G.R. No.

L-40570 January 30, 1976

TEODORO C. UMALI, petitioner,

vs.
HON. ANGEL BACANI, in his capacity as Presiding Judge of Branch IX of the Court of
First Instance of Pangasinan and FIDEL H. SAYNES, respondents.

FACTS:
• On May 14, 1972, a storm with strong rain hit the Municipality of Alcala Pangasinan,
which started from 2:00 o'clock in the afternoon and lasted up to about midnight of the
same day.
• During the storm, the banana plants standing on an elevated ground along the barrio road
in San Pedro Ili of said municipality and near the transmission line of the Alcala Electric
Plant were blown down and fell on the electric wire.
• As a result, the live electric wire was cut, one end of which was left hanging on the electric
post and the other fell to the ground under the fallen banana plants.
• On the following morning, at about 9:00 o'clock barrio captain Luciano Bueno of San Pedro
Iii who was passing by saw the broken electric wire and so he warned the people in the
place not to go near the wire for they might get hurt.
• He also saw Cipriano Baldomero, a laborer of the Alcala Electric Plant near the place and
notified him right then and there of the broken line and asked him to fix it, but the latter
told the barrio captain that he could not do it but that he was going to look for the lineman
to fix it.
• Sometime after the barrio captain and Cipriano Baldomero had left the place, a small boy
of 3 years and 8 months old by the name of Manuel P. Saynes, whose house is just on the
opposite side of the road, went to the place where the broken line wire was and got in
contact with it.
• The boy was electrocuted and he subsequently died.
• It was only after the electrocution of Manuel Saynes that the broken wire was fixed at about
10:00 o'clock on the same morning by the lineman of the electric plant.
• Decision of the Court of First Instance of Pangasinan Branch IX found the death by
electrocution of Manuel Saynes, a boy of 3 years and 8 months, as "due to the fault or
negligence of the defendant (Umali) as owner and manager of the Alcala Electric Plant",
although the liability of defendant is mitigated by the contributory negligence of the parents
of the boy "in not providing for the proper and delegate supervision and control over their
son
• Petitioner claims that he could not be liable under the concept of quasi-delict or tort as
owner and manager of the Alcala Electric Plant because the proximate cause of the boy's
death electrocution could not be due to any negligence on his part, but rather to a fortuitous
event-the storm that caused the banana plants to fall and cut the electric line

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 • Pointing out the absence of negligence on the part of his employee Cipriano Baldomero
who tried to have the line repaired and the presence of negligence of the parents of the
child in allowing him to leave his house during that time.

ISSUE:
Whether the proximate cause of the victim's death could be attributed to the parents' negligence in
allowing a child of tender age to go out of the house alone

RULING:
No.

The Court could readily see that because of the aforementioned series of negligence on the part of
defendants' employees resulting in a live wire lying on the premises without any visible warning
of its lethal character, anybody, even a responsible grown up or not necessarily an innocent child,
could have met the same fate that befell the victim.

It may be true, as the lower Court found out, that the contributory negligence of the victim's parents
in not properly taking care of the child, which enabled him to leave the house alone on the morning
of the incident and go to a nearby place cut wire was very near the house (where victim was living)
where the fatal fallen wire electrocuted him, might mitigate respondent's liability, but we cannot
agree with petitioner's theory that the parents' negligence constituted the proximate cause of the
victim's death because the real proximate cause was the fallen live wire which posed a threat to
life and property on that morning due to the series of negligence adverted to above committed by
defendants' employees and which could have killed any other person who might by accident get
into contact with it. Stated otherwise, even if the child was allowed to leave the house unattended
due to the parents' negligence, he would not have died that morning where it not for the cut live
wire he accidentally touched.

A careful examination of the record convinces the Court that a series of negligence on the part of
defendants' employees in the Alcala Electric Plant resulted in the death of the victim by
electrocution. First, by the very evidence of the defendant, there were big and tall banana plants at
the place of the incident standing on an elevated ground which were about 30 feet high and which
were higher than the electric post supporting the electric line, and yet the employees of the
defendant who, with ordinary foresight, could have easily seen that even in case of moderate winds
the electric line would be endangered by banana plants being blown down, did not even take the
necessary precaution to eliminate that source of danger to the electric line.

