G.R. No. L-25142 March 25, 1975 national highway at Sto.

Tomas, The owners and managers of an

Pampanga. The truck bumped the bus establishment or enterprise are likewise
PHILIPPINE RABBIT BUS LINES, INC.
driven by Pangalangan, which was owned responsible for damages caused by their
and FELIX PANGALANGAN, plaintiffs-
by Philippine Rabbit Bus Lines, Inc. As a employees in the service of the branches
appellants,
result of the bumping, Pangalangan in which the latter are employed or on the
vs.
suffered injuries and the bus was occasion of their functions.
PHIL-AMERICAN FORWARDERS, INC.,
damaged and could not be used for
ARCHIMEDES J. BALINGIT and Employers shall be liable for the damages
seventy-nine days, thus depriving the
FERNANDO PINEDA, defendants- caused by their employees and household
company of earnings amounting to
appellees. helpers acting within the scope of their
P8,665.51. Balingit was the manager of
assigned tasks, even though the former
Angel A. Sison for plaintiffs- Phil-American Forwarders, Inc.
are not engaged in any business or
appellants.
Among the defenses interposed by the industry.
Fidel Zosimo U. Canilao for defendants in their answer was that
xxx xxx xxx
defendants-appellees. Balingit was not Pineda's employer.
The responsibility treated of in this article
Balingit moved that the complaint against
shall cease when the persons herein
him be dismissed on the ground that the
AQUINO, J.:ñé+.£ªwph!1 mentioned prove that they observed all
bus company and the bus driver had no
the diligence of a good father of a family
cause of action against him. As already
Philippine Rabbit Bus Lines, Inc. and Felix to prevent damage. (1903a)
stated, the lower court dismissed the
Pangalangan appealed on pure questions
action as to Balingit. The bus company The novel and unprecedented legal issue
of law from the order of the Court of First
and its driver appealed. in this appeal is whether the terms
Instance of Tarlac, dismissing their
complaint against Archimedes J. Balingit. "employers" and "owners and managers of
The Civil Code provides:têñ.£îhqwâ£
an establishment or enterprise" (dueños o
The dismissal was based on the ground ART. 2176. Whoever by act or omission directores de un establicimiento o
that Balingit as the manager of Phil- causes damage to another, there being empresa) used in article 2180 of the Civil
American Forwarders, Inc., which together fault or negligence, is obliged to pay for Code, formerly article 1903 of the old
with Fernando Pineda and Balingit, was the damage done. Such fault or Code, embrace the manager of a
sued for damages in an action based on negligence, if there is no pre-existing corporation owning a truck, the reckless
quasi-delict or culpa aquiliana, is not the contractual relation between the parties, operation of which allegedly resulted in
manager of an establishment is called a quasi-delict and is governed by the vehicular accident from which the
contemplated in article 2180 of the Civil the provisions of this Chapter. damage arose.
Code (Civil Case No. 3865).
ART. 2180. The obligation imposed by We are of the opinion that those terms do
In the complaint for damages filed by the article 2176 is demandable not only for not include the manager of a corporation.
bus company and Pangalangan against one's own acts or omissions, but also for It may be gathered from the context of
Phil-American Forwarders, Inc., Balingit those of persons for whom one is article 2180 that the term "manager"
and Pineda, it was alleged that on responsible. ("director" in the Spanish version) is used
November 24, 1962, Pineda drove in the sense of "employer".
recklessly a freight truck, owned by Phil- xxx xxx xxx
American Forwarders, Inc., along the
Hence, under the allegations of the Balingit and his wife should be treated as
complaint, no tortious or quasi-delictual one and the same civil personality.
liability can be fastened on Balingit as
We cannot countenance that argument in
manager of Phil-American Forwarders,
this appeal. It was not raised in the lower
Inc., in connection with the vehicular
court. The case has to be decided on the
accident already mentioned because he
basis of the pleadings filed in the trial
himself may be regarded as an employee
court where it was assumed that Phil-
or dependiente of his employer, Phil-
American Forwarders, Inc. has a
American Forwarders, Inc.
personality separate and distinct from that
Thus, it was held "que es dependiente, a of the Balingit spouses.
los efectos de la responsabilidad
The legal issue, which the plaintiffs-
subsidiaria establecida en el num 3.0 del
appellants can ventilate in this appeal, is
(art.) 1903, el director de un periodico
one which was raised in the lower court
explotado por una sociedad, porque
and which is within the issues framed by
cualquiera que sea su jerarquia y aunque
the parties (Sec. 18, Rule 46, Rules of
Ileve la direccion de determinadas
Court).
convicciones politicas no por eso deja de
estar subordinado a la superior autoridad When a party deliberately adopts a certain
de la Empresa" (Decision of Spanish theory and the case is decided upon that
Supreme Court dated December 6, 1912 theory in the court below, he will not be
cited in 12 Manresa, Codigo Civil Español permitted to change his theory on appeal
5th Ed. 662; 1913 Enciclopedia Juridica because, to permit him to do so, could be
Española 992). unfair to the adverse party (2 Moran's
Comments on the Rules of Court, 1970
The bus company and its driver, in their
Ed. p. 505).
appellants' brief, injected a new factual
issue which was not alleged in their WHEREFORE, the lower court's order of
complaint. They argue that Phil- American dismissal is affirmed. Costs against the
Forwarders, Inc. is merely a business plaintiffs-appellants.
conduit of Balingit because out of its
capital stock with a par value of P41,200, SO ORDERED.
Balingit and his wife had subscribed
P40,000 and they paid P10,000 on their
subscription, while the other
incorporators, namely, Rodolfo Limjuco,
Ponciano Caparas and Rafael Suntay paid
P250.25 and P25, respectively.

