percent (98%) or the vast majority of difficult
intubations may be anticipated by performing a thorough evaluation of the patient's airway
prior to the operation. 70 As stated beforehand, respondent Dra. Gutierrez failed to observe
the proper pre-operative protocol which could have prevented this unfortunate incident.
Had appropriate diligence and reasonable care been used in the pre-operative evaluation,
respondent physician could have been much more prepared to meet the contingency
brought about by the perceived anatomic variations in the patient's neck and oral area,
defects which would have been easily overcome by a prior knowledge of those variations
together with a change in technique. 71 In other words, an experienced anesthesiologist,
adequately alerted by a thorough pre-operative evaluation, would have had little difficulty
going around the short neck and protruding teeth. 72 Having failed to observe common
medical standards in pre-operative management and intubation, respondent Dra.
Gutierrez' negligence resulted in cerebral anoxia and eventual coma of Erlinda.
We now determine the responsibility of respondent Dr. Orlino Hosaka as the head of the
surgical team. As the so-called "captain of the ship," 73 it is the surgeon's responsibility to
see to it that those under him perform their task in the proper manner. Respondent Dr.
Hosaka's negligence can be found in his failure to exercise the proper authority (as the
"captain" of the operative team) in not determining if his anesthesiologist observed proper
anesthesia protocols. In fact, no evidence on record exists to show that respondent Dr.
417
Hosaka verified if respondent Dra. Gutierrez properly intubated the patient. Furthermore, it
does not escape us that respondent Dr. Hosaka had scheduled another procedure in a
different hospital at the same time as Erlinda's cholecystectomy, and was in fact over three
hours late for the latter's operation. Because of this, he had little or no time to confer with
his anesthesiologist regarding the anesthesia delivery. This indicates that he was remiss in
his professional duties towards his patient. Thus, he shares equal responsibility for the
events which resulted in Erlinda's condition.
We now discuss the responsibility of the hospital in this particular incident. The unique
practice (among private hospitals) of filling up specialist staff with attending and visiting
"consultants," 74 who are allegedly not hospital employees, presents problems in
apportioning responsibility for negligence in medical malpractice cases. However, the
difficulty is only more apparent than real.
In the first place, hospitals exercise significant control in the hiring and firing of
consultants and in the conduct of their work within the hospital premises. Doctors who
apply for "consultant" slots, visiting or attending, are required to submit proof of completion
of residency, their educational qualifications; generally, evidence of accreditation by the
appropriate board (diplomate), evidence of fellowship in most cases, and references. These
requirements are carefully scrutinized by members of the hospital administration or by a
review committee set up by the hospital who either accept or reject the application. 75 This
is particularly true with respondent hospital.
After a physician is accepted, either as a visiting or attending consultant, he is normally
required to attend clinico-pathological conferences, conduct bedside rounds for clerks,
interns and residents, moderate grand rounds and patient audits and perform other tasks
and responsibilities, for the privilege of being able to maintain a clinic in the hospital,
and/or for the privilege of admitting patients into the hospital. In addition to these, the
physician's performance as a specialist is generally evaluated by a peer review committee
on the basis of mortality and morbidity statistics, and feedback from patients, nurses,
interns and residents. A consultant remiss in his duties, or a consultant who regularly falls
short of the minimum standards acceptable to the hospital or its peer review committee, is
normally politely terminated.
In other words, private hospitals, hire, fire and exercise real control over their attending
and visiting "consultant" staff. While "consultants" are not, technically employees, a point
which respondent hospital asserts in denying all responsibility for the patient's condition,
the control exercised, the hiring, and the right to terminate consultants all fulfill the
important hallmarks of an employer-employee relationship, with the exception of the
payment of wages. In assessing whether such a relationship in fact exists, the control test
is determining. Accordingly, on the basis of the foregoing, we rule that for the purpose of
allocating responsibility in medical negligence cases, an employer-employee relationship in
effect exists between hospitals and their attending and visiting physicians. This being the
case, the question now arises as to whether or not respondent hospital is solidarily liable
with respondent doctors for petitioner's condition. 76
The basis for holding an employer solidarily responsible for the negligence of its employee is
found in Article 2180 of the Civil Code which considers a person accountable not only for
his own acts but also for those of others based on the former's responsibility under a
relationship of patria potestas. 77 Such responsibility ceases when the persons or entity
concerned prove that they have observed the diligence of a good father of the family to
418
prevent damage. 78 In other words, while the burden of proving negligence rests on the
plaintiffs, once negligence is shown, the burden shifts to the respondents (parent, guardian,
teacher or employer) who should prove that they observed the diligence of a good father of a
family to prevent damage.
In the instant case, respondent hospital, apart from a general denial of its responsibility
over respondent physicians, failed to adduce evidence showing that it exercised the
diligence of a good father of a family in the hiring and supervision of the latter. It failed to
adduce evidence with regard to the degree of supervision which it exercised over its
physicians. In neglecting to offer such proof, or proof of a similar nature, respondent
hospital thereby failed to discharge its burden under the last paragraph of Article 2180.
Having failed to do this, respondent hospital is consequently solidarily responsible with its
physicians for Erlinda's condition.
Based on the foregoing, we hold that the Court of Appeals erred in accepting and relying on
the testimonies of the witnesses for the private respondents. Indeed, as shown by the above
discussions, private respondents were unable to rebut the presumption of negligence. Upon
these disquisitions we hold that private respondents are solidarily liable for damages under
Article 2176 79 of the Civil Code.
We now come to the amount of damages due petitioners. The trial court awarded a total of
P632,000.00 pesos (should be P616,000.00) in compensatory damages to the plaintiff,
"subject to its being updated" covering the period from 15 November 1985 up to 15 April
1992, based on monthly expenses for the care of the patient estimated at P8,000.00.
At current levels, the P8000/monthly amount established by the trial court at the time of
its decision would be grossly inadequate to cover the actual costs of home-based care for a
comatose individual. The calculated amount was not even arrived at by looking at the
actual cost of proper hospice care for the patient. What it reflected were the actual
expenses incurred and proved by the petitioners after they were forced to bring home the
patient to avoid mounting hospital bills.
And yet ideally, a comatose patient should remain in a hospital or be transferred to a
hospice specializing in the care of the chronically ill for the purpose of providing a proper
milieu adequate to meet minimum standards of care. In the instant case for instance,
Erlinda has to be constantly turned from side to side to prevent bedsores and hypostatic
pneumonia. Feeding is done by nasogastric tube. Food preparation should be normally
made by a dietitian to provide her with the correct daily caloric requirements and vitamin
supplements. Furthermore, she has to be seen on a regular basis by a physical therapist to
avoid muscle atrophy, and by a pulmonary therapist to prevent the accumulation of
secretions which can lead to respiratory complications.
Given these considerations, the amount of actual damages recoverable in suits arising from
negligence should at least reflect the correct minimum cost of proper care, not the cost of
the care the family is usually compelled to undertake at home to avoid bankruptcy.
However, the provisions of the Civil Code on actual or compensatory damages present us
with some difficulties.
Well-settled is the rule that actual damages which may be claimed by the plaintiff are those
suffered by him as he has duly proved. The Civil Code provides:
Art. 2199. — Except as provided by law or by stipulation, one is entitled to an
adequate compensation only for such pecuniary loss suffered by him as he has

419
 duly proved. Such compensation is referred to as actual or compensatory
damages.
Our rules on actual or compensatory damages generally assume that at the time of
litigation, the injury suffered as a consequence of an act of negligence has been completed
and that the cost can be liquidated. However, these provisions neglect to take into account
those situations, as in this case, where the resulting injury might be continuing and
possible future complications directly arising from the injury, while certain to occur, are
difficult to predict.
In these cases, the amount of damages which should be awarded, if they are to adequately
and correctly respond to the injury caused, should be one which compensates for
pecuniary loss incurred and proved, up to the time of trial; and one which would meet
pecuniary loss certain to be suffered but which could not, from the nature of the case, be
made with certainty. 80 In other words, temperate damages can and should be awarded on
top of actual or compensatory damages in instances where the injury is chronic and
continuing. And because of the unique nature of such cases, no incompatibility arises
when both actual and temperate damages are provided for. The reason is that these
damages cover two distinct phases.
As it would not be equitable — and certainly not in the best interests of the administration
of justice — for the victim in such cases to constantly come before the courts and invoke
their aid in seeking adjustments to the compensatory damages previously awarded —
temperate damages are appropriate. The amount given as temperate damages, though to a
certain extent speculative, should take into account the cost of proper care.
In the instant case, petitioners were able to provide only home-based nursing care for a
comatose patient who has remained in that condition for over a decade. Having premised
our award for compensatory damages on the amount provided by petitioners at the onset of
litigation, it would be now much more in step with the interests of justice if the value
awarded for temperate damages would allow petitioners to provide optimal care for their
loved one in a facility which generally specializes in such care. They should not be
compelled by dire circumstances to provide substandard care at home without the aid of
professionals, for anything less would be grossly inadequate. Under the circumstances, an
award of P1,500,000.00 in temperate damages would therefore be reasonable. 81
In Valenzuela vs. Court of Appeals, 82 this Court was confronted with a situation where the
injury suffered by the plaintiff would have led to expenses which were difficult to estimate
because while they would have been a direct result of the injury (amputation), and were
certain to be incurred by the plaintiff, they were likely to arise only in the future. We
awarded P1,000,000.00 in moral damages in that case.
Describing the nature of the injury, the Court therein stated:
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 the lifetime, the
420
 prosthetic devise will have to be replaced and readjusted 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.
x x x           x x x          x x x
A prosthetic devise, 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. 83
The injury suffered by Erlinda as a consequence of private respondents' negligence is
certainly much more serious than the amputation in the Valenzuela case.
Petitioner Erlinda Ramos was in her mid-forties when the incident occurred. She has been
in a comatose state for over fourteen years now. The burden of care has so far been
heroically shouldered by her husband and children, who, in the intervening years have
been deprived of the love of a wife and a mother.
Meanwhile, the actual physical, emotional and financial cost of the care of petitioner would
be virtually impossible to quantify. Even the temperate damages herein awarded would be
inadequate if petitioner's condition remains unchanged for the next ten years.
We recognized, in Valenzuela that a discussion of the victim's actual injury would not even
scratch the surface of the resulting moral damage because it would be highly speculative to
estimate the amount of emotional and moral pain, psychological damage and injury
suffered by the victim or those actually affected by the victim's condition. 84 The husband
and the children, all petitioners in this case, will have to live with the day to day
uncertainty of the patient's illness, knowing any hope of recovery is close to nil. They have
fashioned their daily lives around the nursing care of petitioner, altering their long term
goals to take into account their life with a comatose patient. They, not the respondents, are
charged with the moral responsibility of the care of the victim. The family's moral injury
and suffering in this case is clearly a real one. For the foregoing reasons, an award of
P2,000,000.00 in moral damages would be appropriate.
Finally, by way of example, exemplary damages in the amount of P100,000.00 are hereby
awarded. Considering the length and nature of the instant suit we are of the opinion that
attorney's fees valued at P100,000.00 are likewise proper.
Our courts face unique difficulty in adjudicating medical negligence cases because
physicians are not insurers of life and, they rarely set out to intentionally cause injury or
death to their patients. However, intent is immaterial in negligence cases because where
negligence exists and is proven, the same automatically gives the injured a right to
reparation for the damage caused.

421
Established medical procedures and practices, though in constant flux are devised for the
purpose of preventing complications. A physician's experience with his patients would
sometimes tempt him to deviate from established community practices, and he may end a
distinguished career using unorthodox methods without incident. However, when failure to
follow established procedure results in the evil precisely sought to be averted by observance
of the procedure and a nexus is made between the deviation and the injury or damage, the
physician would necessarily be called to account for it. In the case at bar, the failure to
observe pre-operative assessment protocol which would have influenced the intubation in a
salutary way was fatal to private respondents' case.
WHEREFORE, the decision and resolution of the appellate court appealed from are hereby
modified so as to award in favor of petitioners, and solidarily against private respondents
the following: 1) P1,352,000.00 as actual damages computed as of the date of promulgation
of this decision plus a monthly payment of P8,000.00 up to the time that petitioner Erlinda
Ramos expires or miraculously survives; 2) P2,000,000.00 as moral damages, 3)
P1,500,000.00 as temperate damages; 4) P100,000.00 each as exemplary damages and
attorney's fees; and, 5) the costs of the suit.
SO ORDERED.
Davide, Jr., C.J., Puno, Pardo and Ynares-Santiago, JJ., concur.

G.R. No. 126297             January 31, 2007

PROFESSIONAL SERVICES, INC., Petitioner,
vs.
NATIVIDAD and ENRIQUE AGANA, Respondents.
x-----------------------x
G.R. No. 126467            January 31, 2007
NATIVIDAD (Substituted by her children MARCELINO AGANA III, ENRIQUE AGANA,
JR., EMMA AGANA ANDAYA, JESUS AGANA, and RAYMUND AGANA) and ENRIQUE
AGANA, Petitioners,
vs.
JUAN FUENTES, Respondent.
x- - - - - - - - - - - - - - - - - - - -- - - - x
G.R. No. 127590            January 31, 2007
MIGUEL AMPIL, Petitioner,
vs.
NATIVIDAD AGANA and ENRIQUE AGANA, Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Hospitals, having undertaken one of mankind’s most important and delicate endeavors,
must assume the grave responsibility of pursuing it with appropriate care. The care and
service dispensed through this high trust, however technical, complex and esoteric its
character may be, must meet standards of responsibility commensurate with the
undertaking to preserve and protect the health, and indeed, the very lives of those placed in
the hospital’s keeping.1
Assailed in these three consolidated petitions for review on certiorari is the Court of
Appeals’ Decision2 dated September 6, 1996 in CA-G.R. CV No. 42062 and CA-G.R. SP No.
422
32198 affirming with modification the Decision 3 dated March 17, 1993 of the Regional Trial
Court (RTC), Branch 96, Quezon City in Civil Case No. Q-43322 and nullifying its Order
dated September 21, 1993.
The facts, as culled from the records, are:
On April 4, 1984, Natividad Agana was rushed to the Medical City General Hospital
(Medical City Hospital) because of difficulty of bowel movement and bloody anal discharge.
After a series of medical examinations, Dr. Miguel Ampil, petitioner in G.R. No. 127590,
diagnosed her to be suffering from "cancer of the sigmoid."
On April 11, 1984, Dr. Ampil, assisted by the medical staff 4 of the Medical City Hospital,
performed an anterior resection surgery on Natividad. He found that the malignancy in her
sigmoid area had spread on her left ovary, necessitating the removal of certain portions of
it. Thus, Dr. Ampil obtained the consent of Natividad’s husband, Enrique Agana, to permit
Dr. Juan Fuentes, respondent in G.R. No. 126467, to perform hysterectomy on her.
After Dr. Fuentes had completed the hysterectomy, Dr. Ampil took over, completed the
operation and closed the incision.
However, the operation appeared to be flawed. In the corresponding Record of Operation
dated April 11, 1984, the attending nurses entered these remarks:
"sponge count lacking 2
"announced to surgeon searched (sic) done but to no avail continue for closure."
On April 24, 1984, Natividad was released from the hospital. Her hospital and medical bills,
including the doctors’ fees, amounted to P60,000.00.
After a couple of days, Natividad complained of excruciating pain in her anal region. She
consulted both Dr. Ampil and Dr. Fuentes about it. They told her that the pain was the
natural consequence of the surgery. Dr. Ampil then recommended that she consult an
oncologist to examine the cancerous nodes which were not removed during the operation.
On May 9, 1984, Natividad, accompanied by her husband, went to the United States to
seek further treatment. After four months of consultations and laboratory examinations,
Natividad was told she was free of cancer. Hence, she was advised to return to the
Philippines.
On August 31, 1984, Natividad flew back to the Philippines, still suffering from pains. Two
weeks thereafter, her daughter found a piece of gauze protruding from her vagina. Upon
being informed about it, Dr. Ampil proceeded to her house where he managed to extract by
hand a piece of gauze measuring 1.5 inches in width. He then assured her that the pains
would soon vanish.
Dr. Ampil’s assurance did not come true. Instead, the pains intensified, prompting
Natividad to seek treatment at the Polymedic General Hospital. While confined there, Dr.
Ramon Gutierrez detected the presence of another foreign object in her vagina -- a foul-
smelling gauze measuring 1.5 inches in width which badly infected her vaginal vault. A
recto-vaginal fistula had formed in her reproductive organs which forced stool to excrete
through the vagina. Another surgical operation was needed to remedy the damage. Thus, in
October 1984, Natividad underwent another surgery.
On November 12, 1984, Natividad and her husband filed with the RTC, Branch 96, Quezon
City a complaint for damages against the Professional Services, Inc. (PSI), owner of the
Medical City Hospital, Dr. Ampil, and Dr. Fuentes, docketed as Civil Case No. Q-43322.
They alleged that the latter are liable for negligence for leaving two pieces of gauze inside
Natividad’s body and malpractice for concealing their acts of negligence.
423
Meanwhile, Enrique Agana also filed with the Professional Regulation Commission (PRC) an
administrative complaint for gross negligence and malpractice against Dr. Ampil and Dr.
Fuentes, docketed as Administrative Case No. 1690. The PRC Board of Medicine heard the
case only with respect to Dr. Fuentes because it failed to acquire jurisdiction over Dr. Ampil
who was then in the United States.
On February 16, 1986, pending the outcome of the above cases, Natividad died and was
duly substituted by her above-named children (the Aganas).
On March 17, 1993, the RTC rendered its Decision in favor of the Aganas, finding PSI, Dr.
Ampil and Dr. Fuentes liable for negligence and malpractice, the decretal part of which
reads:
WHEREFORE, judgment is hereby rendered for the plaintiffs ordering the defendants
PROFESSIONAL SERVICES, INC., DR. MIGUEL AMPIL and DR. JUAN FUENTES to pay to
the plaintiffs, jointly and severally, except in respect of the award for exemplary damages
and the interest thereon which are the liabilities of defendants Dr. Ampil and Dr. Fuentes
only, as follows:
1. As actual damages, the following amounts:
a. The equivalent in Philippine Currency of the total of US$19,900.00 at the
rate of P21.60-US$1.00, as reimbursement of actual expenses incurred in the
United States of America;
b. The sum of P4,800.00 as travel taxes of plaintiffs and their physician
daughter;
c. The total sum of P45,802.50, representing the cost of hospitalization at
Polymedic Hospital, medical fees, and cost of the saline solution;
2. As moral damages, the sum of P2,000,000.00;
3. As exemplary damages, the sum of P300,000.00;
4. As attorney’s fees, the sum of P250,000.00;
5. Legal interest on items 1 (a), (b), and (c); 2; and 3 hereinabove, from date of filing of
the complaint until full payment; and
6. Costs of suit.
SO ORDERED.
Aggrieved, PSI, Dr. Fuentes and Dr. Ampil interposed an appeal to the Court of Appeals,
docketed as CA-G.R. CV No. 42062.
Incidentally, on April 3, 1993, the Aganas filed with the RTC a motion for a partial
execution of its Decision, which was granted in an Order dated May 11, 1993. Thereafter,
the sheriff levied upon certain properties of Dr. Ampil and sold them for P451,275.00 and
delivered the amount to the Aganas.
Following their receipt of the money, the Aganas entered into an agreement with PSI and
Dr. Fuentes to indefinitely suspend any further execution of the RTC Decision. However,
not long thereafter, the Aganas again filed a motion for an alias writ of execution against
the properties of PSI and Dr. Fuentes. On September 21, 1993, the RTC granted the motion
and issued the corresponding writ, prompting Dr. Fuentes to file with the Court of Appeals
a petition for certiorari and prohibition, with prayer for preliminary injunction, docketed as
CA-G.R. SP No. 32198. During its pendency, the Court of Appeals issued a
Resolution5 dated October 29, 1993 granting Dr. Fuentes’ prayer for injunctive relief.
On January 24, 1994, CA-G.R. SP No. 32198 was consolidated with CA-G.R. CV No. 42062.