Second, even after the employees of the Alcala Electric Plant were already aware of the possible
damage the storm of May 14, 1972, could have caused their electric lines, thus becoming a possible

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threat to life and property, they did not cut off from the plant the flow of electricity along the lines,
an act they could have easily done pending inspection of the wires to see if they had been cut.

Third, employee Cipriano Baldomero was negligent on the morning of the incident because even
if he was already made aware of the live cut wire, he did not have the foresight to realize that the
same posed a danger to life and property, and that he should have taken the necessary precaution
to prevent anybody from approaching the live wire; instead Baldomero left the premises because
what was foremost in his mind was the repair of the line, obviously forgetting that if left unattended
to it could endanger life and property.

Notwithstanding diligent efforts, the Court fail to find any reversible error committed by the trial
Court in this case, either in its appreciation of the evidence on questions of facts or on the
interpretation and application of laws government quasi-delicts and liabilities emanating
therefrom. The inevitable conclusion is that no error amounting to grave abuse of discretion was
committed and the decision must be left untouched.

WHEREFORE, the decision of respondent Court dated June 27, 1974 is affirmed.

Jagolino (3LM2)
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.

FACTS:
• 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 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.
• The cause of her death was attributed to the injuries she sustained.
• After the burial of their daughter, private respondents demanded upon petitioners the
reimbursement of the hospitalization, medical bills and wake and funeral expenses which
they had incurred. Petitioners refused to pay.
• Consequently, private respondents filed a complaint for damages,
• In its decision, the trial court dismissed the complaint and counterclaim after finding that
the preponderance of the evidence favored petitioners.
o It ruled that the proximate cause of the fall of the counter on ZHIENETH was her
act of clinging to it.
o 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.
o The trial court also held that CRISELDA's negligence contributed to ZHIENETH's
accident.
o In absolving petitioners from any liability, the trial court reasoned that the counter
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.

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 • 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."
• The Court of Appeals, however, decided in favor of private respondents and reversed the
appealed judgment.
o It found that petitioners were negligent in maintaining a structurally dangerous
counter.
o 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.
o 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.
o Faulted the petitioners for this omission, and concluded that the incident that befell
ZHIENETH could have been avoided had petitioners repaired the defective
counter.
o 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.
• Petitioners assail that 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.

ISSUE:
Whether contributory negligence is attributable to Zhieneth.

RULING:
No.

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Anent the negligence imputed to ZHIENETH, the Court apply the conclusive presumption that
favors children below nine (9) years old in that they are incapable of contributory negligence. In
his book, 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.”

Even if the Court 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.

Moreover, CRISELDA should be absolved from any contributory negligence. Initially,

ZHIENETH held on to CRISELDA's waist, later to the latter's hand. 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 mother; and the
gift-wrapping counter was just four meters away from CRISELDA. 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.

Jagolino (3LM2)
G.R. No. 169891 November 2, 2006

PHILIPPINE NATIONAL RAILWAYS, Petitioner,

vs.
ETHEL BRUNTY and JUAN MANUEL M. GARCIA, Respondents.

FACTS:
• Rhonda Brunty, daughter of respondent Ethel Brunty and an American citizen, came to the
Philippines for a visit sometime in January 1980.
• Prior to her departure, she, together with her Filipino host Juan Manuel M. Garcia, traveled
to Baguio City on board a Mercedes Benz sedan driven by Rodolfo L. Mercelita. It was
about 12:00 midnight, January 25, 1980.
• By 2:00 a.m., Rhonda Brunty, Garcia and Mercelita were already approaching the railroad
crossing at Barangay Rizal, Moncada, Tarlac. Mercelita, driving at approximately 70
km/hr, drove past a vehicle, unaware of the railroad track up ahead and that they were about
to collide with PNR Train No. T-71 driven by Alfonso Reyes.
• Mercelita was instantly killed when the Mercedes Benz smashed into the train; the two
other passengers suffered serious physical injuries. A certain James Harrow brought
Rhonda Brunty to the Central Luzon Doctor’s Hospital in Tarlac, where she was
pronounced dead after ten minutes from arrival.
• Garcia, who had suffered severe head injuries, was brought via ambulance to the same
hospital.
• On July 28, 1981, Ethel Brunty sent a demand letter to the PNR demanding payment of
actual, compensatory, and moral damages, as a result of her daughter’s death.
• When PNR did not respond, Ethel Brunty and Garcia, filed a complaint for damages against
the PNR before the RTC of Manila.
o They alleged that the death of Mercelita and Rhonda Brunty, as well as the physical
injuries suffered by Garcia, were the direct and proximate result of the gross and
reckless negligence of PNR in not providing the necessary equipment at the railroad
crossing in Barangay Rizal, Municipality of Moncada, Tarlac.
o They pointed out that there was no flagbar or red light signal to warn motorists who
were about to cross the railroad track, and that the flagman or switchman was only
equipped with a hand flashlight.
• PNR countered that the immediate and proximate cause of the accident was Mercelita’s
negligence, and that he had the last clear chance to avoid the accident. The driver
disregarded the warning signs, the whistle blasts of the oncoming train and the flashlight
signals to stop given by the guard
• After trial on the merits, the RTC rendered its Decision on May 21, 1990 in favor of
plaintiffs.