That argument implies that the veil of

corporate fiction should be pierced and
that Phil-American Forwarders, Inc. and
G.R. No. 124354 December 29, 1999 The antecedent facts as summarized by the for a good anesthesiologist. Dr. Hosaka, in
ROGELIO E. RAMOS and ERLINDA trial court are reproduced hereunder: turn, assured Rogelio that he will get a
RAMOS, in their own behalf and as Plaintiff Erlinda Ramos was, until the good anesthesiologist. Dr. Hosaka charged
natural guardians of the minors, afternoon of June 17, 1985, a 47-year old a fee of P16,000.00, which was to include
ROMMEL RAMOS, ROY RODERICK (Exh. "A") robust woman (TSN, October the anesthesiologist's fee and which was to
RAMOS and RON RAYMOND 19, 1989, p. 10). Except for occasional be paid after the operation (TSN, October
RAMOS, petitioners, complaints of discomfort due to pains 19, 1989, pp. 14-15, 22-23, 31-33; TSN,
vs. allegedly caused by the presence of a stone February 27, 1990, p. 13; and TSN,
COURT OF APPEALS, DELOS SANTOS in her gall bladder (TSN, January 13, 1988, November 9, 1989, pp. 3-4, 10, 17).
MEDICAL CENTER, DR. ORLINO pp. 4-5), she was as normal as any other A day before the scheduled date of
HOSAKA and DRA. PERFECTA woman. Married to Rogelio E. Ramos, an operation, she was admitted at one of the
GUTIERREZ, respondents. executive of Philippine Long Distance rooms of the DLSMC, located along E.
Telephone Company, she has three Rodriguez Avenue, Quezon City (TSN,
KAPUNAN, J.: children whose names are Rommel Ramos, October 19,1989, p. 11).
The Hippocratic Oath mandates physicians Roy Roderick Ramos and Ron Raymond At around 7:30 A.M. of June 17, 1985 and
to give primordial consideration to the Ramos (TSN, October 19, 1989, pp. 5-6). while still in her room, she was prepared
health and welfare of their patients. If a Because the discomforts somehow for the operation by the hospital staff. Her
doctor fails to live up to this precept, he is interfered with her normal ways, she sister-in-law, Herminda Cruz, who was the
made accountable for his acts. A mistake, sought professional advice. She was Dean of the College of Nursing at the
through gross negligence or incompetence advised to undergo an operation for the Capitol Medical Center, was also there for
or plain human error, may spell the removal of a stone in her gall bladder (TSN, moral support. She reiterated her previous
difference between life and death. In this January 13, 1988, p. 5). She underwent a request for Herminda to be with her even
sense, the doctor plays God on his patient's series of examinations which included during the operation. After praying, she
fate. 1 blood and urine tests (Exhs. "A" and "C") was given injections. Her hands were held
In the case at bar, the Court is called upon which indicated she was fit for surgery. by Herminda as they went down from her
to rule whether a surgeon, an Through the intercession of a mutual room to the operating room (TSN, January
anesthesiologist and a hospital should be friend, Dr. Buenviaje (TSN, January 13, 13, 1988, pp. 9-11). Her husband, Rogelio,
made liable for the unfortunate comatose 1988, p. 7), she and her husband Rogelio was also with her (TSN, October 19, 1989,
condition of a patient scheduled for met for the first time Dr. Orlino Hozaka p. 18). At the operating room, Herminda
cholecystectomy. 2 (should be Hosaka; see TSN, February 20, saw about two or three nurses and Dr.
Petitioners seek the reversal of the 1990, p. 3), one of the defendants in this Perfecta Gutierrez, the other defendant,
decision 3 of the Court of Appeals, dated 29 case, on June 10, 1985. They agreed that who was to administer anesthesia.
May 1995, which overturned the their date at the operating table at the Although not a member of the hospital
decision 4 of the Regional Trial Court, dated DLSMC (another defendant), would be on staff, Herminda introduced herself as Dean
30 January 1992, finding private June 17, 1985 at 9:00 A.M.. Dr. Hosaka of the College of Nursing at the Capitol
respondents liable for damages arising decided that she should undergo a Medical Center who was to provide moral
from negligence in the performance of their "cholecystectomy" operation after support to the patient, to them. Herminda
professional duties towards petitioner examining the documents (findings from was allowed to stay inside the operating
Erlinda Ramos resulting in her comatose the Capitol Medical Center, FEU Hospital room.
condition. and DLSMC) presented to him. Rogelio E. At around 9:30 A.M., Dr. Gutierrez reached
Ramos, however, asked Dr. Hosaka to look a nearby phone to look for Dr. Hosaka who
was not yet in (TSN, January 13, 1988, pp. people inside the operating room "moving, patient inside the operating room (TSN,
11-12). Dr. Gutierrez thereafter informed doing this and that, [and] preparing the October 19, 1989, pp. 25-28).
Herminda Cruz about the prospect of a patient for the operation" (TSN, January Herminda Cruz immediately rushed back,
delay in the arrival of Dr. Hosaka. 13, 1988, p. 16). As she held the hand of and saw that the patient was still in
Herminda then went back to the patient Erlinda Ramos, she then saw Dr. Gutierrez trendelenburg position (TSN, January 13,
who asked, "Mindy, wala pa ba ang intubating the hapless patient. She 1988, p. 20). At almost 3:00 P.M. of that
Doctor"? The former replied, "Huwag kang thereafter heard Dr. Gutierrez say, "ang fateful day, she saw the patient taken to
mag-alaala, darating na iyon" (Ibid.). hirap ma-intubate nito, mali yata ang the Intensive Care Unit (ICU).
Thereafter, Herminda went out of the pagkakapasok. O lumalaki ang tiyan" (id., About two days thereafter, Rogelio E.
operating room and informed the patient's p. 17). Because of the remarks of Dra. Ramos was able to talk to Dr. Hosaka. The
husband, Rogelio, that the doctor was not Gutierrez, she focused her attention on latter informed the former that something
yet around (id., p. 13). When she returned what Dr. Gutierrez was doing. She went wrong during the intubation. Reacting
to the operating room, the patient told her, thereafter noticed bluish discoloration of to what was told to him, Rogelio reminded
"Mindy, inip na inip na ako, ikuha mo ako the nailbeds of the left hand of the hapless the doctor that the condition of his wife
ng ibang Doctor." So, she went out again Erlinda even as Dr. Hosaka approached would not have happened, had he (Dr.
and told Rogelio about what the patient her. She then heard Dr. Hosaka issue an Hosaka) looked for a good anesthesiologist
said (id., p. 15). Thereafter, she returned order for someone to call Dr. Calderon, (TSN, October 19, 1989, p. 31).
to the operating room. another anesthesiologist (id., p. 19). After Doctors Gutierrez and Hosaka were also
At around 10:00 A.M., Rogelio E. Ramos Dr. Calderon arrived at the operating room, asked by the hospital to explain what
was "already dying [and] waiting for the she saw this anesthesiologist trying to happened to the patient. The doctors
arrival of the doctor" even as he did his intubate the patient. The patient's nailbed explained that the patient had
best to find somebody who will allow him became bluish and the patient was placed bronchospasm (TSN, November 15, 1990,
to pull out his wife from the operating room in a trendelenburg position — a position pp. 26-27).
(TSN, October 19, 1989, pp. 19-20). He where the head of the patient is placed in Erlinda Ramos stayed at the ICU for a
also thought of the feeling of his wife, who a position lower than her feet which is an month. About four months thereafter or on
was inside the operating room waiting for indication that there is a decrease of blood November 15, 1985, the patient was
the doctor to arrive (ibid.). At almost 12:00 supply to the patient's brain (Id., pp. 19- released from the hospital.
noon, he met Dr. Garcia who remarked that 20). Immediately thereafter, she went out During the whole period of her
he (Dr. Garcia) was also tired of waiting for of the operating room, and she told Rogelio confinement, she incurred hospital bills
Dr. Hosaka to arrive (id., p. 21). While E. Ramos "that something wrong was . . . amounting to P93,542.25 which is the
talking to Dr. Garcia at around 12:10 P.M., happening" (Ibid.). Dr. Calderon was then subject of a promissory note and affidavit
he came to know that Dr. Hosaka arrived able to intubate the patient (TSN, July 25, of undertaking executed by Rogelio E.
as a nurse remarked, "Nandiyan na si Dr. 1991, p. 9). Ramos in favor of DLSMC. Since that fateful
Hosaka, dumating na raw." Upon hearing Meanwhile, Rogelio, who was outside the afternoon of June 17, 1985, she has been
those words, he went down to the lobby operating room, saw a respiratory machine in a comatose condition. She cannot do
and waited for the operation to be being rushed towards the door of the anything. She cannot move any part of her
completed (id., pp. 16, 29-30). operating room. He also saw several body. She cannot see or hear. She is living
At about 12:15 P.M., Herminda Cruz, who doctors rushing towards the operating on mechanical means. She suffered brain
was inside the operating room with the room. When informed by Herminda Cruz damage as a result of the absence of
patient, heard somebody say that "Dr. that something wrong was happening, he oxygen in her brain for four to five minutes
Hosaka is already here." She then saw told her (Herminda) to be back with the (TSN, November 9, 1989, pp. 21-22). After
being discharged from the hospital, she has defendants were guilty of, at the very least, have acted with due care and prudence in
been staying in their residence, still negligence in the performance of their duty rendering medical services to plaintiff-
needing constant medical attention, with to plaintiff-patient Erlinda Ramos. patient. For if the patient was properly
her husband Rogelio incurring a monthly On the part of Dr. Perfecta Gutierrez, this intubated as claimed by them, the patient
expense ranging from P8,000.00 to Court finds that she omitted to exercise would not have become comatose. And,
P10,000.00 (TSN, October 19, 1989, pp. reasonable care in not only intubating the the fact that another anesthesiologist was
32-34). She was also diagnosed to be patient, but also in not repeating the called to try to intubate the patient after
suffering from "diffuse cerebral administration of atropine (TSN, August her (the patient's) nailbed turned bluish,
parenchymal damage" (Exh. "G"; see 20, 1991, pp. 5-10), without due regard to belie their claim. Furthermore, the
also TSN, December 21, 1989, the fact that the patient was inside the defendants should have rescheduled the
p. 6). 5 operating room for almost three (3) hours. operation to a later date. This, they should
Thus, on 8 January 1986, petitioners filed For after she committed a mistake in have done, if defendants acted with due
a civil case 6 for damages with the Regional intubating [the] patient, the patient's care and prudence as the patient's case
Trial Court of Quezon City against herein nailbed became bluish and the patient, was an elective, not an emergency case.
private respondents alleging negligence in thereafter, was placed in trendelenburg xxx xxx xxx
the management and care of Erlinda position, because of the decrease of blood WHEREFORE, and in view of the foregoing,
Ramos. supply to the patient's brain. The evidence judgment is rendered in favor of the
During the trial, both parties presented further shows that the hapless patient plaintiffs and against the defendants.
evidence as to the possible cause of suffered brain damage because of the Accordingly, the latter are ordered to pay,
Erlinda's injury. Plaintiff presented the absence of oxygen in her (patient's) brain jointly and severally, the former the
testimonies of Dean Herminda Cruz and Dr. for approximately four to five minutes following sums of money, to wit:
Mariano Gavino to prove that the sustained which, in turn, caused the patient to 1) the sum of P8,000.00 as actual monthly
by Erlinda was due to lack of oxygen in her become comatose. expenses for the plaintiff Erlinda Ramos
brain caused by the faulty management of On the part of Dr. Orlino Hosaka, this Court reckoned from November 15, 1985 or in
her airway by private respondents during finds that he is liable for the acts of Dr. the total sum of P632,000.00 as of April 15,
the anesthesia phase. On the other hand, Perfecta Gutierrez whom he had chosen to 1992, subject to its being updated;
private respondents primarily relied on the administer anesthesia on the patient as 2) the sum of P100,000.00 as reasonable
expert testimony of Dr. Eduardo Jamora, a part of his obligation to provide the patient attorney's fees;
pulmonologist, to the effect that the cause a good anesthesiologist', and for arriving 3) the sum of P800,000.00 by way of moral
of brain damage was Erlinda's allergic for the scheduled operation almost three damages and the further sum of
reaction to the anesthetic agent, (3) hours late. P200,000,00 by way of exemplary
Thiopental Sodium (Pentothal). On the part of DLSMC (the hospital), this damages; and,
After considering the evidence from both Court finds that it is liable for the acts of 4) the costs of the suit.
sides, the Regional Trial Court rendered negligence of the doctors in their "practice SO ORDERED. 7
judgment in favor of petitioners, to wit: of medicine" in the operating room. Private respondents seasonably interposed
After evaluating the evidence as shown in Moreover, the hospital is liable for failing an appeal to the Court of Appeals. The
the finding of facts set forth earlier, and through its responsible officials, to cancel appellate court rendered a Decision, dated
applying the aforecited provisions of law the scheduled operation after Dr. Hosaka 29 May 1995, reversing the findings of the
and jurisprudence to the case at bar, this inexcusably failed to arrive on time. trial court. The decretal portion of the
Court finds and so holds that defendants In having held thus, this Court rejects the decision of the appellate court reads:
are liable to plaintiffs for damages. The defense raised by defendants that they
WHEREFORE, for the foregoing premises explanation, the appellate court still denied on 9 May 1996, well within the extended
the appealed decision is hereby REVERSED, the motion to admit the motion for period given by the Court.
and the complaint below against the reconsideration of petitioners in its Petitioners assail the decision of the Court
appellants is hereby ordered DISMISSED. Resolution, dated 29 March 1996, primarily of Appeals on the following grounds:
The counterclaim of appellant De Los on the ground that the fifteen-day (15) I
Santos Medical Center is GRANTED but only period for filing a motion for IN PUTTING MUCH RELIANCE ON THE
insofar as appellees are hereby ordered to reconsideration had already expired, to TESTIMONIES OF RESPONDENTS DRA.
pay the unpaid hospital bills amounting to wit: GUTIERREZ, DRA. CALDERON AND DR.
P93,542.25, plus legal interest for justice We said in our Resolution on July 25, 1995, JAMORA;
must be tempered with mercy. that the filing of a Motion for II
SO ORDERED. 8 Reconsideration cannot be extended; IN FINDING THAT THE NEGLIGENCE OF
The decision of the Court of Appeals was precisely, the Motion for Extension (Rollo, THE RESPONDENTS DID NOT CAUSE THE
received on 9 June 1995 by petitioner p. 12) was denied. It is, on the other hand, UNFORTUNATE COMATOSE CONDITION OF
Rogelio Ramos who was mistakenly admitted in the latter Motion that PETITIONER ERLINDA RAMOS;
addressed as "Atty. Rogelio Ramos." No plaintiffs/appellees received a copy of the III
copy of the decision, however, was sent nor decision as early as June 9, 1995. IN NOT APPLYING THE DOCTRINE OF RES
received by the Coronel Law Office, then Computation wise, the period to file a IPSA LOQUITUR. 11
counsel on record of petitioners. Rogelio Motion for Reconsideration expired on June Before we discuss the merits of the case,
referred the decision of the appellate court 24. The Motion for Reconsideration, in turn, we shall first dispose of the procedural
to a new lawyer, Atty. Ligsay, only on 20 was received by the Court of Appeals issue on the timeliness of the petition in
June 1995, or four (4) days before the already on July 4, necessarily, the 15-day relation to the motion for reconsideration
expiration of the reglementary period for period already passed. For that alone, the filed by petitioners with the Court of
filing a motion for reconsideration. On the latter should be denied. Appeals. In their
same day, Atty. Ligsay, filed with the Even assuming admissibility of the Motion Comment, 12 private respondents contend
appellate court a motion for extension of for the Reconsideration, but after that the petition should not be given due
time to file a motion for reconsideration. considering the Comment/Opposition, the course since the motion for reconsideration
The motion for reconsideration was former, for lack of merit, is hereby DENIED. of the petitioners on the decision of the
submitted on 4 July 1995. However, the SO ORDERED. 10 Court of Appeals was validly dismissed by
appellate court denied the motion for A copy of the above resolution was the appellate court for having been filed
extension of time in its Resolution dated 25 received by Atty. Sillano on 11 April 1996. beyond the reglementary period. We do not
July 1995. 9 Meanwhile, petitioners The next day, or on 12 April 1996, Atty. agree.
engaged the services of another counsel, Sillano filed before this Court a motion for A careful review of the records reveals that
Atty. Sillano, to replace Atty. Ligsay. Atty. extension of time to file the present petition the reason behind the delay in filing the
Sillano filed on 7 August 1995 a motion to for certiorari under Rule 45. The Court motion for reconsideration is attributable to
admit the motion for reconsideration granted the motion for extension of time the fact that the decision of the Court of
contending that the period to file the and gave petitioners additional thirty (30) Appeals was not sent to then counsel on
appropriate pleading on the assailed days after the expiration of the fifteen-day record of petitioners, the Coronel Law
decision had not yet commenced to run as (15) period counted from the receipt of the Office. In fact, a copy of the decision of the
the Division Clerk of Court of the Court of resolution of the Court of Appeals within appellate court was instead sent to and
Appeals had not yet served a copy thereof which to submit the petition. The due date received by petitioner Rogelio Ramos on 9
to the counsel on record. Despite this fell on 27 May 1996. The petition was filed June 1995 wherein he was mistakenly
addressed as Atty. Rogelio Ramos. Based shall be tackled in relation to the res ipsa However, much has been said that res ipsa
on the other communications received by loquitur doctrine. loquitur is not a rule of substantive law
petitioner Rogelio Ramos, the appellate Res ipsa loquitur is a Latin phrase which and, as such, does not create or constitute
court apparently mistook him for the literally means "the thing or the transaction an independent or separate ground of
counsel on record. Thus, no copy of the speaks for itself." The phrase "res ipsa liability. 17 Instead, it is considered as
decision of the counsel on record. loquitur'' is a maxim for the rule that the merely evidentiary or in the nature of a