424
Meanwhile, on January 23, 1995, the PRC Board of Medicine rendered its Decision 6 in
Administrative Case No. 1690 dismissing the case against Dr. Fuentes. The Board held that
the prosecution failed to show that Dr. Fuentes was the one who left the two pieces of
gauze inside Natividad’s body; and that he concealed such fact from Natividad.
On September 6, 1996, the Court of Appeals rendered its Decision jointly disposing of CA-
G.R. CV No. 42062 and CA-G.R. SP No. 32198, thus:
WHEREFORE, except for the modification that the case against defendant-appellant Dr.
Juan Fuentes is hereby DISMISSED, and with the pronouncement that defendant-
appellant Dr. Miguel Ampil is liable to reimburse defendant-appellant Professional Services,
Inc., whatever amount the latter will pay or had paid to the plaintiffs-appellees, the decision
appealed from is hereby AFFIRMED and the instant appeal DISMISSED.
Concomitant with the above, the petition for certiorari and prohibition filed by herein
defendant-appellant Dr. Juan Fuentes in CA-G.R. SP No. 32198 is hereby GRANTED and
the challenged order of the respondent judge dated September 21, 1993, as well as the
alias writ of execution issued pursuant thereto are hereby NULLIFIED and SET ASIDE. The
bond posted by the petitioner in connection with the writ of preliminary injunction issued
by this Court on November 29, 1993 is hereby cancelled.
Costs against defendants-appellants Dr. Miguel Ampil and Professional Services, Inc.
SO ORDERED.
Only Dr. Ampil filed a motion for reconsideration, but it was denied in a Resolution 7 dated
December 19, 1996.
Hence, the instant consolidated petitions.
In G.R. No. 126297, PSI alleged in its petition that the Court of Appeals erred in holding
that: (1) it is estopped from raising the defense that Dr. Ampil is not its employee; (2) it is
solidarily liable with Dr. Ampil; and (3) it is not entitled to its counterclaim against the
Aganas. PSI contends that Dr. Ampil is not its employee, but a mere consultant or
independent contractor. As such, he alone should answer for his negligence.
In G.R. No. 126467, the Aganas maintain that the Court of Appeals erred in finding that
Dr. Fuentes is not guilty of negligence or medical malpractice, invoking the doctrine of res
ipsa loquitur. They contend that the pieces of gauze are prima facie proofs that the
operating surgeons have been negligent.
Finally, in G.R. No. 127590, Dr. Ampil asserts that the Court of Appeals erred in finding
him liable for negligence and malpractice sans evidence that he left the two pieces of gauze
in Natividad’s vagina. He pointed to other probable causes, such as: (1) it was Dr. Fuentes
who used gauzes in performing the hysterectomy; (2) the attending nurses’ failure to
properly count the gauzes used during surgery; and (3) the medical intervention of the
American doctors who examined Natividad in the United States of America.
For our resolution are these three vital issues: first, whether the Court of Appeals erred in
holding Dr. Ampil liable for negligence and malpractice; second, whether the Court of
Appeals erred in absolving Dr. Fuentes of any liability; and third, whether PSI may be held
solidarily liable for the negligence of Dr. Ampil.
I - G.R. No. 127590
Whether the Court of Appeals Erred in Holding Dr. Ampil
Liable for Negligence and Malpractice.
Dr. Ampil, in an attempt to absolve himself, gears the Court’s attention to other possible
causes of Natividad’s detriment. He argues that the Court should not discount either of the
425
following possibilities: first, Dr. Fuentes left the gauzes in Natividad’s body after performing
hysterectomy; second, the attending nurses erred in counting the gauzes; and third, the
American doctors were the ones who placed the gauzes in Natividad’s body.
Dr. Ampil’s arguments are purely conjectural and without basis. Records show that he did
not present any evidence to prove that the American doctors were the ones who put or left
the gauzes in Natividad’s body. Neither did he submit evidence to rebut the correctness of
the record of operation, particularly the number of gauzes used. As to the alleged
negligence of Dr. Fuentes, we are mindful that Dr. Ampil examined his (Dr. Fuentes’) work
and found it in order.
The glaring truth is that all the major circumstances, taken together, as specified by the
Court of Appeals, directly point to Dr. Ampil as the negligent party, thus:
First, it is not disputed that the surgeons used gauzes as sponges to control the
bleeding of the patient during the surgical operation.
Second, immediately after the operation, the nurses who assisted in the surgery
noted in their report that the ‘sponge count (was) lacking 2’; that such anomaly was
‘announced to surgeon’ and that a ‘search was done but to no avail’ prompting Dr.
Ampil to ‘continue for closure’ x x x.
Third, after the operation, two (2) gauzes were extracted from the same spot of the
body of Mrs. Agana where the surgery was performed.
An operation requiring the placing of sponges in the incision is not complete until the
sponges are properly removed, and it is settled that the leaving of sponges or other foreign
substances in the wound after the incision has been closed is at least prima facie
negligence by the operating surgeon. 8 To put it simply, such act is considered so
inconsistent with due care as to raise an inference of negligence. There are even legions of
authorities to the effect that such act is negligence per se. 9
Of course, the Court is not blind to the reality that there are times when danger to a
patient’s life precludes a surgeon from further searching missing sponges or foreign objects
left in the body. But this does not leave him free from any obligation. Even if it has been
shown that a surgeon was required by the urgent necessities of the case to leave a sponge
in his patient’s abdomen, because of the dangers attendant upon delay, still, it is his legal
duty to so inform his patient within a reasonable time thereafter by advising her of what he
had been compelled to do. This is in order that she might seek relief from the effects of the
foreign object left in her body as her condition might permit. The ruling in Smith v.
Zeagler10 is explicit, thus:
The removal of all sponges used is part of a surgical operation, and when a physician or
surgeon fails to remove a sponge he has placed in his patient’s body that should be
removed as part of the operation, he thereby leaves his operation uncompleted and creates
a new condition which imposes upon him the legal duty of calling the new condition to his
patient’s attention, and endeavoring with the means he has at hand to minimize and avoid
untoward results likely to ensue therefrom.
Here, Dr. Ampil did not inform Natividad about the missing two pieces of gauze. Worse, he
even misled her that the pain she was experiencing was the ordinary consequence of her
operation. Had he been more candid, Natividad could have taken the immediate and
appropriate medical remedy to remove the gauzes from her body. To our mind, what was
initially an act of negligence by Dr. Ampil has ripened into a deliberate wrongful act of
deceiving his patient.
426
This is a clear case of medical malpractice or more appropriately, medical negligence. To
successfully pursue this kind of case, a patient must only prove that a health care provider
either failed to do something which a reasonably prudent health care provider would have
done, or that he did something that a reasonably prudent provider would not have done;
and that failure or action caused injury to the patient. 11 Simply put, the elements are duty,
breach, injury and proximate causation. Dr, Ampil, as the lead surgeon, had the duty to
remove all foreign objects, such as gauzes, from Natividad’s body before closure of the
incision. When he failed to do so, it was his duty to inform Natividad about it. Dr. Ampil
breached both duties. Such breach caused injury to Natividad, necessitating her further
examination by American doctors and another surgery. That Dr. Ampil’s negligence is the
proximate cause12 of Natividad’s injury could be traced from his act of closing the incision
despite the information given by the attending nurses that two pieces of gauze were still
missing. That they were later on extracted from Natividad’s vagina established the causal
link between Dr. Ampil’s negligence and the injury. And what further aggravated such
injury was his deliberate concealment of the missing gauzes from the knowledge of
Natividad and her family.
II - G.R. No. 126467
Whether the Court of Appeals Erred in Absolving
Dr. Fuentes of any Liability
The Aganas assailed the dismissal by the trial court of the case against Dr. Fuentes on the
ground that it is contrary to the doctrine of res ipsa loquitur. According to them, the fact
that the two pieces of gauze were left inside Natividad’s body is a prima facie evidence of Dr.
Fuentes’ negligence.
We are not convinced.
Literally, res ipsa loquitur means "the thing speaks for itself." It is the rule that the fact of
the occurrence of an injury, taken with the surrounding circumstances, may permit an
inference or raise a presumption of negligence, or make out a plaintiff’s prima facie case,
and present a question of fact for defendant to meet with an explanation. 13 Stated
differently, where the thing which caused the injury, without the fault of the injured, is
under the exclusive control of the defendant and the injury is such that it should not have
occurred if he, having such control used proper care, it affords reasonable evidence, in the
absence of explanation that the injury arose from the defendant’s want of care, and the
burden of proof is shifted to him to establish that he has observed due care and diligence. 14
From the foregoing statements of the rule, the requisites for the applicability of the doctrine
of res ipsa loquitur are: (1) the occurrence of an injury; (2) the thing which caused the
injury was under the control and management of the defendant; (3) the occurrence was
such that in the ordinary course of things, would not have happened if those who had
control or management used proper care; and (4) the absence of explanation by the
defendant. Of the foregoing requisites, the most instrumental is the "control and
management of the thing which caused the injury."15
We find the element of "control and management of the thing which caused the injury" to
be wanting. Hence, the doctrine of res ipsa loquitur will not lie.
It was duly established that Dr. Ampil was the lead surgeon during the operation of
Natividad. He requested the assistance of Dr. Fuentes only to perform hysterectomy when
he (Dr. Ampil) found that the malignancy in her sigmoid area had spread to her left ovary.
Dr. Fuentes performed the surgery and thereafter reported and showed his work to Dr.
427
Ampil. The latter examined it and finding everything to be in order, allowed Dr. Fuentes to
leave the operating room. Dr. Ampil then resumed operating on Natividad. He was about to
finish the procedure when the attending nurses informed him that two pieces of gauze were
missing. A "diligent search" was conducted, but the misplaced gauzes were not found. Dr.
Ampil then directed that the incision be closed. During this entire period, Dr. Fuentes was
no longer in the operating room and had, in fact, left the hospital.
Under the "Captain of the Ship" rule, the operating surgeon is the person in complete
charge of the surgery room and all personnel connected with the operation. Their duty is to
obey his orders.16 As stated before, Dr. Ampil was the lead surgeon. In other words, he was
the "Captain of the Ship." That he discharged such role is evident from his following
conduct: (1) calling Dr. Fuentes to perform a hysterectomy; (2) examining the work of Dr.
Fuentes and finding it in order; (3) granting Dr. Fuentes’ permission to leave; and (4)
ordering the closure of the incision. To our mind, it was this act of ordering the closure of
the incision notwithstanding that two pieces of gauze remained unaccounted for, that
caused injury to Natividad’s body. Clearly, the control and management of the thing which
caused the injury was in the hands of Dr. Ampil, not Dr. Fuentes.
In this jurisdiction, res ipsa loquitur is not a rule of substantive law, hence, does not per se
create or constitute an independent or separate ground of liability, being a mere evidentiary
rule.17 In other words, mere invocation and application of the doctrine does not dispense
with the requirement of proof of negligence. Here, the negligence was proven to have been
committed by Dr. Ampil and not by Dr. Fuentes.
III - G.R. No. 126297
Whether PSI Is Liable for the Negligence of Dr. Ampil
The third issue necessitates a glimpse at the historical development of hospitals and the
resulting theories concerning their liability for the negligence of physicians.
Until the mid-nineteenth century, hospitals were generally charitable institutions, providing
medical services to the lowest classes of society, without regard for a patient’s ability to
pay.18 Those who could afford medical treatment were usually treated at home by their
doctors.19 However, the days of house calls and philanthropic health care are over. The
modern health care industry continues to distance itself from its charitable past and has
experienced a significant conversion from a not-for-profit health care to for-profit hospital
businesses. Consequently, significant changes in health law have accompanied the
business-related changes in the hospital industry. One important legal change is an
increase in hospital liability for medical malpractice. Many courts now allow claims for
hospital vicarious liability under the theories of respondeat superior, apparent authority,
ostensible authority, or agency by estoppel. 20
In this jurisdiction, the statute governing liability for negligent acts is Article 2176 of the
Civil Code, which reads:
Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.
A derivative of this provision is Article 2180, the rule governing vicarious liability under the
doctrine of respondeat superior, thus:
ART. 2180. The obligation imposed by Article 2176 is demandable not only for one’s own
acts or omissions, but also for those of persons for whom one is responsible.
428
 x x x x x x
The owners and managers of an establishment or enterprise are likewise responsible for
damages caused by their employees in the service of the branches in which the latter are
employed or on the occasion of their functions.
Employers shall be liable for the damages caused by their employees and household
helpers acting within the scope of their assigned tasks even though the former are not
engaged in any business or industry.
x x x x x x
The responsibility treated of in this article shall cease when the persons herein mentioned
prove that they observed all the diligence of a good father of a family to prevent damage.
A prominent civilist commented that professionals engaged by an employer, such as
physicians, dentists, and pharmacists, are not "employees" under this article because the
manner in which they perform their work is not within the control of the latter (employer).
In other words, professionals are considered personally liable for the fault or negligence
they commit in the discharge of their duties, and their employer cannot be held liable for
such fault or negligence. In the context of the present case, "a hospital cannot be held liable
for the fault or negligence of a physician or surgeon in the treatment or operation of
patients."21
The foregoing view is grounded on the traditional notion that the professional status and
the very nature of the physician’s calling preclude him from being classed as an agent or
employee of a hospital, whenever he acts in a professional capacity. 22 It has been said that
medical practice strictly involves highly developed and specialized knowledge, 23 such that
physicians are generally free to exercise their own skill and judgment in rendering medical
services sans interference.24 Hence, when a doctor practices medicine in a hospital setting,
the hospital and its employees are deemed to subserve him in his ministrations to the
patient and his actions are of his own responsibility. 25
The case of Schloendorff v. Society of New York Hospital 26 was then considered an authority
for this view. The "Schloendorff doctrine" regards a physician, even if employed by a
hospital, as an independent contractor because of the skill he exercises and the lack of
control exerted over his work. Under this doctrine, hospitals are exempt from the
application of the respondeat superior principle for fault or negligence committed by
physicians in the discharge of their profession.
However, the efficacy of the foregoing doctrine has weakened with the significant
developments in medical care. Courts came to realize that modern hospitals are
increasingly taking active role in supplying and regulating medical care to patients. No
longer were a hospital’s functions limited to furnishing room, food, facilities for treatment
and operation, and attendants for its patients. Thus, in Bing v. Thunig, 27 the New York
Court of Appeals deviated from the Schloendorff doctrine, noting that modern hospitals
actually do far more than provide facilities for treatment. Rather, they regularly employ, on
a salaried basis, a large staff of physicians, interns, nurses, administrative and manual
workers. They charge patients for medical care and treatment, even collecting for such
services through legal action, if necessary. The court then concluded that there is no
reason to exempt hospitals from the universal rule of respondeat superior.
In our shores, the nature of the relationship between the hospital and the physicians is
rendered inconsequential in view of our categorical pronouncement in Ramos v. Court of
Appeals28 that for purposes of apportioning responsibility in medical negligence cases, an
429
employer-employee relationship in effect exists between hospitals and their attending and
visiting physicians. This Court held:
"We now discuss the responsibility of the hospital in this particular incident. The unique
practice (among private hospitals) of filling up specialist staff with attending and visiting
"consultants," who are allegedly not hospital employees, presents problems in apportioning
responsibility for negligence in medical malpractice cases. However, the difficulty is more
apparent than real.
In the first place, hospitals exercise significant control in the hiring and firing of
consultants and in the conduct of their work within the hospital premises. Doctors who
apply for ‘consultant’ slots, visiting or attending, are required to submit proof of completion
of residency, their educational qualifications, generally, evidence of accreditation by the
appropriate board (diplomate), evidence of fellowship in most cases, and references. These
requirements are carefully scrutinized by members of the hospital administration or by a
review committee set up by the hospital who either accept or reject the application. x x x.
After a physician is accepted, either as a visiting or attending consultant, he is normally
required to attend clinico-pathological conferences, conduct bedside rounds for clerks,
interns and residents, moderate grand rounds and patient audits and perform other tasks
and responsibilities, for the privilege of being able to maintain a clinic in the hospital,
and/or for the privilege of admitting patients into the hospital. In addition to these, the
physician’s performance as a specialist is generally evaluated by a peer review committee
on the basis of mortality and morbidity statistics, and feedback from patients, nurses,
interns and residents. A consultant remiss in his duties, or a consultant who regularly falls
short of the minimum standards acceptable to the hospital or its peer review committee, is
normally politely terminated.
In other words, private hospitals, hire, fire and exercise real control over their attending
and visiting ‘consultant’ staff. While ‘consultants’ are not, technically employees, x x x, the
control exercised, the hiring, and the right to terminate consultants all fulfill the important
hallmarks of an employer-employee relationship, with the exception of the payment of
wages. In assessing whether such a relationship in fact exists, the control test is
determining. Accordingly, on the basis of the foregoing, we rule that for the purpose of
allocating responsibility in medical negligence cases, an employer-employee relationship in
effect exists between hospitals and their attending and visiting physicians. "
But the Ramos pronouncement is not our only basis in sustaining PSI’s liability. Its liability
is also anchored upon the agency principle of apparent authority or agency by estoppel and
the doctrine of corporate negligence which have gained acceptance in the determination of a
hospital’s liability for negligent acts of health professionals. The present case serves as a
perfect platform to test the applicability of these doctrines, thus, enriching our
jurisprudence.
Apparent authority, or what is sometimes referred to as the "holding
out" theory, or doctrine of ostensible agency or agency by estoppel, 29 has its origin from the
law of agency. It imposes liability, not as the result of the reality of a contractual
relationship, but rather because of the actions of a principal or an employer in somehow
misleading the public into believing that the relationship or the authority exists. 30 The
concept is essentially one of estoppel and has been explained in this manner:
"The principal is bound by the acts of his agent with the apparent authority which he
knowingly permits the agent to assume, or which he holds the agent out to the public as
430
possessing. The question in every case is whether the principal has by his voluntary act
placed the agent in such a situation that a person of ordinary prudence, conversant with
business usages and the nature of the particular business, is justified in presuming that
such agent has authority to perform the particular act in question. 31
The applicability of apparent authority in the field of hospital liability was upheld long time
ago in Irving v. Doctor Hospital of Lake Worth, Inc. 32 There, it was explicitly stated that
"there does not appear to be any rational basis for excluding the concept of apparent
authority from the field of hospital liability." Thus, in cases where it can be shown that a
hospital, by its actions, has held out a particular physician as its agent and/or employee
and that a patient has accepted treatment from that physician in the reasonable belief that
it is being rendered in behalf of the hospital, then the hospital will be liable for the
physician’s negligence.
Our jurisdiction recognizes the concept of an agency by implication or estoppel. Article
1869 of the Civil Code reads:
ART. 1869. Agency may be express, or implied from the acts of the principal, from his
silence or lack of action, or his failure to repudiate the agency, knowing that another
person is acting on his behalf without authority.
In this case, PSI publicly displays in the lobby of the Medical City Hospital the names and
specializations of the physicians associated or accredited by it, including those of Dr. Ampil
and Dr. Fuentes. We concur with the Court of Appeals’ conclusion that it "is now estopped
from passing all the blame to the physicians whose names it proudly paraded in the public
directory leading the public to believe that it vouched for their skill and competence."
Indeed, PSI’s act is tantamount to holding out to the public that Medical City Hospital,
through its accredited physicians, offers quality health care services. By accrediting Dr.
Ampil and Dr. Fuentes and publicly advertising their qualifications, the hospital created the
impression that they were its agents, authorized to perform medical or surgical services for
its patients. As expected, these patients, Natividad being one of them, accepted the services
on the reasonable belief that such were being rendered by the hospital or its employees,
agents, or servants. The trial court correctly pointed out:
x x x regardless of the education and status in life of the patient, he ought not be burdened
with the defense of absence of employer-employee relationship between the hospital and
the independent physician whose name and competence are certainly certified to the
general public by the hospital’s act of listing him and his specialty in its lobby directory, as
in the case herein. The high costs of today’s medical and health care should at least exact
on the hospital greater, if not broader, legal responsibility for the conduct of treatment and
surgery within its facility by its accredited physician or surgeon, regardless of whether he is
independent or employed."33
The wisdom of the foregoing ratiocination is easy to discern. Corporate entities, like PSI, are
capable of acting only through other individuals, such as physicians. If these accredited
physicians do their job well, the hospital succeeds in its mission of offering quality medical
services and thus profits financially. Logically, where negligence mars the quality of its
services, the hospital should not be allowed to escape liability for the acts of its ostensible
agents.
We now proceed to the doctrine of corporate negligence or corporate responsibility.
One allegation in the complaint in Civil Case No. Q-43332 for negligence and malpractice is
that PSI as owner, operator and manager of Medical City Hospital, "did not perform the
431
necessary supervision nor exercise diligent efforts in the supervision of Drs. Ampil and
Fuentes and its nursing staff, resident doctors, and medical interns who assisted Drs.
Ampil and Fuentes in the performance of their duties as surgeons." 34 Premised on the
doctrine of corporate negligence, the trial court held that PSI is directly liable for such
breach of duty.
We agree with the trial court.
Recent years have seen the doctrine of corporate negligence as the judicial answer to the
problem of allocating hospital’s liability for the negligent acts of health practitioners, absent
facts to support the application of respondeat superior or apparent authority. Its
formulation proceeds from the judiciary’s acknowledgment that in these modern times, the
duty of providing quality medical service is no longer the sole prerogative and responsibility
of the physician. The modern hospitals have changed structure. Hospitals now tend to
organize a highly professional medical staff whose competence and performance need to be
monitored by the hospitals commensurate with their inherent responsibility to provide
quality medical care.35
The doctrine has its genesis in Darling v. Charleston Community Hospital. 36 There, the
Supreme Court of Illinois held that "the jury could have found a hospital negligent, inter
alia, in failing to have a sufficient number of trained nurses attending the patient; failing to
require a consultation with or examination by members of the hospital staff; and failing to
review the treatment rendered to the patient." On the basis of Darling, other jurisdictions
held that a hospital’s corporate negligence extends to permitting a physician known to be
incompetent to practice at the hospital. 37 With the passage of time, more duties were
expected from hospitals, among them: (1) the use of reasonable care in the maintenance of
safe and adequate facilities and equipment; (2) the selection and retention of competent
physicians; (3) the overseeing or supervision of all persons who practice medicine within its
walls; and (4) the formulation, adoption and enforcement of adequate rules and policies
that ensure quality care for its patients. 38 Thus, in Tucson Medical Center, Inc. v.
Misevich,39 it was held that a hospital, following the doctrine of corporate responsibility,
has the duty to see that it meets the standards of responsibilities for the care of patients.
Such duty includes the proper supervision of the members of its medical staff. And in Bost
v. Riley,40 the court concluded that a patient who enters a hospital does so with the
reasonable expectation that it will attempt to cure him. The hospital accordingly has the
duty to make a reasonable effort to monitor and oversee the treatment prescribed and
administered by the physicians practicing in its premises.
In the present case, it was duly established that PSI operates the Medical City Hospital for
the purpose and under the concept of providing comprehensive medical services to the
public. Accordingly, it has the duty to exercise reasonable care to protect from harm all
patients admitted into its facility for medical treatment. Unfortunately, PSI failed to perform
such duty. The findings of the trial court are convincing, thus:
x x x PSI’s liability is traceable to its failure to conduct an investigation of the matter
reported in the nota bene of the count nurse. Such failure established PSI’s part in the dark
conspiracy of silence and concealment about the gauzes. Ethical considerations, if not also
legal, dictated the holding of an immediate inquiry into the events, if not for the benefit of
the patient to whom the duty is primarily owed, then in the interest of arriving at the truth.
The Court cannot accept that the medical and the healing professions, through their
members like defendant surgeons, and their institutions like PSI’s hospital facility, can
432
callously turn their backs on and disregard even a mere probability of mistake or
negligence by refusing or failing to investigate a report of such seriousness as the one in
Natividad’s case.
It is worthy to note that Dr. Ampil and Dr. Fuentes operated on Natividad with the
assistance of the Medical City Hospital’s staff, composed of resident doctors, nurses, and
interns. As such, it is reasonable to conclude that PSI, as the operator of the hospital, has
actual or constructive knowledge of the procedures carried out, particularly the report of
the attending nurses that the two pieces of gauze were missing. In Fridena v. Evans, 41 it
was held that a corporation is bound by the knowledge acquired by or notice given to its
agents or officers within the scope of their authority and in reference to a matter to which
their authority extends. This means that the knowledge of any of the staff of Medical City
Hospital constitutes knowledge of PSI. Now, the failure of PSI, despite the attending nurses’
report, to investigate and inform Natividad regarding the missing gauzes amounts to
callous negligence. Not only did PSI breach its duties to oversee or supervise all persons
who practice medicine within its walls, it also failed to take an active step in fixing the
negligence committed. This renders PSI, not only vicariously liable for the negligence of Dr.
Ampil under Article 2180 of the Civil Code, but also directly liable for its own negligence
under Article 2176. In Fridena, the Supreme Court of Arizona held:
x x x In recent years, however, the duty of care owed to the patient by the hospital has
expanded. The emerging trend is to hold the hospital responsible where the hospital has
failed to monitor and review medical services being provided within its walls. See Kahn
Hospital Malpractice Prevention, 27 De Paul . Rev. 23 (1977).
Among the cases indicative of the ‘emerging trend’ is Purcell v. Zimbelman, 18 Ariz. App.
75,500 P. 2d 335 (1972). In Purcell, the hospital argued that it could not be held liable for
the malpractice of a medical practitioner because he was an independent contractor within
the hospital. The Court of Appeals pointed out that the hospital had created a professional
staff whose competence and performance was to be monitored and reviewed by the
governing body of the hospital, and the court held that a hospital would be negligent where
it had knowledge or reason to believe that a doctor using the facilities was employing a
method of treatment or care which fell below the recognized standard of care.
Subsequent to the Purcell decision, the Arizona Court of Appeals held that a hospital has
certain inherent responsibilities regarding the quality of medical care furnished to patients
within its walls and it must meet the standards of responsibility commensurate with this
undertaking. Beeck v. Tucson General Hospital, 18 Ariz. App. 165, 500 P. 2d 1153 (1972).
This court has confirmed the rulings of the Court of Appeals that a hospital has the duty of
supervising the competence of the doctors on its staff. x x x.
x x x x x x
In the amended complaint, the plaintiffs did plead that the operation was performed at the
hospital with its knowledge, aid, and assistance, and that the negligence of the defendants
was the proximate cause of the patient’s injuries. We find that such general allegations of
negligence, along with the evidence produced at the trial of this case, are sufficient to
support the hospital’s liability based on the theory of negligent supervision."
Anent the corollary issue of whether PSI is solidarily liable with Dr. Ampil for damages, let
it be emphasized that PSI, apart from a general denial of its responsibility, failed to adduce
evidence showing that it exercised the diligence of a good father of a family in the
accreditation and supervision of the latter. In neglecting to offer such proof, PSI failed to
433
discharge its burden under the last paragraph of Article 2180 cited earlier, and, therefore,
must be adjudged solidarily liable with Dr. Ampil. Moreover, as we have discussed, PSI is
also directly liable to the Aganas.
One final word. Once a physician undertakes the treatment and care of a patient, the law
imposes on him certain obligations. In order to escape liability, he must possess that
reasonable degree of learning, skill and experience required by his profession. At the same
time, he must apply reasonable care and diligence in the exercise of his skill and the
application of his knowledge, and exert his best judgment.
WHEREFORE, we DENY all the petitions and AFFIRM the challenged Decision of the Court
of Appeals in CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198.
Costs against petitioners PSI and Dr. Miguel Ampil.
SO ORDERED.
ANGELINA SANDOVAL-GUTIERREZ
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
Chairperson

G.R. No. 227990, March 07, 2018

CITYSTATE SAVINGS BANK, Petitioner, v. TERESITA TOBIAS AND SHELLIDIE
VALDEZ, Respondents.
DECISION
REYES, JR., J.:
This is a petition for review on certiorari1 under Rule 45 of the Rules of Court seeking to
annul and set aside the Decision 2 dated May 31, 2016 and Resolution 3 dated October 10,
2016 issued by the Court of Appeals (CA) in CA-G.R. CV No. 102545.
The Antecedent Facts

Rolando Robles (hereinafter referred to as Robles), a certified public accountant, has been
employed with Citystate Savings Bank (hereinafter referred to as the petitioner) since July
1998 then as Accountant-trainee for its Chino Roces Branch. On September 6, 2000,
Robies was promoted as acting manager for petitioner's Baliuag, Bulacan branch, and
eventually as manager.4

Sometime in 2002, respondent Teresita Tobias (hereinafter referred to as Tobias), a meat

vendor at the Baliuag Public Market, was introduced by her youngest son to Robies, branch
manager of petitioner's Baliuag, Bulacan branch.5

Robies persuaded Tobias to open an account with the petitioner, and thereafter to place her
money in some high interest rate mechanism, to which the latter yielded. 6

Thereafter, Robies would frequent Tobias' stall at the public market to deliver the interest
earned by her deposit accounts in the amount of Php 2,000.00. In turn, Tobias would hand
434
over her passbook to Robies for updating. The passbook would be returned the following
day with typewritten entries but without the corresponding counter signatures. 7

Tobias was later offered by Robies to sign-up in petitioner's back-to-back scheme which is
supposedly offered only to petitioner's most valued clients. Under the scheme, the
depositors authorize the bank to use their bank deposits and invest the same in different
business ventures that yield high interest. Robies allegedly promised that the interest
previously earned by Tobias would be doubled and assured her that he will do all the paper
work. Lured by the attractive offer, Tobias signed the pertinent documents without reading
its contents and invested a total of Php 1,800,000.00 to petitioner through Robies. Later,
Tobias became sickly, thus she included her daughter and herein respondent Shellidie
Valdez (hereinafter referred to as Valdez), as co-depositor in her accounts with the
petitioner.8

In 2005, Robies failed to remit to respondents the interest as scheduled. Respondents tried
to reach Robies but he can no longer be found; their calls were also left unanswered. In a
meeting with Robies' siblings, it was disclosed to the respondents that Robies withdrew the
money and appropriated it for personal use. Robies later talked to the respondents,
promised that he would return the money by installments and pleaded that they do not
report the incident to the petitioner. Robies however reneged on his promise. Petitioner also
refused to make arrangements for the return of respondents' money despite several
demands.9

On January 8, 2007, respondents filed a Complaint for sum of money and damages.
against Robles and the petitioner.10 In their Complaint, respondents alleged that Robles
committed fraud in the performance of his duties as branch manager when he lured Tobias
in signing several pieces of blank documents, under the assurance as bank manager of
petitioner, everything was in order.11

After due proceedings, the Regional Trial Court (RTC), on February 12, 2014, rendered its
Decision,12viz.:
WHEREFORE, in light of the foregoing, judgment is hereby rendered ordering defendant
Robles to pay plaintiff the following:
1. the amount of Php1,800,000.00 as actual damages plus legal rate of interest
from the filing of the complaint until fully paid;
2. the amount of Php100,000.00 as moral damages; and
3. the amount of Php50,000.00 as exemplary damages.
The plaintiffs claim for attorney's fees and litigation expenses are DENIED for lack of merit.

Further, defendant bank is absolved of any liability. Likewise, all counterclaims and cross-
claims are DENIED for lack of merit.

SO ORDERED.13
Ruling of the CA

435
The matter was elevated to the CA. The CA in its Decision 14 dated May 31, 2016, found the
appeal meritorious and accordingly, reversed and set aside the RTC's decision, in this wise:
WHEREFORE, the Appeal is hereby GRANTED. The Decision Dated 12 February 2014 of
the [RTC], Third Judicial Region, Malolos City, Bulacan, Branch 83, in Civil Case No. 11-M-
07, is MODIFIED in that [petitioner] and [Robles] are JOINTLY and SOLIDARILY to pay
[respondents] the amounts set forth in the assailed Decisions as well as attorney's fees in
the amount of ONE HUNDRED THOUSAND PESOS (P 100,000.00).

SO ORDERED.15
Petitioner sought a reconsideration of the decision, but it was denied by the CA in its
Resolution16 dated October 10, 2016.

In the instant petition, respondents put forward the following arguments to support their
position:
V
ARGUMENTS

IN RENDERING THE ASSAILED DECISION AND RESOLUTION, THE CA DECIDED

QUESTIONS OF SUBSTANCE WHICH ARE NOT IN ACCORD WITH APPLICABLE LAWS
AND JURISPRUDENCE.
[A]

THE CA SERIOUSLY ERRED IN RULING THAT THE DOCTRINE OF APPARENT AUTHORITY

IS APPLICABLE IN THIS CASE.
[B]

THE CA SERIOUSLY ERRED IN RULING THAT RESPONDENT TOBIAS IS NOT GUILTY OF

CONTRIBUTORY NEGLIGENCE.
[C]

THE CA SERIOUSLY ERRED IN RULING THAT CITYSTATE IS JOINTLY AND SOLIDARILY

LIABLE WITH ROBLES TO PAY FOR THE DAMAGE SUPPOSEDLY SUFFERED BY
RESPONDENTS.
[D]

THE CA SERIOUSLY ERRED IN RULING THAT CITYSTATE IS JOINTLY AND SOLIDARILY

LIABLE FOR ATTORNEY'S FEES.17
In this petition for review on certiorari, petitioner alleged that it should not be held liable
considering that it has exercised a high degree of diligence in the selection and supervision
of its employees, including Robles, and that it took proper measures in hiring the latter.
Further, it posits that it has complied with standard bank operating procedures in the
conduct of its operations.

Petitioner also argues that Robles acted in his personal capacity in dealing with Tobias,
who agreed with full knowledge and consent to the back-to-back loans and that it was not
436
privy to the transactions between them. Therefore, petitioner submits that the CA erred in
applying the doctrine of apparent authority.
Ruling of the Court

The petition is denied.

The business of banking is one imbued with public interest. As such, banking institutions
are obliged to exercise the highest degree of diligence as well as high standards of integrity
and performance in all its transactions. 18

The law expressly imposes upon the banks a fiduciary duty towards its clients 19 and to
treat in this regard the accounts of its depositors with meticulous care. 20

The contract between the bank and its depositor is governed by the provisions of the Civil
Code on simple loan or mutuum, with the bank as the debtor and the depositor as the
creditor.21

In light of these, banking institutions may be held liable for damages for failure to exercise
the diligence required of it resulting to contractual breach or where the act or omission
complained of constitutes an actionable tort. 22

The nature of a bank's liability is illustrated in the consolidated cases of Philippine

Commercial International Bank v. CA, et al., Ford Philippines, Inc. v. CA, et al. and Ford
Philippines, Inc. v. Citibank, N.A., et al.23 The original actions a quo were instituted by Ford
Philippines, Inc. (Ford) to recover the value of several checks it issued payable to the
Commissioner of Internal Revenue (CIR) which were allegedly embezzled by an organized
syndicate.

The first two of the three consolidated cases mentioned above involve twin petitions for
review assailing the decision and resolution of the CA ordering the collecting bank,
Philippine Commercial International Bank (PCIB) to pay the amount of a crossed Citibank
N.A. (Citibank) check (No. SN-04867) drawn by Ford in favor of CIR as payment for its
taxes.

The said check was deposited with PCIB and subsequently cleared by the Central Bank.
Upon presentment with Citibank, the proceeds of the check were released to PCIB as the
collecting/depository bank.

However, it was later discovered that the check was not paid to the CIR. Ford was-then
forced to make another payment to the CIR.

Investigation revealed that the check was recalled by the General Ledger Accountant of
Ford on the pretext that there has been an error in the computation of tax, he then directed
PCIB to issue two manager's checks in replacement thereof.

Both Citibank and PCIB deny liability, the former arguing that payment was in due course
437
as it merely relied on the latter's guarantee as to "all prior indorsements and/or lack of
indorsements." Thus, Citibank submits that the proximate cause of the injury is the gross
negligence of PCIB in indorsing the check in question. The CA agreed and adjudged PCIB
solely liable for the amount of the check.

On the other hand, the last of the three consolidated cases, assails the decision and
resolution of the CA which held Citibank, the drawee bank, solely liable for the amount of
crossed check nos. SN-10597 and 16508 as actual damages, the proceeds of which have
been misappropriated by a syndicate involving the employees of the drawer Ford, and the
collecting bank PCIB.

This Court in resolving the issue of liability in PCIB v. CA, considered the degree of
negligence of the parties.

While recognizing that the doctrine of imputed negligence makes a principal liable for the
wrongful acts of its agents, this Court noted that the liability of the principal would
nonetheless depend on whether the act of its agent is the proximate cause of the injury to
the third person.

In the case of Ford, this Court ruled that its negligence, if any, cannot be considered as the
proximate cause, emphasizing in this regard the absence of confirmation on the part of
Ford to the request of its General Ledger Accountant for replacement of the checks issued
as payment to the CIR. In absolving Ford from liability, this Court clarified that the mere
fact that the forgery was committed by the drawer/principal's employee or agent, who by
virtue of his position had unusual facilities for perpetrating the fraud and imposing the
forged paper upon the bank, does not automatically shift the loss to such drawer-principal,
in the absence of some circumstance raising estoppel against the latter.

In contrast, this Court found PCIB liable for failing to exercise the necessary care and
prudence required under the circumstances. This Court noted that the action of Ford's
General Ledger Accountant in asking for the replacement of the crossed Citibank check No.
SN-04867, was not in the ordinary course of business and thus should have prompted PCIB
to validate the same. Likewise, considering that the questioned crossed check was
deposited with PCIB in its capacity as collecting agent for the Bureau of Internal Revenue,
it has the responsibility to ensure that the check is deposited in the payee's account only;
and is bound to consult BIR, as its principal, of unwarranted instructions given by the pay
or or its agent, especially so as neither of the latter is its client. Having established PCIB's
negligence, this Court then held the latter solely liable for the proceeds of Citibank check
(No. SN-04867).

Insofar as Citibank check Nos. SN-10597 and 16508, this Court affirmed the findings of the
CA and the trial court that PCIB cannot be faulted for the embezzlement as it did not
actually receive nor held the subject checks. Adopting the conclusion of the trial court, this
Court advanced that the act of misappropriation was in fact "the clandestine or hidden
actuations performed by the members of the syndicate in their own personal, covert and
private capacity and done without the knowledge of the defendant PCIB." 24
438
While this Court admitted that there was no evidence confirming the conscious
participation of PCIB in the embezzlement, it nonetheless found the latter liable pursuant
to the doctrine of imputed negligence, as it was established that its employees performed
the acts causing the loss in their official capacity or authority albeit for their personal and
private gain or benefit.

Yet, finding that the drawee, Citibank was remiss of its contractual duty to pay the
proceeds of the crossed checks only to its designated payee, this Court ruled that Citibank
should also bear liability for the loss incurred by Ford. It ratiocinated:
Citibank should have scrutinized Citibank Check Numbers SN 10597 and 16508 before
paying the amount of the proceeds thereof to the collecting bank of the BIR. One thing is
clear from the record: the clearing stamps at the back of Citibank Check Nos. SN 10597
and 16508 do not bear any initials. Citibank failed to notice and verify the absence of the
clearing stamps. Had this been duly examined, the switching of the worthless checks to
Citibank Check Nos. 10597 and 16508 would have been discovered in time. For this
reason, Citibank had indeed failed to perform what was incumbent upon it, which is to
ensure that the amount of the checks should be paid only to its designated payee. The fact
that the drawee bank did not discover the irregularity seasonably, in our view, constitutes
negligence in carrying out the bank's duty to its depositors. The point is that as a business
affected with public interest and because of the nature of its functions, the bank is under
obligation to treat the accounts of its depositors with meticulous care, always having in
mind the fiduciary nature of their relationship. 25
Then, applying the doctrine of comparative negligence, this Court adjudged PCIB and
Citibank equally liable for the proceeds of Citibank Check Nos. SN 10597 and 16508.

It is without question that when the action against the bank is premised on breach of
contractual obligations, a bank's liability as debtor is not merely vicarious but primary, in
that the defense of exercise of due diligence in the selection and supervision of its
employees is not available.26 Liability of banks is also primary and sole when the loss or
damage to its depositors is directly attributable to its acts, finding that the proximate cause
of the loss was due to the bank's negligence or breach. 27

The bank, in its capacity as principal, may also be adjudged liable under the doctrine of
apparent authority. The principal's liability in this case however, is solidary with that of his
employee.28

The doctrine of apparent authority or what is sometimes referred to as the "holding out"
theory, or the doctrine of ostensible agency, imposes liability, not "as the result of the reality
of a contractual relationship, but rather because of the actions of a principal or an employer
in somehow misleading the public into believing that the relationship or the authority
exists."29 It is defined as:
[T]he power to affect the legal relations of another person by transactions with third
persons arising from the other's manifestations to such third person such that the liability
of the principal for the acts and contracts of his agent extends to those which are within

439
the apparent scope of the authority conferred on him, although no actual authority to do
such acts or to make such contracts has been conferred. 30 (Citations omitted)
Succinctly stating the foregoing principles, the liability of a bank to third persons for acts
done by its agents or employees is limited to the consequences of the latter's acts which it
has ratified, or those that resulted in performance of acts within the scope of actual or
apparent authority it has vested.

In PCIB v. CA,31 however, it is evident and striking that for purposes of holding the
principal/banks liable, no distinction has been made whether the act resulting to injury to
third persons was performed by the agent/employee was pursuant to, or outside the scope
of an apparent or actual official authority. It must be noted nonetheless that this is because
of the peculiar circumstance attendant in that case, that is, the direct perpetrators of the
offense therein are fugitives from justice. Thus, this Court is left to determine who of the
parties must bear the burden for the loss incurred by Ford.

In the case at bar, petitioner does not deny the validity of respondents' accounts, in fact it
suggests that transactions with it have all been accounted for as it is based on official
documents containing authentic signatures of Tobias. The point is well-taken. In fine,
respondents' claim for damages is not predicated on breach of their contractual
relationship with petitioner, but rather on Robles' act of misappropriation.

At any rate, it cannot be said that the petitioner is guilty of breach of contract so as to
warrant the imposition of liability solely upon it.32

Records show that respondents entered into two types of transactions with the petitioner,
the first involving savings accounts, and the other loan agreements. Both of these
transactions were entered into outside the petitioner bank's premises, through Robles.

In the first, the respondents, as the depositors, acts as the creditor, and the petitioner, as
the debtor.33 In these agreements, the petitioner, by receiving the deposit impliedly agrees
to pay upon demand and only upon the depositor's order. 34 Failure by the bank to comply
with these obligations would be considered as breach of contract.

The second transaction which involves three loan agreements, are the subject of
contention. These loans were obtained by respondents, secured by their deposits with the
petitioner, and executed with corresponding authorization letters allowing the latter to debit
from their account in case of default. Respondents do not contest the genuineness of their
signature in the relevant documents; rather they submit that they were merely lured by
Robles into signing the same without knowing their import. The loans were approved and
released by the petitioner, but instead of reinvesting the same, the proceeds were
misappropriated by Robles, as a result, respondents' accounts were debited and applied as
payment for the loan.

Under the premises, the petitioner had the authority to debit from the respondents'
accounts having been appointed as their attorney-in-fact in a duly signed authentic
document.35 Furthermore, there is nothing irregular or striking that transpired which
440
should have impelled petitioner into further inquiry as to the authenticity of the attendant
transactions. Suffice it is to state that the questioned withdrawal was not the first time in
which Robles has acted as the authorized representative of the petitioner or as intermediary
between the petitioner and the respondents, who is also not merely an employee but
petitioner's branch manager.

Moreover, that the respondents have been lured by Robles into signing the said documents
without knowing the implications thereof does not prove complicity or knowledge on the
part of the petitioner of Robles' inappropriate acts.

Nonetheless, while it is clear that the proximate cause of respondents' loss is the
misappropriation of Robles, petitioner is still liable under Article 1911 of the Civil Code, to
wit:
Art. 1911. Even when the agent has exceeded his authority, the principal is solidarity
liable with the agent if the former allowed the latter to act as though he had full powers.
The case of Prudential Bank v. CA36 lends support to this conclusion. There, this Court first
laid down the doctrine of apparent authority, with specific reference to banks, viz.:
Conformably, we have declared in countless decisions that the principal is liable for
obligations contracted by the agent. The agent's apparent representation yields to the
principal's true representation and the contract is considered as entered into between the
principal and the third person,

A bank is liable for wrongful acts of its officers done in the interests of the bank or in the
course of dealings of the officers in their representative capacity but not for acts outside the
scope of their authority. A bank holding out its officers and agent as worthy of confidence
will not be permitted to profit by the frauds they may thus be enabled to perpetuate in the
apparent scope of their employment; nor will it be permitted to shirk its responsibility for
such frauds, even though no benefit may accrue to the bank therefrom. Accordingly, a
banking corporation is liable to innocent third persons where the representation is
made in the course of its business by an agent acting within the general scope of
his authority even though, in the particular case, the agent is secretly abusing his
authority and attempting to perpetrate a fraud upon his principal or some other
person, for his own ultimate benefit.

Application of these principles in especially necessary because banks have a fiduciary

relationship with the public and their stability depends on the confidence of the people in
their honesty and efficiency. Such faith will be eroded where banks do not exercise strict
care in the selection and supervision of its employees, resulting in prejudice to their
depositors.37 (Citations omitted, and emphasis and underscoring Ours)
Petitioner, in support of its position, cites Banate v. Philippine Countryside Rural Bank
(Liloan, Cebu), Inc.,38 this Court finds however that the case presents a different factual
milieu and is not applicable in the case at bar.

In Banate, this Court ruled that the doctrine of apparent authority does not apply and
absolved the bank from liability resulting from the alteration by its branch manager of the
terms of a mortgage contract which secures a loan obtained from the bank. In so ruling,
441
this Court found "[n]o proof of the course of business, usages and practices of the bank
about, or knowledge that the board had or is presumed to have of its responsible officers'
acts regarding the branch manager's apparent authority" 39 to cause such alteration.
Further, "[n]either was there any allegation, much less proof" 40 that the bank ratified its
manager's acts or is estopped to make a contrary claim.

In contrast, in this controversy, the evidence on record sufficiently established that Robles
as branch manager was 'clothed' or 'held out' as having the power to enter into the subject
agreements with the respondents.