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 • PNR appealed the case to the CA. The CA rendered the assailed Decision on August 15,
2005, affirming with partial modifications the findings of the trial court.
o The appellate court affirmed the findings of the RTC as to the negligence of the
PNR. Considering the circumstances prevailing at the time of the fatal accident, it
ruled that the alleged safety measures installed by the PNR at the railroad crossing
were not merely inadequate – they did not satisfy the well-settled safety standards
in transportation.
o However, the CA did not agree with the RTC’s findings on the contributory
negligence of Mercelita, the driver of the Mercedes Benz. It held that Mercelita
could not have foreseen the harm that would befall him and the two other
passengers under the prevailing circumstances, thus, could not be considered guilty
of contributory negligence.
• Petitioner asserts, considering that the decisions of the RTC and the CA vary as to whether
or not Mercelita was guilty of contributory negligence, the findings of the RTC should
prevail. Thus, Mercelita’s contributory negligence should not have been ignored.

ISSUE:
Whether Mercelita (the driver of the Mercedes Benz) is guilty of contributory negligence?

RULING:
Yes.

As to whether or not Mercelita was guilty of contributory negligence, the Court agree with
petitioner.

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. To hold a person as having contributed to his injuries, it must be shown that
he performed an act that brought about his injuries in disregard of warning or signs of an impending
danger to health and body.

To prove contributory negligence, it is still necessary to establish a causal link, although not
proximate, between the negligence of the party and the succeeding injury. In a legal sense,
negligence is contributory only when it contributes proximately to the injury, and not simply a
condition for its occurrence.

The court below found that there was a slight curve before approaching the tracks; the place was
not properly illuminated; one’s view was blocked by a cockpit arena; and Mercelita was not
familiar with the road. Yet, it was also established that Mercelita was then driving the Mercedes
Benz at a speed of 70 km/hr and, in fact, had overtaken a vehicle a few yards before reaching the

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railroad track. Mercelita should not have driven the car the way he did. However, while his acts
contributed to the collision, they nevertheless do not negate petitioner’s liability. Pursuant to
Article 2179 of the New Civil Code, the only effect such contributory negligence could have is to
mitigate liability, which, however, is not applicable in this case, as will be discussed later.

Considering the circumstances attendant in this case, the Court find that an award of ₱500,000.00
as moral damages to the heirs of Rhonda Brunty is proper. In view of recent jurisprudence,
indemnity of ₱50,000.00 for the death of Rhonda Brunty and attorney’s fees amounting to
₱50,000.00 is likewise proper.

WHEREFORE, premises considered, the Decision of the Court of Appeals dated August 15, 2005
is AFFIRMED WITH MODIFICATIONS. The award of actual damages is deleted, and in lieu
thereof, temperate damages of ₱25,000.00 is awarded to the heirs of Rhonda Brunty. The award
of moral damages is reduced to ₱500,000.00.