Petitioner, not being a lawyer and unaware fact of the occurrence of an injury, taken procedural rule. 18 It is regarded as a mode
of the prescriptive period for filing a motion with the surrounding circumstances, may of proof, or a mere procedural of
for reconsideration, referred the same to a permit an inference or raise a presumption convenience since it furnishes a substitute
legal counsel only on 20 June 1995. of negligence, or make out a for, and relieves a plaintiff of, the burden
It is elementary that when a party is plaintiff's prima facie case, and present a of producing specific proof of
represented by counsel, all notices should question of fact for defendant to meet with negligence. 19 In other words, mere
be sent to the party's lawyer at his given an explanation. 13 Where the thing which invocation and application of the doctrine
address. With a few exceptions, notice to a caused the injury complained of is shown does not dispense with the requirement of
litigant without notice to his counsel on to be under the management of the proof of negligence. It is simply a step in
record is no notice at all. In the present defendant or his servants and the accident the process of such proof, permitting the
case, since a copy of the decision of the is such as in ordinary course of things does plaintiff to present along with the proof of
appellate court was not sent to the counsel not happen if those who have its the accident, enough of the attending
on record of petitioner, there can be no management or control use proper care, it circumstances to invoke the doctrine,
sufficient notice to speak of. Hence, the affords reasonable evidence, in the creating an inference or presumption of
delay in the filing of the motion for absence of explanation by the defendant, negligence, and to thereby place on the
reconsideration cannot be taken against that the accident arose from or was caused defendant the burden of going forward with
petitioner. Moreover, since the Court of by the defendant's want of care. 14 the proof. 20 Still, before resort to the
Appeals already issued a second The doctrine of res ipsa loquitur is simply a doctrine may be allowed, the following
Resolution, dated 29 March 1996, which recognition of the postulate that, as a requisites must be satisfactorily shown:
superseded the earlier resolution issued on matter of common knowledge and 1. The accident is of a kind which ordinarily
25 July 1995, and denied the motion for experience, the very nature of certain does not occur in the absence of someone's
reconsideration of petitioner, we believed types of occurrences may justify an negligence;
that the receipt of the former should be inference of negligence on the part of the 2. It is caused by an instrumentality within
considered in determining the timeliness of person who controls the instrumentality the exclusive control of the defendant or
the filing of the present petition. Based on causing the injury in the absence of some defendants; and
this, the petition before us was submitted explanation by the defendant who is 3. The possibility of contributing conduct
on time. charged with negligence. 15 It is grounded which would make the plaintiff responsible
After resolving the foregoing procedural in the superior logic of ordinary human is eliminated. 21
issue, we shall now look into the merits of experience and on the basis of such In the above requisites, the fundamental
the case. For a more logical presentation of experience or common knowledge, element is the "control of instrumentality"
the discussion we shall first consider the negligence may be deduced from the mere which caused the damage. 22 Such element
issue on the applicability of the doctrine occurrence of the accident of control must be shown to be within the
of res ipsa loquitur to the instant case. itself. 16
Hence, res ipsa loquitur is applied dominion of the defendant. In order to
Thereafter, the first two assigned errors in conjunction with the doctrine of common have the benefit of the rule, a plaintiff, in
knowledge. addition to proving injury or damage, must
show a situation where it is applicable, and may be given by non-expert removal of his tonsils, 35 and loss of an eye
must establish that the essential elements witnesses. 29 Hence, in cases where the res while the patient plaintiff was under the
of the doctrine were present in a particular ipsa loquitur is applicable, the court is influence of anesthetic, during or following
incident. 23 permitted to find a physician negligent an operation for appendicitis, 36 among
Medical malpractice 24 cases do not escape upon proper proof of injury to the patient, others.
the application of this doctrine. Thus, res without the aid of expert testimony, where Nevertheless, despite the fact that the
ipsa loquitur has been applied when the the court from its fund of common scope of res ipsa loquitur has been
circumstances attendant upon the harm knowledge can determine the proper measurably enlarged, it does not
are themselves of such a character as to standard of care. 30 Where common automatically apply to all cases of medical
justify an inference of negligence as the knowledge and experience teach that a negligence as to mechanically shift the
cause of that harm. 25 The application resulting injury would not have occurred to burden of proof to the defendant to show
of res ipsa loquitur in medical negligence the patient if due care had been exercised, that he is not guilty of the ascribed
cases presents a question of law since it is an inference of negligence may be drawn negligence. Res ipsa loquitur is not a rigid
a judicial function to determine whether a giving rise to an application of the doctrine or ordinary doctrine to be perfunctorily
certain set of circumstances does, as a of res ipsa loquitur without medical used but a rule to be cautiously applied,
matter of law, permit a given inference. 26 evidence, which is ordinarily required to depending upon the circumstances of each
Although generally, expert medical show not only what occurred but how and case. It is generally restricted to situations
testimony is relied upon in malpractice why it occurred. 31 When the doctrine is in malpractice cases where a layman is able
suits to prove that a physician has done a appropriate, all that the patient must do is to say, as a matter of common knowledge
negligent act or that he has deviated from prove a nexus between the particular act or and observation, that the consequences of
the standard medical procedure, when the omission complained of and the injury professional care were not as such as
doctrine of res ipsa loquitur is availed by sustained while under the custody and would ordinarily have followed if due care
the plaintiff, the need for expert medical management of the defendant without had been
testimony is dispensed with because the need to produce expert medical testimony exercised. 37 A distinction must be made
injury itself provides the proof of to establish the standard of care. Resort between the failure to secure results, and
negligence. 27 The reason is that the to res ipsa loquitur is allowed because the occurrence of something more unusual
general rule on the necessity of expert there is no other way, under usual and and not ordinarily found if the service or
testimony applies only to such matters ordinary conditions, by which the patient treatment rendered followed the usual
clearly within the domain of medical can obtain redress for injury suffered by procedure of those skilled in that particular
science, and not to matters that are within him. practice. It must be conceded that the
the common knowledge of mankind which Thus, courts of other jurisdictions have doctrine of res ipsa loquitur can have no
may be testified to by anyone familiar with applied the doctrine in the following application in a suit against a physician or
the facts. 28 Ordinarily, only physicians and situations: leaving of a foreign object in the surgeon which involves the merits of a
surgeons of skill and experience are body of the patient after an diagnosis or of a scientific
competent to testify as to whether a operation, 32
injuries sustained on a treatment. 38
The physician or surgeon is
patient has been treated or operated upon healthy part of the body which was not not required at his peril to explain why any
with a reasonable degree of skill and care. under, or in the area, of particular diagnosis was not correct, or why
However, testimony as to the statements treatment, 33 removal of the wrong part of any particular scientific treatment did not
and acts of physicians and surgeons, the body when another part was produce the desired result. 39 Thus, res
external appearances, and manifest intended, 34 knocking out a tooth while a ipsa loquitur is not available in a
conditions which are observable by any one patient's jaw was under anesthetic for the malpractice suit if the only showing is that
the desired result of an operation or in the administration of an anesthetic, and administration of anesthesia and prior to
treatment was not accomplished. 40 The in the use and employment of an the performance of cholecystectomy she
real question, therefore, is whether or not endoctracheal tube. Ordinarily a person suffered irreparable damage to her brain.
in the process of the operation any being put under anesthesia is not rendered Thus, without undergoing surgery, she
extraordinary incident or unusual event decerebrate as a consequence of went out of the operating room already
outside of the routine performance administering such anesthesia in the decerebrate and totally incapacitated.
occurred which is beyond the regular scope absence of negligence. Upon these facts Obviously, brain damage, which Erlinda
of customary professional activity in such and under these circumstances a layman sustained, is an injury which does not
operations, which, if unexplained would would be able to say, as a matter of normally occur in the process of a gall
themselves reasonably speak to the common knowledge and observation, that bladder operation. In fact, this kind of
average man as the negligent cause or the consequences of professional situation does not in the absence of
causes of the untoward consequence. 41 If treatment were not as such as would negligence of someone in the
there was such extraneous interventions, ordinarily have followed if due care had administration of anesthesia and in the use
the doctrine of res ipsa loquitur may be been exercised. of endotracheal tube. Normally, a person
utilized and the defendant is called upon to Here the plaintiff could not have been guilty being put under anesthesia is not rendered
explain the matter, by evidence of of contributory negligence because he was decerebrate as a consequence of
exculpation, if he could. 42 under the influence of anesthetics and administering such anesthesia if the proper
We find the doctrine of res ipsa unconscious, and the circumstances are procedure was followed. Furthermore, the
loquitur appropriate in the case at bar. As such that the true explanation of event is instruments used in the administration of
will hereinafter be explained, the damage more accessible to the defendants than to anesthesia, including the endotracheal
sustained by Erlinda in her brain prior to a the plaintiff for they had the exclusive tube, were all under the exclusive control
scheduled gall bladder operation presents control of the instrumentalities of of private respondents, who are the
a case for the application of res ipsa anesthesia. physicians-in-charge. Likewise, petitioner
loquitur. Upon all the facts, conditions and Erlinda could not have been guilty of
A case strikingly similar to the one before circumstances alleged in Count II it is held contributory negligence because she was
us is Voss vs. Bridwell, 43 where the that a cause of action is stated under the under the influence of anesthetics which
Kansas Supreme Court in applying the res doctrine of res ipsa loquitur. 44 rendered her unconscious.
ipsa loquitur stated: Indeed, the principles enunciated in the Considering that a sound and unaffected
The plaintiff herein submitted himself for a aforequoted case apply with equal force member of the body (the brain) is injured
mastoid operation and delivered his person here. In the present case, Erlinda or destroyed while the patient is
over to the care, custody and control of his submitted herself for cholecystectomy and unconscious and under the immediate and
physician who had complete and exclusive expected a routine general surgery to be exclusive control of the physicians, we hold
control over him, but the operation was performed on her gall bladder. On that that a practical administration of justice
never performed. At the time of submission fateful day she delivered her person over dictates the application of res ipsa loquitur.
he was neurologically sound and physically to the care, custody and control of private Upon these facts and under these
fit in mind and body, but he suffered respondents who exercised complete and circumstances the Court would be able to
irreparable damage and injury rendering exclusive control over her. At the time of say, as a matter of common knowledge and
him decerebrate and totally incapacitated. submission, Erlinda was neurologically observation, if negligence attended the
The injury was one which does not sound and, except for a few minor management and care of the patient.
ordinarily occur in the process of a mastoid discomforts, was likewise physically fit in Moreover, the liability of the physicians and
operation or in the absence of negligence mind and body. However, during the the hospital in this case is not predicated
upon an alleged failure to secure the negligence with falsehood. The appellate respondent Dra. Gutierrez failed to
desired results of an operation nor on an court likewise opined that private properly intubate the patient. This fact was
alleged lack of skill in the diagnosis or respondents were able to show that the attested to by Prof. Herminda Cruz, Dean
treatment as in fact no operation or brain damage sustained by Erlinda was not of the Capitol Medical Center School of
treatment was ever performed on Erlinda. caused by the alleged faulty intubation but Nursing and petitioner's sister-in-law, who
Thus, upon all these initial determination a was due to the allergic reaction of the was in the operating room right beside the
case is made out for the application of the patient to the drug Thiopental Sodium patient when the tragic event occurred.
doctrine of res ipsa loquitur. (Pentothal), a short-acting barbiturate, as Witness Cruz testified to this effect:
Nonetheless, in holding that res ipsa testified on by their expert witness, Dr. ATTY. PAJARES:
loquitur is available to the present case we Jamora. On the other hand, the appellate Q: In particular, what did Dra. Perfecta
are not saying that the doctrine is court rejected the testimony of Dean Gutierrez do, if any on the patient?
applicable in any and all cases where injury Herminda Cruz offered in favor of A: In particular, I could see that she was
occurs to a patient while under anesthesia, petitioners that the cause of the brain intubating the patient.
or to any and all anesthesia cases. Each injury was traceable to the wrongful Q: Do you know what happened to that
case must be viewed in its own light and insertion of the tube since the latter, being intubation process administered by Dra.
scrutinized in order to be within the res a nurse, was allegedly not knowledgeable Gutierrez?
ipsa loquitur coverage. in the process of intubation. In so holding, ATTY. ALCERA:
Having in mind the applicability of the res the appellate court returned a verdict in She will be incompetent Your Honor.
ipsa loquitur doctrine and the presumption favor of respondents physicians and COURT:
of negligence allowed therein, the Court hospital and absolved them of any liability Witness may answer if she knows.
now comes to the issue of whether the towards Erlinda and her family. A: As have said, I was with the patient, I
Court of Appeals erred in finding that We disagree with the findings of the Court was beside the stretcher holding the left
private respondents were not negligent in of Appeals. We hold that private hand of the patient and all of a sudden
the care of Erlinda during the anesthesia respondents were unable to disprove the heard some remarks coming from Dra.
phase of the operation and, if in the presumption of negligence on their part in Perfecta Gutierrez herself. She was saying
affirmative, whether the alleged negligence the care of Erlinda and their negligence was "Ang hirap ma-intubate nito, mali yata ang
was the proximate cause of Erlinda's the proximate cause of her piteous pagkakapasok. O lumalaki ang tiyan.
comatose condition. Corollary thereto, we condition. xxx xxx xxx
shall also determine if the Court of Appeals In the instant case, the records are helpful ATTY. PAJARES:
erred in relying on the testimonies of the in furnishing not only the logical scientific Q: From whom did you hear those words
witnesses for the private respondents. evidence of the pathogenesis of the injury "lumalaki ang tiyan"?
In sustaining the position of private but also in providing the Court the legal A: From Dra. Perfecta Gutierrez.
respondents, the Court of Appeals relied on nexus upon which liability is based. As will xxx xxx xxx
the testimonies of Dra. Gutierrez, Dra. be shown hereinafter, private respondents' Q: After hearing the phrase "lumalaki ang
Calderon and Dr. Jamora. In giving weight own testimonies which are reflected in the tiyan," what did you notice on the person
to the testimony of Dra. Gutierrez, the transcript of stenographic notes are replete of the patient?
Court of Appeals rationalized that she was of signposts indicative of their negligence A: I notice (sic) some bluish discoloration
candid enough to admit that she in the care and management of Erlinda. on the nailbeds of the left hand where I was
experienced some difficulty in the With regard to Dra. Gutierrez, we find her at.
endotracheal intubation 45 of the patient negligent in the care of Erlinda during the Q: Where was Dr. Orlino Ho[s]aka then at
and thus, cannot be said to be covering her anesthesia phase. As borne by the records, that particular time?
A: I saw him approaching the patient patient or that she conducted any type of properly inserted. This kind of observation,
during that time. examination to check if the endotracheal we believe, does not require a medical
Q: When he approached the patient, what tube was in its proper place, and to degree to be acceptable.
did he do, if any? determine the condition of the heart, lungs, At any rate, without doubt, petitioner's
A: He made an order to call on the and other organs. Thus, witness Cruz's witness, an experienced clinical nurse
anesthesiologist in the person of Dr. categorical statements that appellant Dra. whose long experience and scholarship led
Calderon. Gutierrez failed to intubate the appellee to her appointment as Dean of the Capitol
Q: Did Dr. Calderon, upon being called, Erlinda Ramos and that it was Dra. Medical Center School at Nursing, was fully
arrive inside the operating room? Calderon who succeeded in doing so clearly capable of determining whether or not the
A: Yes sir. suffer from lack of sufficient factual intubation was a success. She had
Q: What did [s]he do, if any? bases. 47 extensive clinical experience starting as a