The existence of apparent or implied authority is measured by previous acts that have been
ratified or approved or where the accruing benefits have been accepted by the principal. It
may also be established by proof of the course of business, usages and practices of the
bank; or knowledge that the bank or its officials have, or is presumed to have of its
responsible officers' acts regarding bank branch affairs. 41

As aptly pointed by the CA, petitioner's evidence bolsters the case against it, as they
support the finding that Robles as branch manager, has been vested with the apparent or
implied authority to act for the petitioner in offering and facilitating banking transactions.

The testimonies of the witnesses presented by petitioner establish that there was nothing
irregular in the manner in which Robles transacted with the respondents. 42 In fact,
petitioner's witnesses admitted that while the bank's general policy requires that
transactions be completed inside the bank premises, exceptions are made in favor of valued
clients, such as the respondents. In which case, banking transactions are allowed to be
done in the residence or place of business of the depositor, since the same are verified
subsequently by the bank cashier. 43

Moreover, petitioner admitted that for valued clients, the branch manager has the authority
to transact outside of the bank premises. 44 In fact, Robles previously transacted business
on behalf of the petitioner as when it sought and facilitated the opening of respondents'
accounts. Petitioner acknowledged Robles' authority and it honored the accounts so opened
outside the bank premises.

To recall, prior to the alleged back-to-back scheme entered into by the respondents, Robles
has consistently held himself out as representative of the petitioner in seeking and signing
respondents as depositors to various accounts. 45 It bears to stress that in the course of the
said investment, the practice has been for Tobias to surrender the passbook to Robles' for
updating.46 All of which accounts have been in order until after the respondents was lured
into entering the back-to-back scheme.

In this light, respondents cannot be blamed for believing that Robles has the authority to
transact for and on behalf of the petitioner 47 and for relying upon the representations made
by him. After all, Robles as branch manager is recognized "within his field and as to third
persons as the general agent and is in general charge of the corporation, with apparent
authority commensurate with the ordinary business entrusted him and the usual course
442
and conduct thereof."48

Consequently, petitioner is estopped from denying Robles' authority. 49 As the employer of
Robles, petitioner is solidarity liable to the respondents for damages caused by the acts of
the former, pursuant to Article 1911 of the Civil Code. 50

The ruling in PCIB v. CA51 insofar as it imposes liability directly and solely upon the
employer does not apply considering that Robles, while not a petitioner in this case, has
been validly been served with summons by publication 52 and joined as party in the case
before the trial court53 and the CA.54 Jurisdiction having been acquired over his person, this
Court consequently has the authority to rule upon his liability. 55

On a final note, it must be pointed out that the irregularity has only been discovered by the
petitioner on March 30, 2006 when Valdez went to petitioner's Mabini branch to have her
account with Tobias updated.56 It bears to stress that petitioner had the opportunity to
discover such irregularity at the time the loan application was submitted for its approval or
at the latest, when the respondents defaulted with the payment of their obligation. With the
extreme repercussions of the transactions entered into by the respondents, instead of just
relying on the supposed authority of Robles and examining the documents submitted,
petitioner should have at least communicated with the respondents in order to verify with
them the genuineness of their signatures therein and whether they understood the
implications of affixing the same. Nothing short is expected of petitioner considering that
the nature of the banking business is imbued with public interest, and as such the highest
degree of diligence is demanded. 57

WHEREFORE, in view of the foregoing disquisitions, the petition for review on certiorari is
hereby DENIED. The Decision dated May 31, 2016 and Resolution dated October 10, 2016
issued by the Court of Appeals in CA-G.R. CV No. 102545 are AFFIRMED.

SO ORDERED.

G.R. No. 181881               October 18, 2011

BRICCIO "Ricky" A. POLLO, Petitioner,
vs.
CHAIRPERSON KARINA CONSTANTINO-DAVID, DIRECTOR IV RACQUEL DE GUZMAN
BUENSALIDA, DIRECTOR IV LYDIA A. CASTILLO, DIRECTOR III ENGELBERT
ANTHONY D. UNITE AND THE CIVIL SERVICE COMMISSION, Respondents.
DECISION
VILLARAMA, JR., J.:
This case involves a search of office computer assigned to a government employee who was
charged administratively and eventually dismissed from the service. The employee’s
personal files stored in the computer were used by the government employer as evidence of
misconduct.
Before us is a petition for review on certiorari under Rule 45 which seeks to reverse and set
aside the Decision1 dated October 11, 2007 and Resolution2 dated February 29, 2008 of the
443
Court of Appeals (CA). The CA dismissed the petition for certiorari (CA-G.R. SP No. 98224)
filed by petitioner Briccio "Ricky" A. Pollo to nullify the proceedings conducted by the Civil
Service Commission (CSC) which found him guilty of dishonesty, grave misconduct,
conduct prejudicial to the best interest of the service, and violation of Republic Act (R.A.)
No. 6713 and penalized him with dismissal.
The factual antecedents:
Petitioner is a former Supervising Personnel Specialist of the CSC Regional Office No. IV
and also the Officer-in-Charge of the Public Assistance and Liaison Division (PALD) under
the "Mamamayan Muna Hindi Mamaya Na" program of the CSC.
On January 3, 2007 at around 2:30 p.m., an unsigned letter-complaint addressed to
respondent CSC Chairperson Karina Constantino-David which was marked "Confidential"
and sent through a courier service (LBC) from a certain "Alan San Pascual" of Bagong
Silang, Caloocan City, was received by the Integrated Records Management Office (IRMO) at
the CSC Central Office. Following office practice in which documents marked "Confidential"
are left unopened and instead sent to the addressee, the aforesaid letter was given directly
to Chairperson David.
The letter-complaint reads:
The Chairwoman
Civil Service Commission
Batasan Hills, Quezon City
Dear Madam Chairwoman,
Belated Merry Christmas and Advance Happy New Year!
As a concerned citizen of my beloved country, I would like to ask from you personally if it is
just alright for an employee of your agency to be a lawyer of an accused gov’t employee
having a pending case in the csc. I honestly think this is a violation of law and unfair to
others and your office.
I have known that a person have been lawyered by one of your attorny in the region 4
office. He is the chief of the Mamamayan muna hindi mamaya na division. He have been
helping many who have pending cases in the Csc. The justice in our govt system will not be
served if this will continue. Please investigate this anomaly because our perception of your
clean and good office is being tainted.
Concerned Govt employee3
Chairperson David immediately formed a team of four personnel with background in
information technology (IT), and issued a memo directing them to conduct an investigation
and specifically "to back up all the files in the computers found in the Mamamayan Muna
(PALD) and Legal divisions."4 After some briefing, the team proceeded at once to the CSC-
ROIV office at Panay Avenue, Quezon City. Upon their arrival thereat around 5:30 p.m., the
team informed the officials of the CSC-ROIV, respondents Director IV Lydia Castillo
(Director Castillo) and Director III Engelbert Unite (Director Unite) of Chairperson David’s
directive.
The backing-up of all files in the hard disk of computers at the PALD and Legal Services
Division (LSD) was witnessed by several employees, together with Directors Castillo and
Unite who closely monitored said activity. At around 6:00 p.m., Director Unite sent text
messages to petitioner and the head of LSD, who were both out of the office at the time,
informing them of the ongoing copying of computer files in their divisions upon orders of
the CSC Chair. The text messages received by petitioner read:
444
 "Gud p.m. This is Atty. Unite FYI: Co people are going over the PCs of PALD and LSD
per instruction of the Chairman. If you can make it here now it would be better."
"All PCs Of PALD and LSD are being backed up per memo of the chair."
"CO IT people arrived just now for this purpose. We were not also informed about
this.
"We can’t do anything about … it … it’s a directive from chair."
"Memo of the chair was referring to an anonymous complaint"; "ill send a copy of the
memo via mms"5
Petitioner replied also thru text message that he was leaving the matter to Director Unite
and that he will just get a lawyer. Another text message received by petitioner from PALD
staff also reported the presence of the team from CSC main office: "Sir may mga taga C.O.
daw sa kuarto natin."6 At around 10:00 p.m. of the same day, the investigating team
finished their task. The next day, all the computers in the PALD were sealed and secured
for the purpose of preserving all the files stored therein. Several diskettes containing the
back-up files sourced from the hard disk of PALD and LSD computers were turned over to
Chairperson David. The contents of the diskettes were examined by the CSC’s Office for
Legal Affairs (OLA). It was found that most of the files in the 17 diskettes containing files
copied from the computer assigned to and being used by the petitioner, numbering about
40 to 42 documents, were draft pleadings or letters 7 in connection with administrative
cases in the CSC and other tribunals. On the basis of this finding, Chairperson David
issued the Show-Cause Order 8 dated January 11, 2007, requiring the petitioner, who had
gone on extended leave, to submit his explanation or counter-affidavit within five days from
notice.
Evaluating the subject documents obtained from petitioner’s personal files, Chairperson
David made the following observations:
Most of the foregoing files are drafts of legal pleadings or documents that are related to or
connected with administrative cases that may broadly be lumped as pending either in the
CSCRO No. IV, the CSC-NCR, the CSC-Central Office or other tribunals. It is also of note
that most of these draft pleadings are for and on behalves of parties, who are facing charges
as respondents in administrative cases. This gives rise to the inference that the one who
prepared them was knowingly, deliberately and willfully aiding and advancing interests
adverse and inimical to the interest of the CSC as the central personnel agency of the
government tasked to discipline misfeasance and malfeasance in the government service.
The number of pleadings so prepared further demonstrates that such person is not merely
engaged in an isolated practice but pursues it with seeming regularity. It would also be the
height of naivete or credulity, and certainly against common human experience, to believe
that the person concerned had engaged in this customary practice without any
consideration, and in fact, one of the retrieved files (item 13 above) appears to insinuate the
collection of fees. That these draft pleadings were obtained from the computer assigned to
Pollo invariably raises the presumption that he was the one responsible or had a hand in
their drafting or preparation since the computer of origin was within his direct control and
disposition.9
Petitioner filed his Comment, denying that he is the person referred to in the anonymous
letter-complaint which had no attachments to it, because he is not a lawyer and neither is
he "lawyering" for people with cases in the CSC. He accused CSC officials of conducting a
"fishing expedition" when they unlawfully copied and printed personal files in his computer,
445
and subsequently asking him to submit his comment which violated his right against self-
incrimination. He asserted that he had protested the unlawful taking of his computer done
while he was on leave, citing the letter dated January 8, 2007 in which he informed
Director Castillo that the files in his computer were his personal files and those of his
sister, relatives, friends and some associates and that he is not authorizing their sealing,
copying, duplicating and printing as these would violate his constitutional right to privacy
and protection against self-incrimination and warrantless search and seizure. He pointed
out that though government property, the temporary use and ownership of the computer
issued under a Memorandum of Receipt (MR) is ceded to the employee who may exercise all
attributes of ownership, including its use for personal purposes. As to the anonymous
letter, petitioner argued that it is not actionable as it failed to comply with the requirements
of a formal complaint under the Uniform Rules on Administrative Cases in the Civil Service
(URACC). In view of the illegal search, the files/documents copied from his computer
without his consent is thus inadmissible as evidence, being "fruits of a poisonous tree." 10
On February 26, 2007, the CSC issued Resolution No. 070382 11 finding prima facie case
against the petitioner and charging him with Dishonesty, Grave Misconduct, Conduct
Prejudicial to the Best Interest of the Service and Violation of R.A. No. 6713 (Code of
Conduct and Ethical Standards for Public Officials and Employees). Petitioner was directed
to submit his answer under oath within five days from notice and indicate whether he
elects a formal investigation. Since the charges fall under Section 19 of the URACC,
petitioner was likewise placed under 90 days preventive suspension effective immediately
upon receipt of the resolution. Petitioner received a copy of Resolution No. 070382 on
March 1, 2007.
Petitioner filed an Omnibus Motion (For Reconsideration, to Dismiss and/or to Defer)
assailing the formal charge as without basis having proceeded from an illegal search which
is beyond the authority of the CSC Chairman, such power pertaining solely to the court.
Petitioner reiterated that he never aided any people with pending cases at the CSC and
alleged that those files found in his computer were prepared not by him but by certain
persons whom he permitted, at one time or another, to make use of his computer out of
close association or friendship. Attached to the motion were the affidavit of Atty. Ponciano
R. Solosa who entrusted his own files to be kept at petitioner’s CPU and Atty. Eric N.
Estrellado, the latter being Atty. Solosa’s client who attested that petitioner had nothing to
do with the pleadings or bill for legal fees because in truth he owed legal fees to Atty. Solosa
and not to petitioner. Petitioner contended that the case should be deferred in view of the
prejudicial question raised in the criminal complaint he filed before the Ombudsman
against Director Buensalida, whom petitioner believes had instigated this administrative
case. He also prayed for the lifting of the preventive suspension imposed on him. In its
Resolution No. 07051912 dated March 19, 2007, the CSC denied the omnibus motion. The
CSC resolved to treat the said motion as petitioner’s answer.
On March 14, 2007, petitioner filed an Urgent Petition 13 under Rule 65 of the Rules of
Court, docketed as CA-G.R. SP No. 98224, assailing both the January 11, 2007 Show-
Cause Order and Resolution No. 070382 dated February 26, 2007 as having been issued
with grave abuse of discretion amounting to excess or total absence of jurisdiction. Prior to
this, however, petitioner lodged an administrative/criminal complaint against respondents
Directors Racquel D.G. Buensalida (Chief of Staff, Office of the CSC Chairman) and Lydia A.

446
Castillo (CSC-RO IV) before the Office of the Ombudsman, and a separate complaint for
disbarment against Director Buensalida.14
On April 17, 2007, petitioner received a notice of hearing from the CSC setting the formal
investigation of the case on April 30, 2007. On April 25, 2007, he filed in the CA an Urgent
Motion for the issuance of TRO and preliminary injunction. 15 Since he failed to attend the
pre-hearing conference scheduled on April 30, 2007, the CSC reset the same to May 17,
2007 with warning that the failure of petitioner and/or his counsel to appear in the said
pre-hearing conference shall entitle the prosecution to proceed with the formal investigation
ex-parte.16 Petitioner moved to defer or to reset the pre-hearing conference, claiming that
the investigation proceedings should be held in abeyance pending the resolution of his
petition by the CA. The CSC denied his request and again scheduled the pre-hearing
conference on May 18, 2007 with similar warning on the consequences of petitioner and/or
his counsel’s non-appearance.17 This prompted petitioner to file another motion in the CA,
to cite the respondents, including the hearing officer, in indirect contempt. 18
On June 12, 2007, the CSC issued Resolution No. 071134 19 denying petitioner’s motion to
set aside the denial of his motion to defer the proceedings and to inhibit the designated
hearing officer, Atty. Bernard G. Jimenez. The hearing officer was directed to proceed with
the investigation proper with dispatch.
In view of the absence of petitioner and his counsel, and upon the motion of the
prosecution, petitioner was deemed to have waived his right to the formal investigation
which then proceeded ex parte.
On July 24, 2007, the CSC issued Resolution No. 071420, 20 the dispositive part of which
reads:
WHEREFORE, foregoing premises considered, the Commission hereby finds Briccio A.
Pollo, a.k.a. Ricky A. Pollo GUILTY of Dishonesty, Grave Misconduct, Conduct Prejudicial to
the Best Interest of the Service and Violation of Republic Act 6713. He is meted the penalty
of DISMISSAL FROM THE SERVICE with all its accessory penalties, namely,
disqualification to hold public office, forfeiture of retirement benefits, cancellation of civil
service eligibilities and bar from taking future civil service examinations. 21
On the paramount issue of the legality of the search conducted on petitioner’s computer,
the CSC noted the dearth of jurisprudence relevant to the factual milieu of this case where
the government as employer invades the private files of an employee stored in the computer
assigned to him for his official use, in the course of initial investigation of possible
misconduct committed by said employee and without the latter’s consent or participation.
The CSC thus turned to relevant rulings of the United States Supreme Court, and cited the
leading case of O’Connor v. Ortega 22 as authority for the view that government agencies, in
their capacity as employers, rather than law enforcers, could validly conduct search and
seizure in the governmental workplace without meeting the "probable cause" or warrant
requirement for search and seizure. Another ruling cited by the CSC is the more recent
case of United States v. Mark L. Simons 23 which declared that the federal agency’s
computer use policy foreclosed any inference of reasonable expectation of privacy on the
part of its employees. Though the Court therein recognized that such policy did not, at the
same time, erode the respondent’s legitimate expectation of privacy in the office in which
the computer was installed, still, the warrantless search of the employee’s office was upheld
as valid because a government employer is entitled to conduct a warrantless search

447
pursuant to an investigation of work-related misconduct provided the search is reasonable
in its inception and scope.
With the foregoing American jurisprudence as benchmark, the CSC held that petitioner has
no reasonable expectation of privacy with regard to the computer he was using in the
regional office in view of the CSC computer use policy which unequivocally declared that a
CSC employee cannot assert any privacy right to a computer assigned to him. Even
assuming that there was no such administrative policy, the CSC was of the view that the
search of petitioner’s computer successfully passed the test of reasonableness for
warrantless searches in the workplace as enunciated in the aforecited authorities. The CSC
stressed that it pursued the search in its capacity as government employer and that it was
undertaken in connection with an investigation involving work-related misconduct, which
exempts it from the warrant requirement under the Constitution. With the matter of
admissibility of the evidence having been resolved, the CSC then ruled that the totality of
evidence adequately supports the charges of grave misconduct, dishonesty, conduct
prejudicial to the best interest of the service and violation of R.A. No. 6713 against the
petitioner. These grave infractions justified petitioner’s dismissal from the service with all
its accessory penalties.
In his Memorandum24 filed in the CA, petitioner moved to incorporate the above resolution
dismissing him from the service in his main petition, in lieu of the filing of an appeal via
a Rule 43 petition. In a subsequent motion, he likewise prayed for the inclusion of
Resolution No. 07180025 which denied his motion for reconsideration.
By Decision dated October 11, 2007, the CA dismissed the petition for certiorari after
finding no grave abuse of discretion committed by respondents CSC officials. The CA held
that: (1) petitioner was not charged on the basis of the anonymous letter but from the
initiative of the CSC after a fact-finding investigation was conducted and the results thereof
yielded a prima facie case against him; (2) it could not be said that in ordering the back-up
of files in petitioner’s computer and later confiscating the same, Chairperson David had
encroached on the authority of a judge in view of the CSC computer policy declaring the
computers as government property and that employee-users thereof have no reasonable
expectation of privacy in anything they create, store, send, or receive on the computer
system; and (3) there is nothing contemptuous in CSC’s act of proceeding with the formal
investigation as there was no restraining order or injunction issued by the CA.
His motion for reconsideration having been denied by the CA, petitioner brought this
appeal arguing that –
I
THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED AND COMMITTED
SERIOUS IRREGULARITY AND BLATANT ERRORS IN LAW AMOUNTING TO GRAVE
ABUSE OF DISCRETION WHEN IT RULED THAT ANONYMOUS COMPLAINT IS
ACTIONABLE UNDER E.O. 292 WHEN IN TRUTH AND IN FACT THE CONTRARY IS
EXPLICITLY PROVIDED UNDER 2nd PARAGRAPH OF SECTION 8 OF CSC
RESOLUTION NO. 99-1936, WHICH IS AN [AMENDMENT] TO THE ORIGINAL RULES
PER CSC RESOLUTION NO. 94-0521;
II
THE HONORABLE COURT GRIEVOUSLY ERRED AND COMMITTED PALPABLE
ERRORS IN LAW AMOUNTING TO GRAVE ABUSE OF DISCRETION WHEN IT RULED
THAT PETITIONER CANNOT INVOKE HIS RIGHT TO PRIVACY, TO UNREASONABLE
448
 SEARCH AND SEIZURE, AGAINST SELF-INCRIMINATION, BY VIRTUE OF OFFICE
MEMORANDUM NO. 10 S. 2002, A MERE INTERNAL MEMORANDUM SIGNED
SOLELY AND EXCLUSIVELY BY RESPONDENT DAVID AND NOT BY THE
COLLEGIAL COMMISSION CONSIDERING THAT POLICY MATTERS INVOLVING
SUB[S]TANTIAL RIGHTS CANNOT BE COVERED BY AN OFFICE MEMORANDUM
WHICH IS LIMITED TO PROCEDURAL AND ROUTINARY INSTRUCTION;
III
THE HONORABLE COURT GRAVELY ERRED AND COMMITTED GRAVE ABUSE OF
DISCRETION WHEN IT RULED THAT MEMO SEARCH DATED JANUARY 3, 2007
AND THE TAKING OF DOCUMENTS IN THE EVENING THEREOF FROM 7:00 TO
10:00 P.M. IS NOT GRAVE ABUSE OF DISCRETION LIMITING THE DEFINITION [OF]
GRAVE ABUSE OF DISCRETION TO ONE INVOLVING AND TAINTED WITH
PERSONAL HOSTILITY. IT LIKEWISE ERRED IN HOLDING THAT DATA STORED IN
THE GOVERNMENT COMPUTERS ARE GOVERNMENT PROPERTIES INCLUDING
THE PERSONAL FILES WHEN THE CONTRARY IS PROVIDED UNDER SECTION 14
OF OM. 10 s. 2002. AND GRIEVOUSLY ERRED STILL WHEN IT RULED THAT
RESPONDENT DAVID BY VIRTUE OF O.M. 10 DID NOT ENCROACH ON THE
DUTIES AND FUNCTIONS OF A JUDGE PURSUANT TO ARTICLE III, SECTION 2 OF
THE 1987 PHILIPPINE CONSTITUTION;
IV
THE HONORABLE COURT ERRED WHEN IT FAILED TO CONSIDER ALL OTHER
NEW ARGUMENTS, ADDITIONAL EVIDENCE HEREUNTO SUBMITTED AS WELL AS
ITS FAILURE TO EVALUATE AND TAKE ACTION ON THE 2 MOTIONS TO ADMIT
AND INCORPORATE CSC RESOLUTION NOS. 07-1420 DATED JULY 24, 2007 AND
CSC RESOLUTION 07-1800 DATED SEPTEMBER 10, 2007. IT DID NOT RULE
LIKEWISE ON THE FOUR URGENT MOTION TO RESOLVE ANCILLARY PRAYER FOR
TRO.26
Squarely raised by the petitioner is the legality of the search conducted on his office
computer and the copying of his personal files without his knowledge and consent, alleged
as a transgression on his constitutional right to privacy.
The right to privacy has been accorded recognition in this jurisdiction as a facet of the right
protected by the guarantee against unreasonable search and seizure under Section 2,
Article III of the 1987 Constitution,27 which provides:
Sec. 2. The right of the people to be secure in their persons, houses, papers, and effects
against unreasonable searches and seizures of whatever nature and for any purpose shall
be inviolable, and no search warrant or warrant of arrest shall issue except upon probable
cause to be determined personally by the judge after examination under oath or affirmation
of the complainant and the witnesses he may produce, and particularly describing the
place to be searched and the persons or things to be seized.
The constitutional guarantee is not a prohibition of all searches and seizures but only of
"unreasonable" searches and seizures. 28 But to fully understand this concept and
application for the purpose of resolving the issue at hand, it is essential that we examine
the doctrine in the light of pronouncements in another jurisdiction. As the Court declared
in People v. Marti29 :
Our present constitutional provision on the guarantee against unreasonable search and
seizure had its origin in the 1935 Charter which, worded as follows:
449
"The right of the people to be secure in their persons, houses, papers and effects against
unreasonable searches and seizures shall not be violated, and no warrants shall issue but
upon probable cause, to be determined by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and particularly
describing the place to be searched, and the persons or things to be seized." (Sec. 1[3],
Article III)
was in turn derived almost verbatim from the Fourth Amendment to the United States
Constitution. As such, the Court may turn to the pronouncements of the United States
Federal Supreme Court and State Appellate Courts which are considered doctrinal in this
jurisdiction.30
In the 1967 case of Katz v. United States, 31 the US Supreme Court held that the act of FBI
agents in electronically recording a conversation made by petitioner in an enclosed public
telephone booth violated his right to privacy and constituted a "search and seizure".
Because the petitioner had a reasonable expectation of privacy in using the enclosed booth
to make a personal telephone call, the protection of the Fourth Amendment extends to such
area. In the concurring opinion of Mr. Justice Harlan, it was further noted that the
existence of privacy right under prior decisions involved a two-fold requirement: first, that a
person has exhibited an actual (subjective) expectation of privacy; and second, that the
expectation be one that society is prepared to recognize as reasonable (objective). 32
In Mancusi v. DeForte33 which addressed the reasonable expectations of private employees
in the workplace, the US Supreme Court held that a union employee had Fourth
Amendment rights with regard to an office at union headquarters that he shared with other
union officials, even as the latter or their guests could enter the office. The Court thus
"recognized that employees may have a reasonable expectation of privacy against intrusions
by police."
That the Fourth Amendment equally applies to a government workplace was addressed in
the 1987 case of O’Connor v. Ortega 34 where a physician, Dr. Magno Ortega, who was
employed by a state hospital, claimed a violation of his Fourth Amendment rights when
hospital officials investigating charges of mismanagement of the psychiatric residency
program, sexual harassment of female hospital employees and other irregularities involving
his private patients under the state medical aid program, searched his office and seized
personal items from his desk and filing cabinets. In that case, the Court categorically
declared that "[i]ndividuals do not lose Fourth Amendment rights merely because they work
for the government instead of a private employer." 35 A plurality of four Justices concurred
that the correct analysis has two steps: first, because "some government offices may be so
open to fellow employees or the public that no expectation of privacy is reasonable", a court
must consider "[t]he operational realities of the workplace" in order to determine whether
an employee’s Fourth Amendment rights are implicated; and next, where an employee has
a legitimate privacy expectation, an employer’s intrusion on that expectation "for
noninvestigatory, work-related purposes, as well as for investigations of work-related
misconduct, should be judged by the standard of reasonableness under all the
circumstances."36
On the matter of government employees’ reasonable expectations of privacy in their
workplace, O’Connor teaches:
x x x Public employees’ expectations of privacy in their offices, desks, and file cabinets, like
similar expectations of employees in the private sector, may be reduced by virtue of actual
450
office practices and procedures, or by legitimate regulation. x x x The employee’s
expectation of privacy must be assessed in the context of the employment relation. An office
is seldom a private enclave free from entry by supervisors, other employees, and business
and personal invitees. Instead, in many cases offices are continually entered by fellow
employees and other visitors during the workday for conferences, consultations, and other
work-related visits. Simply put, it is the nature of government offices that others – such as
fellow employees, supervisors, consensual visitors, and the general public – may have
frequent access to an individual’s office. We agree with JUSTICE SCALIA that
"[c]onstitutional protection against unreasonable searches by the government does not
disappear merely because the government has the right to make reasonable intrusions in
its capacity as employer," x x x but some government offices may be so open to fellow
employees or the public that no expectation of privacy is reasonable. x x x Given the
great variety of work environments in the public sector, the question of whether an
employee has a reasonable expectation of privacy must be addressed on a case-by-
case basis.37 (Citations omitted; emphasis supplied.)
On the basis of the established rule in previous cases, the US Supreme Court declared that
Dr. Ortega’s Fourth Amendment rights are implicated only if the conduct of the hospital
officials infringed "an expectation of privacy that society is prepared to consider as
reasonable." Given the undisputed evidence that respondent Dr. Ortega did not share his
desk or file cabinets with any other employees, kept personal correspondence and other
private items in his own office while those work-related files (on physicians in residency
training) were stored outside his office, and there being no evidence that the hospital had
established any reasonable regulation or policy discouraging employees from storing
personal papers and effects in their desks or file cabinets (although the absence of such a
policy does not create any expectation of privacy where it would not otherwise exist), the
Court concluded that Dr. Ortega has a reasonable expectation of privacy at least in his
desk and file cabinets.38
Proceeding to the next inquiry as to whether the search conducted by hospital officials was
reasonable, the O’Connor plurality decision discussed the following principles:
Having determined that Dr. Ortega had a reasonable expectation of privacy in his office, the
Court of Appeals simply concluded without discussion that the "search…was not a
reasonable search under the fourth amendment." x x x "[t]o hold that the Fourth
Amendment applies to searches conducted by [public employers] is only to begin the
inquiry into the standards governing such searches…[W]hat is reasonable depends on the
context within which a search takes place. x x x Thus, we must determine the appropriate
standard of reasonableness applicable to the search. A determination of the standard of
reasonableness applicable to a particular class of searches requires "balanc[ing] the nature
and quality of the intrusion on the individual’s Fourth Amendment interests against the
importance of the governmental interests alleged to justify the intrusion." x x x In the case
of searches conducted by a public employer, we must balance the invasion of the
employees’ legitimate expectations of privacy against the government’s need for
supervision, control, and the efficient operation of the workplace.
xxxx
In our view, requiring an employer to obtain a warrant whenever the employer wished to
enter an employee’s office, desk, or file cabinets for a work-related purpose would seriously
disrupt the routine conduct of business and would be unduly burdensome. Imposing
451
unwieldy warrant procedures in such cases upon supervisors, who would otherwise have
no reason to be familiar with such procedures, is simply unreasonable. In contrast to other
circumstances in which we have required warrants, supervisors in offices such as at the
Hospital are hardly in the business of investigating the violation of criminal laws. Rather,
work-related searches are merely incident to the primary business of the agency. Under
these circumstances, the imposition of a warrant requirement would conflict with the
"common-sense realization that government offices could not function if every employment
decision became a constitutional matter." x x x
xxxx
The governmental interest justifying work-related intrusions by public employers is the
efficient and proper operation of the workplace. Government agencies provide myriad
services to the public, and the work of these agencies would suffer if employers were
required to have probable cause before they entered an employee’s desk for the purpose of
finding a file or piece of office correspondence. Indeed, it is difficult to give the concept of
probable cause, rooted as it is in the criminal investigatory context, much meaning when
the purpose of a search is to retrieve a file for work-related reasons. Similarly, the concept
of probable cause has little meaning for a routine inventory conducted by public employers
for the purpose of securing state property. x x x To ensure the efficient and proper
operation of the agency, therefore, public employers must be given wide latitude to enter
employee offices for work-related, noninvestigatory reasons.
We come to a similar conclusion for searches conducted pursuant to an investigation of
work-related employee misconduct. Even when employers conduct an investigation, they
have an interest substantially different from "the normal need for law enforcement." x x x
Public employers have an interest in ensuring that their agencies operate in an effective
and efficient manner, and the work of these agencies inevitably suffers from the
inefficiency, incompetence, mismanagement, or other work-related misfeasance of its
employees. Indeed, in many cases, public employees are entrusted with tremendous
responsibility, and the consequences of their misconduct or incompetence to both the
agency and the public interest can be severe. In contrast to law enforcement officials,
therefore, public employers are not enforcers of the criminal law; instead, public employers
have a direct and overriding interest in ensuring that the work of the agency is conducted
in a proper and efficient manner. In our view, therefore, a probable cause requirement for
searches of the type at issue here would impose intolerable burdens on public
employers. The delay in correcting the employee misconduct caused by the need for
probable cause rather than reasonable suspicion will be translated into tangible and
often irreparable damage to the agency’s work, and ultimately to the public interest.
xxx
xxxx
In sum, we conclude that the "special needs, beyond the normal need for law
enforcement make the…probable-cause requirement impracticable," x x x for
legitimate, work-related noninvestigatory intrusions as well as investigations of work-
related misconduct. A standard of reasonableness will neither unduly burden the efforts
of government employers to ensure the efficient and proper operation of the workplace, nor
authorize arbitrary intrusions upon the privacy of public employees. We hold, therefore,
that public employer intrusions on the constitutionally protected privacy interests of
government employees for noninvestigatory, work-related purposes, as well as
452
for investigations of work-related misconduct, should be judged by the standard of
reasonableness under all the circumstances. Under this reasonableness standard, both
the inception and the scope of the intrusion must be reasonable:
"Determining the reasonableness of any search involves a twofold inquiry: first, one must
consider ‘whether the…action was justified at its inception,’ x x x ; second, one must
determine whether the search as actually conducted ‘was reasonably related in scope to the
circumstances which justified the interference in the first place,’" x x x
Ordinarily, a search of an employee’s office by a supervisor will be "justified at its
inception" when there are reasonable grounds for suspecting that the search will turn
up evidence that the employee is guilty of work-related misconduct, or that the
search is necessary for a noninvestigatory work-related purpose such as to retrieve a
needed file. x x x The search will be permissible in its scope when "the measures
adopted are reasonably related to the objectives of the search and not excessively
intrusive in light of …the nature of the [misconduct]." x x x39 (Citations omitted;
emphasis supplied.)
Since the District Court granted summary judgment without a hearing on the factual
dispute as to the character of the search and neither was there any finding made as to the
scope of the search that was undertaken, the case was remanded to said court for the
determination of the justification for the search and seizure, and evaluation of the
reasonableness of both the inception of the search and its scope.
In O’Connor the Court recognized that "special needs" authorize warrantless searches
involving public employees for work-related reasons. The Court thus laid down a balancing
test under which government interests are weighed against the employee’s reasonable
expectation of privacy. This reasonableness test implicates neither probable cause nor the
warrant requirement, which are related to law enforcement. 40
O’Connor was applied in subsequent cases raising issues on employees’ privacy rights in
the workplace. One of these cases involved a government employer’s search of an office
computer, United States v. Mark L. Simons 41 where the defendant Simons, an employee of
a division of the Central Intelligence Agency (CIA), was convicted of receiving and
possessing materials containing child pornography. Simons was provided with an office
which he did not share with anyone, and a computer with Internet access. The agency had
instituted a policy on computer use stating that employees were to use the Internet for
official government business only and that accessing unlawful material was specifically
prohibited. The policy also stated that users shall understand that the agency will
periodically audit, inspect, and/or monitor the user’s Internet access as deemed
appropriate. CIA agents instructed its contractor for the management of the agency’s
computer network, upon initial discovery of prohibited internet activity originating from
Simons’ computer, to conduct a remote monitoring and examination of Simons’ computer.
After confirming that Simons had indeed downloaded pictures that were pornographic in
nature, all the files on the hard drive of Simon’s computer were copied from a remote work
station. Days later, the contractor’s representative finally entered Simon’s office, removed
the original hard drive on Simon’s computer, replaced it with a copy, and gave the original
to the agency security officer. Thereafter, the agency secured warrants and searched
Simons’ office in the evening when Simons was not around. The search team copied the
contents of Simons’ computer; computer diskettes found in Simons’ desk drawer; computer
files stored on the zip drive or on zip drive diskettes; videotapes; and various documents,
453
including personal correspondence. At his trial, Simons moved to suppress these evidence,
arguing that the searches of his office and computer violated his Fourth Amendment rights.
After a hearing, the district court denied the motion and Simons was found guilty as
charged.
Simons appealed his convictions. The US Supreme Court ruled that the searches of
Simons’ computer and office did not violate his Fourth Amendment rights and the first
search warrant was valid. It held that the search remains valid under the O’Connor
exception to the warrant requirement because evidence of the crime was discovered in the
course of an otherwise proper administrative inspection. Simons’ violation of the agency’s
Internet policy happened also to be a violation of criminal law; this does not mean that said
employer lost the capacity and interests of an employer. The warrantless entry into Simons’
office was reasonable under the Fourth Amendment standard announced in O’Connor
because at the inception of the search, the employer had "reasonable grounds for
suspecting" that the hard drive would yield evidence of misconduct, as the employer was
already aware that Simons had misused his Internet access to download over a thousand
pornographic images. The retrieval of the hard drive was reasonably related to the objective
of the search, and the search was not excessively intrusive. Thus, while Simons had a
reasonable expectation of privacy in his office, he did not have such legitimate expectation
of privacy with regard to the files in his computer.
x x x To establish a violation of his rights under the Fourth Amendment, Simons must first
prove that he had a legitimate expectation of privacy in the place searched or the item
seized. x x x And, in order to prove a legitimate expectation of privacy, Simons must show
that his subjective expectation of privacy is one that society is prepared to accept as
objectively reasonable. x x x
xxxx
x x x We conclude that the remote searches of Simons’ computer did not violate his Fourth
Amendment rights because, in light of the Internet policy, Simons lacked a legitimate
expectation of privacy in the files downloaded from the Internet. Additionally, we conclude
that Simons’ Fourth Amendment rights were not violated by FBIS’ retrieval of Simons’ hard
drive from his office.
Simons did not have a legitimate expectation of privacy with regard to the record or
fruits of his Internet use in light of the FBIS Internet policy. The policy clearly stated
that FBIS would "audit, inspect, and/or monitor" employees’ use of the Internet,
including all file transfers, all websites visited, and all e-mail messages, "as deemed
appropriate." x x x This policy placed employees on notice that they could not reasonably
expect that their Internet activity would be private. Therefore, regardless of whether Simons
subjectively believed that the files he transferred from the Internet were private, such a
belief was not objectively reasonable after FBIS notified him that it would be overseeing his
Internet use. x x x Accordingly, FBIS’ actions in remotely searching and seizing the
computer files Simons downloaded from the Internet did not violate the Fourth
Amendment.
xxxx
The burden is on Simons to prove that he had a legitimate expectation of privacy in
his office. x x x Here, Simons has shown that he had an office that he did not share. As
noted above, the operational realities of Simons’ workplace may have diminished his
legitimate privacy expectations. However, there is no evidence in the record of any
454
workplace practices, procedures, or regulations that had such an effect. We therefore
conclude that, on this record, Simons possessed a legitimate expectation of privacy in
his office.
xxxx
In the final analysis, this case involves an employee’s supervisor entering the employee’s
government office and retrieving a piece of government equipment in which the employee
had absolutely no expectation of privacy – equipment that the employer knew contained
evidence of crimes committed by the employee in the employee’s office. This situation may
be contrasted with one in which the criminal acts of a government employee were unrelated
to his employment. Here, there was a conjunction of the conduct that violated the
employer’s policy and the conduct that violated the criminal law. We consider that FBIS’
intrusion into Simons’ office to retrieve the hard drive is one in which a reasonable
employer might engage. x x x42 (Citations omitted; emphasis supplied.)
This Court, in Social Justice Society (SJS) v. Dangerous Drugs Board 43 which involved the
constitutionality of a provision in R.A. No. 9165 requiring mandatory drug testing of
candidates for public office, students of secondary and tertiary schools, officers and
employees of public and private offices, and persons charged before the prosecutor’s office
with certain offenses, have also recognized the fact that there may be such legitimate
intrusion of privacy in the workplace.
The first factor to consider in the matter of reasonableness is the nature of the privacy
interest upon which the drug testing, which effects a search within the meaning of Sec. 2,
Art. III of the Constitution, intrudes. In this case, the office or workplace serves as the
backdrop for the analysis of the privacy expectation of the employees and the
reasonableness of drug testing requirement. The employees’ privacy interest in an office is
to a large extent circumscribed by the company’s work policies, the collective bargaining
agreement, if any, entered into by management and the bargaining unit, and the inherent
right of the employer to maintain discipline and efficiency in the workplace. Their privacy
expectation in a regulated office environment is, in fine, reduced; and a degree of
impingement upon such privacy has been upheld. (Emphasis supplied.)
Applying the analysis and principles announced in O’Connor and Simons to the case at
bar, we now address the following questions: (1) Did petitioner have a reasonable
expectation of privacy in his office and computer files?; and (2) Was the search authorized
by the CSC Chair, the copying of the contents of the hard drive on petitioner’s computer
reasonable in its inception and scope?
In this inquiry, the relevant surrounding circumstances to consider include "(1) the
employee’s relationship to the item seized; (2) whether the item was in the immediate
control of the employee when it was seized; and (3) whether the employee took actions to
maintain his privacy in the item." These factors are relevant to both the subjective and
objective prongs of the reasonableness inquiry, and we consider the two questions
together.44 Thus, where the employee used a password on his computer, did not share his
office with co-workers and kept the same locked, he had a legitimate expectation of privacy
and any search of that space and items located therein must comply with the Fourth
Amendment.45
We answer the first in the negative. Petitioner failed to prove that he had an actual
(subjective) expectation of privacy either in his office or government-issued computer which
contained his personal files. Petitioner did not allege that he had a separate enclosed office
455
which he did not share with anyone, or that his office was always locked and not open to
other employees or visitors. Neither did he allege that he used passwords or adopted any
means to prevent other employees from accessing his computer files. On the contrary, he
submits that being in the public assistance office of the CSC-ROIV, he normally would have
visitors in his office like friends, associates and even unknown people, whom he even
allowed to use his computer which to him seemed a trivial request. He described his office
as "full of people, his friends, unknown people" and that in the past 22 years he had been
discharging his functions at the PALD, he is "personally assisting incoming clients,
receiving documents, drafting cases on appeals, in charge of accomplishment report,
Mamamayan Muna Program, Public Sector Unionism, Correction of name, accreditation of
service, and hardly had anytime for himself alone, that in fact he stays in the office as a
paying customer."46 Under this scenario, it can hardly be deduced that petitioner had such
expectation of privacy that society would recognize as reasonable.
Moreover, even assuming arguendo, in the absence of allegation or proof of the
aforementioned factual circumstances, that petitioner had at least a subjective expectation
of privacy in his computer as he claims, such is negated by the presence of policy
regulating the use of office computers, as in Simons.
Office Memorandum No. 10, S. 2002 "Computer Use Policy (CUP)" explicitly provides:
POLICY
1. The Computer Resources are the property of the Civil Service Commission
and may be used only for legitimate business purposes.
2. Users shall be permitted access to Computer Resources to assist them in the
performance of their respective jobs.
3. Use of the Computer Resources is a privilege that may be revoked at any given
time.
xxxx
No Expectation of Privacy
4. No expectation of privacy. Users except the Members of the Commission shall not
have an expectation of privacy in anything they create, store, send, or receive on the
computer system.
The Head of the Office for Recruitment, Examination and Placement shall select and
assign Users to handle the confidential examination data and processes.
5. Waiver of privacy rights. Users expressly waive any right to privacy in anything
they create, store, send, or receive on the computer through the Internet or any other
computer network. Users understand that the CSC may use human or automated
means to monitor the use of its Computer Resources.
6. Non-exclusivity of Computer Resources. A computer resource is not a personal
property or for the exclusive use of a User to whom a memorandum of receipt (MR)
has been issued. It can be shared or operated by other users. However, he is
accountable therefor and must insure its care and maintenance.
xxxx
Passwords
12. Responsibility for passwords. Users shall be responsible for safeguarding their
passwords for access to the computer system. Individual passwords shall not be
printed, stored online, or given to others. Users shall be responsible for all