Jagolino (3LM2)
G.R. No. 219649

AL DELA CRUZ, Petitioner

vs.
CAPT. RENATO OCTA VIANO and WILMA OCTA VIANO, Respondents

FACTS:
• Around 9:00 p.m. on April 1, 1999, respondent Captain Renato Octaviano, a military
dentist, respondent Wilma Octaviano, Renato's mother and Janet Octaviano, Renato's
sister, rode a tricycle driven by Eduardo Y. Padilla.
• Respondent Wilma and Janet were inside the sidecar of the vehicle, while Renato rode at
the back of the tricycle driver.
• Renato was asking his mother for a change to complete his ₱l0.00 bill when he looked at
the road and saw a light from an oncoming car which was going too fast. The car, driven
by petitioner, hit the back portion of the tricycle where Renato was riding.
• The force of the impact caused the tricycle to tum around and land on the pavement near
the gutter. Thus, Renato was thrown from the tricycle and landed on the gutter about two
meters away.
• Renato felt severe pain in his lower extremities and went momentarily unconscious
• Petitioner brought them to his house and alighted thereat for two to three minutes and then
he brought the passengers to a clinic. Renato insisted on being brought to a hospital because
he realized the severity of his injuries.
• Thus, Renato, her mother, and Janet were brought to Perpetual Help Medical Center where
Renato's leg was amputated from below the knee on that same night.
• After his treatment at Perpetual Help Medical Center, Renato was brought to the AFP
Medical Center at V. Luna General Hospital and stayed there for nine months for
rehabilitation.
• Shortly before his discharge at V. Luna, he suffered bone infection. He was brought to Fort
Bonifacio Hospital where he was operated on thrice for bone infection. Thereafter, he was
treated at the same hospital for six months.
• In the year 2000, he had a prosthesics attached to his leg at V. Luna at his own expense.
Renato spent a total of ₱623,268.00 for his medical bills and prosthetics.
• Renato and his mother Wilma filed with the RTC a civil case for damages against petitioner
and the owner of the vehicle.
• The RTC, in its Decision dated February 24, 2009, dismissed the claim of respondents.
o According to the RTC, petitioner's version of the incident was more believable
because it was corroborated by Sgt. Martinez who testified that he saw an Elf van
parked along the street.
o The RTC also ruled that petitioner did everything that was expected of a cautious
driver.

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 o It was also ruled that the liability rests on the tricycle driver who drove without
license and petitioner's contributory negligence in riding at the back of the driver
in violation of Municipal Ordinance No. 35-88 that limits the passengers of a
tricycle to three persons including the driver.
• Respondents appealed the RTC decision to the CA. In its Decision dated January 30, 2014,
the CA reversed the RTC's decision.
o According to the CA, petitioner was negligent as shown in the police report.
o It also found that petitioner was positive for alcoholic breath, thus, he violated
Republic Act (R.A.) No. 4136 that prohibits any person from driving a motor
vehicle while under the influence of alcohol or narcotic drug.
• Petitioner insists that he was not negligent and that the driver of the tricycle was the one at
fault.

ISSUE:
Whether contributory negligence is attributable to the tricycle driver and respondent.

RULING:
No.

Neither is it correct to impute contributory negligence on the part of the tricycle driver and
respondent Renato when the latter had violated a municipal ordinance that limits the number of
passengers for each tricycle for hire to three persons including the driver.

In this case, the causal link between the alleged negligence of the tricycle driver and respondent
Renato was not established. This court has appreciated that negligence per se, arising from the
mere violation of a traffic statute, need not be sufficient in itself in establishing liability for
damages.

Even granting that the tricycle driver was presented in court and was proved negligent, his
negligence cannot cancel out the negligence of defendant Dela Cruz, because their liabilities arose
from different sources. The obligation or liability of the tricycle driver arose out of the contract of
carriage between him and petitioners whereas defendant Dela Cruz is liable under Article 2176 of
the Civil Code or under quasi-delicts. There is ample evidence to show that defendant Dela Cruz
was negligent within the purview of Article 2176 of the Civil Code, hence, he cannot escape
liability.

WHEREFORE, the Petition for Review on Certiorari under Rule 45 of the Rules of Court, dated
August 12, 2015, of petitioner Al Dela Cruz is DENIED for lack of merit. Consequently, the
Decision dated January 30, 2014 and Resolution dated June 22, 2015 of the Court of Appeals in
CAG. R. CV No. 93399 are AFFIRMED.

Jagolino (3LM2)
G.R. No. 188363 February 27, 2013

ALLIED BANKING CORPORATION, Petitioner,

vs.
BANK OF THE PHILIPPINE ISLANDS, Respondents.