A: [S]he tried to intubate the patient. In other words, what the Court of Appeals staff nurse in Chicago, Illinois; staff nurse
Q: What happened to the patient? is trying to impress is that being a nurse, and clinical instructor in a teaching
A: When Dr. Calderon try (sic) to intubate and considered a layman in the process of hospital, the FEU-NRMF; Dean of the
the patient, after a while the patient's intubation, witness Cruz is not competent Laguna College of Nursing in San Pablo
nailbed became bluish and I saw the to testify on whether or not the intubation City; and then Dean of the Capitol Medical
patient was placed in trendelenburg was a success. Center School of Nursing. 50 Reviewing
position. We do not agree with the above reasoning witness Cruz' statements, we find that the
xxx xxx xxx of the appellate court. Although witness same were delivered in a straightforward
Q: Do you know the reason why the patient Cruz is not an anesthesiologist, she can manner, with the kind of detail, clarity,
was placed in that trendelenburg position? very well testify upon matters on which she consistency and spontaneity which would
A: As far as I know, when a patient is in is capable of observing such as, the have been difficult to fabricate. With her
that position, there is a decrease of blood statements and acts of the physician and clinical background as a nurse, the Court is
supply to the brain. 46 surgeon, external appearances, and satisfied that she was able to demonstrate
xxx xxx xxx manifest conditions which are observable through her testimony what truly
The appellate court, however, disbelieved by any one. 48 This is precisely allowed transpired on that fateful day.
Dean Cruz's testimony in the trial court by under the doctrine of res ipsa Most of all, her testimony was affirmed by
declaring that: loquitur where the testimony of expert no less than respondent Dra. Gutierrez who
A perusal of the standard nursing witnesses is not required. It is the accepted admitted that she experienced difficulty in
curriculum in our country will show that rule that expert testimony is not necessary inserting the tube into Erlinda's trachea, to
intubation is not taught as part of nursing for the proof of negligence in non-technical wit:
procedures and techniques. Indeed, we matters or those of which an ordinary ATTY. LIGSAY:
take judicial notice of the fact that nurses person may be expected to have Q: In this particular case, Doctora, while
do not, and cannot, intubate. Even on the knowledge, or where the lack of skill or you were intubating at your first attempt
assumption that she is fully capable of want of care is so obvious as to render (sic), you did not immediately see the
determining whether or not a patient is expert testimony unnecessary. 49 We take trachea?
properly intubated, witness Herminda judicial notice of the fact that anesthesia DRA. GUTIERREZ:
Cruz, admittedly, did not peep into the procedures have become so common, that A: Yes sir.
throat of the patient. (TSN, July 25, 1991, even an ordinary person can tell if it was Q: Did you pull away the tube immediately?
p. 13). More importantly, there is no administered properly. As such, it would A: You do not pull the . . .
evidence that she ever auscultated the not be too difficult to tell if the tube was Q: Did you or did you not?
A: I did not pull the tube. interpretation of laboratory data. 54 The human lives lie at the core of the
Q: When you said "mahirap yata ito," what physical examination performed by the physician's centuries-old Hippocratic Oath.
were you referring to? anesthesiologist is directed primarily Her failure to follow this medical procedure
A: "Mahirap yata itong i-intubate," that was toward the central nervous system, is, therefore, a clear indicia of her
the patient. cardiovascular system, lungs and upper negligence.
Q: So, you found some difficulty in airway. 55 A thorough analysis of the Respondent Dra. Gutierrez, however,
inserting the tube? patient's airway normally involves attempts to gloss over this omission by
A: Yes, because of (sic) my first attempt, I investigating the following: cervical spine playing around with the trial court's
did not see right away. 51 mobility, temporomandibular mobility, ignorance of clinical procedure, hoping that
Curiously in the case at bar, respondent prominent central incisors, diseased or she could get away with it. Respondent
Dra. Gutierrez made the haphazard artificial teeth, ability to visualize uvula and Dra. Gutierrez tried to muddle the
defense that she encountered hardship in the thyromental distance. 56 Thus, physical difference between an elective surgery and
the insertion of the tube in the trachea of characteristics of the patient's upper an emergency surgery just so her failure to
Erlinda because it was positioned more airway that could make tracheal intubation perform the required pre-operative
anteriorly (slightly deviated from the difficult should be studied. 57 Where the evaluation would escape unnoticed. In her
normal anatomy of a person) 52 making it need arises, as when initial assessment testimony she asserted:
harder to locate and, since Erlinda is obese indicates possible problems (such as the ATTY. LIGSAY:
and has a short neck and protruding teeth, alleged short neck and protruding teeth of Q: Would you agree, Doctor, that it is good
it made intubation even more difficult. Erlinda) a thorough examination of the medical practice to see the patient a day
The argument does not convince us. If this patient's airway would go a long way before so you can introduce yourself to
was indeed observed, private respondents towards decreasing patient morbidity and establish good doctor-patient relationship
adduced no evidence demonstrating that mortality. and gain the trust and confidence of the
they proceeded to make a thorough In the case at bar, respondent Dra. patient?
assessment of Erlinda's airway, prior to the Gutierrez admitted that she saw Erlinda for DRA. GUTIERREZ:
induction of anesthesia, even if this would the first time on the day of the operation A: As I said in my previous statement, it
mean postponing the procedure. From itself, on 17 June 1985. Before this date, depends on the operative procedure of the
their testimonies, it appears that the no prior consultations with, or pre- anesthesiologist and in my case, with
observation was made only as an operative evaluation of Erlinda was done by elective cases and normal cardio-
afterthought, as a means of defense. her. Until the day of the operation, pulmonary clearance like that, I usually
The pre-operative evaluation of a patient respondent Dra. Gutierrez was unaware of don't do it except on emergency and on
prior to the administration of anesthesia is the physiological make-up and needs of cases that have an abnormalities (sic). 58
universally observed to lessen the Erlinda. She was likewise not properly However, the exact opposite is true. In an
possibility of anesthetic accidents. Pre- informed of the possible difficulties she emergency procedure, there is hardly
operative evaluation and preparation for would face during the administration of enough time available for the fastidious
anesthesia begins when the anesthesia to Erlinda. Respondent Dra. demands of pre-operative procedure so
anesthesiologist reviews the patient's Gutierrez' act of seeing her patient for the that an anesthesiologist is able to see the
medical records and visits with the patient, first time only an hour before the scheduled patient only a few minutes before surgery,
traditionally, the day before elective operative procedure was, therefore, an act if at all. Elective procedures, on the other
surgery. 53 It includes taking the patient's of exceptional negligence and professional hand, are operative procedures that can
medical history, review of current drug irresponsibility. The measures cautioning wait for days, weeks or even months.
therapy, physical examination and prudence and vigilance in dealing with Hence, in these cases, the anesthesiologist
possesses the luxury of time to be at the deprivation which led to anoxic A: We do it in conjunction with the
patient's beside to do a proper interview encephalopathy, 60 was due to an anesthesiologist when they have to
and clinical evaluation. There is ample time unpredictable drug reaction to the short- intubate our patient.
to explain the method of anesthesia, the acting barbiturate. We find the theory of Q: But not in particular when you practice
drugs to be used, and their possible private respondents unacceptable. pulmonology?
hazards for purposes of informed consent. First of all, Dr. Jamora cannot be A: No.
Usually, the pre-operative assessment is considered an authority in the field of Q: In other words, your knowledge about
conducted at least one day before the anesthesiology simply because he is not an pentothal is based only on what you have
intended surgery, when the patient is anesthesiologist. Since Dr. Jamora is a read from books and not by your own
relaxed and cooperative. pulmonologist, he could not have been personal application of the medicine
Erlinda's case was elective and this was capable of properly enlightening the court pentothal?
known to respondent Dra. Gutierrez. Thus, about anesthesia practice and procedure A: Based on my personal experience also
she had all the time to make a thorough and their complications. Dr. Jamora is on pentothal.
evaluation of Erlinda's case prior to the likewise not an allergologist and could not Q: How many times have you used
operation and prepare her for anesthesia. therefore properly advance expert opinion pentothal?
However, she never saw the patient at the on allergic-mediated processes. Moreover, A: They used it on me. I went into
bedside. She herself admitted that she had he is not a pharmacologist and, as such, bronchospasm during my appendectomy.
seen petitioner only in the operating room, could not have been capable, as an expert Q: And because they have used it on you
and only on the actual date of the would, of explaining to the court the and on account of your own personal
cholecystectomy. She negligently failed to pharmacologic and toxic effects of the experience you feel that you can testify on
take advantage of this important supposed culprit, Thiopental Sodium pentothal here with medical authority?
opportunity. As such, her attempt to (Pentothal). A: No. That is why I used references to
exculpate herself must fail. The inappropriateness and absurdity of support my claims. 61
Having established that respondent Dra. accepting Dr. Jamora's testimony as an An anesthetic accident caused by a rare
Gutierrez failed to perform pre-operative expert witness in the anesthetic practice of drug-induced bronchospasm properly falls
evaluation of the patient which, in turn, Pentothal administration is further within the fields of anesthesia, internal
resulted to a wrongful intubation, we now supported by his own admission that he medicine-allergy, and clinical
determine if the faulty intubation is truly formulated his opinions on the drug not pharmacology. The resulting anoxic
the proximate cause of Erlinda's comatose from the practical experience gained by a encephalopathy belongs to the field of
condition. specialist or expert in the administration neurology. While admittedly, many
Private respondents repeatedly hammered and use of Sodium Pentothal on patients, bronchospastic-mediated pulmonary
the view that the cerebral anoxia which led but only from reading certain references, to diseases are within the expertise of
to Erlinda's coma was due to wit: pulmonary medicine, Dr. Jamora's field,
bronchospasm 59 mediated by her allergic ATTY. LIGSAY: the anesthetic drug-induced, allergic
response to the drug, Thiopental Sodium, Q: In your line of expertise on mediated bronchospasm alleged in this
introduced into her system. Towards this pulmonology, did you have any occasion to case is within the disciplines of
end, they presented Dr. Jamora, a Fellow use pentothal as a method of anesthesiology, allergology and
of the Philippine College of Physicians and management? pharmacology. On the basis of the
Diplomate of the Philippine Specialty Board DR. JAMORA: foregoing transcript, in which the
of Internal Medicine, who advanced private pulmonologist himself admitted that he
respondents' theory that the oxygen could not testify about the drug with
medical authority, it is clear that the private respondents' hypothesis without respondent Dra. Gutierrez remarked, "Ang
appellate court erred in giving weight to Dr. supporting medical proof, and against the hirap ma-intubate nito, mali yata ang
Jamora's testimony as an expert in the weight of available evidence, then every pagkakapasok. O lumalaki ang tiyan."
administration of Thiopental Sodium. anesthetic accident would be an act of God. Thereafter, witness Cruz noticed abdominal
The provision in the rules of Evidently, the Thiopental-allergy theory distention on the body of Erlinda. The
evidence 62 regarding expert witnesses vigorously asserted by private respondents development of abdominal distention,
states: was a mere afterthought. Such an together with respiratory embarrassment
Sec. 49. Opinion of expert witness. — The explanation was advanced in order to indicates that the endotracheal tube
opinion of a witness on a matter requiring advanced in order to absolve them of any entered the esophagus instead of the
special knowledge, skill, experience or and all responsibility for the patient's respiratory tree. In other words, instead of
training which he is shown to possess, may condition. the intended endotracheal intubation what
be received in evidence. In view of the evidence at hand, we are actually took place was an esophageal
Generally, to qualify as an expert witness, inclined to believe petitioners' stand that it intubation. During intubation, such
one must have acquired special knowledge was the faulty intubation which was the distention indicates that air has entered the
of the subject matter about which he or she proximate cause of Erlinda's comatose gastrointestinal tract through the
is to testify, either by the study of condition. esophagus instead of the lungs through the
recognized authorities on the subject or by Proximate cause has been defined as that trachea. Entry into the esophagus would
practical experience. 63 Clearly, Dr. Jamora which, in natural and continuous sequence, certainly cause some delay in oxygen
does not qualify as an expert witness based unbroken by any efficient intervening delivery into the lungs as the tube which
on the above standard since he lacks the cause, produces injury, and without which carries oxygen is in the wrong place. That
necessary knowledge, skill, and training in the result would not have occurred. 64 An abdominal distention had been observed
the field of anesthesiology. Oddly, apart injury or damage is proximately caused by during the first intubation suggests that the
from submitting testimony from a specialist an act or a failure to act, whenever it length of time utilized in inserting the
in the wrong field, private respondents' appears from the evidence in the case, that endotracheal tube (up to the time the tube
intentionally avoided providing testimony the act or omission played a substantial was withdrawn for the second attempt)
by competent and independent experts in part in bringing about or actually causing was fairly significant. Due to the delay in
the proper areas. the injury or damage; and that the injury the delivery of oxygen in her lungs Erlinda
Moreover, private respondents' theory, or damage was either a direct result or a showed signs of cyanosis. 66 As stated in
that Thiopental Sodium may have reasonably probable consequence of the the testimony of Dr. Hosaka, the lack of
produced Erlinda's coma by triggering an act or omission. 65 It is the dominant, oxygen became apparent only after he
allergic mediated response, has no support moving or producing cause. noticed that the nailbeds of Erlinda were
in evidence. No evidence of stridor, skin Applying the above definition in relation to already blue. 67 However, private
reactions, or wheezing — some of the more the evidence at hand, faulty intubation is respondents contend that a second
common accompanying signs of an allergic undeniably the proximate cause which intubation was executed on Erlinda and this
reaction — appears on record. No triggered the chain of events leading to one was successfully done. We do not think
laboratory data were ever presented to the Erlinda's brain damage and, ultimately, her so. No evidence exists on record, beyond
court. comatosed condition. private respondents' bare claims, which
In any case, private respondents Private respondents themselves admitted supports the contention that the second
themselves admit that Thiopental induced, in their testimony that the first intubation intubation was successful. Assuming that
allergic-mediated bronchospasm happens was a failure. This fact was likewise the endotracheal tube finally found its way
only very rarely. If courts were to accept observed by witness Cruz when she heard into the proper orifice of the trachea, the
same gave no guarantee of oxygen thorough pre-operative evaluation, would and visiting "consultants," 74 who are
delivery, the hallmark of a successful have had little difficulty going around the allegedly not hospital employees, presents
intubation. In fact, cyanosis was again short neck and protruding teeth. 72 Having problems in apportioning responsibility for
observed immediately after the second failed to observe common medical negligence in medical malpractice cases.
intubation. Proceeding from this event standards in pre-operative management However, the difficulty is only more
(cyanosis), it could not be claimed, as and intubation, respondent Dra. Gutierrez' apparent than real.
private respondents insist, that the second negligence resulted in cerebral anoxia and In the first place, hospitals exercise
intubation was accomplished. Even eventual coma of Erlinda. significant control in the hiring and firing of
granting that the tube was successfully We now determine the responsibility of consultants and in the conduct of their
inserted during the second attempt, it was respondent Dr. Orlino Hosaka as the head work within the hospital premises. Doctors
obviously too late. As aptly explained by of the surgical team. As the so-called who apply for "consultant" slots, visiting or
the trial court, Erlinda already suffered "captain of the ship," 73 it is the surgeon's attending, are required to submit proof of
brain damage as a result of the inadequate responsibility to see to it that those under completion of residency, their educational
oxygenation of her brain for about four to him perform their task in the proper qualifications; generally, evidence of
five minutes. 68 manner. Respondent Dr. Hosaka's accreditation by the appropriate board
The above conclusion is not without basis. negligence can be found in his failure to (diplomate), evidence of fellowship in most
Scientific studies point out that intubation exercise the proper authority (as the cases, and references. These requirements
problems are responsible for one-third "captain" of the operative team) in not are carefully scrutinized by members of the
(1/3) of deaths and serious injuries determining if his anesthesiologist hospital administration or by a review
associated with observed proper anesthesia protocols. In committee set up by the hospital who