456
 transactions made using their passwords. No User may access the computer system
with another User’s password or account.
13. Passwords do not imply privacy. Use of passwords to gain access to the computer
system or to encode particular files or messages does not imply that Users have an
expectation of privacy in the material they create or receive on the computer system .
The Civil Service Commission has global passwords that permit access to all
materials stored on its networked computer system regardless of whether those
materials have been encoded with a particular User’s password. Only members of the
Commission shall authorize the application of the said global passwords.
x x x x47 (Emphasis supplied.)
The CSC in this case had implemented a policy that put its employees on notice that they
have no expectation of privacy in anything they create, store, send or receive on the office
computers, and that the CSC may monitor the use of the computer resources using both
automated or human means. This implies that on-the-spot inspections may be done to
ensure that the computer resources were used only for such legitimate business purposes.
One of the factors stated in O’Connor which are relevant in determining whether an
employee’s expectation of privacy in the workplace is reasonable is the existence of a
workplace privacy policy.48 In one case, the US Court of Appeals Eighth Circuit held that a
state university employee has not shown that he had a reasonable expectation of privacy in
his computer files where the university’s computer policy, the computer user is informed
not to expect privacy if the university has a legitimate reason to conduct a search. The user
is specifically told that computer files, including e-mail, can be searched when the
university is responding to a discovery request in the course of litigation. Petitioner
employee thus cannot claim a violation of Fourth Amendment rights when university
officials conducted a warrantless search of his computer for work-related materials. 49
As to the second point of inquiry on the reasonableness of the search conducted on
petitioner’s computer, we answer in the affirmative.
The search of petitioner’s computer files was conducted in connection with investigation of
work-related misconduct prompted by an anonymous letter-complaint addressed to
Chairperson David regarding anomalies in the CSC-ROIV where the head of the
Mamamayan Muna Hindi Mamaya Na division is supposedly "lawyering" for individuals
with pending cases in the CSC. Chairperson David stated in her sworn affidavit:
8. That prior to this, as early as 2006, the undersigned has received several text messages
from unknown sources adverting to certain anomalies in Civil Service Commission Regional
Office IV (CSCRO IV) such as, staff working in another government agency, "selling" cases
and aiding parties with pending cases, all done during office hours and involved the use of
government properties;
9. That said text messages were not investigated for lack of any verifiable leads and details
sufficient to warrant an investigation;
10. That the anonymous letter provided the lead and details as it pinpointed the persons
and divisions involved in the alleged irregularities happening in CSCRO IV;
11. That in view of the seriousness of the allegations of irregularities happening in CSCRO
IV and its effect on the integrity of the Commission, I decided to form a team of Central
Office staff to back up the files in the computers of the Public Assistance and Liaison
Division (PALD) and Legal Division;
x x x x50
457
A search by a government employer of an employee’s office is justified at inception when
there are reasonable grounds for suspecting that it will turn up evidence that the employee
is guilty of work-related misconduct. 51 Thus, in the 2004 case decided by the US Court of
Appeals Eighth Circuit, it was held that where a government agency’s computer use policy
prohibited electronic messages with pornographic content and in addition expressly
provided that employees do not have any personal privacy rights regarding their use of the
agency information systems and technology, the government employee had no legitimate
expectation of privacy as to the use and contents of his office computer, and therefore
evidence found during warrantless search of the computer was admissible in prosecution
for child pornography. In that case, the defendant employee’s computer hard drive was first
remotely examined by a computer information technician after his supervisor received
complaints that he was inaccessible and had copied and distributed non-work-related e-
mail messages throughout the office. When the supervisor confirmed that defendant had
used his computer to access the prohibited websites, in contravention of the express policy
of the agency, his computer tower and floppy disks were taken and examined. A formal
administrative investigation ensued and later search warrants were secured by the police
department. The initial remote search of the hard drive of petitioner’s computer, as well as
the subsequent warrantless searches was held as valid under the O’Connor ruling that a
public employer can investigate work-related misconduct so long as any search is justified
at inception and is reasonably related in scope to the circumstances that justified it in the
first place.52
Under the facts obtaining, the search conducted on petitioner’s computer was justified at
its inception and scope. We quote with approval the CSC’s discussion on the
reasonableness of its actions, consistent as it were with the guidelines established by
O’Connor:
Even conceding for a moment that there is no such administrative policy, there is no doubt
in the mind of the Commission that the search of Pollo’s computer has successfully passed
the test of reasonableness for warrantless searches in the workplace as enunciated in the
above-discussed American authorities. It bears emphasis that the Commission pursued
the search in its capacity as a government employer and that it was undertaken in
connection with an investigation involving a work-related misconduct, one of the
circumstances exempted from the warrant requirement. At the inception of the search, a
complaint was received recounting that a certain division chief in the CSCRO No. IV was
"lawyering" for parties having pending cases with the said regional office or in the
Commission. The nature of the imputation was serious, as it was grievously
disturbing. If, indeed, a CSC employee was found to be furtively engaged in the practice of
"lawyering" for parties with pending cases before the Commission would be a highly
repugnant scenario, then such a case would have shattering repercussions. It would
undeniably cast clouds of doubt upon the institutional integrity of the Commission as a
quasi-judicial agency, and in the process, render it less effective in fulfilling its mandate as
an impartial and objective dispenser of administrative justice. It is settled that a court or an
administrative tribunal must not only be actually impartial but must be seen to be so,
otherwise the general public would not have any trust and confidence in it.
Considering the damaging nature of the accusation, the Commission had to act fast,
if only to arrest or limit any possible adverse consequence or fall-out. Thus, on the same
date that the complaint was received, a search was forthwith conducted involving the
458
computer resources in the concerned regional office. That it was the computers that were
subjected to the search was justified since these furnished the easiest means for an
employee to encode and store documents. Indeed, the computers would be a likely
starting point in ferreting out incriminating evidence. Concomitantly, the ephemeral
nature of computer files, that is, they could easily be destroyed at a click of a button,
necessitated drastic and immediate action. Pointedly, to impose the need to comply with
the probable cause requirement would invariably defeat the purpose of the wok-related
investigation.
Worthy to mention, too, is the fact that the Commission effected the warrantless search in
an open and transparent manner. Officials and some employees of the regional office, who
happened to be in the vicinity, were on hand to observe the process until its completion. In
addition, the respondent himself was duly notified, through text messaging, of the search
and the concomitant retrieval of files from his computer.
All in all, the Commission is convinced that the warrantless search done on computer
assigned to Pollo was not, in any way, vitiated with unconstitutionality. It was a reasonable
exercise of the managerial prerogative of the Commission as an employer aimed at ensuring
its operational effectiveness and efficiency by going after the work-related misfeasance of its
employees. Consequently, the evidence derived from the questioned search are deemed
admissible.53
Petitioner’s claim of violation of his constitutional right to privacy must necessarily fail. His
other argument invoking the privacy of communication and correspondence under Section
3(1), Article III of the 1987 Constitution is also untenable considering the recognition
accorded to certain legitimate intrusions into the privacy of employees in the government
workplace under the aforecited authorities. We likewise find no merit in his contention that
O’Connor and Simons are not relevant because the present case does not involve a criminal
offense like child pornography. As already mentioned, the search of petitioner’s computer
was justified there being reasonable ground for suspecting that the files stored therein
would yield incriminating evidence relevant to the investigation being conducted by CSC as
government employer of such misconduct subject of the anonymous complaint. This
situation clearly falls under the exception to the warrantless requirement in administrative
searches defined in O’Connor.
The Court is not unaware of our decision in Anonymous Letter-Complaint against Atty.
Miguel Morales, Clerk of Court, Metropolitan Trial Court of Manila 54 involving a branch
clerk (Atty. Morales) who was investigated on the basis of an anonymous letter alleging that
he was consuming his working hours filing and attending to personal cases, using office
supplies, equipment and utilities. The OCA conducted a spot investigation aided by NBI
agents. The team was able to access Atty. Morales’ personal computer and print two
documents stored in its hard drive, which turned out to be two pleadings, one filed in the
CA and another in the RTC of Manila, both in the name of another lawyer. Atty. Morales’
computer was seized and taken in custody of the OCA but was later ordered released on his
motion, but with order to the MISO to first retrieve the files stored therein. The OCA
disagreed with the report of the Investigating Judge that there was no evidence to support
the charge against Atty. Morales as no one from the OCC personnel who were interviewed
would give a categorical and positive statement affirming the charges against Atty. Morales,
along with other court personnel also charged in the same case. The OCA recommended
that Atty. Morales should be found guilty of gross misconduct. The Court En Banc held
459
that while Atty. Morales may have fallen short of the exacting standards required of every
court employee, the Court cannot use the evidence obtained from his personal computer
against him for it violated his constitutional right against unreasonable searches and
seizures. The Court found no evidence to support the claim of OCA that they were able to
obtain the subject pleadings with the consent of Atty. Morales, as in fact the latter
immediately filed an administrative case against the persons who conducted the spot
investigation, questioning the validity of the investigation and specifically invoking his
constitutional right against unreasonable search and seizure. And as there is no other
evidence, apart from the pleadings, retrieved from the unduly confiscated personal
computer of Atty. Morales, to hold him administratively liable, the Court had no choice but
to dismiss the charges against him for insufficiency of evidence.
The above case is to be distinguished from the case at bar because, unlike the former
which involved a personal computer of a court employee, the computer from which the
personal files of herein petitioner were retrieved is a government-issued computer, hence
government property the use of which the CSC has absolute right to regulate and monitor.
Such relationship of the petitioner with the item seized (office computer) and other relevant
factors and circumstances under American Fourth Amendment jurisprudence, notably the
existence of CSC MO 10, S. 2007 on Computer Use Policy, failed to establish that petitioner
had a reasonable expectation of privacy in the office computer assigned to him.
Having determined that the personal files copied from the office computer of petitioner are
admissible in the administrative case against him, we now proceed to the issue of whether
the CSC was correct in finding the petitioner guilty of the charges and dismissing him from
the service.
Well-settled is the rule that the findings of fact of quasi-judicial agencies, like the CSC, are
accorded not only respect but even finality if such findings are supported by substantial
evidence. Substantial evidence is such amount of relevant evidence which a reasonable
mind might accept as adequate to support a conclusion, even if other equally reasonable
minds might conceivably opine otherwise. 55
The CSC based its findings on evidence consisting of a substantial number of drafts of legal
pleadings and documents stored in his office computer, as well as the sworn affidavits and
testimonies of the witnesses it presented during the formal investigation. According to the
CSC, these documents were confirmed to be similar or exactly the same content-wise with
those on the case records of some cases pending either with CSCRO No. IV, CSC-NCR or
the Commission Proper. There were also substantially similar copies of those pleadings filed
with the CA and duly furnished the Commission. Further, the CSC found the explanation
given by petitioner, to the effect that those files retrieved from his computer hard drive
actually belonged to his lawyer friends Estrellado and Solosa whom he allowed the use of
his computer for drafting their pleadings in the cases they handle, as implausible and
doubtful under the circumstances. We hold that the CSC’s factual finding regarding the
authorship of the subject pleadings and misuse of the office computer is well-supported by
the evidence on record, thus:
It is also striking to note that some of these documents were in the nature of pleadings
responding to the orders, decisions or resolutions of these offices or directly in opposition to
them such as a petition for certiorari or a motion for reconsideration of CSC Resolution.
This indicates that the author thereof knowingly and willingly participated in the promotion
or advancement of the interests of parties contrary or antagonistic to the Commission.
460
Worse, the appearance in one of the retrieved documents the phrase, "Eric N. Estr[e]llado,
Epal kulang ang bayad mo," lends plausibility to an inference that the preparation or
drafting of the legal pleadings was pursued with less than a laudable motivation. Whoever
was responsible for these documents was simply doing the same for the money – a "legal
mercenary" selling or purveying his expertise to the highest bidder, so to speak.
Inevitably, the fact that these documents were retrieved from the computer of Pollo raises
the presumption that he was the author thereof. This is because he had a control of the
said computer. More significantly, one of the witnesses, Margarita Reyes, categorically
testified seeing a written copy of one of the pleadings found in the case records lying on the
table of the respondent. This was the Petition for Review in the case of Estrellado addressed
to the Court of Appeals. The said circumstances indubitably demonstrate that Pollo was
secretly undermining the interest of the Commission, his very own employer.
To deflect any culpability, Pollo would, however, want the Commission to believe that the
documents were the personal files of some of his friends, including one Attorney Ponciano
Solosa, who incidentally served as his counsel of record during the formal investigation of
this case. In fact, Atty. Solosa himself executed a sworn affidavit to this effect.
Unfortunately, this contention of the respondent was directly rebutted by the prosecution
witness, Reyes, who testified that during her entire stay in the PALD, she never saw Atty.
Solosa using the computer assigned to the respondent. Reyes more particularly stated that
she worked in close proximity with Pollo and would have known if Atty. Solosa, whom she
personally knows, was using the computer in question. Further, Atty. Solosa himself was
never presented during the formal investigation to confirm his sworn statement such that
the same constitutes self-serving evidence unworthy of weight and credence. The same is
true with the other supporting affidavits, which Pollo submitted.
At any rate, even admitting for a moment the said contention of the respondent, it evinces
the fact that he was unlawfully authorizing private persons to use the computer assigned to
him for official purpose, not only once but several times gauging by the number of
pleadings, for ends not in conformity with the interests of the Commission. He was, in
effect, acting as a principal by indispensable cooperation…Or at the very least, he should
be responsible for serious misconduct for repeatedly allowing CSC resources, that is, the
computer and the electricity, to be utilized for purposes other than what they were officially
intended.
Further, the Commission cannot lend credence to the posturing of the appellant that the
line appearing in one of the documents, "Eric N. Estrellado, Epal kulang ang bayad mo,"
was a private joke between the person alluded to therein, Eric N. Estrellado, and his
counsel, Atty. Solosa, and not indicative of anything more sinister. The same is too
preposterous to be believed. Why would such a statement appear in a legal pleading stored
in the computer assigned to the respondent, unless he had something to do with it? 56
Petitioner assails the CA in not ruling that the CSC should not have entertained an
anonymous complaint since Section 8 of CSC Resolution No. 99-1936 (URACC) requires a
verified complaint:
Rule II – Disciplinary Cases
SEC. 8. Complaint. - A complaint against a civil service official or employee shall not be
given due course unless it is in writing and subscribed and sworn to by the complainant.
However, in cases initiated by the proper disciplining authority, the complaint need not
be under oath.
461
No anonymous complaint shall be entertained unless there is obvious truth or merit to
the allegation therein or supported by documentary or direct evidence, in which case the
person complained of may be required to comment.
xxxx
We need not belabor this point raised by petitioner. The administrative complaint is deemed
to have been initiated by the CSC itself when Chairperson David, after a spot inspection
and search of the files stored in the hard drive of computers in the two divisions adverted to
in the anonymous letter -- as part of the disciplining authority’s own fact-finding
investigation and information-gathering -- found a prima facie case against the petitioner
who was then directed to file his comment. As this Court held in Civil Service Commission
v. Court of Appeals57 --
Under Sections 46 and 48 (1), Chapter 6, Subtitle A, Book V of E.O. No. 292 and Section 8,
Rule II of Uniform Rules on Administrative Cases in the Civil Service, a complaint may be
initiated against a civil service officer or employee by the appropriate disciplining authority,
even without being subscribed and sworn to. Considering that the CSC, as the disciplining
authority for Dumlao, filed the complaint, jurisdiction over Dumlao was validly acquired.
(Emphasis supplied.)
As to petitioner’s challenge on the validity of CSC OM 10, S. 2002 (CUP), the same deserves
scant consideration. The alleged infirmity due to the said memorandum order having been
issued solely by the CSC Chair and not the Commission as a collegial body, upon which the
dissent of Commissioner Buenaflor is partly anchored, was already explained by
Chairperson David in her Reply to the Addendum to Commissioner Buenaflor’s previous
memo expressing his dissent to the actions and disposition of the Commission in this case.
According to Chairperson David, said memorandum order was in fact exhaustively
discussed, provision by provision in the January 23, 2002 Commission Meeting, attended
by her and former Commissioners Erestain, Jr. and Valmores. Hence, the Commission En
Banc at the time saw no need to issue a Resolution for the purpose and further because the
CUP being for internal use of the Commission, the practice had been to issue a
memorandum order.58 Moreover, being an administrative rule that is merely internal in
nature, or which regulates only the personnel of the CSC and not the public, the CUP need
not be published prior to its effectivity.59
In fine, no error or grave abuse of discretion was committed by the CA in affirming the
CSC’s ruling that petitioner is guilty of grave misconduct, dishonesty, conduct prejudicial
to the best interest of the service, and violation of R.A. No. 6713. The gravity of these
offenses justified the imposition on petitioner of the ultimate penalty of dismissal with all
its accessory penalties, pursuant to existing rules and regulations.
WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated October
11, 2007 and Resolution dated February 29, 2008 of the Court of Appeals in CA-G.R. SP
No. 98224 are AFFIRMED.
With costs against the petitioner.
SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice
WE CONCUR:
RENATO C. CORONA
Chief Justice
462
 See Separate Concurring Opinion I join opinion of J. Bersamin
ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.
Associate Justice Associate Justice

I join the concurring and dissenting

opinion of Justice Bersamin
ARTURO D. BRION
TERESITA J. LEONARDO-DE
Associate Justice
CASTRO
Associate Justice

DIOSDADO M. PERALTA LUCAS P. BERSAMIN

Associate Justice Associate Justice

I join Justice L. Bersamin's concurring

(No Part)
and dissenting opinion
MARIANO C. DEL CASTILLO*
ROBERTO A. ABAD
Associate Justice
Associate Justice

JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA

Associate Justice Associate Justice

I concur but share J. Carpio's

concerns BIENVENIDO L. REYES
MARIA LOURDES P. A. SERENO Associate Justice
Associate Justice
ESTELA M. PERLAS-BERNABE
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the 1987 Constitution, I certify that the conclusions
in the above Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court.
RENATO C. CORONA
Chief Justice

G.R. No. 202666               September 29, 2014

RHONDA AVE S. VIVARES and SPS. MARGARITA and DAVID SUZARA, Petitioners,
vs.
ST. THERESA'S COLLEGE, MYLENE RHEZA T. ESCUDERO, and JOHN
DOES, Respondents.
DECISION
VELASCO, JR., J.:

463
The individual's desire for privacy is never absolute, since participation in society is an
equally powerful desire. Thus each individual is continually engaged in a personal
adjustment process in which he balances the desire for privacy with the desire for
disclosure and communication of himself to others, in light of the environmental conditions
and social norms set by the society in which he lives.
- Alan Westin, Privacy and Freedom (1967)
The Case
Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, in
relation to Section 19 of A.M. No. 08-1-16-SC,1 otherwise known as the "Rule on the Writ of
Habeas Data." Petitioners herein assail the July 27, 2012 Decision 2 of the Regional Trial
Court, Branch 14 in Cebu City (RTC) in SP. Proc. No. 19251-CEB, which dismissed their
habeas data petition.
The Facts
Nenita Julia V. Daluz (Julia) and Julienne Vida Suzara (Julienne), both minors, were,
during the period material, graduating high school students at St. Theresa's College (STC),
Cebu City. Sometime in January 2012, while changing into their swimsuits for a beach
party they were about to attend, Julia and Julienne, along with several others, took digital
pictures of themselves clad only in their undergarments. These pictures were then
uploaded by Angela Lindsay Tan (Angela) on her Facebook3 profile.
Back at the school, Mylene Rheza T. Escudero (Escudero), a computer teacher at STC’s
high school department, learned from her students that some seniors at STC posted
pictures online, depicting themselves from the waist up, dressed only in brassieres.
Escudero then asked her students if they knew who the girls in the photos are. In turn,
they readily identified Julia, Julienne, and Chloe Lourdes Taboada (Chloe), among others.
Using STC’s computers, Escudero’s students logged in to their respective personal
Facebook accounts and showed her photos of the identified students, which include: (a)
Julia and Julienne drinking hard liquor and smoking cigarettes inside a bar; and (b) Julia
and Julienne along the streets of Cebu wearing articles of clothing that show virtually the
entirety of their black brassieres. What is more, Escudero’s students claimed that there
were times when access to or the availability of the identified students’ photos was not
confined to the girls’ Facebook friends,4 but were, in fact, viewable by any Facebook user.5
Upon discovery, Escudero reported the matter and, through one of her student’s Facebook
page, showed the photosto Kristine Rose Tigol (Tigol), STC’s Discipline-in-Charge, for
appropriate action. Thereafter, following an investigation, STC found the identified students
to have deported themselves in a manner proscribed by the school’s Student Handbook, to
wit:
1. Possession of alcoholic drinks outside the school campus;
2. Engaging in immoral, indecent, obscene or lewd acts;
3. Smoking and drinking alcoholicbeverages in public places;
4. Apparel that exposes the underwear;
5. Clothing that advocates unhealthy behaviour; depicts obscenity; contains sexually
suggestive messages, language or symbols; and 6. Posing and uploading pictures on
the Internet that entail ample body exposure.
On March 1, 2012, Julia, Julienne, Angela, and the other students in the pictures in
question, reported, as required, to the office of Sr. Celeste Ma. Purisima Pe (Sr. Purisima),
STC’s high school principal and ICM6 Directress. They claimed that during the meeting,
464
they were castigated and verbally abused by the STC officials present in the conference,
including Assistant Principal Mussolini S. Yap (Yap), Roswinda Jumiller, and Tigol. What is
more, Sr. Purisima informed their parents the following day that, as part of their penalty,
they are barred from joining the commencement exercises scheduled on March 30, 2012.
A week before graduation, or on March 23, 2012, Angela’s mother, Dr. Armenia M. Tan
(Tan), filed a Petition for Injunction and Damages before the RTC of Cebu City against STC,
et al., docketed as Civil Case No. CEB-38594. 7 In it, Tan prayed that defendants therein be
enjoined from implementing the sanction that precluded Angela from joining the
commencement exercises.
On March 25, 2012,petitioner Rhonda Ave Vivares (Vivares), the mother of Julia, joined the
fray as an intervenor. On March 28, 2012, defendants inCivil Case No. CEB-38594 filed
their memorandum, containing printed copies of the photographs in issue as annexes. That
same day, the RTC issued a temporary restraining order (TRO) allowing the students to
attend the graduation ceremony, to which STC filed a motion for reconsideration.
Despite the issuance of the TRO,STC, nevertheless, barred the sanctioned students from
participating in the graduation rites, arguing that, on the date of the commencement
exercises, its adverted motion for reconsideration on the issuance ofthe TRO remained
unresolved.
Thereafter, petitioners filed before the RTC a Petition for the Issuance of a Writ of Habeas
Data, docketed as SP. Proc. No. 19251-CEB8 on the basis of the following considerations:
1. The photos of their children in their undergarments (e.g., bra) were taken for
posterity before they changed into their swimsuits on the occasion of a birthday
beach party;
2. The privacy setting of their children’s Facebook accounts was set at "Friends
Only." They, thus, have a reasonable expectation of privacy which must be respected.
3. Respondents, being involved in the field of education, knew or ought to have
known of laws that safeguard the right to privacy. Corollarily, respondents knew or
ought to have known that the girls, whose privacy has been invaded, are the victims
in this case, and not the offenders. Worse, after viewing the photos, the minors were
called "immoral" and were punished outright;
4. The photos accessed belong to the girls and, thus, cannot be used and reproduced
without their consent. Escudero, however, violated their rights by saving digital
copies of the photos and by subsequently showing them to STC’s officials. Thus, the
Facebook accounts of petitioners’ children were intruded upon;
5. The intrusion into the Facebook accounts, as well as the copying of information,
data, and digital images happened at STC’s Computer Laboratory; and
6. All the data and digital images that were extracted were boldly broadcasted by
respondents through their memorandum submitted to the RTC in connection with
Civil Case No. CEB-38594. To petitioners, the interplay of the foregoing constitutes
an invasion of their children’s privacy and, thus, prayed that: (a) a writ of habeas
databe issued; (b) respondents be ordered to surrender and deposit with the court all
soft and printed copies of the subjectdata before or at the preliminary hearing; and (c)
after trial, judgment be rendered declaring all information, data, and digital images
accessed, saved or stored, reproduced, spread and used, to have been illegally
obtained inviolation of the children’s right to privacy.