FACTS:
• On October 10, 2002, a check in the amount of ₱1,000,000.00 payable to "Mateo Mgt.
Group International" (MMGI) was presented for deposit and accepted at Allied Banking
Corporation’s (petitioner) Kawit Branch.
• The check, post-dated "Oct. 9, 2003", was drawn against the account of Marciano Silva,
Jr. (Silva) with respondent Bank of the Philippine Islands (BPI) Bel-Air Branch.
• Upon receipt, petitioner sent the check for clearing to respondent through the Philippine
Clearing House Corporation (PCHC).
• The check was cleared by respondent and petitioner credited the account of MMGI with
₱1,000,000.00. On October 22, 2002, MMGI’s account was closed and all the funds therein
were withdrawn.
• A month later, Silva discovered the debit of ₱1,000,000.00 from his account. In response
to Silva’s complaint, respondent credited his account with the aforesaid sum
• On March 21, 2003, respondent returned a photocopy of the check to petitioner for the
reason: "Postdated." Petitioner, however, refused to accept and sent back to respondent a
photocopy of the check. Thereafter, the check, or more accurately, the Charge Slip, was
tossed several times from petitioner to respondent, and back to petitioner,
• Petitioner filed a complaint before the Arbitration Committee, asserting that respondent
should solely bear the entire face value of the check due to its negligence in failing to return
the check to petitioner within the 24-hour reglementary period
• In its Answer with Counterclaims, respondent charged petitioner with gross negligence for
accepting the post-dated check in the first place. It contended that petitioner’s admitted
negligence was the sole and proximate cause of the loss.
• On December 8, 2004, the Arbitration Committee rendered its Decision in favor of
petitioner and against the respondent. Also finding both parties negligent in the
performance of their duties, the Committee applied the doctrine of "Last Clear Chance"
and ruled that the loss should be shouldered by respondent alone
• On May 13, 2005, respondent filed a petition for review in the RTC
o Respondent argued that assuming it to be liable, the PCHC erred in holding it solely
responsible and should bear entirely the consequent loss considering that while
respondent may have the "last" opportunity in proximity, it was petitioner which
had the longest, fairest and clearest chance to discover the mistake and avoid the
happening of the loss

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 • In its Decision dated December 13, 2005, the RTC affirmed with modification the
Arbitration Committee’s decision by deleting the award of attorney’s fees.
o The RTC found no merit in respondent’s stance that through inadvertence it failed
to discover that the check was post-dated and that confirmation within 24 hours is
often "elusive if not outright impossible" because a drawee bank receives hundreds
if not thousands of checks in an ordinary clearing day
o Petitioner admitted that its standard operating procedure as regards confirmation of
checks was not followed. No less than petitioner’s witness admitted that BPI tried
to call up the drawer of the check, as their procedure dictates when it comes to
checks in large amounts. However, having initially failed to contact the drawer, no
follow up calls were made nor other actions taken. Despite these, petitioner cleared
the check. Having admitted making said calls, it is simply impossible for petitioner
to have missed the fact that the check was postdated.
• By Decision dated March 19, 2009, the CA set aside the RTC judgment and ruled for a 60-
40 sharing of the loss as it found petitioner guilty of contributory negligence in accepting
what is clearly a post-dated check.
o The CA found that petitioner’s failure to notice the irregularity on the face of the
check was a breach of its duty to the public and a telling sign of its lack of due
diligence in handling checks coursed through it.
o While the CA conceded that the drawee bank has a bigger responsibility in the
clearing of checks, it declared that the presenting bank cannot take lightly its
obligation to make sure that only valid checks are introduced into the clearing
system.
• As well established by the records, both petitioner and respondent were admittedly
negligent in the encashment of a check post-dated one year from its presentment.

ISSUE:
Whether the 60-40 apportionment of loss ordered by the CA was justified.

RULING:
Yes.

A collecting bank is guilty of contributory negligence when it accepted for deposit a post-dated
check notwithstanding that said check had been cleared by the drawee bank which failed to return
the check within the 24- hour reglementary period.

In this case, the evidence clearly shows that the proximate cause of the unwarranted encashment
of the subject check was the negligence of respondent who cleared a post-dated check sent to it
thru the PCHC clearing facility without observing its own verification procedure. As correctly
found by the PCHC and upheld by the RTC, if only respondent exercised ordinary care in the

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clearing process, it could have easily noticed the glaring defect upon seeing the date written on the
face of the check "Oct. 9, 2003".

What petitioner omitted to mention is that in the cited case of Philippine Bank of Commerce v.
Court of Appeals, while the Court found petitioner bank as the culpable party under the doctrine
of last clear chance since it had, thru its teller, the last opportunity to avert the injury incurred by
its client simply by faithfully observing its own validation procedure, it nevertheless ruled that the
plaintiff depositor (private respondent) must share in the loss on account of its contributory
negligence.