anesthesia. 69
Nevertheless, ninety-eight fact, no evidence on record exists to show either accept or reject the
percent (98%) or the vast majority of that respondent Dr. Hosaka verified if application. 75 This is particularly true with
difficult intubations may be anticipated by respondent Dra. Gutierrez properly respondent hospital.
performing a thorough evaluation of the intubated the patient. Furthermore, it does After a physician is accepted, either as a
patient's airway prior to the not escape us that respondent Dr. Hosaka visiting or attending consultant, he is
operation. 70 As stated beforehand, had scheduled another procedure in a normally required to attend clinico-
respondent Dra. Gutierrez failed to observe different hospital at the same time as pathological conferences, conduct bedside
the proper pre-operative protocol which Erlinda's cholecystectomy, and was in fact rounds for clerks, interns and residents,
could have prevented this unfortunate over three hours late for the latter's moderate grand rounds and patient audits
incident. Had appropriate diligence and operation. Because of this, he had little or and perform other tasks and
reasonable care been used in the pre- no time to confer with his anesthesiologist responsibilities, for the privilege of being
operative evaluation, respondent physician regarding the anesthesia delivery. This able to maintain a clinic in the hospital,
could have been much more prepared to indicates that he was remiss in his and/or for the privilege of admitting
meet the contingency brought about by the professional duties towards his patient. patients into the hospital. In addition to
perceived anatomic variations in the Thus, he shares equal responsibility for the these, the physician's performance as a
patient's neck and oral area, defects which events which resulted in Erlinda's specialist is generally evaluated by a peer
would have been easily overcome by a condition. review committee on the basis of mortality
prior knowledge of those variations We now discuss the responsibility of the and morbidity statistics, and feedback from
together with a change in technique. 71 In hospital in this particular incident. The patients, nurses, interns and residents. A
other words, an experienced unique practice (among private hospitals) consultant remiss in his duties, or a
anesthesiologist, adequately alerted by a of filling up specialist staff with attending consultant who regularly falls short of the
minimum standards acceptable to the shown, the burden shifts to the At current levels, the P8000/monthly
hospital or its peer review committee, is respondents (parent, guardian, teacher or amount established by the trial court at the
normally politely terminated. employer) who should prove that they time of its decision would be grossly
In other words, private hospitals, hire, fire observed the diligence of a good father of inadequate to cover the actual costs of
and exercise real control over their a family to prevent damage. home-based care for a comatose
attending and visiting "consultant" staff. In the instant case, respondent hospital, individual. The calculated amount was not
While "consultants" are not, technically apart from a general denial of its even arrived at by looking at the actual cost
employees, a point which respondent responsibility over respondent physicians, of proper hospice care for the patient. What
hospital asserts in denying all responsibility failed to adduce evidence showing that it it reflected were the actual expenses
for the patient's condition, the control exercised the diligence of a good father of incurred and proved by the petitioners after
exercised, the hiring, and the right to a family in the hiring and supervision of the they were forced to bring home the patient
terminate consultants all fulfill the latter. It failed to adduce evidence with to avoid mounting hospital bills.
important hallmarks of an employer- regard to the degree of supervision which And yet ideally, a comatose patient should
employee relationship, with the exception it exercised over its physicians. In remain in a hospital or be transferred to a
of the payment of wages. In assessing neglecting to offer such proof, or proof of a hospice specializing in the care of the
whether such a relationship in fact exists, similar nature, respondent hospital thereby chronically ill for the purpose of providing a
the control test is determining. failed to discharge its burden under the last proper milieu adequate to meet minimum
Accordingly, on the basis of the foregoing, paragraph of Article 2180. Having failed to standards of care. In the instant case for
we rule that for the purpose of allocating do this, respondent hospital is instance, Erlinda has to be constantly
responsibility in medical negligence cases, consequently solidarily responsible with its turned from side to side to prevent
an employer-employee relationship in physicians for Erlinda's condition. bedsores and hypostatic pneumonia.
effect exists between hospitals and their Based on the foregoing, we hold that the Feeding is done by nasogastric tube. Food
attending and visiting physicians. This Court of Appeals erred in accepting and preparation should be normally made by a
being the case, the question now arises as relying on the testimonies of the witnesses dietitian to provide her with the correct
to whether or not respondent hospital is for the private respondents. Indeed, as daily caloric requirements and vitamin
solidarily liable with respondent doctors for shown by the above discussions, private supplements. Furthermore, she has to be
petitioner's condition. 76 respondents were unable to rebut the seen on a regular basis by a physical
The basis for holding an employer solidarily presumption of negligence. Upon these therapist to avoid muscle atrophy, and by
responsible for the negligence of its disquisitions we hold that private a pulmonary therapist to prevent the
employee is found in Article 2180 of the respondents are solidarily liable for accumulation of secretions which can lead
Civil Code which considers a person damages under Article 2176 79 of the Civil to respiratory complications.
accountable not only for his own acts but Code. Given these considerations, the amount of
also for those of others based on the We now come to the amount of damages actual damages recoverable in suits arising
former's responsibility under a relationship due petitioners. The trial court awarded a from negligence should at least reflect the
of patria potestas. 77 Such responsibility total of P632,000.00 pesos (should be correct minimum cost of proper care, not
ceases when the persons or entity P616,000.00) in compensatory damages to the cost of the care the family is usually
concerned prove that they have observed the plaintiff, "subject to its being updated" compelled to undertake at home to avoid
the diligence of a good father of the family covering the period from 15 November bankruptcy. However, the provisions of the
to prevent damage. 78 In other words, 1985 up to 15 April 1992, based on Civil Code on actual or compensatory
while the burden of proving negligence monthly expenses for the care of the damages present us with some difficulties.
rests on the plaintiffs, once negligence is patient estimated at P8,000.00.
Well-settled is the rule that actual damages As it would not be equitable — and certainly P1,000,000.00 in moral damages in that
which may be claimed by the plaintiff are not in the best interests of the case.
those suffered by him as he has duly administration of justice — for the victim in Describing the nature of the injury, the
proved. The Civil Code provides: such cases to constantly come before the Court therein stated:
Art. 2199. — Except as provided by law or courts and invoke their aid in seeking As a result of the accident, Ma. Lourdes
by stipulation, one is entitled to an adjustments to the compensatory damages Valenzuela underwent a traumatic
adequate compensation only for such previously awarded — temperate damages amputation of her left lower extremity at
pecuniary loss suffered by him as he has are appropriate. The amount given as the distal left thigh just above the knee.
duly proved. Such compensation is referred temperate damages, though to a certain Because of this, Valenzuela will forever be
to as actual or compensatory damages. extent speculative, should take into deprived of the full ambulatory functions of
Our rules on actual or compensatory account the cost of proper care. her left extremity, even with the use of
damages generally assume that at the time In the instant case, petitioners were able to state of the art prosthetic technology. Well
of litigation, the injury suffered as a provide only home-based nursing care for beyond the period of hospitalization (which
consequence of an act of negligence has a comatose patient who has remained in was paid for by Li), she will be required to
been completed and that the cost can be that condition for over a decade. Having undergo adjustments in her prosthetic
liquidated. However, these provisions premised our award for compensatory devise due to the shrinkage of the stump
neglect to take into account those damages on the amount provided by from the process of healing.
situations, as in this case, where the petitioners at the onset of litigation, it These adjustments entail costs, prosthetic
resulting injury might be continuing and would be now much more in step with the replacements and months of physical and
possible future complications directly interests of justice if the value awarded for occupational rehabilitation and therapy.
arising from the injury, while certain to temperate damages would allow During the lifetime, the prosthetic devise
occur, are difficult to predict. petitioners to provide optimal care for their will have to be replaced and readjusted to
In these cases, the amount of damages loved one in a facility which generally changes in the size of her lower limb
which should be awarded, if they are to specializes in such care. They should not be effected by the biological changes of
adequately and correctly respond to the compelled by dire circumstances to provide middle-age, menopause and aging.
injury caused, should be one which substandard care at home without the aid Assuming she reaches menopause, for
compensates for pecuniary loss incurred of professionals, for anything less would be example, the prosthetic will have to be
and proved, up to the time of trial; and one grossly inadequate. Under the adjusted to respond to the changes in bone
which would meet pecuniary loss certain to circumstances, an award of P1,500,000.00 resulting from a precipitate decrease in
be suffered but which could not, from the in temperate damages would therefore be calcium levels observed in the bones of all
nature of the case, be made with reasonable. 81 post-menopausal women. In other words,
certainty. 80 In other words, temperate In Valenzuela vs. Court of Appeals, 82 this the damage done to her would not only be
damages can and should be awarded on Court was confronted with a situation permanent and lasting, it would also be
top of actual or compensatory damages in where the injury suffered by the plaintiff permanently changing and adjusting to the
instances where the injury is chronic and would have led to expenses which were physiologic changes which her body would
continuing. And because of the unique difficult to estimate because while they normally undergo through the years. The
nature of such cases, no incompatibility would have been a direct result of the replacements, changes, and adjustments
arises when both actual and temperate injury (amputation), and were certain to be will require corresponding adjustive
damages are provided for. The reason is incurred by the plaintiff, they were likely to physical and occupational therapy. All of
that these damages cover two distinct arise only in the future. We awarded these adjustments, it has been
phases. documented, are painful.
xxx xxx xxx of recovery is close to nil. They have necessarily be called to account for it. In
A prosthetic devise, however fashioned their daily lives around the the case at bar, the failure to observe pre-
technologically advanced, will only allow a nursing care of petitioner, altering their operative assessment protocol which would
reasonable amount of functional long term goals to take into account their have influenced the intubation in a salutary
restoration of the motor functions of the life with a comatose patient. They, not the way was fatal to private respondents' case.
lower limb. The sensory functions are respondents, are charged with the moral WHEREFORE, the decision and resolution of
forever lost. The resultant anxiety, responsibility of the care of the victim. The the appellate court appealed from are
sleeplessness, psychological injury, mental family's moral injury and suffering in this hereby modified so as to award in favor of
and physical pain are inestimable. 83 case is clearly a real one. For the foregoing petitioners, and solidarily against private
The injury suffered by Erlinda as a reasons, an award of P2,000,000.00 in respondents the following: 1)
consequence of private respondents' moral damages would be appropriate. P1,352,000.00 as actual damages
negligence is certainly much more serious Finally, by way of example, exemplary computed as of the date of promulgation of
than the amputation in the Valenzuela damages in the amount of P100,000.00 are this decision plus a monthly payment of
case. hereby awarded. Considering the length P8,000.00 up to the time that petitioner
Petitioner Erlinda Ramos was in her mid- and nature of the instant suit we are of the Erlinda Ramos expires or miraculously
forties when the incident occurred. She has opinion that attorney's fees valued at survives; 2) P2,000,000.00 as moral
been in a comatose state for over fourteen P100,000.00 are likewise proper. damages, 3) P1,500,000.00 as temperate
years now. The burden of care has so far Our courts face unique difficulty in damages; 4) P100,000.00 each as
been heroically shouldered by her husband adjudicating medical negligence cases exemplary damages and attorney's fees;
and children, who, in the intervening years because physicians are not insurers of life and, 5) the costs of the suit.
have been deprived of the love of a wife and, they rarely set out to intentionally SO ORDERED.
and a mother. cause injury or death to their patients.
Meanwhile, the actual physical, emotional However, intent is immaterial in negligence
and financial cost of the care of petitioner cases because where negligence exists and
would be virtually impossible to quantify. is proven, the same automatically gives the
Even the temperate damages herein injured a right to reparation for the damage
awarded would be inadequate if petitioner's caused.
condition remains unchanged for the next Established medical procedures and
ten years. practices, though in constant flux are
We recognized, in Valenzuela that a devised for the purpose of preventing
discussion of the victim's actual injury complications. A physician's experience
would not even scratch the surface of the with his patients would sometimes tempt
resulting moral damage because it would him to deviate from established community
be highly speculative to estimate the practices, and he may end a distinguished
amount of emotional and moral pain, career using unorthodox methods without
psychological damage and injury suffered incident. However, when failure to follow
by the victim or those actually affected by established procedure results in the evil
the victim's condition. 84 The husband and precisely sought to be averted by
the children, all petitioners in this case, will observance of the procedure and a nexus
have to live with the day to day uncertainty is made between the deviation and the
of the patient's illness, knowing any hope injury or damage, the physician would
G.R. No. 157632 December 6, Petitioner was the administrator of certain appealed the dismissal before the Court of
2006 parcels of land in Upper Boso-Boso, Appeals, which later affirmed the decision
JOSE S. ROQUE, JR., substituted by his Antipolo, Rizal, particularly Lots No. 13259 of the lower court in a Decision5 dated 11
wife NORMA ROQUE, petitioner, and 13260 covered by Original Certificates June 1990. Respondent’s appeal to this
vs. of Titles (OCTs) No. NP-419 and NP-422, Court was also dismissed in a Resolution
JAIME T. TORRES, substituted by his both registered in the name of his son dated 11 February 1991.
son JAMES KENLEY M. TORRES, and Rafael Roque. Sometime before the Petitioner maintained that at around four
the HONORABLE COURT OF incident, respondent, claiming to be the o’clock in the afternoon of 27 August 1989,
APPEALS, respondent. owner of said property, hired security he, together with his housemaid Leilyn
guards from Anchor Security and Detective Saplot Kandt, Magno Imperial, Jose
Agency, namely Cesar Aquino, Alfredo Imperial, and Eliseo Pesito, visited the said
DECISION Negro, and Mariano Cabos, who allegedly property and was surprised to see seven
barred petitioner from entering the security guards, including the above-
property and threatened him with physical mentioned security guards, guarding the
CHICO-NAZARIO, J.: harm should he attempt to tend the said property upon orders of respondent.
Before Us is a Petition for Review land. As a result, petitioner filed a case for Aquino, Negro, and Cabos approached
on Certiorari under Rule 45 of the Rules of grave threats against said security guards petitioner and asked: "Bakit wala ka noong
Civil Procedure, assailing the Decision 1 of before the Municipal Trial Court (MTC) of arraignment sa Antipolo noong August 16,
the Court of Appeals in CA-G.R. CV No. Rizal. 1989?"6 to which he replied that his
55895, dated 21 March 2003, which Prior to the incident, or on 9 September presence was not necessary since he was
reversed and set aside the Judgment2 of 1988, respondent instituted an Action3 for not the accused. Thereafter, the said
the Regional Trial Court (RTC) of Quezon cancellation of OCTs No. NP-419 and NP- security guards asked him to leave the
City, Branch 104, in Civil Case No. Q-93- 422 in the name of petitioner’s son Rafael property and uttered: "Bakit mo kami
14408, dated 8 April 1997, ordering Roque before the RTC of Antipolo which kinakalaban? Utos ni Torres na ito’y
respondent to pay petitioner damages in was dismissed by the trial court in an bantayan pagkat ito’y kanyang property
the total amount of P1,600,000.00 and Order4 dated 26 June 1989. According to raw!." Petitioner showed his son’s titles to
attorney’s fees. the court a quo, therein petitioner Torres’ the property but the security guards
The instant case sprang from an action for action was premature for failure to exhaust merely answered: "Fake ‘yan at hindi kayo
damages filed by the original petitioner, the administrative remedies in the Bureau of maaaring pumasok dito. Kayo ay dapat
late Jose Roque, Jr., against respondent, Lands, consistent with the established paalisin." A security guard then cocked his
the recently deceased Jaime Torres, for doctrine that where a party seeks for the shotgun and warned petitioner to leave the
injuries sustained by petitioner on 27 cancellation of a Free Patent, he must place. Petitioner offered to settle the
August 1989, allegedly inflicted by the pursue his action in the proper agency and dispute in the office of Anchor Security