465
Finding the petition sufficient in form and substance, the RTC, through an Order dated
July 5, 2012, issued the writ of habeas data. Through the same Order, herein respondents
were directed to file their verified written return, together with the supporting affidavits,
within five (5) working days from service of the writ.
In time, respondents complied with the RTC’s directive and filed their verified written
return, laying down the following grounds for the denial of the petition, viz: (a) petitioners
are not the proper parties to file the petition; (b) petitioners are engaging in forum
shopping; (c) the instant case is not one where a writ of habeas data may issue;and (d)
there can be no violation of their right to privacy as there is no reasonable expectation of
privacy on Facebook.
Ruling of the Regional Trial Court
On July 27, 2012, the RTC rendered a Decision dismissing the petition for habeas data.
The dispositive portion of the Decision pertinently states:
WHEREFORE, in view of the foregoing premises, the Petition is hereby DISMISSED.
The parties and media must observe the aforestated confidentiality.
xxxx
SO ORDERED.9
To the trial court, petitioners failed to prove the existence of an actual or threatened
violation of the minors’ right to privacy, one of the preconditions for the issuance of the writ
of habeas data. Moreover, the court a quoheld that the photos, having been uploaded on
Facebook without restrictions as to who may view them, lost their privacy in some way.
Besides, the RTC noted, STC gathered the photographs through legal means and for a legal
purpose, that is, the implementation of the school’s policies and rules on discipline.
Not satisfied with the outcome, petitioners now come before this Court pursuant to Section
19 of the Rule on Habeas Data.10
The Issues
The main issue to be threshed out inthis case is whether or not a writ of habeas datashould
be issued given the factual milieu. Crucial in resolving the controversy, however, is the
pivotal point of whether or not there was indeed an actual or threatened violation of the
right to privacy in the life, liberty, or security of the minors involved in this case.
Our Ruling
We find no merit in the petition.
Procedural issues concerning the availability of the Writ of Habeas Data
The writ of habeas datais a remedy available to any person whose right to privacy in life,
liberty or security is violated or threatened by an unlawful act or omission of a public
official or employee, or of a private individual or entity engaged in the gathering, collecting
or storing of data or information regarding the person, family, home and correspondence of
the aggrieved party.11 It is an independent and summary remedy designed to protect the
image, privacy, honor, information, and freedom of information of an individual, and to
provide a forum to enforce one’s right to the truth and to informational privacy. It seeks to
protect a person’s right to control information regarding oneself, particularly in instances in
which such information is being collected through unlawful means in order to achieve
unlawful ends.12
In developing the writ of habeas data, the Court aimed to protect an individual’s right to
informational privacy, among others. A comparative law scholar has, in fact, defined
habeas dataas "a procedure designed to safeguard individual freedom from abuse in the
466
information age."13 The writ, however, will not issue on the basis merely of an alleged
unauthorized access to information about a person.Availment of the writ requires the
existence of a nexus between the right to privacy on the one hand, and the right to life,
liberty or security on the other.14 Thus, the existence of a person’s right to informational
privacy and a showing, at least by substantial evidence, of an actual or threatened violation
of the right to privacy in life, liberty or security of the victim are indispensable before the
privilege of the writ may be extended.15
Without an actionable entitlement in the first place to the right to informational privacy, a
habeas datapetition will not prosper. Viewed from the perspective of the case at bar,this
requisite begs this question: given the nature of an online social network (OSN)––(1) that it
facilitates and promotes real-time interaction among millions, if not billions, of users, sans
the spatial barriers,16 bridging the gap created by physical space; and (2) that any
information uploaded in OSNs leavesan indelible trace in the provider’s databases, which
are outside the control of the end-users––is there a right to informational privacy in OSN
activities of its users? Before addressing this point, We must first resolve the procedural
issues in this case.
a. The writ of habeas data is not only confined to cases of extralegal killings and enforced
disappearances
Contrary to respondents’ submission, the Writ of Habeas Datawas not enacted solely for
the purpose of complementing the Writ of Amparoin cases of extralegal killings and
enforced disappearances.
Section 2 of the Rule on the Writ of Habeas Data provides:
Sec. 2. Who May File. – Any aggrieved party may file a petition for the writ of habeas data.
However, in cases of extralegal killings and enforced disappearances, the petition may be
filed by:
(a) Any member of the immediate family of the aggrieved party, namely: the spouse,
children and parents; or
(b) Any ascendant, descendant or collateral relative of the aggrieved party within the
fourth civil degreeof consanguinity or affinity, in default of those mentioned in the
preceding paragraph. (emphasis supplied)
Had the framers of the Rule intended to narrow the operation of the writ only to cases of
extralegal killings or enforced disappearances, the above underscored portion of Section 2,
reflecting a variance of habeas data situations, would not have been made.
Habeas data, to stress, was designed "to safeguard individual freedom from abuse in the
information age."17 As such, it is erroneous to limit its applicability to extralegal killings and
enforced disappearances only. In fact, the annotations to the Rule preparedby the
Committee on the Revision of the Rules of Court, after explaining that the Writ of Habeas
Data complements the Writ of Amparo, pointed out that:
The writ of habeas data, however, can be availed of as an independent remedy to enforce
one’s right to privacy, more specifically the right to informational privacy. The remedies
against the violation of such right can include the updating, rectification, suppression or
destruction of the database or information or files in possession or in control of
respondents.18 (emphasis Ours) Clearly then, the privilege of the Writ of Habeas Datamay
also be availed of in cases outside of extralegal killings and enforced disappearances.
b. Meaning of "engaged" in the gathering, collecting or storing of data or information

467
Respondents’ contention that the habeas data writ may not issue against STC, it not being
an entity engaged in the gathering, collecting or storing of data or information regarding the
person, family, home and correspondence of the aggrieved party, while valid to a point, is,
nonetheless, erroneous.
To be sure, nothing in the Rule would suggest that the habeas data protection shall be
available only against abuses of a person or entity engaged in the businessof gathering,
storing, and collecting of data. As provided under Section 1 of the Rule:
Section 1. Habeas Data. – The writ of habeas datais a remedy available to any person
whose right to privacy in life, liberty or security is violated or threatened by an unlawful act
or omission of a public official or employee, or of a private individual or entity engaged in
the gathering, collecting or storing of data or information regarding the person, family,
home and correspondence of the aggrieved party. (emphasis Ours)
The provision, when taken in its proper context, as a whole, irresistibly conveys the idea
that habeas data is a protection against unlawful acts or omissions of public officials and of
private individuals or entities engaged in gathering, collecting, or storing data about the
aggrieved party and his or her correspondences, or about his or her family. Such individual
or entity need not be in the business of collecting or storing data.
To "engage" in something is different from undertaking a business endeavour. To "engage"
means "to do or take part in something." 19 It does not necessarily mean that the activity
must be done in pursuit of a business. What matters is that the person or entity must be
gathering, collecting or storing said data or information about the aggrieved party or his or
her family. Whether such undertaking carries the element of regularity, as when one
pursues a business, and is in the nature of a personal endeavour, for any other reason or
even for no reason at all, is immaterial and such will not prevent the writ from getting to
said person or entity.
To agree with respondents’ above argument, would mean unduly limiting the reach of the
writ to a very small group, i.e., private persons and entities whose business is data
gathering and storage, and in the process decreasing the effectiveness of the writ asan
instrument designed to protect a right which is easily violated in view of rapid
advancements in the information and communications technology––a right which a great
majority of the users of technology themselves are not capable of protecting.
Having resolved the procedural aspect of the case, We now proceed to the core of the
controversy.
The right to informational privacy on Facebook
a. The Right to Informational Privacy
The concept of privacyhas, through time, greatly evolved, with technological advancements
having an influential part therein. This evolution was briefly recounted in former Chief
Justice Reynato S. Puno’s speech, The Common Right to Privacy, 20 where he explained the
three strands of the right to privacy, viz: (1) locational or situational privacy; 21 (2)
informational privacy; and (3) decisional privacy. 22 Of the three, what is relevant to the case
at bar is the right to informational privacy––usually defined as the right of individuals to
control information about themselves. 23
With the availability of numerous avenues for information gathering and data sharing
nowadays, not to mention each system’s inherent vulnerability to attacks and intrusions,
there is more reason that every individual’s right to control said flow of information should
be protected and that each individual should have at least a reasonable expectation of
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privacy in cyberspace. Several commentators regarding privacy and social networking sites,
however, all agree that given the millions of OSN users, "[i]n this [Social Networking]
environment, privacy is no longer grounded in reasonable expectations, but rather in some
theoretical protocol better known as wishful thinking." 24
It is due to this notion that the Court saw the pressing need to provide for judicial remedies
that would allow a summary hearing of the unlawful use of data or information and to
remedy possible violations of the right to privacy. 25 In the same vein, the South African
High Court, in its Decision in the landmark case, H v. W, 26 promulgated on January30,
2013, recognized that "[t]he law has to take into account the changing realities not only
technologically but also socially or else it will lose credibility in the eyes of the people. x x x
It is imperative that the courts respond appropriately to changing times, acting cautiously
and with wisdom." Consistent with this, the Court, by developing what may be viewed as
the Philippine model of the writ of habeas data, in effect, recognized that, generally
speaking, having an expectation of informational privacy is not necessarily incompatible
with engaging in cyberspace activities, including those that occur in OSNs.
The question now though is up to whatextent is the right to privacy protected in OSNs?
Bear in mind that informational privacy involves personal information. At the same time,
the very purpose of OSNs is socializing––sharing a myriad of information, 27 some of which
would have otherwise remained personal.
b. Facebook’s Privacy Tools: a response to the clamor for privacy in OSN activities
Briefly, the purpose of an OSN is precisely to give users the ability to interact and to stay
connected to other members of the same or different social media platform through the
sharing of statuses, photos, videos, among others, depending on the services provided by
the site. It is akin to having a room filled with millions of personal bulletin boards or
"walls," the contents of which are under the control of each and every user. In his or her
bulletin board, a user/owner can post anything––from text, to pictures, to music and
videos––access to which would depend on whether he or she allows one, some or all of the
other users to see his or her posts. Since gaining popularity, the OSN phenomenon has
paved the way to the creation of various social networking sites, includingthe one involved
in the case at bar, www.facebook.com (Facebook), which, according to its developers, people
use "to stay connected with friends and family, to discover what’s going on in the world,
and to share and express what matters to them." 28
Facebook connections are established through the process of "friending" another user. By
sending a "friend request," the user invites another to connect their accounts so that they
can view any and all "Public" and "Friends Only" posts of the other.Once the request is
accepted, the link is established and both users are permitted to view the other user’s
"Public" or "Friends Only" posts, among others. "Friending," therefore, allows the user to
form or maintain one-to-one relationships with other users, whereby the user gives his or
her "Facebook friend" access to his or her profile and shares certain information to the
latter.29
To address concerns about privacy,30 but without defeating its purpose, Facebook was
armed with different privacy tools designed to regulate the accessibility of a user’s
profile31 as well as information uploaded by the user. In H v. W, 32 the South Gauteng High
Court recognized this ability of the users to "customize their privacy settings," but did so
with this caveat: "Facebook states in its policies that, although it makes every effort to
protect a user’s information, these privacy settings are not foolproof." 33
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For instance, a Facebook user canregulate the visibility and accessibility of digital
images(photos), posted on his or her personal bulletin or "wall," except for the user’sprofile
picture and ID, by selecting his or her desired privacy setting:
(a) Public - the default setting; every Facebook user can view the photo;
(b) Friends of Friends - only the user’s Facebook friends and their friends can view
the photo;
(b) Friends - only the user’s Facebook friends can view the photo;
(c) Custom - the photo is made visible only to particular friends and/or networks of
the Facebook user; and
(d) Only Me - the digital image can be viewed only by the user.
The foregoing are privacy tools, available to Facebook users, designed to set up barriers to
broaden or limit the visibility of his or her specific profile content, statuses, and photos,
among others, from another user’s point of view. In other words, Facebook extends its
users an avenue to make the availability of their Facebook activities reflect their choice as
to "when and to what extent to disclose facts about [themselves] – and to put others in the
position of receiving such confidences." 34 Ideally, the selected setting will be based on one’s
desire to interact with others, coupled with the opposing need to withhold certain
information as well as to regulate the spreading of his or her personal information.
Needless to say, as the privacy setting becomes more limiting, fewer Facebook users can
view that user’s particular post.
STC did not violate petitioners’ daughters’ right to privacy
Without these privacy settings, respondents’ contention that there is no reasonable
expectation of privacy in Facebook would, in context, be correct. However, such is not the
case. It is through the availability of said privacy tools that many OSN users are said to
have a subjective expectation that only those to whomthey grant access to their profile will
view the information they post or upload thereto.35
This, however, does not mean thatany Facebook user automatically has a protected
expectation of privacy inall of his or her Facebook activities.
Before one can have an expectation of privacy in his or her OSN activity, it is first necessary
that said user, in this case the children of petitioners,manifest the intention to keepcertain
posts private, through the employment of measures to prevent access thereto or to limit its
visibility.36 And this intention can materialize in cyberspace through the utilization of the
OSN’s privacy tools. In other words, utilization of these privacy tools is the manifestation,in
cyber world, of the user’s invocation of his or her right to informational privacy. 37
Therefore, a Facebook user who opts to make use of a privacy tool to grant or deny access
to his or her post orprofile detail should not be denied the informational privacy right which
necessarily accompanies said choice. 38 Otherwise, using these privacy tools would be a
feckless exercise, such that if, for instance, a user uploads a photo or any personal
information to his or her Facebook page and sets its privacy level at "Only Me" or a custom
list so that only the user or a chosen few can view it, said photo would still be deemed
public by the courts as if the user never chose to limit the photo’s visibility and
accessibility. Such position, if adopted, will not only strip these privacy tools of their
function but it would also disregard the very intention of the user to keep said photo or
information within the confines of his or her private space.
We must now determine the extent that the images in question were visible to other
Facebook users and whether the disclosure was confidential in nature. In other words, did
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the minors limit the disclosure of the photos such that the images were kept within their
zones of privacy? This determination is necessary in resolving the issue of whether the
minors carved out a zone of privacy when the photos were uploaded to Facebook so that
the images will be protected against unauthorized access and disclosure.
Petitioners, in support of their thesis about their children’s privacy right being violated,
insist that Escudero intruded upon their children’s Facebook accounts, downloaded copies
ofthe pictures and showed said photos to Tigol. To them, this was a breach of the minors’
privacy since their Facebook accounts, allegedly, were under "very private" or "Only
Friends" setting safeguarded with a password.39 Ultimately, they posit that their children’s
disclosure was only limited since their profiles were not open to public viewing. Therefore,
according to them, people who are not their Facebook friends, including respondents, are
barred from accessing said post without their knowledge and consent. Aspetitioner’s
children testified, it was Angelawho uploaded the subjectphotos which were only viewable
by the five of them,40 although who these five are do not appear on the records.
Escudero, on the other hand, stated in her affidavit 41 that "my students showed me some
pictures of girls cladin brassieres. This student [sic] of mine informed me that these are
senior high school [students] of STC, who are their friends in [F]acebook. x x x They then
said [that] there are still many other photos posted on the Facebook accounts of these girls.
At the computer lab, these students then logged into their Facebook account [sic], and
accessed from there the various photographs x x x. They even told me that there had been
times when these photos were ‘public’ i.e., not confined to their friends in Facebook."
In this regard, We cannot give muchweight to the minors’ testimonies for one key reason:
failure to question the students’ act of showing the photos to Tigol disproves their allegation
that the photos were viewable only by the five of them. Without any evidence to corroborate
their statement that the images were visible only to the five of them, and without their
challenging Escudero’s claim that the other students were able to view the photos, their
statements are, at best, self-serving, thus deserving scant consideration. 42
It is well to note that not one of petitioners disputed Escudero’s sworn account that her
students, who are the minors’ Facebook "friends," showed her the photos using their own
Facebook accounts. This only goes to show that no special means to be able to viewthe
allegedly private posts were ever resorted to by Escudero’s students, 43 and that it is
reasonable to assume, therefore, that the photos were, in reality, viewable either by (1) their
Facebook friends, or (2) by the public at large.
Considering that the default setting for Facebook posts is"Public," it can be surmised that
the photographs in question were viewable to everyone on Facebook, absent any proof that
petitioners’ children positively limited the disclosure of the photograph. If suchwere the
case, they cannot invoke the protection attached to the right to informational privacy. The
ensuing pronouncement in US v. Gines-Perez44 is most instructive:
[A] person who places a photograph on the Internet precisely intends to forsake and
renounce all privacy rights to such imagery, particularly under circumstances suchas here,
where the Defendant did not employ protective measures or devices that would have
controlled access to the Web page or the photograph itself.45
Also, United States v. Maxwell46 held that "[t]he more open the method of transmission is,
the less privacy one can reasonably expect. Messages sent to the public at large inthe chat
room or e-mail that is forwarded from correspondent to correspondent loses any semblance
of privacy."
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That the photos are viewable by "friends only" does not necessarily bolster the petitioners’
contention. In this regard, the cyber community is agreed that the digital images under this
setting still remain to be outside the confines of the zones of privacy in view of the
following:
(1) Facebook "allows the world to be more open and connected by giving its users the
tools to interact and share in any conceivable way;"47
(2) A good number of Facebook users "befriend" other users who are total strangers; 48
(3) The sheer number of "Friends" one user has, usually by the hundreds; and
(4) A user’s Facebook friend can "share"49 the former’s post, or "tag"50 others who are
not Facebook friends with the former, despite its being visible only tohis or her own
Facebook friends.
It is well to emphasize at this point that setting a post’s or profile detail’s privacy to
"Friends" is no assurance that it can no longer be viewed by another user who is not
Facebook friends with the source of the content. The user’s own Facebook friend can share
said content or tag his or her own Facebook friend thereto, regardless of whether the user
tagged by the latter is Facebook friends or not with the former. Also, when the post is
shared or when a person is tagged, the respective Facebook friends of the person who
shared the post or who was tagged can view the post, the privacy setting of which was set
at "Friends."
To illustrate, suppose A has 100 Facebook friends and B has 200. A and B are not
Facebook friends. If C, A’s Facebook friend, tags B in A’s post, which is set at "Friends," the
initial audience of 100 (A’s own Facebook friends) is dramatically increased to 300 (A’s 100
friends plus B’s 200 friends or the public, depending upon B’s privacy setting). As a result,
the audience who can view the post is effectively expanded––and to a very large extent.
This, along with its other features and uses, is confirmation of Facebook’s proclivity
towards user interaction and socialization rather than seclusion or privacy, as it
encourages broadcasting of individual user posts. In fact, it has been said that OSNs have
facilitated their users’ self-tribute, thereby resulting into the "democratization of
fame."51 Thus, it is suggested, that a profile, or even a post, with visibility set at "Friends
Only" cannot easily, more so automatically, be said to be "very private," contrary to
petitioners’ argument.
As applied, even assuming that the photos in issue are visible only to the sanctioned
students’ Facebook friends, respondent STC can hardly be taken to task for the perceived
privacy invasion since it was the minors’ Facebook friends who showed the pictures to
Tigol. Respondents were mere recipients of what were posted. They did not resort to any
unlawful means of gathering the information as it was voluntarily given to them by persons
who had legitimate access to the said posts. Clearly, the fault, if any, lies with the friends of
the minors. Curiously enough, however, neither the minors nor their parents imputed any
violation of privacy against the students who showed the images to Escudero.
Furthermore, petitioners failed to prove their contention that respondents reproduced and
broadcasted the photographs. In fact, what petitioners attributed to respondents as an act
of offensive disclosure was no more than the actuality that respondents appended said
photographs in their memorandum submitted to the trial court in connection with Civil
Case No. CEB-38594.52 These are not tantamount to a violation of the minor’s
informational privacy rights, contrary to petitioners’ assertion.

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In sum, there can be no quibbling that the images in question, or to be more precise, the
photos of minor students scantily clad, are personal in nature, likely to affect, if
indiscriminately circulated, the reputation of the minors enrolled in a conservative
institution. However, the records are bereft of any evidence, other than bare assertions that
they utilized Facebook’s privacy settings to make the photos visible only to them or to a
select few. Without proof that they placed the photographs subject of this case within the
ambit of their protected zone of privacy, they cannot now insist that they have an
expectation of privacy with respect to the photographs in question.
Had it been proved that the access tothe pictures posted were limited to the original
uploader, through the "Me Only" privacy setting, or that the user’s contact list has been
screened to limit access to a select few, through the "Custom" setting, the result may have
been different, for in such instances, the intention to limit access to the particular post,
instead of being broadcasted to the public at large or all the user’s friends en masse,
becomes more manifest and palpable.
On Cyber Responsibility
It has been said that "the best filter is the one between your children’s ears." 53 This means
that self-regulation on the part of OSN users and internet consumers ingeneral is the best
means of avoiding privacy rights violations. 54 As a cyberspace communitymember, one has
to be proactive in protecting his or her own privacy. 55 It is in this regard that many OSN
users, especially minors, fail.Responsible social networking or observance of the
"netiquettes"56 on the part of teenagers has been the concern of many due to the
widespreadnotion that teenagers can sometimes go too far since they generally lack the
people skills or general wisdom to conduct themselves sensibly in a public forum. 57
Respondent STC is clearly aware of this and incorporating lessons on good cyber
citizenship in its curriculum to educate its students on proper online conduct may be
mosttimely. Too, it is not only STC but a number of schools and organizations have already
deemed it important to include digital literacy and good cyber citizenshipin their respective
programs and curricula in view of the risks that the children are exposed to every time they
participate in online activities.58 Furthermore, considering the complexity of the cyber world
and its pervasiveness,as well as the dangers that these children are wittingly or unwittingly
exposed to in view of their unsupervised activities in cyberspace, the participation of the
parents in disciplining and educating their children about being a good digital citizen is
encouraged by these institutions and organizations. In fact, it is believed that "to limit such
risks, there’s no substitute for parental involvement and supervision." 59
As such, STC cannot be faulted for being steadfast in its duty of teaching its students to
beresponsible in their dealings and activities in cyberspace, particularly in OSNs, whenit
enforced the disciplinary actions specified in the Student Handbook, absenta showing that,
in the process, it violated the students’ rights.
OSN users should be aware of the risks that they expose themselves to whenever they
engage incyberspace activities.1âwphi1 Accordingly, they should be cautious enough to
control their privacy and to exercise sound discretion regarding how much information
about themselves they are willing to give up. Internet consumers ought to be aware that, by
entering or uploading any kind of data or information online, they are automatically and
inevitably making it permanently available online, the perpetuation of which is outside the
ambit of their control. Furthermore, and more importantly, information, otherwise private,

473
voluntarily surrendered by them can be opened, read, or copied by third parties who may
or may not be allowed access to such.
It is, thus, incumbent upon internet users to exercise due diligence in their online dealings
and activities and must not be negligent in protecting their rights. Equity serves the
vigilant. Demanding relief from the courts, as here, requires that claimants themselves take
utmost care in safeguarding a right which they allege to have been violated. These are
indispensable. We cannot afford protection to persons if they themselves did nothing to
place the matter within the confines of their private zone. OSN users must be mindful
enough to learn the use of privacy tools, to use them if they desire to keep the information
private, and to keep track of changes in the available privacy settings, such as those of
Facebook, especially because Facebook is notorious for changing these settings and the
site's layout often.
In finding that respondent STC and its officials did not violate the minors' privacy rights,
We find no cogent reason to disturb the findings and case disposition of the court a quo.
In light of the foregoing, the Court need not belabor the other assigned errors.
WHEREFORE, premises considered, the petition is hereby DENIED. The Decision dated
July 27, 2012 of the Regional Trial Court, Branch 14 in Cebu City in SP. Proc. No. 19251-
CEB is hereby AFFIRMED.
No pronouncement as to costs.
SO ORDERED.

G.R. No. 202124

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
IRENEO JUGUETA, Accused-Appellant.
DECISION
PERALTA, J.:
This resolves the appeal from the Decision 1 of the Court of Appeals (CA) dated January 30,
2012 in CA-G.R. CR HC No. 03252. The CA affirmed the judgments of the Regional Trial
Court (RTC), Branch 61, Gumaca, Quezon, finding accused-appellant Ireneo
Jugueta y Flores guilty beyond reasonable doubt of Double Murder in Criminal Case No.
7698-G and Multiple Attempted Murder in Criminal Case No. 7702-G.
In Criminal Case No. 7698-G, appellant was charged with Double Murder, defined and
penalized under Article 248 of the Revised Penal Code, allegedly committed as follows:
That on or about the 6th day of June 2002, at about 9:00 o'clock in the evening, at
Barangay Caridad Ilaya, Municipality of Atimonan, Province of Quezon, Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused, armed with a
caliber.22 firearm, with intent to kill, qualified by treachery and evident premeditation, did
then and there willfully, unlawfully and feloniously attack, assault and shoot with said
firearm Mary Grace Divina, a minor, 13 years old, who suffered the following:
"Gunshot wound -
Point of Entry – lower abdomen, right, 2 cm. from the midline and 6 cm. from the level of
the umbilicus, directed upward toward the left upper abdomen."
and Claudine Divina, a minor, 3 ½ years of age, who suffered the following:
"Gunshot wound -
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Point of Entry - 9th ICS along the mid-axillary line, right, 1 cm. diameter
Point of Exit - 7th ICS mid-axillary line, left;"
which directly caused their instant death.
That the crime committed in the dwelling of the offended party who had not given
provocation for the attack and the accused took advantage of nighttime to facilitate the
commission of the offense.
Contrary to law.2
In Criminal Case No. 7702-G, appellant, together with Gilbert Estores and Roger San
Miguel, was charged with Multiple Attempted Murder, allegedly committed as follows:
That on or about 9:00 o’clock in the evening of 6th day of June, 2002, at Barangay Caridad
Ilaya, Municipality of Atimonan, Province of Quezon, Philippines and within the jurisdiction
of this Honorable Court, the above-named accused, conspiring and confederating together
and mutually helping one another, armed with short firearms of undetermined calibres,
with intent to kill, qualified by treachery, with evident premeditation and abuse of superior
strength, did then and there wilfully, unlawfully and feloniously attack, assault, and shoot
with the said firearms the house occupied by the family of Norberto Divina, thereby
commencing the commission of the crime of Murder, directly by overt acts, but did not
perform all the acts of execution which would have produced it by reason of some cause or
accident other than the spontaneous desistance of the accused, that is, the occupants
Norberto Divina, his wife Maricel Divina and children Elizabeth Divina and Judy Ann
Divina, both elementary pupils and who are minors, were not hit.
CONTRARY TO LAW.3
Roger San Miguel, however, moved for reinvestigation of the case against them. At said
proceedings, one Danilo Fajarillo submitted his sworn statement stating that on June 6,
2002, he saw appellant with a certain "Hapon" and Gilbert Estores at the crime scene, but
it was only appellant who was carrying a firearm while the other two had no participation
in the shooting incident. Fajarillo further stated that Roger San Miguel was not present at
the crime scene. Based on the sworn statement of Fajarillo, the Provincial Prosecutor found
no prima facie case against Gilbert Estores and Roger San Miguel. 4 Thus, upon motion of
the prosecution, the case for Attempted Murder against Gilbert Estores and Roger San
Miguel was dismissed, and trial proceeded only as to appellant.5
At the trial, the prosecution presented the testimonies of Norberto Divina, the victim, and
Dr. Lourdes Taguinod who executed the Medico-Legal Certificate and confirmed that the
children of Norberto, namely, Mary Grace and Claudine, died from gunshot wounds. Dr.
Taguinod noted that the trajectory of the bullet wounds showed that the victims were at a
higher location than the shooter, but she could not tell what kind of ammunitions were
used.6
Norberto testified that the appellant is his brother-in-law. He recounted that in the evening
of June 6, 2002, as his entire family lay down on the floor of their one-room nipa hut to
sleep, the "sack" walling of their hut was suddenly stripped off, and only the supporting
bamboo (fences) remained. With the covering of the wall gone, the three (3) men responsible
for the deed came into view. Norberto clearly saw their faces which were illuminated by the
light of a gas lamp hanging in their small hut. Norberto identified the 3 men as appellant,
Gilbert Estores and Roger San Miguel.
The 3 men ordered Norberto to come down from his house, but he refused to do so. The
men then uttered, "Magdasal ka na at katapusan mo na ngayon." Norberto pleaded with
475
them, saying, "Maawa kayo sa amin, matanda na ako at marami akong anak. Anong
kasalanan ko sa inyo?" Despite such plea for mercy, a gunshot was fired, and Norberto
immediately threw his body over his children and wife in an attempt to protect them from
being hit. Thereafter, he heard successive gunshots being fired in the direction where his
family huddled together in their hut.7
When the volley of shots ceased and the three (3) men left, Norberto saw that his two (2)
young daughters were wounded. His wife went out of their house to ask for help from
neighbors, while he and his older daughter carried the two (2) wounded children out to the
street. His daughter Mary Grace died on the way to the hospital, while Claudine expired at
the hospital despite the doctors' attempts to revive her. 8
In answer to questions of what could have prompted such an attack from appellant,
Norberto replied that he had a previous altercation with appellant who was angered by the
fact that he (Norberto) filed a case against appellant's two other brothers for molesting his
daughter.9
On the other hand, appellant was only able to proffer denial and alibi as his defense.
Appellant's testimony, along with those of Gilbert Estores, Roger San Miguel, Isidro San
Miguel and Ruben Alegre, was that he (appellant) was just watching TV at the house of
Isidro San Miguel, where he had been living for several years, at the time the shooting
incident occurred. However, he and the other witnesses admitted that said house was a
mere five-minute walk away from the crime scene.10
Finding appellant’s defense to be weak, and ascribing more credence to the testimony of
Norberto, the trial court ruled that the evidence clearly established that appellant, together
with two other assailants, conspired to shoot and kill the family of Norberto. Appellant was
then convicted of Double Murder in Criminal Case No. 7698-G and Multiple Attempted
Murder in Criminal Case No. 7702-G.
The dispositive portion of the trial court’s judgment in Criminal Case No. 7698-G reads:
WHEREFORE and in view of all the foregoing, the Court finds accused Ireneo Jugueta
guilty beyond reasonable doubt for Double Murder defined and punished under Article 248
of the Revised Penal Code and is hereby sentenced to suffer Reclusion Perpetua for the
death of Mary Grace Divina and to indemnify her heirs in the amount of Php50,000.00 and
another to suffer Reclusion Perpetua for the death of Claudine Divina and accused is
further ordered to indemnify the heirs of Claudine Divina in the sum of Php50,000.00. In
addition, he is hereby ordered to pay the heirs of the victims actual damages in the amount
of Php16,150.00 and to pay for the costs.
SO ORDERED.11
On the other hand, the dispositive portion of the trial court’s judgment in Criminal Case
No. 7702-G, reads:
WHEREFORE and in view of all the foregoing, the Court finds accused Ireneo Jugueta
guilty beyond reasonable doubt for Multiple Attempted Murder defined and penalized under
Article 248 in relation to Article 51 of the Revised Penal Code and is hereby sentenced to
suffer the penalty of FOUR (4) YEARS and TWO (2) MONTHS of Prision Correccional as
minimum to EIGHT (8) YEARS and ONE (1) DAY of Prision Mayor as maximum for each of
the offended parties; Norberto Divina, Maricel Divina, Elizabeth Divina and Judy Ann
Divina. Further, accused is ordered to pay for the costs of the suit.
SO ORDERED.12