Following established jurisprudential precedents, the Court believe the allocation of sixty percent
(60%) of the actual damages involved in this case (represented by the amount of the checks with
legal interest) to petitioner is proper under the premises. Respondent should, in light of its
contributory negligence, bear forty percent (40%) of its own loss.

In Philippine Bank of Commerce v. Court of Appeals and The Consolidated Bank & Trust
Corporation v. Court of Appeals, where the bank’s negligence is the proximate cause of the loss
and the depositor is guilty of contributory negligence, we allocated the damages between the bank
and the depositor on a 60-40 ratio.

Assessing the facts and in the light of the cited precedents, the Court thus finds no error committed
by the CA in allocating the resulting loss from the wrongful encashment of the subject check on a
60-40 ratio.

WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated March 19,
2009 of the Court of Appeals in CA-G.R. SP No. 97604 is hereby AFFIRMED.

Jagolino (3LM2)
G.R. No. 235511, June 20, 2018

METROPOLITAN BANK AND TRUST COMPANY, Petitioner,

v.
JUNNEL'S MARKETING CORPORATION, PURIFICACION DELIZO, AND BANK OF
COMMERCE, Respondents.

G.R. No. 235565, June 20, 2018

BANK OF COMMERCE, Petitioner,

v.
JUNNEL'S MARKETING CORPORATION, PURIFICACION
DELIZO, AND METROPOLITAN BANK AND TRUST COMPANY, Respondents.

FACTS:
• Respondent Junnel's Marketing Corporation (JMC) is a domestic corporation engaged in
the business of selling wines and liquors.
• It has a current account with Metrobank from which it draws checks to pay its different
suppliers. Among JMC's suppliers are Jardine Wines and Spirits (Jardine) and Premiere
Wines (Premiere).
• In 2000, during an audit of its financial records, JMC discovered an anomaly involving
eleven (11) checks (subject checks) it had issued to the orders of Jardine and Premiere on
various dates between October 1998 to May 1999.
• As it was, the subject checks had already been charged against JMC's current account but
were, for some reason, not covered by any official receipt from Jardine or Premiere. The
subject checks, which are all crossed checks and amounting to P1,481,292.00 in total
• Examination of the dorsal portion of the subject checks revealed that all had been deposited
with Bankcom, Dau branch, under Account No. 0015-32987-7.6 Upon inquiring with
Jardine and Premiere, however, JMC was able to confirm that neither of the said suppliers
owns Bankcom Account No. 0015-32987-7.
• Meanwhile, on 30 April 2000, respondent Purificacion Delizo (Delizo), a former
accountant of JMC confessed to one Nelvia Yusi, President of JMC that, during her time
as an accountant for JMC, she stole several company checks drawn against JMC's current
account.
• She professed that the said checks were never given to the named payees but were
forwarded by her to one Lita Bituin (Bituin).
• Delizo further admitted that she, Bituin and an unknown bank manager colluded to cause
the deposit and encashing of the stolen checks and shared in the proceeds thereof.
• JMC surmised that the subject checks are among the checks purportedly stolen by Delizo.