security guards employed by respondent. a review by the court will not be permitted Agency, through its manager, Mrs.
In this petition, the deceased petitioner unless administrative remedies have been Nassam, but the security guards merely
Jose Roque, Jr. is substituted by his wife exhausted. The trial court also declared replied: "Wala kaming pakialam kay
Norma Roque while respondent Jaime T. that the said action was in effect an action Nassam. Lahat ginagawa dito, lahat ay utos
Torres, per agreement of all his heirs, is for reversion under Section 101 of the ni Torres. At ‘yan ay sinusunod naming
herein represented by his son James Public Land Act, thus, the action should be dahil si Torres ang bumubuhay sa amin."
Kenley M. Torres. in the name of the government and not the When petitioner refused to leave the
private complainants. Respondent premises, Cabos threatened petitioner that
should he stay inside, Cabos would shoot (ALFAI), of which he was president. defendant. This is because of the fact that
him, so petitioner immediately left the Respondent further asserts that being the defendant Torres exercised direct
place. However, Cabos still fired at him but President of ALFAI, his instruction to the supervision of the said security guards. As
missed. Petitioner ran fast to his makeshift security guards was to prevent squatters or a matter of fact, he provided the guards
hut where Cabos followed him. Petitioner intruders from entering the property and to with his school bus to perform their duties
ran to the back of his makeshift hut and make use of reasonable force to repel effectively. Hence, defendant Torres is
was shot again by Cabos, hitting petitioner aggression in the event of any untoward liable for the unlawful acts committed by
on the back. When petitioner fell, he turned incident. the said security guards against herein
and saw Cabos and Negro shooting at him. After trial, the lower court, on 8 April 1997, plaintiff. Such unlawful acts would not have
At the same time, Aquino was also firing at rendered judgment in favor of petitioner. been accomplished had defendant Torres
the makeshift hut. After a while, the other According to the court a quo: being their "employer" at that time, not
security guards, namely Sulla, Betasulo, After a thorough examination of the instructed them so. What resulted to the
and Romy Mendoza, came, and together evidence presented by both parties, the shooting of the plaintiff by the security
with Cabos and Negro, mauled and kicked Court is faced with the issue of: "Whether guards cannot be given justice except by
petitioner all over his body until he lost or not defendant Torres can be held liable indemnifying him. And considering that
consciousness. for damages to herein plaintiff as a result plaintiff suffered paralization of his body
As a result of the incident, petitioner was of the injuries inflicted by the security and blindness in his left eye,
hospitalized and placed under continuous guards deployed in the property in question notwithstanding the fact of incurring the
treatment and medication. Due to the on August 28, 1989 [sic]. amount of P300,000.00 as hospitalization
multiple gunshot wounds, hematoma, and There is no question that the security and medical expenses plus the continuous
contusions sustained by petitioner, his left guards involved in the shooting incident on medication up to the present, the Court
eye became 90 to 95% blind and his body August 28, 1989 [sic] were employed of believes that the plaintiff should be
was paralyzed from the bustline down. [sic] Anchor Security and Detective compensated. (Emphasis ours.)
Consequently, petitioner filed a criminal Agency. There is also no question that the WHEREFORE, judgment is hereby rendered
case7 for frustrated murder before the RTC same security guards were hired by in favor of the plaintiff as against defendant
of Antipolo against the security guards. defendant Torres to man and guard the Torres and the latter is ordered to pay the
Eventually, after suffering for more than property in question in Boso-Boso, plaintiff the following:
nine years, petitioner died. Antipolo, Rizal. In this simple scenario a) the amount of P300,000.00 as actual
On his part, respondent admits the and in the event that said security damages;
existence of the titles in the name of Rafael guards caused wrong to others while b) the amount of P1,000,000.00 as moral
Roque but denies the latter’s ownership in their tour of duty, the law provides damages;
over the property. He further admits the that the liability falls on the employer c) the amount of P300,000.00 as
dismissal of his case for cancellation of being the principal. On the contrary, exemplary damages; and
Roque’s titles based on a technical ground. for illegal or harmful acts committed d) the amount of P50,000.00 as attorney’s
Respondent likewise admits to the posting by the security guards as [sic] per fee.8
of the security guards on the property to order of the client or the one who hired Aggrieved by the above judgment,
guard the same from any intruder but them, liability attaches to the latter. In respondent lodged an appeal before the
denies that they were his personal security the instant case, the unlawful act Court of Appeals. According to respondent,
guards, and moreover claimed that they committed by the security guards he did not know that the security guards
were security guards of the Antipolo against the plaintiff is within the strict would commit the alleged aggressive acts
Landowners and Farmers Association, Inc. compliance of the instruction of the until the commission thereof, and that said
security guards acted upon their own Under the facts obtaining, the above With the reversal of the trial court
judgment. Respondent claimed that provision of law does not apply. The court judgment, petitioner filed the instant
petitioner was an intruder and squatter on a quo succinctly declared: appeal, raising the following issues:
the property who entered it without "There is no question that the security I. Whether or not the Court of Appeals
permission from members of the ALFAI, the guards involved in the shooting incident on committed grave and reversible error in
real owners of the said property. Thus, August 28, 1989 were employed (sic) of ruling that petitioner failed to prove by
respondent argued that petitioner forcibly Anchor Security Detective Agency. There is mere preponderance of evidence that
entered the property and that the security also no question that the same security respondent Torres was involved in any
guards merely repelled the unlawful guards were hired by defendant Torres to malevolent designs on petitioner;
aggression. man and guard the property in question in II. Whether or not the Court of Appeals
Subsequently, the appellate court reversed Boso-Boso, Antipolo, Rizal. committed grave and reversible error in
the RTC judgment and rendered a Decision, xxxx ruling that Article 2180 in relation to Article
the pertinent portions of which read: There is no question therefore that the said 2176 of the Civil Code is not applicable to
It is appellee’s contention that appellant as security guards who inflicted the injuries the case at bar; and
employer of the said security guards is sustained by the appellee were not III. Whether or not the Court of Appeals
liable for the injuries inflicted by the latter employees of herein appellant. This being committed grave and reversible error in
who acted under his instructions to guard so, the ruling in the case of Soliman, Jr. vs. applying the case of Soliman, Jr. v. Tuazon
the subject premises. Tuazon applies, viz: to the case at bar.
Verily, the obligation imposed under Article It is settled that where the security agency, We agree with the Court of Appeals’ finding
2176 of the Civil Code is demandable not as here recruits, hires and assigns the work that respondent cannot be held liable under
only for one’s own acts or omissions but of its watchmen or security guards, the Article 2180 of the Civil Code for the
also for those persons for whom, one is agency is the employer of such security damages suffered by petitioner because
responsible. The owners and managers of guards or watchmen. Liability for illegal or respondent is not the employer of the
an establishment or enterprise are likewise harmful acts committed by the security security guards who inflicted the injuries
responsible for damages caused by their guards attaches to the employer agency, upon the person of the petitioner. As
employees in exercise of their duties and not to the clients or customers of such reiterated in the recent case of Mercury
and/or functions. agency. Drug Corporation v. Libunao:[10]
Relevantly, Article 2180 of the Civil Code At any rate, the appellant cannot be held In Soliman, Jr. v. Tuazon, we held that
provides that: liable under Art. 33 of the Civil Code as no where the security agency recruits, hires
Art. 2180. The obligation imposed by evidence whatsoever, was adduced to and assigns the works of its watchmen or
article 2176 is not demandable not only for show his participation in the commission of security guards to a client, the employer of
one’s own acts or omissions, but also for the acts complained of. Neither was such guards or watchmen is such agency,
those persons for whom one is responsible. appellee able to prove that appellant can and not the client, since the latter has no
xxxx be held liable in the alternative under hand in selecting the security guards. Thus,
The owners and managers of an Article 2176 in relation to Article 2180 of the duty to observe the diligence of a good
establishment or enterprise are likewise the Civil Code. father of a family cannot be demanded
responsible for damages caused by their xxxx from the said client:
employees in the service of the branches in WHEREFORE, the assailed decision is x x x [I]t is settled in our jurisdiction that
which the latter are employed or on hereby REVERSED and SET ASIDE and the where the security agency, as here,
occasion of their functions. complaint as well as the counterclaim filed recruits, hires and assigns the work of its
before the court a quo is DISMISSED.9 watchmen or security guards, the agency
is the employer of such guards or representatives and by providing the were already registered in the name of
watchmen. Liability for illegal or harmful escape vehicle, more than sufficient petitioner’s son, the cancellation for title
acts committed by the security guards evidence was established on the civil case filed by respondent having been
attaches to the employer agency, and not liability of private respondent under dismissed. In fact, during trial, the offer for
to the clients or customers of such agency. Article 2176 of the Civil Code of the stipulation of petitioner’s counsel that at
As a general rule, a client or customer of a Philippines. the time of the shooting incident, there is a
security agency has no hand in selecting It must be emphasized that private valid and existing title in the name of
who among the pool of security guards or respondent committed all these overt acts petitioner’s son which was never cancelled
watchmen employed by the agency shall be despite an earlier Decision by the Regional by the court, was accepted by the
assigned to it; the duty to observe the Trial Court of Antipolo, Branch 71, affirming respondent. Therefore, by hiring the
diligence of a good father of a family in the Rafael Roque’s ownership of the properties security guards to prevent entry, possibly
selection of the guards cannot, in the and dismissing the case he (private even by the registered owner, to the
ordinary course of events, be demanded respondent) filed for the cancellation of NP- subject property, titles to which he fully
from the client whose premises or property 419 and NP-422 in Rafael Roque’s knew he did not possess, respondent
are protected by the security guards. name. Had he not misrepresented to blatantly acted in bad faith. Respondent’s
x x x [T]he fact that a client company may the security guards that he owns the unwarranted act of posting security guards
give instructions or directions to the properties and had he not hired these within the property, which he clearly knew
security guards assigned to it, does not, by security guards/common thugs to is registered in the name of another,
itself, render the client responsible as an secure the premises which he does not unduly placed petitioner at harm and
employer of the security guards concerned own, then the untoward incident deprived him of his right to fully exercise
and liable for their wrongful acts or would not have happened. To allow his privileges and duties as administrator of
omissions.11 private respondent to escape liability, said property. Respondent, by his grossly
This conclusion, however, does not despite his misdeeds, will not only result in faulty acts, paved the way to the infliction
necessarily preclude this Court from grave injustice to Jose Roque, Jr. who of injuries by the security guards on
holding respondent liable under the law for eventually died after having been petitioner.
damages resulting from the injuries paralyzed for several years as a result of Furthermore, respondent’s palpable
inflicted on petitioner by the unlawful acts [the] incident but will likewise result in the display of bad faith in claiming a superior
of the security guards. As stressed by implied tolerance by this Honorable Court right to the property over petitioner’s son
petitioner in his Memorandum: of private respondent’s disobedience or entitles petitioner to damages resulting
Assuming arguendo that the security disrespect of a lawful order/decision of the therefrom. In order that a plaintiff may
guards are not respondent’s employees, trial court (RTC Branch 71, Antipolo) which maintain an action for the injuries which he
the same does not constitute a valid he failed or refused to honor.12 (Emphasis sustained, he must establish that such
defense at all. Article 2176 of the Civil Code ours.) injuries resulted from a breach of duty
provides that a person who, by act or Article 2176 of the Civil Code states that which the defendant owed to the plaintiff –
omission, causes damage to another "whoever by act or omission causes a concurrence of injury to the plaintiff and
through fault or negligence may be held damage to another, there being fault or legal responsibility by the person causing
liable in damages. By making it appear negligence, is obliged to pay for the it.13 In other words, in order that the law
that he owns the disputed properties, damage done." In the case at bar, will give redress for an act causing
putting security guards thereat to respondent cannot feign ignorance of the damage, the act must be not only hurtful,
inti[mi]date, harass or cause the fact that at the time of the shooting but wrongful.14
rightful owner and his incident, the titles to the disputed property
In the case at bar, it is clear that family, had suffered physical suffering, damages as a result of the wanton act of
respondent violated the principle embodied mental anguish, fright, serious anxiety and respondent in stationing security guards in
in Article 19 of the Civil Code which moral shock resulting from respondent’s the property, the title of which is under the
mandates that "every person must, in acts which caused petitioner grave physical name of petitioner’s son, said act
the exercise of his rights and in the injuries eventually leading to his death. The ultimately resulting in the paralysis and
performance of his duties, act with several years of torment and agonizing on blindness of petitioner, we find the award
justice, give everyone his due, and the part of the deceased petitioner and his of exemplary damages to be proper by way
observe honesty and good faith." When family more than justifiy the award of of correction for the public good of
a right is exercised in a manner which moral damages. It must be emphasized respondent’s flagrant display of bad faith.
discards these norms resulting in damage that moral damages are not intended to WHEREFORE, premises considered, the
to another, a legal wrong is committed for enrich the complainant at the expense of a Petition for Review is hereby GRANTED.
which the actor can be held defendant.19 They are awarded only to The Decision of the Court of Appeals in CA-
accountable.15 As we have stated in a enable the injured parties to obtain means, G.R. CV No. 55895 is
previous case, if mere fault or negligence diversions or amusements that will serve to hereby REVERSED and SET ASIDE. The
in one’s acts can make him liable for alleviate the moral sufferings the injured Judgment of the Regional Trial Court of
damages for injury caused thereby, with parties have undergone by reason of Quezon City, Branch 104, in Civil Case No.
more reason should abuse or bad faith defendant’s culpable action.20 In other Q-93-14408 ordering respondent Torres to
make him liable.16 words, the award of moral damages is pay petitioner Roque the amount
With respect to the award of damages, we aimed at a restoration within the limits of of P300,000.00 as actual damages; the
sustain the ruling of the trial court. It is the possible, of the spiritual status quo amount of P1,000,000.00 as moral
essential in the award of damages that the ante; and therefore it must be damages; the amount of P300,000.00 as
claimant must have satisfactorily proven proportionate to the suffering exemplary damages; and the amount
during the trial the existence of the factual inflicted.21 Therefore, in light of the of P50,000.00 as attorney’s fee is
basis of the damages and its causal sufferings sustained by petitioner and his hereby REINSTATED.
connection to defendant’s acts.17 During family, we are inclined to sustain the award SO ORDERED.
trial, petitioner, through his own testimony of P1,000,000.00 as moral damages.
and that of his wife, was able to establish As to exemplary damages, Article 2229 of
that they have incurred actual damages in the Civil Code provides that such damages
the amount of P300,000.00 for the may be imposed by way of example or
hospitalization of petitioner as a result of correction for the public good, in addition
the shooting and the mauling incident, to the moral, temperate, liquidated or
thus, the award of actual damages in said compensatory damages. While exemplary
amount is proper. damages cannot be recovered as a matter
As regards the award of moral damages, of right, they need not be proved, although
we have ruled that there is no hard and fast plaintiff must show that he is entitled to
rule in the determination of what would be moral, temperate or compensatory
a fair amount of moral damages, since each damages before the court may consider the
case must be governed by its own peculiar question of whether or not exemplary
circumstances.18 As reflected in the records damages should be awarded.22 In the case
of the instant case, there is no gainsaying at bar, having determined that petitioner is
the fact that petitioner, together with his entitled to the award of actual and moral
G.R. No. 185597 Petitioners filed with the Regional Trial On January 18, 1999, the RTC rendered
JOHN E.R. REYES and MERWIN JOSEPH Court (RTC) of Makati a complaint for judgment 12 against respondents Doctolero and Avila,
REYES, Petitioners, damages against respondents Doctolero finding them responsible for the injuries sustained by petitioners.