476
Aggrieved by the trial court's judgments, appellant appealed to the CA. On January 30,
2012, the CA rendered a Decision affirming appellant's conviction for the crimes charged. 13
Dissatisfied with the CA Decision, appellant elevated the case to this Court. On July 30,
2012, the Court issued a Resolution 14 notifying the parties that they may submit their
respective Supplemental Briefs. Both parties manifested that they will no longer submit
supplemental briefs since they had exhaustively discussed their positions before the CA. 15
The main issue advanced in the Appellant's Brief deals with the inconsistencies in
Norberto's testimony, such as his failure to state from the beginning that all three
assailants had guns, and to categorically identify appellant as the one holding the gun used
to kill Norberto’s children.
The appeal is unmeritorious.
At the outset, it must be stressed that factual findings of the trial court, its assessment of
the credibility of witnesses and the probative weight of their testimonies, and the
conclusions based on these factual findings are to be given the highest respect. Thus,
generally, the Court will not recalibrate and re-examine evidence that had been analyzed
and ruled upon by the trial court and affirmed by the CA.16
The evidence on record fully supports the trial court's factual finding, as affirmed by the
CA, that appellant acted in concert with two other individuals, all three of them carrying
firearms and simultaneously firing at Norberto and his family, killing his two young
daughters. Norberto clearly saw all of the three assailants with their firearms as there is
illumination coming from a lamp inside their house that had been laid bare after its walling
was stripped off, to wit:
Q: When the wall of your house was stripped off by these three persons at the same time,
do you have light in your house?
A: Yes, sir.
Q: What kind of light was there?
A: A gas lamp.
Q: Where was the gas lamp placed at that time?
A: In the middle of our house.
xxxx
Q: when did they fire a shot?
A: On the same night, when they had stripped off the wallings.
Q: How many gunshots did you hear?
A: Only one.
Q: Do you know the sound of a gunshot? A firearm?
A: Yes, sir, it is loud? (sic)
xxxx
Q: After the first shot, was there any second shot?
A: After that, successive fire shot (sic) followed and my youngest and eldest daughters were
hit.
xxxx
Q: How many of the three were holding guns at that time?
A: All of them.
Q: You mean to tell the honorable court that these three persons were
having one firearm each?
A: Yes, sir.
477
Q: And they fired shots at the same time?
A: Yes, sir.
Q: To what direction these three persons fired (sic) their firearms during that night?
A: To the place where we were.
Q: When those three persons were firing their respective firearms, what was your position
then?
A: I ordered my children to lie down.
Q: How about you, what was your position when you were ordering your children to lie
down?
A: (witness demonstrated his position as if covering his children with his body and ordering
them to line (sic) down face down)
Q: Mr. Witness, for how long did these three persons fire shots at your house?
A: Less than five minutes, sir.
Q: After they fired their shots, they left your house?
A: Yes, sir.
Q: And when these persons left your house, you inspected your children to see what
happened to them?
A: Yes, sir, they were hit.
x x x17
Appellant and the two other malefactors are equally responsible for the death of Norberto's
daughters because, as ruled by the trial court, they clearly conspired to kill Norberto's
family. Conspiracy exists when two or more persons come to an agreement regarding the
commission of a crime and decide to commit it. Proof of a prior meeting between the
perpetrators to discuss the commission of the crime is not necessary as long as their
concerted acts reveal a common design and unity of purpose. In such case, the act of one is
the act of all.18 Here, the three men undoubtedly acted in concert as they went to the
house of Norberto together, each with his own firearm. It is, therefore, no longer necessary
to identify and prove that it is the bullet particularly fired from appellant's firearm that
killed the children.
Murder is defined under Article 248 of the Revised Penal Code as the unlawful killing of a
person, which is not parricide or infanticide, attended by circumstances such as treachery
or evident premeditation.19 The presence of any one of the circumstances enumerated in
Article 248 of the Code is sufficient to qualify a killing as murder. 20 The trial court correctly
ruled that appellant is liable for murder because treachery attended the killing of Norberto’s
two children, thus:
x x x Evidence adduced show that the family of Norberto Divina, were all lying down side by
side about to sleep on June 6, 2002 at around 9:00 o’clock in the evening, when suddenly
their wall made of sack was stripped off by [appellant] Ireneo Jugueta, Roger San Miguel
and Gilberto Alegre (sic) [Gilbert Estores]. They ordered him to go out of their house and
when he refused despite his plea for mercy, they fired at them having hit and killed his two
(2) daughters. The family of Norberto Divina were unarmed and his children were at very
tender ages. Mary Grace Divina and Claudine who were shot and killed were 13 years old
and 3 ½ years old respectively. In this case, the victims were defenseless and manifestly
overpowered by armed assailants when they were gunned down. There was clear showing
that the attack was made suddenly and unexpectedly as to render the victims helpless and

478
unable to defend themselves. Norberto and his wife and his children could have already
been asleep at that time of the night. x x x 21
Verily, the presence of treachery qualified the killing of the hapless children to murder. As
held in People v. Fallorina,22 the essence of treachery is the sudden and unexpected attack
on an unsuspecting victim without the slightest provocation on his part. Minor children,
who by reason of their tender years, cannot be expected to put up a defense. When an adult
person illegally attacks a child, treachery exists.
As to the charge of multiple attempted murder, the last paragraph of Article 6 of the
Revised Penal Code states that a felony is attempted when the offender commences the
commission of a felony directly by overt acts, and does not perform all the acts of execution
which should produce the felony by reason of some cause or accident other than his own
spontaneous desistance. In Esqueda v. People,23 the Court held:
If one inflicts physical injuries on another but the latter survives, the crime committed is
either consummated physical injuries, if the offender had no intention to kill the victim, or
frustrated or attempted homicide or frustrated murder or attempted murder if the offender
intends to kill the victim. Intent to kill may be proved by evidence of: (a) motive; (b) the
nature or number of weapons used in the commission of the crime; (c) the nature and
number of wounds inflicted on the victim; (d) the manner the crime was committed; and (e)
the words uttered by the offender at the time the injuries are inflicted by him on the victim.
In this case, the prosecution has clearly established the intent to kill on the part of
appellant as shown by the use of firearms, the words uttered 24during, as well as the
manner of, the commission of the crime. The Court thus quotes with approval the trial
court’s finding that appellant is liable for attempted murder, viz.:
In the case at bar, the perpetrators who acted in concert commenced the felony of murder
first by suddenly stripping off the wall of their house, followed by successive firing at the
intended victims when Norberto Divina refused to go out of the house as ordered by them.
If only there were good in aiming their target, not only Mary Grace and Claudine had been
killed but surely all the rest of the family would surely have died. Hence, perpetrators were
liable for Murder of Mary Grace Divina and Claudine Divina but for Multiple Attempted
Murder for Norberto Divina, Maricel Divina, Elizabeth Divina and Judy Ann Divina. But as
[appellant] Ireneo Jugueta was the only one charged in this case, he alone is liable for the
crime committed.25
Meanwhile, the supposed inconsistencies in Norberto's testimony, i.e., that he failed to
state from the very beginning that all three assailants were carrying firearms, and that it
was the shots from appellant’s firearm that killed the children, are too trivial and
inconsequential to put a dent on said witness's credibility. An examination of Norberto's
testimony would show that there are no real inconsistencies to speak of. As ruled in People
v. Cabtalan,26 "[m]inor inconsistencies and discrepancies pertaining to trivial matters do not
affect the credibility of witnesses, as well as their positive identification of the accused as
the perpetrators of the crime."27 Both the trial court and the CA found Norberto's candid
and straightforward testimony to be worthy of belief and this Court sees no reason why it
should not conform to the principle reiterated in Medina, Jr. v. People28 that:
Time and again, this Court has deferred to the trial court's factual findings and
evaluation of the credibility of witnesses, especially when affirmed by the CA, in the
absence of any clear showing that the trial court overlooked or misconstrued cogent
facts and circumstances that would justify altering or revising such findings and
479
 evaluation. This is because the trial court's determination proceeds from its first-
hand opportunity to observe the demeanor of the witnesses, their conduct and
attitude under grilling examination, thereby placing the trial court in unique position
to assess the witnesses' credibility and to appreciate their truthfulness, honesty and
candor x x x.29
The records of this case, particularly the testimonies of the witnesses, reveal no
outstanding or exceptional circumstance to justify a deviation from such long-standing
principle. There is no cogent reason to overturn the trial court's ruling that the prosecution
evidence, particularly the testimony of Norberto Divina identifying appellant as one of the
assailants, is worthy of belief. Thus, the prosecution evidence established beyond any
reasonable doubt that appellant is one of the perpetrators of the crime.
However, the Court must make a clarification as to the nomenclature used by the trial
court to identify the crimes for which appellant was penalized. There is some confusion
caused by the trial court's use of the terms "Double Murder" and "Multiple Attempted
Murder" in convicting appellant, and yet imposing penalties which nevertheless show that
the trial court meant to penalize appellant for two (2) separate counts of Murder and four
(4) counts of Attempted Murder.
The facts, as alleged in the Information in Criminal Case No. 7698-G, and as proven during
trial, show that appellant is guilty of 2 counts of the crime of Murder and not Double
Murder, as the killing of the victims was not the result of a single act but of several acts of
appellant and his cohorts. In the same vein, appellant is also guilty of 4 counts of the crime
of Attempted Murder and not Multiple Attempted Murder in Criminal Case No. 7702-G. It
bears stressing that the Informations in this case failed to comply with the requirement in
Section 13, Rule 110 of the Revised Rules of Court that an information must charge only
one offense.
As a general rule, a complaint or information must charge only one offense, otherwise, the
same is defective. The reason for the rule is stated in People of the Philippines and AAA v.
Court of Appeals, 21st Division, Mindanao Station, et al.,30 thus:
The rationale behind this rule prohibiting duplicitous complaints or informations is to give
the accused the necessary knowledge of the charge against him and enable him to
sufficiently prepare for his defense. The State should not heap upon the accused two or
more charges which might confuse him in his defense. Non-compliance with this rule is a
ground for quashing the duplicitous complaint or information under Rule 117 of the Rules
on Criminal Procedure and the accused may raise the same in a motion to quash before he
enters his plea, otherwise, the defect is deemed waived.
However, since appellant entered a plea of not guilty during arraignment and failed to move
for the quashal of the Informations, he is deemed to have waived his right to question the
same. Section 9 of Rule 117 provides that "[t]he failure of the accused to assert any ground
of a motion to quash before he pleads to the complaint or information, either because he
did not file a motion to quash or failed to allege the same in said motion, shall be deemed a
waiver of any objections except those based on the grounds provided for in paragraphs (a),
(b), (g), and (i) of Section 3 of this Rule."
It is also well-settled that when two or more offenses are charged in a single complaint or
information but the accused fails to object to it before trial, the court may convict him of as
many offenses as are charged and proved, and impose upon him the proper penalty for
each offense.31
480
Appellant can therefore be held liable for all the crimes alleged in the Informations in
Criminal Case Nos. 7698-G and 7702-G, i.e., 2 counts of murder and 4 counts of
attempted murder, respectively, and proven during trial.
Meanwhile, in People v. Nelmida,32 the Court explained the concept of a complex crime as
defined in Article 4833 of the Revised Penal Code, thus:
In a complex crime, two or more crimes are actually committed, however, in the eyes of the
law and in the conscience of the offender they constitute only one crime, thus, only one
penalty is imposed. There are two kinds of complex crime. The first is known as a
compound crime, or when a single act constitutes two or more grave or less grave felonies
while the other is known as a complex crime proper, or when an offense is a necessary
means for committing the other. The classic example of the first kind is when a single bullet
results in the death of two or more persons. A different rule governs where separate and
distinct acts result in a number killed. Deeply rooted is the doctrine that when various
victims expire from separate shot, such acts constitute separate and distinct crimes. 34
Here, the facts surrounding the shooting incident clearly show that appellant and the two
others, in firing successive and indiscriminate shots at the family of Norberto from their
respective firearms, intended to kill not only Norberto, but his entire family. When several
gunmen, as in this case, indiscriminately fire a series of shots at a group of people, it shows
their intention to kill several individuals. Hence, they are committing not only one crime.
What appellant and his cohorts committed cannot be classified as a complex crime because
as held in People v. Nelmida,35 "each act by each gunman pulling the trigger of their
respective firearms, aiming each particular moment at different persons constitute distinct
and individual acts which cannot give rise to a complex crime." 36
Furthermore, the Court notes that both the trial court and the CA failed to take into
account dwelling as an ordinary, aggravating circumstance, despite the fact that the
Informations in Criminal Case Nos. 7698-G and 7702-G contain sufficient allegations to
that effect, to wit:
Criminal Case No. 7698-G for Double Murder:
That the crime was committed in the dwelling of the offended party who had not given
provocation for the attack and the accused took advantage of nighttime to facilitate the
commission of the offense.37
Criminal Case No. 7702-G for Multiple Attempted Murder:
x x x the above-named accused, conspiring and confederating together and mutually
helping one another, armed with short firearms of undetermined calibres, with intent to
kill, qualified by treachery, with evident premeditation and abuse of superior strength, did
then and there wilfully, unlawfully and feloniously attack, assault, and shoot with the said
firearms the house occupied by the family of Norberto Divina, thereby commencing the
commission of the crime of Murder, directly by overt acts, but did not perform all the acts
of execution which would have produced it by reason of some cause or accident other than
the spontaneous desistance of the accused x x x38
In People v. Agcanas,39 the Court stressed that "[i]t has been held in a long line of cases
that dwelling is aggravating because of the sanctity of privacy which the law accords to
human abode. He who goes to another's house to hurt him or do him wrong is more guilty
than he who offends him elsewhere." Dwelling aggravates a felony where the crime is
committed in the dwelling of the offended party provided that the latter has not given
provocation therefor.40 The testimony of Norberto established the fact that the group of
481
appellant violated the victims' home by destroying the same and attacking his entire family
therein, without provocation on the part of the latter. Hence, the trial court should have
appreciated dwelling as an ordinary aggravating circumstance.
In view of the attendant ordinary aggravating circumstance, the Court must modify the
penalties imposed on appellant. Murder is punishable by reclusion perpetua to death,
thus, with an ordinary aggravating circumstance of dwelling, the imposable penalty is
death for each of two (2) counts of murder. 41 However, pursuant to Republic Act (RA) No.
9346, proscribing the imposition of the death penalty, the penalty to be imposed on
appellant should be reclusion perpetua for each of the two (2) counts of murder without
eligibility for parole. With regard to the four (4) counts of attempted murder, the penalty
prescribed for each count is prision mayor. With one ordinary aggravating circumstance,
the penalty should be imposed in its maximum period. Applying the Indeterminate
Sentence Law, the maximum penalty should be from ten (10) years and one (1) day to
twelve (12) years of prision mayor, while the minimum shall be taken from the penalty next
lower in degree, i.e., prision correccional, in any of its periods, or anywhere from six (6)
months and one (1) day to six (6) years. This Court finds it apt to impose on appellant the
indeterminate penalty of four (4) years, two (2) months and one (1) day of prision
correccional, as minimum, to ten (10) years and one (1) day of prision mayor, as minimum,
for each of the four (4) counts of attempted murder.
Anent the award of damages, the Court deems it proper to address the matter in detail as
regards criminal cases where the imposable penalty is reclusion perpetua to death.
Generally, in these types of criminal cases, there are three kinds of damages awarded by
the Court; namely: civil indemnity, moral, and exemplary damages. Likewise, actual
damages may be awarded or temperate damages in some instances.
First, civil indemnity ex delicto is the indemnity authorized in our criminal law for the
offended party, in the amount authorized by the prevailing judicial policy and apart from
other proven actual damages, which itself is equivalent to actual or compensatory damages
in civil law.42 This award stems from Article 100 of the RPC which states, "Every person
criminally liable for a felony is also civilly liable."
It is to be noted that civil indemnity is, technically, not a penalty or a fine; hence, it can be
increased by the Court when appropriate.43 Article 2206 of the Civil Code provides:
Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at
least three thousand pesos, even though there may have been mitigating circumstances. In
addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased,
and the indemnity shall be paid to the heirs of the latter; such indemnity shall in
every case be assessed and awarded by the court, unless the deceased on account of
permanent physical disability not caused by the defendant, had no earning capacity
at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of Article
291, the recipient who is not an heir called to the decedent's inheritance by the law of
testate or intestate succession, may demand support from the person causing the
death, for a period not exceeding five years, the exact duration to be fixed by the
court;

482
 (3) The spouse, legitimate and illegitimate descendants and ascendants of the
deceased may demand moral damages for mental anguish by reason of the death of
the deceased.
In our jurisdiction, civil indemnity is awarded to the offended party as a kind of monetary
restitution or compensation to the victim for the damage or infraction that was done to the
latter by the accused, which in a sense only covers the civil aspect. Precisely, it is civil
indemnity. Thus, in a crime where a person dies, in addition to the penalty of
imprisonment imposed to the offender, the accused is also ordered to pay the victim a sum
of money as restitution. Also, it is apparent from Article 2206 that the law only imposes a
minimum amount for awards of civil indemnity, which is ₱3,000.00. The law did not
provide for a ceiling. Thus, although the minimum amount for the award cannot be
changed, increasing the amount awarded as civil indemnity can be validly modified and
increased when the present circumstance warrants it.44
The second type of damages the Court awards are moral damages, which are also
compensatory in nature. Del Mundo v. Court of Appeals45 expounded on the nature and
purpose of moral damages, viz.:
Moral damages, upon the other hand, may be awarded to compensate one for manifold
injuries such as physical suffering, mental anguish, serious anxiety, besmirched
reputation, wounded feelings and social humiliation. These damages must be understood
to be in the concept of grants, not punitive or corrective in nature, calculated to
compensate the claimant for the injury suffered. Although incapable of exactness and no
proof of pecuniary loss is necessary in order that moral damages may be awarded, the
amount of indemnity being left to the discretion of the court, it is imperative, nevertheless,
that (1) injury must have been suffered by the claimant, and (2) such injury must have
sprung from any of the cases expressed in Article 2219 46 and Article 222047 of the Civil
Code. x x x.
Similarly, in American jurisprudence, moral damages are treated as "compensatory
damages awarded for mental pain and suffering or mental anguish resulting from a
wrong."48 They may also be considered and allowed "for resulting pain and suffering, and
for humiliation, indignity, and vexation suffered by the plaintiff as result of his or her
assailant's conduct, as well as the factors of provocation, the reasonableness of the force
used, the attendant humiliating circumstances, the sex of the victim, [and] mental
distress."49
The rationale for awarding moral damages has been explained in Lambert v. Heirs of Rey
Castillon: "[T]he award of moral damages is aimed at a restoration, within the limits
possible, of the spiritual status quo ante; and therefore, it must be proportionate to the
suffering inflicted."50
Corollarily, moral damages under Article 2220 51 of the Civil Code also does not fix the
amount of damages that can be awarded. It is discretionary upon the court, depending on
the mental anguish or the suffering of the private offended party. The amount of moral
damages can, in relation to civil indemnity, be adjusted so long as it does not exceed the
award of civil indemnity.52
Finally, the Civil Code of the Philippines provides, in respect to exemplary damages, thus:
ART. 2229. Exemplary or corrective damages are imposed, by way of example or correction
for the public good, in addition to the moral, temperate, liquidated or compensatory
damages.
483
ART. 2230. In criminal offenses, exemplary damages as a part of the civil liability may be
imposed when the crime was committed with one or more aggravating circumstances. Such
damages are separate and distinct from fines and shall be paid to the offended party.
Also known as "punitive" or "vindictive" damages, exemplary or corrective damages are
intended to serve as a deterrent to serious wrong doings, and as a vindication of undue
sufferings and wanton invasion of the rights of an injured or a punishment for those guilty
of outrageous conduct. These terms are generally, but not always, used interchangeably. In
common law, there is preference in the use of exemplary damages when the award is to
account for injury to feelings and for the sense of indignity and humiliation suffered by a
person as a result of an injury that has been maliciously and wantonly inflicted, 53 the
theory being that there should be compensation for the hurt caused by the highly
reprehensible conduct of the defendant – associated with such circumstances as
willfulness, wantonness, malice, gross negligence or recklessness, oppression, insult or
fraud or gross fraud54 – that intensifies the injury. The terms punitive or vindictive damages
are often used to refer to those species of damages that may be awarded against a person to
punish him for his outrageous conduct. In either case, these damages are intended in good
measure to deter the wrongdoer and others like him from similar conduct in the future. 55
The term aggravating circumstances used by the Civil Code, the law not having specified
otherwise, is to be understood in its broad or generic sense. The commission of an offense
has a two-pronged effect, one on the public as it breaches the social order and the other
upon the private victim as it causes personal sufferings, each of which is addressed by,
respectively, the prescription of heavier punishment for the accused and by an award of
additional damages to the victim. The increase of the penalty or a shift to a graver felony
underscores the exacerbation of the offense by the attendance of aggravating
circumstances, whether ordinary or qualifying, in its commission. Unlike the criminal
liability which is basically a State concern, the award of damages, however, is likewise, if
not primarily, intended for the offended party who suffers thereby. It would make little
sense for an award of exemplary damages to be due the private offended party when the
aggravating circumstance is ordinary but to be withheld when it is qualifying. Withal, the
ordinary or qualifying nature of an aggravating circumstance is a distinction that should
only be of consequence to the criminal, rather than to the civil, liability of the offender. In
fine, relative to the civil aspect of the case, an aggravating circumstance, whether ordinary
or qualifying, should entitle the offended party to an award of exemplary damages within
the unbridled meaning of Article 2230 of the Civil Code. 56
The reason is fairly obvious as to why the Revised Rules of Criminal Procedure 57 requires
aggravating circumstances, whether ordinary or qualifying, to be stated in the complaint or
information. It is in order not to trample on the constitutional right of an accused to be
informed of the nature of the alleged offense that he or she has committed. A criminal
complaint or information should basically contain the elements of the crime, as well as its
qualifying and ordinary aggravating circumstances, for the court to effectively determine
the proper penalty it should impose. This, however, is not similar in the recovery of civil
liability. In the civil aspect, the presence of an aggravating circumstance, even if not alleged
in the information but proven during trial would entitle the victim to an award of exemplary
damages.
Being corrective in nature, exemplary damages, therefore, can be awarded, not only due to
the presence of an aggravating circumstance, but also where the circumstances of the case
484
show the highly reprehensible or outrageous conduct of the offender. In much the same
way as Article 2230 prescribes an instance when exemplary damages may be awarded,
Article 2229, the main provision, lays down the very basis of the award. Thus, in People v.
Matrimonio,58 the Court imposed exemplary damages to deter other fathers with perverse
tendencies or aberrant sexual behavior from sexually abusing their own daughters. Also,
in People v. Cristobal,59 the Court awarded exemplary damages on account of the moral
corruption, perversity and wickedness of the accused in sexually assaulting a pregnant
married woman. In People v. Cañada,60 People v. Neverio61 and People v. Layco, Sr.,62 the
Court awarded exemplary damages to set a public example, to serve as deterrent to elders
who abuse and corrupt the youth, and to protect the latter from sexual abuse.
Existing jurisprudence pegs the award of exemplary damages at ₱30,000.00,63 despite the
lack of any aggravating circumstance. The Court finds it proper to increase the amount to
₱50,000.00 in order to deter similar conduct.
If, however, the penalty for the crime committed is death, which cannot be imposed
because of the provisions of R.A. No. 9346, prevailing jurisprudence 64 sets the amount of
₱100,000.00 as exemplary damages.
Before awarding any of the above mentioned damages, the Court, however, must first
consider the penalty imposed by law. Under RA 7659 or An Act to Impose the Death Penalty
on Certain Heinous Crimes, Amending for that Purpose the Revised Penal Laws, and for
Other Purposes, certain crimes under the RPC and special penal laws were amended to
impose the death penalty under certain circumstances. 65 Under the same law, the following
crimes are punishable by reclusion perpetua: piracy in general,66 mutiny on the high
seas,67 and simple rape.68 For the following crimes, RA 7659 has imposed the penalty
of reclusion perpetua to death: qualified piracy;69 qualified bribery under certain
circumstances;70 parricide;71 murder;72 infanticide, except when committed by the mother of
the child for the purpose of concealing her dishonor or either of the maternal grandparents
for the same purpose;73 kidnapping and serious illegal detention under certain
circumstances;74 robbery with violence against or intimidation of persons under certain
circumstances;75 destructive arson, except when death results as a consequence of the
commission of any of the acts penalized under the article; 76 attempted or frustrated rape,
when a homicide is committed by reason or on occasion thereof; plunder; 77 and carnapping,
when the driver or occupant of the carnapped motor vehicle is killed or raped in the course
of the commission of the carnapping or on the occasion thereof. 78 Finally, RA 7659 imposes
the death penalty on the following crimes:
(a) In qualified bribery, when it is the public officer who asks or demands the gift or
present.
(b) In kidnapping and serious illegal detention: (i) when the kidnapping or detention
was committed for the purpose of extorting ransom from the victim or any other
person; (ii) when the victim is killed or dies as a consequence of the detention; (iii)
when the victim is raped, subjected to torture or dehumanizing acts.
(c) In destructive arson, when as a consequence of the commission of any of the acts
penalized under Article 320, death results.
(d) In rape: (i) when by reason or on occasion of the rape, the victim becomes insane
or homicide is committed; (ii) when committed with any of the following attendant
circumstances: (1) when the victim is under eighteen (18) years of age and the
offender is a parent, ascendant, step-parent, guardian, relative by consanguinity or
485
 affinity within the third civil degree, or the common-law-spouse of the parent of the
victim; (2) when the victim is under the custody of the police or military authorities;
(3) when the rape is committed in full view of the husband, parent, any of the
children or other relatives within the third degree of consanguinity; (4) when the
victim is a religious or a child below seven years old; (5) when the offender knows
that he is afflicted with Acquired Immune Deficiency Syndrome (AIDS) disease; (6)
when committed by any member of the Armed Forces of the Philippines or the
Philippine National Police or any law enforcement agency; and (7) when by reason or
on the occasion of the rape, the victim has suffered permanent physical mutilation.
From these heinous crimes, where the imposable penalties consist of two (2) indivisible
penalties or single indivisible penalty, all of them must be taken in relation to Article 63 of
the RPC, which provides:
Article 63. Rules for the application of indivisible penalties. - In all cases in which the law
prescribes a single indivisible penalty, it shall be applied by the courts regardless of any
mitigating or aggravating circumstances that may have attended the commission of the
deed.
In all cases in which the law prescribes a penalty composed of two indivisible penalties, the
following rules shall be observed in the application thereof:
1. when in the commission of the deed there is present only one aggravating
circumstance, the greater penalty shall be applied.
2. when there are neither mitigating nor aggravating circumstances in the
commission of the deed, the lesser penalty shall be applied.
3. when the commission of the act is attended by some mitigating circumstance and
there is no aggravating circumstance, the lesser penalty shall be applied.
4. when both mitigating and aggravating circumstances attended the commission of
the act, the courts shall reasonably allow them to offset one another in consideration
of their number and importance, for the purpose of applying the penalty in
accordance with the preceding rules, according to the result of such compensation.
(Revised Penal Code, Art. 63)
Thus, in order to impose the proper penalty, especially in cases of indivisible penalties, the
court has the duty to ascertain the presence of any mitigating or aggravating
circumstances. Accordingly, in crimes where the imposable penalty is reclusion perpetua to
death, the court can impose either reclusion perpetua or death, depending on the
mitigating or aggravating circumstances present.
But with the enactment of RA 9346 or An Act Prohibiting the Imposition of Death Penalty in
the Philippines, the imposition of death penalty is now prohibited. It provides that in lieu of
the death penalty, the penalty of reclusion perpetua shall be imposed when the law violated
makes use of the nomenclature of the penalties of the RPC. 79
As a result, the death penalty can no longer be imposed. Instead, they have to
impose reclusion perpetua. Despite this, the principal consideration for the award of
damages, following the ruling in People v. Salome80 and People v. Quiachon,81 is "the penalty
provided by law or imposable for the offense because of its heinousness, not the public
penalty actually imposed on the offender." 82
When the circumstances surrounding the crime would justify the imposition of the death
penalty were it not for RA 9346, the Court has ruled, as early as July 9, 1998 in People v.
Victor,83 that the award of civil indemnity for the crime of rape when punishable by death
486
should be ₱75,000.00 We reasoned that "[t]his is not only a reaction to the apathetic
societal perception of the penal law and the financial fluctuations over time, but also an
expression of the displeasure of the Court over the incidence of heinous crimes against
chastity."84 Such reasoning also applies to all heinous crimes found in RA 7659. The
amount was later increased to ₱100,000.00.85
In addition to this, the Court likewise awards moral damages. In People v.
Arizapa,86 ₱50,000.00 was awarded as moral damages without need of pleading or proving
them, for in rape cases, it is recognized that the victim's injury is concomitant with and
necessarily results from the odious crime of rape to warrant per se the award of moral
damages.87 Subsequently, the amount was increased to ₱75,000.00 in People v.
Soriano88 and P100,000.00 in People v. Gambao.89
Essentially, despite the fact that the death penalty cannot be imposed because of RA 9346,
the imposable penalty as provided by the law for the crime, such as those found in RA
7569, must be used as the basis for awarding damages and not the actual penalty
imposed.1avvphi1
Again, for crimes where the imposable penalty is death in view of the attendance of an
ordinary aggravating circumstance but due to the prohibition to impose the death penalty,
the actual penalty imposed is reclusion perpetua, the latest jurisprudence90 pegs the
amount of ₱100,000.00 as civil indemnity and ₱100,0000.00 as moral damages. For the
qualifying aggravating circumstance and/or the ordinary aggravating circumstances
present, the amount of ₱100,000.00 is awarded as exemplary damages aside from civil
indemnity and moral damages. Regardless of the attendance of qualifying aggravating
circumstance, the exemplary damages shall be fixed at ₱100,000.00. "[T]his is not only a
reaction to the apathetic societal perception of the penal law and the financial fluctuation
over time, but also an expression of the displeasure of the Court over the incidence of
heinous crimes x x x."91
When the circumstances surrounding the crime call for the imposition of reclusion
perpetua only, there being no ordinary aggravating circumstance, the Court rules that the
proper amounts should be ₱75,000.00 as civil indemnity, ₱75,000.00 as moral damages
and ₱75,000.00 exemplary damages, regardless of the number of qualifying aggravating
circumstances present.
When it comes to compound and complex crimes, although the single act done by the
offender caused several crimes, the fact that those were the result of a single design, the
amount of civil indemnity and moral damages will depend on the penalty and the number
of victims. For each of the victims, the heirs should be properly compensated. If it is
multiple murder without any ordinary aggravating circumstance but merely a qualifying
aggravating circumstance, but the penalty imposed is death because of Art. 48 of the RPC
wherein the maximum penalty shall be imposed, 92 then, for every victim who dies, the heirs
shall be indemnified with ₱100,000.00 as civil indemnity, ₱100,000.00 as moral damages
and ₱100,000.00 as exemplary damages.
In case of a special complex crime, which is different from a complex crime under Article 48
of the RPC, the following doctrines are noteworthy:
In People of the Philippines v. Conrado Laog,93 this Court ruled that special complex crime,
or more properly, a composite crime, has its own definition and special penalty in the
Revised Penal Code, as amended. Justice Regalado, in his Separate Opinion in the case
of People v. Barros,94 explained that composite crimes are "neither of the same legal basis
487
as nor subject to the rules on complex crimes in Article 48 [of the Revised Penal Code],
since they do not consist of a single act giving rise to two or more grave or less grave
felonies [compound crimes] nor do they involve an offense being a necessary means to
commit another [complex crime proper]. However, just like the regular complex crimes and
the present case of aggravated illegal possession of firearms, only a single penalty is
imposed for each of such composite crimes although composed of two or more offenses." 95
In People v. De Leon,96 we expounded on the special complex crime of robbery with
homicide, as follows:
In robbery with homicide, the original criminal design of the malefactor is to commit
robbery, with homicide perpetrated on the occasion or by reason of the robbery. The intent
to commit robbery must precede the taking of human life. The homicide may take place
before, during or after the robbery. It is only the result obtained, without reference or
distinction as to the circumstances, causes or modes or persons intervening in the
commission of the crime that has to be taken into consideration. There is no such felony of
robbery with homicide through reckless imprudence or simple negligence. The constitutive
elements of the crime, namely, robbery with homicide, must be consummated.
It is immaterial that the death would supervene by mere accident; or that the victim of
homicide is other than the victim of robbery, or that two or more persons are killed, or that
aside from the homicide, rape, intentional mutilation, or usurpation of authority, is
committed by reason or on the occasion of the crime. Likewise immaterial is the fact that
the victim of homicide is one of the robbers; the felony would still be robbery with homicide.
Once a homicide is committed by or on the occasion of the robbery, the felony committed is
robbery with homicide. All the felonies committed by reason of or on the occasion of the
robbery are integrated into one and indivisible felony of robbery with homicide. The word
"homicide" is used in its generic sense. Homicide, thus, includes murder, parricide, and
infanticide.97
In the special complex crime of rape with homicide, the term "homicide" is to be understood
in its generic sense, and includes murder and slight physical injuries committed by reason
or on occasion of the rape. 98 Hence, even if any or all of the circumstances (treachery,
abuse of superior strength and evident premeditation) alleged in the information have been
duly established by the prosecution, the same would not qualify the killing to murder and
the crime committed by appellant is still rape with homicide. As in the case of robbery with
homicide, the aggravating circumstance of treachery is to be considered as a generic
aggravating circumstance only. Thus we ruled in People v. Macabales:99
Finally, appellants contend that the trial court erred in concluding that the aggravating
circumstance of treachery is present. They aver that treachery applies to crimes against
persons and not to crimes against property. However, we find that the trial court in this
case correctly characterized treachery as a generic aggravating, rather than qualifying,
circumstance. Miguel was rendered helpless by appellants in defending himself when his
arms were held by two of the attackers before he was stabbed with a knife by appellant
Macabales, as their other companions surrounded them. In People v. Salvatierra, we ruled
that when alevosia (treachery) obtains in the special complex crime of robbery with
homicide, such treachery is to be regarded as a generic aggravating circumstance.
Robbery with homicide is a composite crime with its own definition and special penalty in
the Revised Penal Code. There is no special complex crime of robbery with murder under
the Revised Penal Code. Here, treachery forms part of the circumstances proven concerning
488
the actual commission of the complex crime. Logically it could not qualify the homicide to
murder but, as generic aggravating circumstance, it helps determine the penalty to be
imposed.100
Applying the above discussion on special complex crimes, if the penalty is death but it
cannot be imposed due to RA 9346 and what is actually imposed is the penalty of reclusion
perpetua, the civil indemnity and moral damages will be ₱100,000.00 each, and another
₱100,000.00 as exemplary damages in view of the heinousness of the crime and to set an
example. If there is another composite crime included in a special complex crime and the
penalty imposed is death, an additional ₱100,000.00 as civil indemnity, ₱100,000.00 moral
damages and ₱100,000.00 exemplary damages shall be awarded for each composite crime
committed.
For example, in case of Robbery with Homicide 101 wherein three (3) people died as a
consequence of the crime, the heirs of the victims shall be entitled to the award of damages
as discussed earlier. This is true, however, only if those who were killed were the victims of
the robbery or mere bystanders and not when those who died were the perpetrators or
robbers themselves because the crime of robbery with homicide may still be committed
even if one of the robbers dies. 102 This is also applicable in robbery with rape where there is
more than one victim of rape.
In awarding civil indemnity and moral damages, it is also important to determine the stage
in which the crime was committed and proven during the trial. Article 6 of the RPC
provides:
Art. 6. Consummated, frustrated, and attempted felonies. - Consummated felonies, as well
as those which are frustrated and attempted, are punishable.
A felony is consummated when all the elements necessary for its execution and
accomplishment are present; and it is frustrated when an offender performs all the acts of
execution which would produce the felony as a consequence but which, nevertheless, do
not produce it by reason of causes independent of the will of the perpetrator.
There is an attempt when the offender commences the commission of a felony directly by
overt acts, and does not perform all the acts of execution which should produce the felony
by reason of some cause or accident other than his own spontaneous desistance.
As discussed earlier, when the crime proven is consummated and the penalty imposed is
death but reduced to reclusion perpetua because of R.A. 9346, the civil indemnity and
moral damages that should be awarded will each be ₱100,000.00 and another ₱100,000.00
for exemplary damages or when the circumstances of the crime call for the imposition
of reclusion perpetua only, the civil indemnity and moral damages should be ₱75,000.00
each, as well as exemplary damages in the amount of ₱75,000.00. If, however, the crime
proven is in its frustrated stage, the civil indemnity and moral damages that should be
awarded will each be ₱50,000.00, and an award of ₱25,000.00 civil indemnity and
₱25,000.00 moral damages when the crime proven is in its attempted stage. The difference
in the amounts awarded for the stages is mainly due to the disparity in the outcome of the
crime committed, in the same way that the imposable penalty varies for each stage of the
crime. The said amounts of civil indemnity and moral damages awarded in cases of felonies
in their frustrated or attempted stages shall be the bases when the crimes committed
constitute complex crime under Article 48 of the RPC. For example, in a crime of murder
with attempted murder, the amount of civil indemnity, moral damages and exemplary