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• On 28 January 2002, JMC filed before the Regional Trial Court (RTC) of Pasay City a
complaint for sum of money against Delizo, Bankcom and Metrobank.
o JMC alleged that the wrongful conversion of the subject checks was caused by a
combination of the "tortious and felonious" scheme of Delizo and the "negligent
and unlawful acts" of Bankcom and Metrobank
• On 28 May 2013, the RTC rendered a decision holding both Bankcom and Metrobank
liable to JMC- on a 2/3 to 1/3 ratio, respectively-for the amount of subject checks plus
interest as well as attorney's fees, but absolving Delizo from any liability.
o Subject checks were complete and not forged. They were, however, stolen by
unknown malefactors and were wrongfully encashed due to the negligence of
Bankcom and Metrobank.
o Delizo's complicity in the acquisition and negotiation of the subject checks was
not proven. No direct evidence linking Delizo to the deeds was presented. Also,
Delizo was only forced by Yusi to confess about the missing checks and to
execute the handwritten confession.
o Involvement of Bankcom and Metrobank on the wrongful encashment of the
subject checks, however, were clearly established:
§ Bankcom accepted the subject checks for deposit under Account No. 0015-
32987-7, endorsed them and sent them for clearance with the Philippine
Clearing House Corporation (PCHC). Bankcom did all these despite the fact
that the subject checks were ll crossed checks and that Account No. 0015-
32987-7 neither belongs to Jardine nor Premiere-the payees named in the
subject checks. In this regard, Bankcom was clearly negligent.
§ Metrobank, on the other hand, is also negligent for its failure to scrutinize
the subject checks before clearing and honoring them. Had Metrobank done
so, it would have noticed that Bankcom's ID band stamped at the back of
the subject checks did not contain any initials and are, therefore, defective.
In this regard, Metrobank was remiss in its duty to ensure that the subject
checks are paid only to the named payees.
o In view of the comparative negligence of Bankcom and Metrobank, they should be
held liable to JMC, on a 2/3 to 1/3 ratio, respectively, for the amount of subject
checks plus interest.
• On 22 March 2017, the CA rendered its decision affirming, albeit with modification, the
decision of the RTC.
o CA agreed with the RTC that Bankcom and Metrobank should be held liable to
JMC, on a 2/3 to 1/3 ratio, respectively, for the amount of subject checks
• Metrobank submits that, under the circumstances, it should be Bankcom-as the last
indorser of the subject checks-that should bear the loss and be held solely liable to JMC.
• Bankcom proffers the view that it is JMC that should bear the loss of the subject checks.
Bankcom argues that it was JMC's faulty accounting procedures which led to the subject
checks being stolen and misappropriated.

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ISSUE:
Whether the doctrine of comparative negligence is applicable in the case at bar.

RULING:
No.

Instead of applying the rule on the sequence of recovery to the case at bench, the RTC and the CA
held both Metrobank and Bankcom liable to JMC in accordance with a fixed ratio. In so doing, the
RTC and the CA seemingly relied on the doctrine of comparative negligence as applied in the
cases of Bank of the Philippine Islands v. Court of Appeals and Allied Banking Corporation v. Lio
Sim Wan.

It must be emphasized, however, that the factual contexts of Bank of the Philippine Islands and
Allied Banking Corporation are starkly different from the instant case:

1. Bank of the Philippine Islands involved two (2) cashier's checks issued by the Bank of the
Philippine Islands (BPI) in favor of a certain Eligia Fernando (Eligia). The checks are supposed to
represent the proceeds of a pre-terminated money market placement of Eligia with BPI. BPI issued
the checks upon the mere phone request of a person who introduced herself as Eligia. The checks
were subsequently deposited with the China Banking Corporation (CBC) under an account that
was opened by a person who identified herself as Eligia. This person thereafter encashed the
checks.

It was later established, however, that Eligia never requested the pre-termination of her money
market placement nor opened an account with the CBC. It was an impostor who did so.

2. Allied Banking Corporation, on the other hand, involved a manager's check issued by the Allied
Banking Corporation (ABC) in favor of a certain Lim Sio Wan (Lim). The check is supposed to
represent the proceeds of a pre-terminated money market placement of Lim with ABC. ABC issued
the checks upon the mere phone request of a person who introduced herself as Lim. The checks,
now bearing an indorsement of Lim, were then deposited with the Metrobank under the account
of a certain Filipinas Cement Corporation. The checks were eventually encashed.

A glaring peculiarity in the cases of Bank of the Philippine Islands and Allied Banking Corporation
is that the drawee bank-which is essentially also the drawer in the scenario-is not only guilty of
wrongfully paying a check but also of negligence in issuing such check. Indeed, this is the very
reason why the drawee bank in the two cases were adjudged co-liable with the collecting bank
under a fixed ratio and the former was not allowed to claim reimbursement from the latter. The
drawee bank cannot claim that its participation in the wrongful payment of a check was merely
limited to its reliance on the guarantees of the collecting bank. In other words, the drawee bank

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was held liable in its own right because it was the one that negligently issued the checks in the first
place.

That, however, is clearly not the situation in the case at bench. Here, no negligence similar to that
committed by the drawee banks in Bank of the Philippine Islands and Allied Banking Corporation-
whether in type or in magnitude-can be attributed to Metrobank. Metrobank, though guilty of the
unauthorized check payments, only acted upon the guarantees deemed made by Bankcom under
prevailing banking practices. While Metrobank's reliance upon the guarantees of Bankcom did not
excuse it from being answerable to JMC, such reliance does enable Metrobank to seek
reimbursement from Bankcom on the ground of the breach in the latter's warranties as a collecting
bank. Under such circumstances, we cannot deny Metrobank's right to seek reimbursement from
Bankcom.