vs. and Avila and their employer Grandeur, The RTC ordered them to jointly and severally pay petitioners the

ORICO DOCTOLERO, ROMEO A VILA, charging the latter with negligence in the following: ₱344,898.73 as actual damages; ₱360,000.00 as lost

GRANDEUR SECURITY AND SERVICES selection and supervision of its employees. income; ₱20,000.00 as school expenses; ₱300,000.00 as moral

CORPORATION, and MAKATI CINEMA They likewise impleaded MCS on the damages; ₱100,000.00 as exemplary damages; ₱75,000.00 as

SQUARE, Respondents. ground that it was negligent in getting attorney's fees; and costs of suit. 13 The trial thereafter continued

DECISION Grandeur's services. In their complaint, with respect to Grandeur and MCS.

JARDELEZA, J.: petitioners prayed that respondents be On April 15, 2005, the RTC rendered a
This is a petition for review ordered, jointly and severally, to pay them decision dismissing the complaint against
on certiorari 1 under Rule 45 of the Rules of Court actual, moral, and exemplary damages, MCS. It, however, held Grandeur solidarily
challenging the Decision2 dated July 25, 2008 and the
attorney's fees and litigation 8 costs. liable with respondents Doctolero and
Resolution3 dated December 5, 2008 of the Court of Appeals (CA)
Respondents Doctolero and Avila failed to Avila. According to the RTC, Grandeur was
in CA-G.R. CV No. 88101.
file an answer despite service of summons unable to prove that it exercised the
The case arose from an altercation between upon them. Thus, they were declared in diligence of a good father of a family in
respondent Orico Doctolero (Doctolero ), a default in an Order dated December 12, the supervision of its employees because it
security guard of respondent Grandeur 1997.9 failed to prove strict implementation of its
Security and Services Corporation For its part, Grandeur asserted that it rules, regulations, guidelines, issuances
(Grandeur) and petitioners John E.R. Reyes exercised the required diligence in the and instructions, and to monitor consistent
(John) and Mervin Joseph Reyes (Mervin) selection and supervision of its employees. compliance by respondents. 14
in the parking area of respondent Makati It likewise averred that the shooting On September 19, 2005, upon Grandeur's
Cinema Square (MCS).4 incident was caused by the unlawful motion for reconsideration, the RTC issued
Grandeur advances a different version, one aggression of petitioners who took an Order modifying its April 15, 2005
based on the Initial Report 6 conducted by advantage of their "martial arts" skills. 10 Decision, to wit:
Investigator Cosme Giron. While Doctolero was on duty at the
On the other hand, MCS contends that it WHEREFORE, premises considered, the
ramp of the exit driveway of MCS's basement parking, John took
cannot be held liable for damages simply Motion for Reconsideration is
over the left lane and insisted entry through the basement
because of its ownership of the premises hereby GRANTED, and the decision dated
parking's exit driveway. Knowing that this is against traffic rules,
where the shooting incident occurred. It 15 April 2005 is hereby modified, as
Doctolero stopped John, prompting the latter to alight from his
argued that the injuries sustained by follows:
vehicle and confront Doctolero. With his wife unable to pacify him,
petitioners were caused by the acts of The Court renders judgment in favor of
John punched and kicked Doctolero, hitting the latter on his left
respondents Doctolero and Avila, for whom plaintiffs finding defendants Orico
face and stomach. Doctolero tried to step back to avoid his
respondent Grandeur should be solely Doctolero and [Romeo] Avila liable for
aggressor but John persisted, causing Doctolero to draw his
responsible. It further argued that the negligence and to pay plaintiffs, the
service firearm and fire a warning shot. John ignored this and
carpark was, at that time, being managed following amounts:
continued his attack.
by Park Asia Philippines and MCS had no 1. [P]344,898. 73 as actual damages;
He caught up with Doctolero and wrestled control over the carpark when the shooting 2. [P]360,000.00 as the reasonable lost
with him to get the firearm. This caused the incident occurred on January 26, 1996. It (sic) or income and P20,000.00 in the form
gun to fire off and hit John's leg. Mervin likewise denied liability for the items lost in or tuition fees, books, and other school
then ran after Doctolero but was shot on petitioners' vehicle. 11 incidental expenses;
the stomach by security guard Avila. 7 3. [P]300,000 as moral damages;
4. [P] 100,000.00 as exemplary damages; clients. In this regard, the RTC cited to seminars which Grandeur attached to its
5. [P]75,000.00 as attorney's fees; Grandeur's standard operational motion for reconsideration can be
6. costs of suit. procedures, as testified to by Ungui, which considered as they are related to the
The Court, however, orders include: (1) daily marking before the testimonial evidence adduced during
the DISMISSAL of the complaint filed security guards are posted; (2) post-to- trial. 20
against defendants Grandeur Security and post station conducted by the branch Finally, the CA rejected petitioners'
Services Corporation and supervisor and vice-supervisor; (3) round argument that MCS should be held liable as
[MCS].1âwphi1 It is likewise ordered the the clock inspection by the company indirect employers of respondents.
Dismissal or both the Counterclaims filed inspector to determine the efficiency and According to the CA, the concept of indirect
by defendants Grandeur Security and fulfilment by the security guards of their employer only relates to the liability for
Services Corp., and [MCS] for the right to respective duties; (4) a monthly area unpaid wages and, as such, finds no
litigate is the price we pay in a civil society. formation conducted by the operation application to this case involving "imputed
SO ORDERED. 15 (Emphasis in the original.) officer; (5) a quarterly area formation negligence" under Article 2180 of the Civil
In reconsidering its Decision, the RTC held conducted by the operation officer; (6) a Code. It held that the lack of employer-
that it re-evaluated the facts and the general formation conducted every six employee relationship between
attending circumstances of the present months by the president, vice-president, respondents Doctolero and Avila and
case and was convinced that Grandeur has operation officer and HRD head; (7) a respondent MCS bars petitioners' claim
sufficiently overcome the presumption of yearly neuro-psychiatric test; (8) a special against MCS for the former's acts. [[21]
negligence. It gave credence to the seminar conducted every two years; (9) re- Petitioners filed a motion for
testimony of Grandeur's witness, Eduardo training course also held every two years; reconsideration which the CA denied in its
Ungui, the head of the Human Resources and (10) monthly briefing or orientation to Resolution dated December 5, 2008.22
Department (HRD) of Grandeur, as regards those security guards who committed Hence, the present petition.
the various procedures in its selection from violations. 17 The RTC likewise gave weight to the The sole issue for the consideration of this
and hiring of security guards. Ungui memorandum/certificates submitted by Grandeur as proof of its
Court is whether Grandeur and MCS may
testified that Grandeur's hiring procedure diligence in the supervision of the actual work performances of its
be held vicariously liable for the damages
included, among others, several rounds of employees. 18
caused by respondents Doctolero and Avila
interview, submission of various clearances Petitioners assailed the RTC Order dated to petitioners John and Mervin Reyes.
from different government agencies, such September 19, 2005 before the CA. We deny the petition.
as the NBI clearance and PNP clearance, The CA dismissed petitioners' appeal and Petitioner contends that MCS should be
undergoing neuro-psychiatric affirmed the RTC's Order. It agreed that held liable for the negligence of
examinations, drug testing and physical Grandeur was able to prove with respondents Avila and Doctolero. According
examinations, attending pre-licensing preponderant evidence that it observed the to petitioners, since the act or omission
training and seminars, securing a security degree of diligence required in both complained of took place in the vicinity of
license, and undergoing on the job training selection and supervision of its security MCS, it is liable for all damages which are
for seven days. 16 guards. 19 the natural and probable consequences of
Furthermore, the RTC held that Grandeur The CA likewise rejected petitioners' the act or omission complained of. They
was able to show that it observed diligence arguments against the additional evidence reasoned that MCS hired the services of
of a good father of the family during the belatedly adduced by Grandeur in support Grandeur, whose employees (the security
existence of the employment when it of its motion for reconsideration before the guards), in turn, committed harmful acts
conducted regular and close supervision of RTC. It ruled that the additional that caused the damages suffered by
its security guards assigned to various memoranda and certificate of attendance petitioners. MCS should thus be declared as
joint tortfeasor with Grandeur and vicarious liability under Article 2180 of the Civil Code cannot apply
Avila, and second, that after hiring
respondent security guards. 23 as against BSP. 31 Similarly, we find no employer-employee
Doctolero and Avila, Grandeur had
We cannot agree. MCS is not liable to relationship between MCS and respondent guards. The guards
exercised due diligence
petitioners. were merely assigned by Grandeur to secure MCS' premises
in supervising them.
As a general rule, one is only responsible pursuant to their Contract of Guard Services. Thus, MCS cannot be
In Metro Manila Transit Corporation v.
for his own act or omission. 24 This general rule is held vicariously liable for damages caused by these guards' acts
Court of Appeals, we held:
laid down in Article 2176 of the Civil Code, which provides: or omissions.
On the matter of selection of
Art. 2176. Whoever by act or omission Neither can it be said that a principal- employees, Campo vs. Camarote, supra,
causes damage to another, there being agency relationship existed between MCS lays down this admonition:
fault or negligence, is obliged to pay for the and Grandeur. Section 8 of the Contract for x x x In order that the owner of a vehicle
damage clone. Such fault or negligence, if Guard Services between them explicitly may be considered as having exercised all
there is no pre-existing contractual relation states: diligence of a good father of a family, he
between the parties, is called a quasi-delict 8. LIABILITY TO GUARDS AND THIRD should not have been satisfied with the
and is governed by the provisions or this PARTIES mere possession of a professional driver's
Chapter. The SECURITY COMPANY is NOT an agent license; he should have carefully
The law, however, provides for exceptions or employees (sic) of the CLIENT and the examined the applicant for
when it makes certain persons liable for the guards to be assigned by the SECURITY employment as to his qualifications,
act or omission of another.1âwphi1 One COMP ANY to the CLIENT are in no sense his experience and record of
exception is an employer who is made employees of the latter as they arc for all service. These steps appellant failed to
vicariously liable for the tort committed by intents and purposes under contract with observe; he has therefore, failed to
his employee under paragraph 5 of Article the SECURITY COMPANY. Accordingly, the exercise all due diligence required of a
2180.25 Here, although the employer is not the actual CLIENT shall not be responsible for any and good father of a family in the choice or
tortfeasor, the law makes him vicariously liable on the basis of the
all claims for personal injury or death that selection of driver.
civil law principle of paterfamilias for failure to exercise due care
arises of or in the course of the Due diligence in the supervision of
and vigilance over the acts of one's subordinates to prevent
performance of guard duties. 32 (Emphasis in the employees, on the other hand, includes the
damage to another.26 original.)
formulation of suitable rules and
It must be stressed, however, that the II regulations for the guidance of employees
above rule is applicable only if there is an On the other hand, paragraph 5 of Article and the issuance of proper instructions
employer-employee relationship. 27 This 218033 of the Civil Code may be applicable to Grandeur, it intended for the protection of the public
employer-employee relationship cannot be presumed but must be being undisputed that respondent guards were its employees.
and persons with whom the employer has
sufficiently proven by the plaintiff.28 The plaintiff must also show When the employee causes damage due to his own negligence
relations through his or its employees and
that the employee was acting within the scope of his assigned task while performing his own duties, there arises the Juris
the imposition of necessary disciplinary
when the tort complained of was committed. It is only then that tantum presumption that the employer is negligent, rebuttable
measures upon employees in case of
the defendant, as employer, may find it necessary to interpose the only by proof of observance of the diligence of a good father of a
breach or as may be warranted to ensure
defense of due diligence in the selection and supervision family. 34 The "diligence of a good father" referred to in the last
the performance of acts indispensable to
of 29 employees. paragraph of Article 2180 means diligence in the selection and
the business of and beneficial to their
In Mamaril v. The Boy Scout of the supervision of employees. 35
employer. To this, we add that actual
Philippines,30 we found that there was no employer-
To rebut the presumption of negligence, implementation and monitoring of
employee relationship between Boy Scout of the Philippines (BSP)
Grandeur must prove two things: first, that consistent compliance with said rules
and the security guards assigned to it by an agency pursuant to a
it had exercised due diligence in should be the constant concern of the
Guard Service Contract. In the absence of such relationship,
the selection of respondents Doctolero and employer, acting through dependable
supervisors who should regularly report on diligence of a good father of a family in 9. The applicant then undergoes a
their supervisory functions. 36 (Emphasis supplied; the selection and hiring of its security probationary period of six months after
citations omitted.)
guards. As testified to by its HRD head which the employee automatically becomes
In the earlier case of Central Taxicab Corp. Ungui, and corroborated by documentary regular upon meeting the company
v. Ex-Meralco Employees Transportation evidence including clearances from various standards. 41
Co.,37 the Court held that there was no hard-and-fast rule on government agencies, certificates, and Unlike in the aforecited MMTC cases, the
the quantum of evidence needed to prove due observance of all
favorable test results in medical and evidence presented by Grandeur consists
the diligence of a good father of a family as would constitute a
psychiatric examinations, Grandeur's not only in the testimony of its HRD head
valid defense to the legal presumption of negligence on the part of
selection and hiring procedure was outlined but also by documentary evidence showing
an employer or master whose employee has, by his negligence,
as follows: respondents Doctolero's and Avila's
caused damage to another. Jurisprudence nevertheless shows that
1. Initial screening; compliance with the above hiring and
testimonial evidence, without more, is insufficient to meet the
2. Submission of personal bio-data; selection process consisting of their
required quantum of proof.38
3. Submission of the following documents respective: (1) private security
In Metro Manila Transit Corporation v. and clearances: (1) NBI Clearance; (2) licenses; 42 (2) NBI Clearances;43 (3) Medical