489
damages is ₱100,000.00 each, while in the attempted murder, the civil indemnity, moral
damages and exemplary damages is ₱25,000.00 each.
In a special complex crime, like robbery with homicide, if, aside from homicide, several
victims (except the robbers) sustained injuries, they shall likewise be indemnified. It must
be remembered that in a special complex crime, unlike in a complex crime, the component
crimes have no attempted or frustrated stages because the intention of the offender/s is to
commit the principal crime which is to rob but in the process of committing the said crime,
another crime is committed. For example, if on the occasion of a robbery with homicide,
other victims sustained injuries, regardless of the severity, the crime committed is still
robbery with homicide as the injuries become part of the crime, "Homicide", in the special
complex crime of robbery with homicide, is understood in its generic sense and now forms
part of the essential element of robbery, 103 which is the use of violence or the use of force
upon anything. Hence, the nature and severity of the injuries sustained by the victims
must still be determined for the purpose of awarding civil indemnity and damages. If a
victim suffered mortal wounds and could have died if not for a timely medical intervention,
the victim should be awarded civil indemnity, moral damages, and exemplary damages
equivalent to the damages awarded in a frustrated stage, and if a victim suffered injuries
that are not fatal, an award of civil indemnity, moral damages and exemplary damages
should likewise be awarded equivalent to the damages awarded in an attempted stage.
In other crimes that resulted in the death of a victim and the penalty consists of divisible
penalties, like homicide, death under tumultuous affray, reckless imprudence resulting to
homicide, the civil indemnity awarded to the heirs of the victim shall be ₱50,000.00 and
₱50,000.00 moral damages without exemplary damages being awarded. However, an award
of ₱50,000.00 exemplary damages in a crime of homicide shall be added if there is an
aggravating circumstance present that has been proven but not alleged in the information.
Aside from those discussed earlier, the Court also awards temperate damages in certain
cases. The award of ₱25,000.00 as temperate damages in homicide or murder cases is
proper when no evidence of burial and funeral expenses is presented in the trial
court.104 Under Article 2224 of the Civil Code, temperate damages may be recovered, as it
cannot be denied that the heirs of the victims suffered pecuniary loss although the exact
amount was not proved.105 In this case, the Court now increases the amount to be awarded
as temperate damages to ₱50,000.00.
In the case at bar, the crimes were aggravated by dwelling, and the murders committed
were further made atrocious by the fact that the victims are innocent, defenseless minors –
one is a mere 3½-year-old toddler, and the other a 13-year-old girl. The increase in the
amount of awards for damages is befitting to show not only the Court's, but all of society's
outrage over such crimes and wastage of lives.
In summary:
I. For those crimes106 like, Murder,107 Parricide,108 Serious Intentional
Mutilation,  Infanticide,  and other crimes involving death of a victim where the
109 110

penalty consists of indivisible penalties:

1.1 Where the penalty imposed is death but reduced to reclusion
perpetua because of RA 9346:
a. Civil indemnity – ₱100,000.00
b. Moral damages – ₱100,000.00
c. Exemplary damages – ₱100,000.00
490
 1.2 Where the crime committed was not consummated:
a. Frustrated:
i. Civil indemnity – ₱75,000.00
ii. Moral damages – ₱75,000.00
iii. Exemplary damages – ₱75,000.00
b. Attempted:
i. Civil indemnity – ₱50,000.00
ii. Exemplary damages – ₱50,000.00
iii. Exemplary damages – ₱50,000.00
2.1 Where the penalty imposed is reclusion perpetua, other than the
above-mentioned:
a. Civil indemnity – ₱75,000.00
b. Moral damages – ₱75,000.00
c. Exemplary damages – ₱75,000.00
2.2 Where the crime committed was not consummated:
a. Frustrated:
i. Civil indemnity – ₱50,000.00
ii. Moral damages – ₱50,000.00
iii. Exemplary damages – ₱50,000.00
b. Attempted:
i. Civil indemnity – ₱25,000.00
ii. Moral damages – ₱25,000.00
iii. Exemplary damages – ₱25,000.00
II. For Simple Rape/Qualified Rape:
1.1 Where the penalty imposed is Death but reduced to reclusion
perpetua because of RA 9346:
a. Civil indemnity – ₱100,000.00
b. Moral damages – ₱100,000.00
c. Exemplary damages111 – ₱100,000.00
1.2 Where the crime committed was not consummated but merely attempted: 112
a. Civil indemnity – ₱50,000.00
b. Moral damages – ₱50,000.00
c. Exemplary damages – ₱50,000.00
2.1 Where the penalty imposed is reclusion perpetua, other than the above-
mentioned:
a. Civil indemnity – ₱75,000.00
b. Moral damages – ₱75,000.00
c. Exemplary damages – ₱75,000.00
2.2 Where the crime committed was not consummated, but merely attempted:
a. Civil indemnity – ₱25,000.00
b. Moral damages – ₱25,000.00
c. Exemplary damages – ₱25,000.00
III. For Complex crimes under Article 48 of the Revised Penal Code where death,
injuries, or sexual abuse results, the civil indemnity, moral damages and exemplary
damages will depend on the penalty, extent of violence and sexual abuse; and the
number of victims where the penalty consists of indivisible penalties:
491
 1.1 Where the penalty imposed is Death but reduced to reclusion
perpetua because of RA 9346:
a. Civil indemnity – ₱100,000.00
b. Moral damages – ₱100,000.00
c. Exemplary damages – ₱100,000.00
1.2 Where the penalty imposed is reclusion perpetua, other than the above-
mentioned:
a. Civil indemnity – ₱75,000.00
b. Moral damages – ₱75,000.00
c. Exemplary damages – ₱75,000.00
The above Rules apply to every victim who dies as a result of the crime
committed. In other complex crimes where death does not result, like in
Forcible Abduction with Rape, the civil indemnity, moral and exemplary
damages depend on the prescribed penalty and the penalty imposed, as the
case may be.
IV. For Special Complex Crimes like Robbery with Homicide, 113 Robbery with
Rape,114 Robbery with Intentional Mutilation,115 Robbery with
Arson,116 Rape with Homicide,117 Kidnapping with Murder,118 Carnapping with
Homicide119 or Carnapping with Rape,120 Highway Robbery with
Homicide,  Qualified Piracy,  Arson with Homicide,123 Hazing with Death, Rape,
121 122

Sodomy or Mutilation124 and other crimes with death, injuries, and sexual abuse as
the composite crimes, where the penalty consists of indivisible penalties:
1.1 Where the penalty imposed is Death but reduced to reclusion
perpetua because of RA 9346:
a. Civil indemnity – ₱100,000.00
b. Moral damages – ₱100,000.00
c. Exemplary damages – ₱100,000.00
In Robbery with Intentional Mutilation, the amount of damages is the same as
the above if the penalty imposed is Death but reduced to reclusion
perpetua although death did not occur.
1.2 For the victims who suffered mortal/fatal wounds 125 and could have died if
not for a timely medical intervention, the following shall be awarded:
a. Civil indemnity – ₱75,000.00
b. Moral damages – ₱75,000.00
c. Exemplary damages – ₱75,000.00
1.3 For the victims who suffered non-mortal/non-fatal injuries:
a. Civil indemnity – ₱50,000.00
b. Moral damages – ₱50,000.00
c. Exemplary damages – ₱50,000.00
2.1 Where the penalty imposed is reclusion perpetua, other than the above-
mentioned:
a. Civil indemnity – ₱75,000.00
b. Moral damages – ₱75,000.00
c. Exemplary damages – ₱75,000.00
In Robbery with Intentional Mutilation, the amount of damages is the same as
the above if the penalty imposed is reclusion perpetua.
492
 2.2 For the victims who suffered mortal/fatal wounds and could have died if
not for a timely medical intervention, the following shall be awarded:
a. Civil indemnity – ₱50,000.00
b. Moral damages – ₱50,000.00
c. Exemplary damages – ₱50,000.00
2.3 For the victims who suffered non-mortal/non-fatal injuries:
a. Civil indemnity – ₱25,000.00
b. Moral damages – ₱25,000.00
c. Exemplary damages – ₱25,000.00
In Robbery with Physical Injuries,126 the amount of damages shall likewise be
dependent on the nature/severity of the wounds sustained, whether fatal or
non-fatal.
The above Rules do not apply if in the crime of Robbery with Homicide, the
robber/s or perpetrator/s are themselves killed or injured in the
incident.1âwphi1
Where the component crime is rape, the above Rules shall likewise apply, and
that for every additional rape committed, whether against the same victim or
other victims, the victims shall be entitled to the same damages unless the
other crimes of rape are treated as separate crimes, in which case, the
damages awarded to simple rape/qualified rape shall apply.
V. In other crimes that result in the death of a victim and the penalty consists of
divisible penalties, i.e., Homicide, Death under Tumultuous Affray, Infanticide to
conceal the dishonour of the offender, 127 Reckless Imprudence Resulting to Homicide,
Duel, Intentional Abortion and Unintentional Abortion, etc.:
1.1 Where the crime was consummated:
a. Civil indemnity – ₱50,000.00
b. Moral damages – ₱50,000.00
1.2 Where the crime committed was not consummated, except those crimes
where there are no stages, i.e., Reckless Imprudence and Death under
tumultuous affray:
a. Frustrated:
i. Civil indemnity – ₱30,000.00
ii. Moral damages – ₱30,000.00
b. Attempted:
i. Civil indemnity – ₱20,000.00
ii. Moral damages – ₱20,000.00
If an aggravating circumstance was proven during the trial, even if not
alleged in the Information,128 in addition to the above mentioned
amounts as civil indemnity and moral damages, the amount of
₱50,000.00 exemplary damages for consummated; ₱30,000.00 for
frustrated; and ₱20,000.00 for attempted, shall be awarded.
VI. A. In the crime of Rebellion where the imposable penalty is reclusion
perpetua and death occurs in the course of the rebellion, the heirs of those who died
are entitled to the following:129
a. Civil indemnity – ₱100,000.00
b. Moral damages – ₱100,000.00
493
 c. Exemplary damages – ₱100,000.00130
B. For the victims who suffered mortal/fatal wounds in the course of the
rebellion and could have died if not for a timely medical intervention, the
following shall be awarded:
a. Civil indemnity – ₱75,000.00
b. Moral damages – ₱75,000.00
c. Exemplary damages – ₱75,000.00
C. For the victims who suffered non-mortal/non-fatal injuries:
a. Civil indemnity – ₱50,000.00
b. Moral damages – ₱50,000.00
c. Exemplary damages – ₱50,000.00
VII. In all of the above instances, when no documentary evidence of burial or funeral
expenses is presented in court, the amount of ₱50,000.00 as temperate damages
shall be awarded.
To reiterate, Article 2206 of the Civil Code provides that the minimum amount for awards of
civil indemnity is P3,000.00, but does not provide for a ceiling. Thus, although the
minimum amount cannot be changed, increasing the amount awarded as civil indemnity
can be validly modified and increased when the present circumstance warrants it. 131
Prescinding from the foregoing, for the two (2) counts of murder, attended by the ordinary
aggravating circumstance of dwelling, appellant should be ordered to pay the heirs of the
victims the following damages: (1) ₱100,000.00 as civil indemnity for each of the two
children who died; (2) ₱100,000.00 as moral damages for each of the two victims; (3)
another ₱100,000.00 as exemplary damages for each of the two victims; and (4) temperate
damages in the amount of ₱50,000.00 for each of the two deceased. For the four (4) counts
of Attempted Murder, appellant should pay ₱50,000.00 as civil indemnity, ₱50,000.00 as
moral damages and ₱50,000.00 as exemplary damages for each of the four victims. In
addition, the civil indemnity, moral damages, exemplary damages and temperate damages
payable by the appellant are subject to interest at the rate of six percent (6%) per annum
from the finality of this decision until fully paid. 132
Lastly, this Court echoes the concern of the trial court regarding the dismissal of the
charges against Gilberto Estores and Roger San Miguel who had been identified by
Norberto Divina as the companions of appellant on the night the shooting occurred.
Norberto had been very straightforward and unwavering in his identification of Estores and
San Miguel as the two other people who fired the gunshots at his family. More significantly,
as noted by the prosecutor, the testimonies of Estores and San Miguel, who insisted they
were not at the crime scene, tended to conflict with the sworn statement of Danilo Fajarillo,
which was the basis for the Provincial Prosecutor's ruling that he finds no probable cause
against the two. Danilo Fajarillo's sworn statement said that on June 6, 2002, he saw
appellant with a certain "Hapon" and Gilbert Estores at the crime scene, but it was only
appellant who was carrying a firearm and the two other people with him had no
participation in the shooting incident. Said circumstances bolster the credibility of Norberto
Divina's testimony that Estores and San Miguel may have been involved in the killing of his
two young daughters.
After all, such reinvestigation would not subject Estores and San Miguel to double jeopardy
because the same only attaches if the following requisites are present: (1) a first jeopardy
has attached before the second; (2) the first jeopardy has been validly terminated; and (3) a
494
second jeopardy is for the same offense as in the first. In turn, a first jeopardy attaches
only (a) after a valid indictment; (b) before a competent court; (c) after arraignment; (d)
when a valid plea has been entered; and (e) when the accused has been acquitted or
convicted, or the case dismissed or otherwise terminated without his express consent. 133 In
this case, the case against Estores and San Miguel was dismissed before they were
arraigned. Thus, there can be no double jeopardy to speak of. Let true justice be served by
reinvestigating the real participation, if any, of Estores and San Miguel in the killing of
Mary Grace and Claudine Divina.
WHEREFORE, the instant appeal is DISMISSED. The Decision of the Court of Appeals
dated January 30, 2012 in CA-G.R. CR HC No. 03252 is AFFIRMED with the
following MODIFICATIONS:
(1) In Criminal Case No. 7698-G, the Court finds accused-appellant Ireneo
Jugueta GUILTY beyond reasonable doubt of two (2) counts of the crime of murder
defined under Article 248 of the Revised Penal Code, attended by the aggravating
circumstance of dwelling, and hereby sentences him to suffer two (2) terms
of reclusion perpetua without eligibility for parole under R.A. 9346. He
is ORDERED to PAY the heirs of Mary Grace Divina and Claudine Divina the
following amounts for each of the two victims: (a) ₱100,000.00 as civil indemnity; (b)
₱100,000.00 as moral damages; (c) ₱100,000.00 as exemplary damages; and (d)
₱50,000.00 as temperate damages.
(2) In Criminal Case No. 7702-G, the Court finds accused-appellant Ireneo
Jugueta GUILTY beyond reasonable doubt of four (4) counts of the crime of
attempted murder defined and penalized under Article 248 in relation to Article 51 of
the Revised Penal Code, attended by the aggravating circumstance of dwelling, and
sentences him to suffer the indeterminate penalty of four (4) years, two (2) months
and one (1) day of prision correccional, as minimum, to ten (10) years and one (1) day
of prision mayor, as maximum, for each of the four (4) counts of attempted murder.
He is ORDERED to PAY moral damages in the amount of P50,000.00, civil
indemnity of P50,000.00 and exemplary damages of PS0,000.00 to each of the four
victims, namely, Norberto Divina, Maricel Divina, Elizabeth Divina and Judy Ann
Divina.
(3) Accused-appellant Ireneo Jugueta is also ORDERED to PAY interest at the rate of
six percent (6%) per annum from the time of finality of this decision until fully paid,
to be imposed on the civil indemnity, moral damages, exemplary damages and
temperate damages.
(4) Let the Office of the Prosecutor General, through the Department of Justice,
be FURNISHED a copy of this Decision. The Prosecutor General is DIRECTED to
immediately conduct a REINVESTIGATION on the possible criminal liability of
Gilbert Estores and Roger San Miguel regarding this case. Likewise, let a copy of this
Decision be furnished the Secretary of Justice for his information and guidance.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:

495
G.R. No. 189871               August 13, 2013
DARIO NACAR, PETITIONER,
vs.
GALLERY FRAMES AND/OR FELIPE BORDEY, JR., RESPONDENTS.
DECISION
PERALTA, J.:
This is a petition for review on certiorari assailing the Decision 1 dated September 23, 2008
of the Court of Appeals (CA) in CA-G.R. SP No. 98591, and the Resolution 2 dated October 9,
2009 denying petitioner’s motion for reconsideration.
The factual antecedents are undisputed.
Petitioner Dario Nacar filed a complaint for constructive dismissal before the Arbitration
Branch of the National Labor Relations Commission (NLRC) against respondents Gallery
Frames (GF) and/or Felipe Bordey, Jr., docketed as NLRC NCR Case No. 01-00519-97.
On October 15, 1998, the Labor Arbiter rendered a Decision 3 in favor of petitioner and
found that he was dismissed from employment without a valid or just cause. Thus,
petitioner was awarded backwages and separation pay in lieu of reinstatement in the
amount of ₱158,919.92. The dispositive portion of the decision, reads:
With the foregoing, we find and so rule that respondents failed to discharge the burden of
showing that complainant was dismissed from employment for a just or valid cause. All the
more, it is clear from the records that complainant was never afforded due process before
he was terminated. As such, we are perforce constrained to grant complainant’s prayer for
the payments of separation pay in lieu of reinstatement to his former position, considering
the strained relationship between the parties, and his apparent reluctance to be reinstated,
computed only up to promulgation of this decision as follows:
SEPARATION PAY
Date Hired = August 1990
Rate = ₱198/day
Date of Decision = Aug. 18, 1998
Length of Service = 8 yrs. & 1 month
₱198.00 x 26 days x 8 months = ₱41,184.00
BACKWAGES
Date Dismissed = January 24, 1997
Rate per day = ₱196.00
Date of Decisions = Aug. 18, 1998
a) 1/24/97 to 2/5/98 = 12.36 mos.
₱196.00/day x 12.36 mos. = ₱62,986.56
b) 2/6/98 to 8/18/98 = 6.4 months
Prevailing Rate per day = ₱62,986.00
496
 ₱198.00 x 26 days x 6.4 mos. = ₱32,947.20
TOTAL = ₱95.933.76
xxxx
WHEREFORE, premises considered, judgment is hereby rendered finding respondents
guilty of constructive dismissal and are therefore, ordered:
To pay jointly and severally the complainant the amount of sixty-two thousand nine
hundred eighty-six pesos and 56/100 (₱62,986.56) Pesos representing his separation pay;
To pay jointly and severally the complainant the amount of nine (sic) five thousand nine
hundred thirty-three and 36/100 (₱95,933.36) representing his backwages; and
All other claims are hereby dismissed for lack of merit.
SO ORDERED.4
Respondents appealed to the NLRC, but it was dismissed for lack of merit in the
Resolution5 dated February 29, 2000. Accordingly, the NLRC sustained the decision of the
Labor Arbiter. Respondents filed a motion for reconsideration, but it was denied. 6
Dissatisfied, respondents filed a Petition for Review on Certiorari before the CA. On August
24, 2000, the CA issued a Resolution dismissing the petition. Respondents filed a Motion
for Reconsideration, but it was likewise denied in a Resolution dated May 8, 2001. 7
Respondents then sought relief before the Supreme Court, docketed as G.R. No. 151332.
Finding no reversible error on the part of the CA, this Court denied the petition in the
Resolution dated April 17, 2002.8
An Entry of Judgment was later issued certifying that the resolution became final and
executory on May 27, 2002.9 The case was, thereafter, referred back to the Labor Arbiter. A
pre-execution conference was consequently scheduled, but respondents failed to appear. 10
On November 5, 2002, petitioner filed a Motion for Correct Computation, praying that his
backwages be computed from the date of his dismissal on January 24, 1997 up to the
finality of the Resolution of the Supreme Court on May 27, 2002. 11 Upon recomputation,
the Computation and Examination Unit of the NLRC arrived at an updated amount in the
sum of ₱471,320.31.12
On December 2, 2002, a Writ of Execution 13 was issued by the Labor Arbiter ordering the
Sheriff to collect from respondents the total amount of ₱471,320.31. Respondents filed a
Motion to Quash Writ of Execution, arguing, among other things, that since the Labor
Arbiter awarded separation pay of ₱62,986.56 and limited backwages of ₱95,933.36, no
more recomputation is required to be made of the said awards. They claimed that after the
decision becomes final and executory, the same cannot be altered or amended
anymore.14 On January 13, 2003, the Labor Arbiter issued an Order 15 denying the motion.
Thus, an Alias Writ of Execution16 was issued on January 14, 2003.
Respondents again appealed before the NLRC, which on June 30, 2003 issued a
Resolution17 granting the appeal in favor of the respondents and ordered the recomputation
of the judgment award.
On August 20, 2003, an Entry of Judgment was issued declaring the Resolution of the
NLRC to be final and executory. Consequently, another pre-execution conference was held,
but respondents failed to appear on time. Meanwhile, petitioner moved that an Alias Writ of
Execution be issued to enforce the earlier recomputed judgment award in the sum of
₱471,320.31.18

497
The records of the case were again forwarded to the Computation and Examination Unit for
recomputation, where the judgment award of petitioner was reassessed to be in the total
amount of only ₱147,560.19.
Petitioner then moved that a writ of execution be issued ordering respondents to pay him
the original amount as determined by the Labor Arbiter in his Decision dated October 15,
1998, pending the final computation of his backwages and separation pay.
On January 14, 2003, the Labor Arbiter issued an Alias Writ of Execution to satisfy the
judgment award that was due to petitioner in the amount of ₱147,560.19, which petitioner
eventually received.
Petitioner then filed a Manifestation and Motion praying for the re-computation of the
monetary award to include the appropriate interests. 19
On May 10, 2005, the Labor Arbiter issued an Order 20 granting the motion, but only up to
the amount of ₱11,459.73. The Labor Arbiter reasoned that it is the October 15, 1998
Decision that should be enforced considering that it was the one that became final and
executory. However, the Labor Arbiter reasoned that since the decision states that the
separation pay and backwages are computed only up to the promulgation of the said
decision, it is the amount of ₱158,919.92 that should be executed. Thus, since petitioner
already received ₱147,560.19, he is only entitled to the balance of ₱11,459.73.
Petitioner then appealed before the NLRC,21 which appeal was denied by the NLRC in its
Resolution22 dated September 27, 2006. Petitioner filed a Motion for Reconsideration, but it
was likewise denied in the Resolution23 dated January 31, 2007.
Aggrieved, petitioner then sought recourse before the CA, docketed as CA-G.R. SP No.
98591.
On September 23, 2008, the CA rendered a Decision 24 denying the petition. The CA opined
that since petitioner no longer appealed the October 15, 1998 Decision of the Labor Arbiter,
which already became final and executory, a belated correction thereof is no longer allowed.
The CA stated that there is nothing left to be done except to enforce the said judgment.
Consequently, it can no longer be modified in any respect, except to correct clerical errors
or mistakes.
Petitioner filed a Motion for Reconsideration, but it was denied in the Resolution 25 dated
October 9, 2009.
Hence, the petition assigning the lone error:
I
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED,
COMMITTED GRAVE ABUSE OF DISCRETION AND DECIDED CONTRARY TO LAW IN
UPHOLDING THE QUESTIONED RESOLUTIONS OF THE NLRC WHICH, IN TURN,
SUSTAINED THE MAY 10, 2005 ORDER OF LABOR ARBITER MAGAT MAKING THE
DISPOSITIVE PORTION OF THE OCTOBER 15, 1998 DECISION OF LABOR ARBITER
LUSTRIA SUBSERVIENT TO AN OPINION EXPRESSED IN THE BODY OF THE SAME
DECISION.26
Petitioner argues that notwithstanding the fact that there was a computation of backwages
in the Labor Arbiter’s decision, the same is not final until reinstatement is made or until
finality of the decision, in case of an award of separation pay. Petitioner maintains that
considering that the October 15, 1998 decision of the Labor Arbiter did not become final
and executory until the April 17, 2002 Resolution of the Supreme Court in G.R. No. 151332
was entered in the Book of Entries on May 27, 2002, the reckoning point for the
498
computation of the backwages and separation pay should be on May 27, 2002 and not
when the decision of the Labor Arbiter was rendered on October 15, 1998. Further,
petitioner posits that he is also entitled to the payment of interest from the finality of the
decision until full payment by the respondents.
On their part, respondents assert that since only separation pay and limited backwages
were awarded to petitioner by the October 15, 1998 decision of the Labor Arbiter, no more
recomputation is required to be made of said awards. Respondents insist that since the
decision clearly stated that the separation pay and backwages are "computed only up to
[the] promulgation of this decision," and considering that petitioner no longer appealed the
decision, petitioner is only entitled to the award as computed by the Labor Arbiter in the
total amount of ₱158,919.92. Respondents added that it was only during the execution
proceedings that the petitioner questioned the award, long after the decision had become
final and executory. Respondents contend that to allow the further recomputation of the
backwages to be awarded to petitioner at this point of the proceedings would substantially
vary the decision of the Labor Arbiter as it violates the rule on immutability of judgments.
The petition is meritorious.
The instant case is similar to the case of Session Delights Ice Cream and Fast Foods v.
Court of Appeals (Sixth Division), 27 wherein the issue submitted to the Court for resolution
was the propriety of the computation of the awards made, and whether this violated the
principle of immutability of judgment. Like in the present case, it was a distinct feature of
the judgment of the Labor Arbiter in the above-cited case that the decision already provided
for the computation of the payable separation pay and backwages due and did not further
order the computation of the monetary awards up to the time of the finality of the
judgment. Also in Session Delights, the dismissed employee failed to appeal the decision of
the labor arbiter. The Court clarified, thus:
In concrete terms, the question is whether a re-computation in the course of execution of
the labor arbiter's original computation of the awards made, pegged as of the time the
decision was rendered and confirmed with modification by a final CA decision, is legally
proper. The question is posed, given that the petitioner did not immediately pay the awards
stated in the original labor arbiter's decision; it delayed payment because it continued with
the litigation until final judgment at the CA level.
A source of misunderstanding in implementing the final decision in this case proceeds from
the way the original labor arbiter framed his decision. The decision consists essentially of
two parts.
The first is that part of the decision that cannot now be disputed because it has been
confirmed with finality. This is the finding of the illegality of the dismissal and the awards
of separation pay in lieu of reinstatement, backwages, attorney's fees, and legal interests.
The second part is the computation of the awards made. On its face, the computation the
labor arbiter made shows that it was time-bound as can be seen from the figures used in
the computation. This part, being merely a computation of what the first part of the
decision established and declared, can, by its nature, be re-computed. This is the part, too,
that the petitioner now posits should no longer be re-computed because the computation is
already in the labor arbiter's decision that the CA had affirmed. The public and private
respondents, on the other hand, posit that a re-computation is necessary because the relief
in an illegal dismissal decision goes all the way up to reinstatement if reinstatement is to be

499
made, or up to the finality of the decision, if separation pay is to be given in lieu
reinstatement.
That the labor arbiter's decision, at the same time that it found that an illegal dismissal
had taken place, also made a computation of the award, is understandable in light of
Section 3, Rule VIII of the then NLRC Rules of Procedure which requires that a computation
be made. This Section in part states:
[T]he Labor Arbiter of origin, in cases involving monetary awards and at all events, as far as
practicable, shall embody in any such decision or order the detailed and full amount
awarded.
Clearly implied from this original computation is its currency up to the finality of the labor
arbiter's decision. As we noted above, this implication is apparent from the terms of the
computation itself, and no question would have arisen had the parties terminated the case
and implemented the decision at that point.
However, the petitioner disagreed with the labor arbiter's findings on all counts - i.e., on the
finding of illegality as well as on all the consequent awards made. Hence, the petitioner
appealed the case to the NLRC which, in turn, affirmed the labor arbiter's decision. By law,
the NLRC decision is final, reviewable only by the CA on jurisdictional grounds.
The petitioner appropriately sought to nullify the NLRC decision on jurisdictional grounds
through a timely filed Rule 65 petition for certiorari. The CA decision, finding that NLRC
exceeded its authority in affirming the payment of 13th month pay and indemnity, lapsed
to finality and was subsequently returned to the labor arbiter of origin for execution.
It was at this point that the present case arose. Focusing on the core illegal dismissal
portion of the original labor arbiter's decision, the implementing labor arbiter ordered the
award re-computed; he apparently read the figures originally ordered to be paid to be the
computation due had the case been terminated and implemented at the labor arbiter's
level. Thus, the labor arbiter re-computed the award to include the separation pay and the
backwages due up to the finality of the CA decision that fully terminated the case on the
merits. Unfortunately, the labor arbiter's approved computation went beyond the finality of
the CA decision (July 29, 2003) and included as well the payment for awards the final CA
decision had deleted - specifically, the proportionate 13th month pay and the indemnity
awards. Hence, the CA issued the decision now questioned in the present petition.
We see no error in the CA decision confirming that a re-computation is necessary as it
essentially considered the labor arbiter's original decision in accordance with its basic
component parts as we discussed above. To reiterate, the first part contains the finding of
illegality and its monetary consequences; the second part is the computation of the awards
or monetary consequences of the illegal dismissal, computed as of the time of the labor
arbiter's original decision.28
Consequently, from the above disquisitions, under the terms of the decision which is
sought to be executed by the petitioner, no essential change is made by a recomputation as
this step is a necessary consequence that flows from the nature of the illegality of dismissal
declared by the Labor Arbiter in that decision. 29 A recomputation (or an original
computation, if no previous computation has been made) is a part of the law – specifically,
Article 279 of the Labor Code and the established jurisprudence on this provision – that is
read into the decision. By the nature of an illegal dismissal case, the reliefs continue to add
up until full satisfaction, as expressed under Article 279 of the Labor Code. The
recomputation of the consequences of illegal dismissal upon execution of the decision does
500
not constitute an alteration or amendment of the final decision being implemented. The
illegal dismissal ruling stands; only the computation of monetary consequences of this
dismissal is affected, and this is not a violation of the principle of immutability of final
judgments.30
That the amount respondents shall now pay has greatly increased is a consequence that it
cannot avoid as it is the risk that it ran when it continued to seek recourses against the
Labor Arbiter's decision. Article 279 provides for the consequences of illegal dismissal in no
uncertain terms, qualified only by jurisprudence in its interpretation of when separation
pay in lieu of reinstatement is allowed. When that happens, the finality of the illegal
dismissal decision becomes the reckoning point instead of the reinstatement that the law
decrees. In allowing separation pay, the final decision effectively declares that the
employment relationship ended so that separation pay and backwages are to be computed
up to that point.31
Finally, anent the payment of legal interest. In the landmark case of Eastern Shipping
Lines, Inc. v. Court of Appeals,32 the Court laid down the guidelines regarding the manner
of computing legal interest, to wit:
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as
follows:
1. When the obligation is breached, and it consists in the payment of a sum of
money, i.e., a loan or forbearance of money, the interest due should be that which
may have been stipulated in writing. Furthermore, the interest due shall itself earn
legal interest from the time it is judicially demanded. In the absence of stipulation,
the rate of interest shall be 12% per annum to be computed from default, i.e., from
judicial or extrajudicial demand under and subject to the provisions of Article 1169 of
the Civil Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached,
an interest on the amount of damages awarded may be imposed at the discretion of
the court at the rate of 6% per annum. No interest, however, shall be adjudged on
unliquidated claims or damages except when or until the demand can be established
with reasonable certainty. Accordingly, where the demand is established with
reasonable certainty, the interest shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be
so reasonably established at the time the demand is made, the interest shall begin to
run only from the date the judgment of the court is made (at which time the
quantification of damages may be deemed to have been reasonably ascertained). The
actual base for the computation of legal interest shall, in any case, be on the amount
finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 12% per annum from such finality until its satisfaction,
this interim period being deemed to be by then an equivalent to a forbearance of
credit.33
Recently, however, the Bangko Sentral ng Pilipinas Monetary Board (BSP-MB), in its
Resolution No. 796 dated May 16, 2013, approved the amendment of Section 2 34 of Circular