Hence, given the differences in the factual milieu between this case on one hand arid the cases of
Bank of the Philippine Islands and Allied Banking Corporation on the other, we find that the
doctrine of comparative negligence cannot be applied so as to apportion the respective liabilities
of Metrobank and Bankcom. The liabilities of Metrobank and Bankcom, as already discussed in
length, must be governed by the rule on sequential recovery pursuant to Bank of America.

WHEREFORE, the consolidated appeals are DENIED. The Decision dated 22 March 2017 and
Resolution dated 19 October 2017 of the Court of Appeals (CA) in CA-G.R. CV No. 102462 are
herein MODIFIED with respect to the individual liabilities of the Metropolitan Bank and Trust
Company and the Bank of Commerce.

Other findings and pronouncements of the Court of Appeals in its Decision dated 22 March 2017
and Resolution dated 19 October 2017 in CA-G.R. CV No. 102462 that are not contrary to this
Decision are AFFIRMED.

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G.R. No. L-3422 June 13, 1952

HIDALGO ENTERPRISES, INC., petitioner,

vs.
GUILLERMO BALANDAN, ANSELMA ANILA and THE COURT OF APPEALS,
respondents.

FACTS:
• Petitioner Hidalgo Enterprises, Inc. "was the owner of an ice-plant factory in the City of
San Pablo, Laguna, in whose premises were installed two tanks full of water, nine feet
deep, for cooling purposes of its engine.
• While the factory compound was surrounded with fence, the tanks themselves were not
provided with any kind of fence or top covers. The edges of the tanks were barely a foot
high from the surface of the ground.
• Through the wide gate entrance, which is continually open, motor vehicles hauling ice and
persons buying said commodity passed, and any one could easily enter the said factory, as
he pleased. There was no guard assigned on the gate.
• At about noon of April 16, 1948, plaintiff's son, Mario Balandan, a boy barely 8 years old,
while playing with and in company of other boys of his age entered the factory premises
through the gate, to take a bath in one of said tanks; and while thus bathing, Mario sank to
the bottom of the tank, only to be fished out later, already a cadaver, having been died of
"asphyxia secondary to drowning."
• The Court of Appeals, and the Court of First Instance of Laguna, took the view that the
petitioner maintained an attractive nuisance (the tanks), and neglected to adopt the
necessary precautions to avoid accidents to persons entering its premises. It applied the
doctrine of attractive nuisance, of American origin, recognized in this Jurisdiction

ISSUE:
Whether the body of water an attractive nuisance.

RULING:
No.

The doctrine of attractive nuisance may be stated, in short, as follows: One who maintains on his
premises dangerous instrumentalities or appliances of a character likely to attract children in play,
and who fails to exercise ordinary care to prevent children from playing therewith or resorting
thereto, is liable to a child of tender years who is injured thereby, even if the child is technically a
trespasser in the premises.

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The principle reason for the doctrine is that the condition or appliance in question although its
danger is apparent to those of age, is so enticing or alluring to children of tender years as to induce
them to approach, get on or use it, and this attractiveness is an implied invitation to such children

The attractive nuisance doctrine generally is not applicable to bodies of water, artificial as well as
natural, in the absence of some unusual condition or artificial feature other than the mere water
and its location.

There are numerous cases in which the attractive nuisance doctrine has not been held not to be
applicable to ponds or reservoirs, pools of water, streams, canals, dams, ditches, culverts, drains,
cesspools or sewer pools.

The reason why a swimming pool or pond or reservoir of water is not considered an attractive
nuisance was lucidly explained by the Indiana Appellate Court as follows:

“Nature has created streams, lakes and pools which attract children. Lurking in their waters is
always the danger of drowning. Against this danger children are early instructed so that they are
sufficiently presumed to know the danger; and if the owner of private property creates an artificial
pool on his own property, merely duplicating the work of nature without adding any new danger,
. . . (he) is not liable because of having created an "attractive nuisance."

Therefore, as petitioner's tanks are not classified as attractive nuisance, the question whether the
petitioner had taken reasonable precautions becomes immaterial.

The appealed decision is reversed and the Hidalgo Enterprises, Inc. is absolved from liability.

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