501
No. 905, Series of 1982 and, accordingly, issued Circular No. 799, 35 Series of 2013, effective
July 1, 2013, the pertinent portion of which reads:
The Monetary Board, in its Resolution No. 796 dated 16 May 2013, approved the following
revisions governing the rate of interest in the absence of stipulation in loan contracts,
thereby amending Section 2 of Circular No. 905, Series of 1982:
Section 1. The rate of interest for the loan or forbearance of any money, goods or credits
and the rate allowed in judgments, in the absence of an express contract as to such rate of
interest, shall be six percent (6%) per annum.
Section 2. In view of the above, Subsection X305.136 of the Manual of Regulations for Banks
and Sections 4305Q.1,37 4305S.338 and 4303P.139 of the Manual of Regulations for Non-
Bank Financial Institutions are hereby amended accordingly.
This Circular shall take effect on 1 July 2013.
Thus, from the foregoing, in the absence of an express stipulation as to the rate of interest
that would govern the parties, the rate of legal interest for loans or forbearance of any
money, goods or credits and the rate allowed in judgments shall no longer be twelve percent
(12%) per annum - as reflected in the case of Eastern Shipping Lines 40 and Subsection
X305.1 of the Manual of Regulations for Banks and Sections 4305Q.1, 4305S.3 and
4303P.1 of the Manual of Regulations for Non-Bank Financial Institutions, before its
amendment by BSP-MB Circular No. 799 - but will now be six percent (6%) per annum
effective July 1, 2013. It should be noted, nonetheless, that the new rate could only be
applied prospectively and not retroactively. Consequently, the twelve percent (12%) per
annum legal interest shall apply only until June 30, 2013. Come July 1, 2013 the new rate
of six percent (6%) per annum shall be the prevailing rate of interest when applicable.
Corollarily, in the recent case of Advocates for Truth in Lending, Inc. and Eduardo B.
Olaguer v. Bangko Sentral Monetary Board, 41 this Court affirmed the authority of the BSP-
MB to set interest rates and to issue and enforce Circulars when it ruled that "the BSP-MB
may prescribe the maximum rate or rates of interest for all loans or renewals thereof or the
forbearance of any money, goods or credits, including those for loans of low priority such as
consumer loans, as well as such loans made by pawnshops, finance companies and similar
credit institutions. It even authorizes the BSP-MB to prescribe different maximum rate or
rates for different types of borrowings, including deposits and deposit substitutes, or loans
of financial intermediaries."
Nonetheless, with regard to those judgments that have become final and executory prior to
July 1, 2013, said judgments shall not be disturbed and shall continue to be implemented
applying the rate of interest fixed therein.1awp++i1
To recapitulate and for future guidance, the guidelines laid down in the case of Eastern
Shipping Lines42 are accordingly modified to embody BSP-MB Circular No. 799, as follows:
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts,
delicts or quasi-delicts is breached, the contravenor can be held liable for damages.
The provisions under Title XVIII on "Damages" of the Civil Code govern in
determining the measure of recoverable damages.1âwphi1
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is
imposed, as follows:
When the obligation is breached, and it consists in the payment of a sum of money, i.e., a
loan or forbearance of money, the interest due should be that which may have been
502
stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the
time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6%
per annum to be computed from default, i.e., from judicial or extrajudicial demand under
and subject to the provisions of Article 1169 of the Civil Code.
When an obligation, not constituting a loan or forbearance of money, is breached, an
interest on the amount of damages awarded may be imposed at the discretion of the court
at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated
claims or damages, except when or until the demand can be established with reasonable
certainty. Accordingly, where the demand is established with reasonable certainty, the
interest shall begin to run from the time the claim is made judicially or extrajudicially (Art.
1169, Civil Code), but when such certainty cannot be so reasonably established at the time
the demand is made, the interest shall begin to run only from the date the judgment of the
court is made (at which time the quantification of damages may be deemed to have been
reasonably ascertained). The actual base for the computation of legal interest shall, in any
case, be on the amount finally adjudged.
When the judgment of the court awarding a sum of money becomes final and executory, the
rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall
be 6% per annum from such finality until its satisfaction, this interim period being deemed
to be by then an equivalent to a forbearance of credit.
And, in addition to the above, judgments that have become final and executory prior to July
1, 2013, shall not be disturbed and shall continue to be implemented applying the rate of
interest fixed therein.
WHEREFORE, premises considered, the Decision dated September 23, 2008 of the Court of
Appeals in CA-G.R. SP No. 98591, and the Resolution dated October 9, 2009 are
REVERSED and SET ASIDE. Respondents are Ordered to Pay petitioner:
(1) backwages computed from the time petitioner was illegally dismissed on January
24, 1997 up to May 27, 2002, when the Resolution of this Court in G.R. No. 151332
became final and executory;
(2) separation pay computed from August 1990 up to May 27, 2002 at the rate of one
month pay per year of service; and
(3) interest of twelve percent (12%) per annum of the total monetary awards,
computed from May 27, 2002 to June 30, 2013 and six percent (6%) per annum from
July 1, 2013 until their full satisfaction.
The Labor Arbiter is hereby ORDERED to make another recomputation of the total
monetary benefits awarded and due to petitioner in accordance with this Decision.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:

G.R. No. 97412 July 12, 1994

EASTERN SHIPPING LINES, INC., petitioner,
vs.
HON. COURT OF APPEALS AND MERCANTILE INSURANCE COMPANY,
INC., respondents.
503
Alojada & Garcia and Jimenea, Dala & Zaragoza for petitoner.
Zapa Law Office for private respondent.

VITUG, J.:
The issues, albeit not completely novel, are: (a) whether or not a claim for damage
sustained on a shipment of goods can be a solidary, or joint and several, liability of the
common carrier, the arrastre operator and the customs broker; (b) whether the payment of
legal interest on an award for loss or damage is to be computed from the time the complaint
is filed or from the date the decision appealed from is rendered; and (c) whether the
applicable rate of interest, referred to above, is twelve percent (12%) or six percent (6%).
The findings of the court a quo, adopted by the Court of Appeals, on the antecedent and
undisputed facts that have led to the controversy are hereunder reproduced:
This is an action against defendants shipping company, arrastre operator and
broker-forwarder for damages sustained by a shipment while in defendants'
custody, filed by the insurer-subrogee who paid the consignee the value of
such losses/damages.
On December 4, 1981, two fiber drums of riboflavin were shipped from
Yokohama, Japan for delivery vessel "SS EASTERN COMET" owned by
defendant Eastern Shipping Lines under Bill of Lading
No. YMA-8 (Exh. B). The shipment was insured under plaintiff's Marine
Insurance Policy No. 81/01177 for P36,382,466.38.
Upon arrival of the shipment in Manila on December 12, 1981, it was
discharged unto the custody of defendant Metro Port Service, Inc. The latter
excepted to one drum, said to be in bad order, which damage was unknown to
plaintiff.
On January 7, 1982 defendant Allied Brokerage Corporation received the
shipment from defendant Metro Port Service, Inc., one drum opened and
without seal (per "Request for Bad Order Survey." Exh. D).
On January 8 and 14, 1982, defendant Allied Brokerage Corporation made
deliveries of the shipment to the consignee's warehouse. The latter excepted to
one drum which contained spillages, while the rest of the contents was
adulterated/fake (per "Bad Order Waybill" No. 10649, Exh. E).
Plaintiff contended that due to the losses/damage sustained by said drum, the
consignee suffered losses totaling P19,032.95, due to the fault and negligence
of defendants. Claims were presented against defendants who failed and
refused to pay the same (Exhs. H, I, J, K, L).
As a consequence of the losses sustained, plaintiff was compelled to pay the
consignee P19,032.95 under the aforestated marine insurance policy, so that it
became subrogated to all the rights of action of said consignee against
defendants (per "Form of Subrogation", "Release" and Philbanking check, Exhs.
M, N, and O). (pp. 85-86, Rollo.)
There were, to be sure, other factual issues that confronted both courts. Here, the appellate
court said:
Defendants filed their respective answers, traversing the material allegations of
the complaint contending that: As for defendant Eastern Shipping it alleged
that the shipment was discharged in good order from the vessel unto the
504
custody of Metro Port Service so that any damage/losses incurred after the
shipment was incurred after the shipment was turned over to the latter, is no
longer its liability (p. 17, Record); Metroport averred that although subject
shipment was discharged unto its custody, portion of the same was already in
bad order (p. 11, Record); Allied Brokerage alleged that plaintiff has no cause of
action against it, not having negligent or at fault for the shipment was already
in damage and bad order condition when received by it, but nonetheless, it still
exercised extra ordinary care and diligence in the handling/delivery of the
cargo to consignee in the same condition shipment was received by it.
From the evidence the court found the following:
The issues are:
1. Whether or not the shipment sustained losses/damages;
2. Whether or not these losses/damages were sustained while in
the custody of defendants (in whose respective custody, if
determinable);
3. Whether or not defendant(s) should be held liable for the
losses/damages (see plaintiff's pre-Trial Brief, Records, p. 34;
Allied's pre-Trial Brief, adopting plaintiff's Records, p. 38).
As to the first issue, there can be no doubt that the shipment
sustained losses/damages. The two drums were shipped in good
order and condition, as clearly shown by the Bill of Lading and
Commercial Invoice which do not indicate any damages drum that
was shipped (Exhs. B and C). But when on December 12, 1981 the
shipment was delivered to defendant Metro Port Service, Inc., it
excepted to one drum in bad order.
Correspondingly, as to the second issue, it follows that the
losses/damages were sustained while in the respective and/or
successive custody and possession of defendants carrier (Eastern),
arrastre operator (Metro Port) and broker (Allied Brokerage). This
becomes evident when the Marine Cargo Survey Report (Exh. G),
with its "Additional Survey Notes", are considered. In the latter
notes, it is stated that when the shipment was "landed on vessel"
to dock of Pier # 15, South Harbor, Manila on December 12, 1981,
it was observed that "one (1) fiber drum (was) in damaged condition,
covered by the vessel's Agent's Bad Order Tally Sheet No. 86427."
The report further states that when defendant Allied Brokerage
withdrew the shipment from defendant arrastre operator's custody
on January 7, 1982, one drum was found opened without seal,
cello bag partly torn but contents intact. Net unrecovered spillages
was
15 kgs. The report went on to state that when the drums reached
the consignee, one drum was found with adulterated/faked
contents. It is obvious, therefore, that these losses/damages
occurred before the shipment reached the consignee while under
the successive custodies of defendants. Under Art. 1737 of the New
Civil Code, the common carrier's duty to observe extraordinary
505
 diligence in the vigilance of goods remains in full force and effect
even if the goods are temporarily unloaded and stored in transit in
the warehouse of the carrier at the place of destination, until the
consignee has been advised and has had reasonable opportunity to
remove or dispose of the goods (Art. 1738, NCC). Defendant
Eastern Shipping's own exhibit, the "Turn-Over Survey of Bad
Order Cargoes" (Exhs. 3-Eastern) states that on December 12,
1981 one drum was found "open".
and thus held:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby
rendered:
A. Ordering defendants to pay plaintiff, jointly and severally:
1. The amount of P19,032.95, with the present legal interest of
12% per annum from October 1, 1982, the date of filing of this
complaints, until fully paid (the liability of defendant Eastern
Shipping, Inc. shall not exceed US$500 per case or the CIF value of
the loss, whichever is lesser, while the liability of defendant Metro
Port Service, Inc. shall be to the extent of the actual invoice value
of each package, crate box or container in no case to exceed
P5,000.00 each, pursuant to Section 6.01 of the Management
Contract);
2. P3,000.00 as attorney's fees, and
3. Costs.
B. Dismissing the counterclaims and crossclaim of
defendant/cross-claimant Allied Brokerage
Corporation.
SO ORDERED. (p. 207, Record).
Dissatisfied, defendant's recourse to US.
The appeal is devoid of merit.
After a careful scrutiny of the evidence on record. We find that the conclusion
drawn therefrom is correct. As there is sufficient evidence that the shipment
sustained damage while in the successive possession of appellants, and
therefore they are liable to the appellee, as subrogee for the amount it paid to
the consignee. (pp. 87-89, Rollo.)
The Court of Appeals thus affirmed in toto the judgment of the court
a quo.
In this petition, Eastern Shipping Lines, Inc., the common carrier, attributes error and
grave abuse of discretion on the part of the appellate court when —
I. IT HELD PETITIONER CARRIER JOINTLY AND SEVERALLY LIABLE WITH
THE ARRASTRE OPERATOR AND CUSTOMS BROKER FOR THE CLAIM OF
PRIVATE RESPONDENT AS GRANTED IN THE QUESTIONED DECISION;
II. IT HELD THAT THE GRANT OF INTEREST ON THE CLAIM OF PRIVATE
RESPONDENT SHOULD COMMENCE FROM THE DATE OF THE FILING OF
THE COMPLAINT AT THE RATE OF TWELVE PERCENT PER ANNUM INSTEAD
OF FROM THE DATE OF THE DECISION OF THE TRIAL COURT AND ONLY AT

506
 THE RATE OF SIX PERCENT PER ANNUM, PRIVATE RESPONDENT'S CLAIM
BEING INDISPUTABLY UNLIQUIDATED.
The petition is, in part, granted.
In this decision, we have begun by saying that the questions raised by petitioner carrier are
not all that novel. Indeed, we do have a fairly good number of previous decisions this Court
can merely tack to.
The common carrier's duty to observe the requisite diligence in the shipment of goods lasts
from the time the articles are surrendered to or unconditionally placed in the possession of,
and received by, the carrier for transportation until delivered to, or until the lapse of a
reasonable time for their acceptance by, the person entitled to receive them (Arts. 1736-
1738, Civil Code; Ganzon vs. Court of Appeals, 161 SCRA 646; Kui Bai vs. Dollar
Steamship Lines, 52 Phil. 863). When the goods shipped either are lost or arrive in
damaged condition, a presumption arises against the carrier of its failure to observe that
diligence, and there need not be an express finding of negligence to hold it liable (Art. 1735,
Civil Code; Philippine National Railways vs. Court of Appeals, 139 SCRA 87; Metro Port
Service vs. Court of Appeals, 131 SCRA 365). There are, of course, exceptional cases when
such presumption of fault is not observed but these cases, enumerated in Article 1734 1 of
the Civil Code, are exclusive, not one of which can be applied to this case.
The question of charging both the carrier and the arrastre operator with the obligation of
properly delivering the goods to the consignee has, too, been passed upon by the Court.
In Fireman's Fund Insurance vs. Metro Port Services (182 SCRA 455), we have explained, in
holding the carrier and the arrastre operator liable in solidum, thus:
The legal relationship between the consignee and the arrastre operator is akin
to that of a depositor and warehouseman (Lua Kian v. Manila Railroad Co., 19
SCRA 5 [1967]. The relationship between the consignee and the common
carrier is similar to that of the consignee and the arrastre operator (Northern
Motors, Inc. v. Prince Line, et al., 107 Phil. 253 [1960]). Since it is the duty of
the ARRASTRE to take good care of the goods that are in its custody and to
deliver them in good condition to the consignee, such responsibility also
devolves upon the CARRIER. Both the ARRASTRE and the CARRIER are
therefore charged with the obligation to deliver the goods in good condition to
the consignee.
We do not, of course, imply by the above pronouncement that the arrastre operator and the
customs broker are themselves always and necessarily liable solidarily with the carrier,
or vice-versa, nor that attendant facts in a given case may not vary the rule. The instant
petition has been brought solely by Eastern Shipping Lines, which, being the carrier and
not having been able to rebut the presumption of fault, is, in any event, to be held liable in
this particular case. A factual finding of both the court a quo and the appellate court, we
take note, is that "there is sufficient evidence that the shipment sustained damage while in
the successive possession of appellants" (the herein petitioner among them). Accordingly,
the liability imposed on Eastern Shipping Lines, Inc., the sole petitioner in this case, is
inevitable regardless of whether there are others solidarily liable with it.
It is over the issue of legal interest adjudged by the appellate court that deserves more than
just a passing remark.
Let us first see a chronological recitation of the major rulings of this Court:

507
The early case of Malayan Insurance Co., Inc., vs. Manila Port
Service,  decided  on 15 May 1969, involved a suit for recovery of money arising out of short
2 3

deliveries and pilferage of goods. In this case, appellee Malayan Insurance (the plaintiff in
the lower court) averred in its complaint that the total amount of its claim for the value of
the undelivered goods amounted to P3,947.20. This demand, however, was neither
established in its totality nor definitely ascertained. In the stipulation of facts later entered
into by the parties, in lieu of proof, the amount of P1,447.51 was agreed upon. The trial
court rendered judgment ordering the appellants (defendants) Manila Port Service and
Manila Railroad Company to pay appellee Malayan Insurance the sum of P1,447.51
with legal interest thereon from the date the complaint was filed on 28 December 1962 until
full payment thereof. The appellants then assailed, inter alia, the award of legal interest. In
sustaining the appellants, this Court ruled:
Interest upon an obligation which calls for the payment of money, absent a
stipulation, is the legal rate. Such interest normally is allowable from the date
of demand, judicial or extrajudicial. The trial court opted for judicial demand
as the starting point.
But then upon the provisions of Article 2213 of the Civil Code, interest "cannot
be recovered upon unliquidated claims or damages, except when the demand
can be established with reasonable certainty." And as was held by this Court
in Rivera vs. Perez,4 L-6998, February 29, 1956, if the suit were for
damages, "unliquidated and not known until definitely ascertained, assessed
and determined by the courts after proof (Montilla c. Corporacion de
P.P. Agustinos, 25 Phil. 447; Lichauco v. Guzman,
38 Phil. 302)," then, interest "should be from the date of the decision."
(Emphasis supplied)
The case of Reformina vs. Tomol,5 rendered on 11 October 1985, was for "Recovery of
Damages for Injury to Person and Loss of Property." After trial, the lower court decreed:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and third
party defendants and against the defendants and third party plaintiffs as
follows:
Ordering defendants and third party plaintiffs Shell and Michael, Incorporated
to pay jointly and severally the following persons:
xxx xxx xxx
(g) Plaintiffs Pacita F. Reformina and Francisco Reformina the sum of
P131,084.00 which is the value of the boat F B Pacita III together with its
accessories, fishing gear and equipment minus P80,000.00 which is the value
of the insurance recovered and the amount of P10,000.00 a month as the
estimated monthly loss suffered by them as a result of the fire of May 6, 1969
up to the time they are actually paid or already the total sum of P370,000.00 as
of June 4, 1972 with legal interest from the filing of the complaint until paid  and
to pay attorney's fees of P5,000.00 with costs against defendants and third
party plaintiffs. (Emphasis supplied.)
On appeal to the Court of Appeals, the latter modified the amount of damages
awarded but sustained the trial court in adjudging legal interest from the filing of the
complaint until fully paid. When the appellate court's decision became final, the case
was remanded to the lower court for execution, and this was when the trial court
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 issued its assailed resolution which applied the 6% interest per annum prescribed in
Article 2209 of the Civil Code. In their petition for review on certiorari, the petitioners
contended that Central Bank Circular
No. 416, providing thus —
By virtue of the authority granted to it under Section 1 of Act 2655, as
amended, Monetary Board in its Resolution No. 1622 dated July 29, 1974, has
prescribed that the rate of interest for the loan, or forbearance of any money,
goods, or credits and the rate allowed in judgments, in the absence of express
contract as to such rate of interest, shall be twelve (12%) percent per annum.
This Circular shall take effect immediately. (Emphasis found in the text) —
should have, instead, been applied. This Court6 ruled:
The judgments spoken of and referred to are judgments in litigations involving
loans or forbearance of any money, goods or credits. Any other kind of
monetary judgment which has nothing to do with, nor involving loans or
forbearance of any money, goods or credits does not fall within the coverage of
the said law for it is not within the ambit of the authority granted to the
Central Bank.
xxx xxx xxx
Coming to the case at bar, the decision herein sought to be executed is one
rendered in an Action for Damages for injury to persons and loss of property
and does not involve any loan, much less forbearances of any money, goods or
credits. As correctly argued by the private respondents, the law applicable to
the said case is Article 2209 of the New Civil Code which reads —
Art. 2209. — If the obligation consists in the payment of a sum of
money, and the debtor incurs in delay, the indemnity for damages,
there being no stipulation to the contrary, shall be the payment of
interest agreed upon, and in the absence of stipulation, the legal
interest which is six percent per annum.
The above rule was reiterated in Philippine Rabbit Bus Lines, Inc., v. Cruz,7 promulgated on
28 July 1986. The case was for damages occasioned by an injury to person and loss of
property. The trial court awarded private respondent Pedro Manabat actual and
compensatory damages in the amount of P72,500.00 with legal interest thereon from the
filing of the complaint until fully paid. Relying on the Reformina v. Tomol case, this
Court8 modified the interest award from 12% to 6% interest per annum but sustained the
time computation thereof, i.e., from the filing of the complaint until fully paid.
In Nakpil and Sons vs. Court of Appeals,9 the trial court, in an action for the recovery of
damages arising from the collapse of a building, ordered,
inter alia, the "defendant United Construction Co., Inc. (one of the petitioners)
. . . to pay the plaintiff, . . . , the sum of P989,335.68 with interest at the legal rate from
November 29, 1968, the date of the filing of the complaint until full payment . . . ." Save from
the modification of the amount granted by the lower court, the Court of Appeals sustained
the trial court's decision. When taken to this Court for review, the case, on 03 October
1986, was decided, thus:
WHEREFORE, the decision appealed from is hereby MODIFIED and
considering the special and environmental circumstances of this case, we deem
it reasonable to render a decision imposing, as We do hereby impose, upon the
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 defendant and the third-party defendants (with the exception of Roman Ozaeta)
a solidary (Art. 1723, Civil Code, Supra.
p. 10) indemnity in favor of the Philippine Bar Association of FIVE MILLION
(P5,000,000.00) Pesos to cover all damages (with the exception to attorney's
fees) occasioned by the loss of the building (including interest charges and lost
rentals) and an additional ONE HUNDRED THOUSAND (P100,000.00) Pesos as
and for attorney's fees, the total sum being payable upon the finality of this
decision. Upon failure to pay on such finality, twelve (12%) per cent interest per
annum shall be imposed upon aforementioned amounts from finality until paid.
Solidary costs against the defendant and third-party defendants (Except
Roman Ozaeta). (Emphasis supplied)
A motion for reconsideration was filed by United Construction, contending that "the
interest of twelve (12%) per cent per annum imposed on the total amount of the
monetary award was in contravention of law." The Court 10 ruled out the applicability
of the Reformina and Philippine Rabbit Bus Lines cases and, in its resolution of 15
April 1988, it explained:
There should be no dispute that the imposition of 12% interest pursuant to
Central Bank Circular No. 416 . . . is applicable only in the following: (1) loans;
(2) forbearance of any money, goods or credit; and
(3) rate allowed in judgments (judgments spoken of refer to judgments involving
loans or forbearance of any money, goods or credits. (Philippine Rabbit Bus
Lines Inc. v. Cruz, 143 SCRA 160-161 [1986]; Reformina v. Tomol, Jr., 139
SCRA 260 [1985]). It is true that in the instant case, there is neither a loan or a
forbearance, but then no interest is actually imposed provided the sums referred
to in the judgment are paid upon the finality of the judgment. It is delay in the
payment of such final judgment, that will cause the imposition of the interest.
It will be noted that in the cases already adverted to, the rate of interest is
imposed on the total sum, from the filing of the complaint until paid; in other
words, as part of the judgment for damages. Clearly, they are not applicable to
the instant case. (Emphasis supplied.)
The subsequent case of American Express International, Inc., vs. Intermediate Appellate
Court11 was a petition for review on certiorari from the decision, dated 27 February 1985, of
the then Intermediate Appellate Court reducing the amount of moral and exemplary
damages awarded by the trial court, to P240,000.00 and P100,000.00, respectively, and its
resolution, dated 29 April 1985, restoring the amount of damages awarded by the trial
court, i.e., P2,000,000.00 as moral damages and P400,000.00 as exemplary damages
with interest thereon at 12% per annum from notice of judgment, plus costs of suit. In a
decision of 09 November 1988, this Court, while recognizing the right of the private
respondent to recover damages, held the award, however, for moral damages by the trial
court, later sustained by the IAC, to be inconceivably large. The Court 12 thus set aside the
decision of the appellate court and rendered a new one, "ordering the petitioner to pay
private respondent the sum of One Hundred Thousand (P100,000.00) Pesos as moral
damages, with
six (6%) percent interest thereon computed from the finality of this decision until paid.
(Emphasis supplied)

510
Reformina came into fore again in the 21 February 1989 case of Florendo v. Ruiz13 which
arose from a breach of employment contract. For having been illegally dismissed, the
petitioner was awarded by the trial court moral and exemplary damages without, however,
providing any legal interest thereon. When the decision was appealed to the Court of
Appeals, the latter held:
WHEREFORE, except as modified hereinabove the decision of the CFI of Negros
Oriental dated October 31, 1972 is affirmed in all respects, with the
modification that defendants-appellants, except defendant-appellant Merton
Munn, are ordered to pay, jointly and severally, the amounts stated in the
dispositive portion of the decision, including the sum of P1,400.00 in concept
of compensatory damages, with interest at the legal rate from the date of the
filing of the complaint until fully paid (Emphasis supplied.)
The petition for review to this Court was denied. The records were thereupon
transmitted to the trial court, and an entry of judgment was made. The writ of
execution issued by the trial court directed that only compensatory damages should
earn interest at 6% per annum from the date of the filing of the complaint. Ascribing
grave abuse of discretion on the part of the trial judge, a petition
for certiorari assailed the said order. This Court said:
. . . , it is to be noted that the Court of Appeals ordered the payment of interest
"at the legal rate" from the time of the filing of the complaint. . . Said circular
[Central Bank Circular No. 416] does not apply to actions based on a breach of
employment contract like the case at bar. (Emphasis supplied)
The Court reiterated that the 6% interest per annum on the damages should be
computed from the time the complaint was filed until the amount is fully paid.
Quite recently, the Court had another occasion to rule on the matter. National Power
Corporation vs. Angas,14 decided on 08 May 1992, involved the expropriation of certain
parcels of land. After conducting a hearing on the complaints for eminent domain, the trial
court ordered the petitioner to pay the private respondents certain sums of money as just
compensation for their lands so expropriated "with legal interest thereon . . . until fully
paid." Again, in applying the 6% legal interest per annum under the Civil Code, the
Court15 declared:
. . . , (T)he transaction involved is clearly not a loan or forbearance of money,
goods or credits but expropriation of certain parcels of land for a public
purpose, the payment of which is without stipulation regarding interest, and
the interest adjudged by the trial court is in the nature of indemnity for
damages. The legal interest required to be paid on the amount of just
compensation for the properties expropriated is manifestly in the form of
indemnity for damages for the delay in the payment thereof. Therefore, since
the kind of interest involved in the joint judgment of the lower court sought to
be enforced in this case is interest by way of damages, and not by way of
earnings from loans, etc. Art. 2209 of the Civil Code shall apply.
Concededly, there have been seeming variances in the above holdings. The cases can
perhaps be classified into two groups according to the similarity of the issues involved and
the corresponding rulings rendered by the court. The "first group" would consist of the
cases of Reformina v. Tomol (1985), Philippine Rabbit Bus Lines v. Cruz (1986), Florendo
v. Ruiz (1989)
511
and National Power Corporation v. Angas (1992). In the "second group" would be Malayan
Insurance Company v. Manila Port Service (1969), Nakpil and Sons v. Court of
Appeals (1988), and American Express International v. Intermediate Appellate Court (1988).
In the "first group", the basic issue focuses on the application of either the 6% (under the
Civil Code) or 12% (under the Central Bank Circular) interest per annum. It is easily
discernible in these cases that there has been a consistent holding that the Central Bank
Circular imposing the 12% interest per annum applies only to loans or forbearance 16 of
money, goods or credits, as well as to judgments involving such loan or forbearance of
money, goods or credits, and that the 6% interest under the Civil Code governs when the
transaction involves the payment of indemnities in the concept of damage arising from the
breach or a delay in the performance of obligations in general. Observe, too, that in these
cases, a common time frame in the computation of the 6% interest per annum has been
applied, i.e., from the time the complaint is filed until the adjudged amount is fully paid.
The "second group", did not alter the pronounced rule on the application of the 6% or 12%
interest per annum,17 depending on whether or not the amount involved is a loan or
forbearance, on the one hand, or one of indemnity for damage, on the other hand. Unlike,
however, the "first group" which remained consistent in holding that the running of the
legal interest should be from the time of the filing of the complaint until fully paid, the
"second group" varied on the commencement of the running of the legal interest.
Malayan held that the amount awarded should bear legal interest from the date of the
decision of the court a quo, explaining that "if the suit were for damages, 'unliquidated and
not known until definitely ascertained, assessed and determined by the courts after proof,'
then, interest 'should be from the date of the decision.'" American Express International
v. IAC, introduced a different time frame for reckoning the 6% interest by ordering it to be
"computed from the finality of (the) decision until paid." The Nakpil and Sons case ruled that
12% interest per annum should be imposed from the finality of the decision until the
judgment amount is paid.
The ostensible discord is not difficult to explain. The factual circumstances may have called
for different applications, guided by the rule that the courts are vested with discretion,
depending on the equities of each case, on the award of interest. Nonetheless, it may not be
unwise, by way of clarification and reconciliation, to suggest the following rules of thumb
for future guidance.
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts
or quasi-delicts18 is breached, the contravenor can be held liable for damages. 19 The
provisions under Title XVIII on "Damages" of the Civil Code govern in determining the
measure of recoverable damages.20
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as
follows:
1. When the obligation is breached, and it consists in the payment of a sum of money,  i.e.,
a loan or forbearance of money, the interest due should be that which may have been
stipulated in writing.21 Furthermore, the interest due shall itself earn legal interest from the
time it is judicially demanded. 22 In the absence of stipulation, the rate of interest shall be
12% per annum to be computed from default, i.e., from judicial or extrajudicial demand
under and subject to the provisions of Article 116923 of the Civil Code.

512
2. When an obligation, not constituting a loan or forbearance of money, is breached, an
interest on the amount of damages awarded may be imposed at the discretion of the
court24 at the rate of 6% per annum.25 No interest, however, shall be adjudged on
unliquidated claims or damages except when or until the demand can be established with
reasonable certainty.26 Accordingly, where the demand is established with reasonable
certainty, the interest shall begin to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably
established at the time the demand is made, the interest shall begin to run only from the
date the judgment of the court is made (at which time the quantification of damages may be
deemed to have been reasonably ascertained). The actual base for the computation of legal
interest shall, in any case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory,
the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above,
shall be 12% per annum from such finality until its satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of credit.
WHEREFORE, the petition is partly GRANTED. The appealed decision is AFFIRMED with
the MODIFICATION that the legal interest to be paid is SIX PERCENT (6%) on the amount
due computed from the decision, dated
03 February 1988, of the court a quo. A TWELVE PERCENT (12%) interest, in lieu of SIX
PERCENT (6%), shall be imposed on such amount upon finality of this decision until the
payment thereof.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo,
Melo, Quiason, Puno and Kapunan, JJ., concur.
Mendoza, J., took no part.

513