Court of Appeals, the Court found that PDICE Clearance; (3) Barangay Clearance; Certificates; 44 (4) Police Clearances; 45 (5) Certificate of Live

"[p]etitioner's attempt to prove (4) PNP Clearance; (5) Birth Certificate; (6) Birth46/Certification issued by the Local Civil Registrar

its diligentissimi patris familias in the High School Diploma/Transcript/College appertaining to date of birth; 47 (6) Certificates issued by the

selection and supervision of Diploma; (7) Reserved Officers Training Safety Vocational and Training Center for satisfactory completion

employees through oral evidence must Corps or Citizens Army Training ce1iificate; of the Pre-Licensing Training Course;48 (7) High School

fail as it was unable to buttress the same (8) Court Clearances; and (9) resignation Diplomas;49 (8) SSS Personal Data Records;50 (9) Barangay

with any other evidence, object or or clearance from previous employment; Clearances;51 (10) Court Clearance; 52 (11) Neuro-psychiatric

documentary, which might obviate the 4. Pre-licensing training (15 days or 150 result issued by Goodwill Medical Center, Inc. for Doctolero's pre-

apparent biased nature of the hours) for those without experience or pre- employment screening as Security Guard 53 /Evaluation Report by

testimony."39 There, the supposed training course (56 hours) for applicants Office Chief Surgeon Army, Headquarters, Phil. Army, Fort

clearances, results of seminars and tests with working experience as security guard; Bonifacio Metro-Manila for Avila showing an above-average result

which Leonardo allegedly submitted and 5. Undergo neuro-psychiatric examination, and no psychotic ideations;54 (12) Certification from Varsitarian

complied with were never presented in drug testing and physical examination; Security and Investigation Agency, Inc. that Doctolero has been

court despite the fact that, if true, then 6. Submit and secure a security license employed with said agency; 55 (13) Ce1iificate issued by Cordova

they were obviously in the possession and before being given an application form; High School showing that Doctolero had completed the

control of Metro Manila Transit Corporation 7. Series of Interviews by Grandeur's requirements of the courts of Institution in Citizen Army Training-

(MMTC). Subsequently, in a different case Recruiting Officer, Personnel Clerk, Head of I ; 56 (14) Certification by Grandeur that Doctolero has submitted

also involving MMTC, the Court held that Human Resources Department, Operation the requirements for his application for the post of Security

"in a trial involving the issue of vicarious Department or Security Officer, Senior Guard. 57 Thus, we agree with the RTC and CA's evaluation that

liability, employers must submit concrete Security Officer, Chief Security Officer, Grandeur was able to satisfactorily prove that it had exercised due

proof, including documentary Assistant Vice President for Operations, diligence in the selection of respondents Doctolero and Avila.

evidence." 40 Assistant Vice President for Accounting, Once evidence is introduced showing that
A and recommending approval by the Vice the employer exercised the required
Here, both the R TC and the CA found that President and the President. amount of care in selecting its employees,
Grandeur was able to sufficiently prove, 8. The applicant undergoes on-the-job half of the employer's burden is
through testimonial and documentary training (OJT) for seven days assigned in overcome.58
evidence, that it had exercised the the field or within Grandeur's office; and B
The question of diligent supervision,
however, depends on the circumstances of
employment.1âwphi1 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 59
Here, Grandeur's HRD head, Ungui,
likewise testified on Grandeur's standard
operational procedures, showing the
means by which Grandeur conducts close
and regular supervision over the security
guards assigned to their various
clients. 60 Grandeur also submitted as evidence certificates of

the 62 attendance to various seminars and the memoranda both

those commending respondents for their good works63 and

reprimanding them for violations of various company

policies.64 We agree with the CA that these may be considered,

as they are related to the documents and testimonies adduced

during trial to show Grandeur's diligence in the supervision of the

actual work performance of its employees.

Considering all the evidence borne by the

records, we find that Grandeur has
sufficiently exercised the diligence of a
good father of a family in the selection and
supervision of its employees. Hence,
having successfully overcome the legal
presumption of negligence, it is relieved of
liability from the negligent acts of its
employees, respondents Doctolero and
Avila.
WHEREFORE, the petition is DENIED.
The Decision dated July 25, 2008 and the
Resolution dated December 5, 2008 of the
Court of Appeals are AFFIRMED.
SO ORDERED.
G.R. No. 163609 November 27, of Ernesto Simbulan.3 Lozano borrowed the being on board the vehicle when it hit
2008 pick-up truck from Simbulan to bring Marvin. The Municipality of Koronadal
SPS. BUENAVENTURA JAYME AND Miguel to Buayan Airport at General Santos adopted the answer of Lozano and Miguel.
ROSARIO JAYME, petitioners, City to catch his Manila flight.4 As for First Integrated Bonding and
vs. The pick-up truck accidentally hit Marvin C. Insurance Company, Inc., the vehicle
RODRIGO APOSTOL, FIDEL LOZANO, Jayme, a minor, who was then crossing the insurer, it insisted that its liability is
ERNESTO SIMBULAN, MAYOR National Highway in Poblacion, Polomolok, contributory and is only conditioned on the
FERNANDO Q. MIGUEL, MUNICIPALITY South Cotabato.5 The intensity of the right of the insured. Since the insured did
OF KORONADAL (NOW CITY OF collision sent Marvin some fifty (50) meters not file a claim within the prescribed
KORONADAL), PROVINCE OF SOUTH away from the point of impact, a clear period, any cause of action against it had
COTABATO, represented by the indication that Lozano was driving at a very prescribed.
MUNICIPAL TREASURER and/or high speed at the time of the accident.6 RTC Disposition
MUNICIPAL MAYOR FERNANDO Q. Marvin sustained severe head injuries with On January 25, 1999, the RTC rendered
MIGUEL, and THE FIRST INTEGRATED subdural hematoma and diffused cerebral judgment in favor of spouses Jayme, the
BONDING AND INSURANCE COMPANY, contusion.7 He was initially treated at the dispositive portion of which reads:
INC., respondents. Howard Hubbard Memorial Hospital.8 Due WHEREFORE, in view of the foregoing, the
DECISION to the seriousness of his injuries, he was defendant Municipality of Koronadal cannot
REYES, R.T., J.: airlifted to the Ricardo Limso Medical be held liable for the damages incurred by
MAY a municipal mayor be held solidarily Center in Davao City for more intensive other defendant (sic) being an agency of
liable for the negligent acts of the driver treatment.9 Despite medical attention, the State performing a (sic) governmental
assigned to him, which resulted in the Marvin expired six (6) days after the functions. The same with defendant
death of a minor pedestrian? accident.10 Hermogenes Simbulan, not being the
Challenged in this petition for review Petitioners spouses Buenaventura and owner of the subject vehicle, he is absolved
on certiorari is the Decision1 of the Court of Rosario Jayme, the parents of Marvin, filed of any liability. The complaint against
Appeals (CA) which reversed and set aside a complaint for damages with the RTC defendant First Integrated Bonding
the decision of the Regional Trial Court against respondents.11 In their complaint, Insurance Company, Inc. is hereby ordered
(RTC), Polomolok, Cotabato City, Branch they prayed that all respondents be held dismissed there being no cause of action
39, insofar as defendant Mayor Fernando solidarily liable for their loss. They pointed against said insurance company.
Q. Miguel is concerned. The CA absolved out that that proximate cause of Marvin's However, defendants Fidel Lozano, Rodrigo
Mayor Miguel from any liability since it was death was Lozano's negligent and reckless Apostol, and Mayor Fernando Miguel of
not he, but the Municipality of Koronadal, operation of the vehicle. They prayed for Koronadal, South Cotabato, are hereby
that was the employer of the negligent actual, moral, and exemplary damages, ordered jointly and severally to pay the
driver. attorney's fees, and litigation expenses. plaintiff (sic) the following sums:
The Facts In their respective Answers, all 1. One Hundred Seventy Three Thousand
On February 5, 1989, Mayor Miguel of respondents denied liability for Marvin's One Hundred One and Forty Centavos
Koronadal, South Cotabato was on board death. Apostol and Simbulan averred that (P173,101.40) Pesos as actual damages
the Isuzu pick-up truck driven by Fidel Lozano took the pick-up truck without their with legal interest of 12% per annum
Lozano, an employee of the Municipality of consent. Likewise, Miguel and Lozano computed from February 11, 1989 until
Koronadal.2 The pick-up truck was pointed out that Marvin's sudden sprint fully paid;
registered under the name of Rodrigo across the highway made it impossible to 2. Fifty Thousand (P50,000.00) Pesos as
Apostol, but it was then in the possession avoid the accident. Yet, Miguel denied moral damages;
3. Twenty Thousand (P20,000.00) Pesos as employer of Lozano, Mayor Miguel could The doctrine of vicarious liability or
exemplary damages; not thus be held liable for the damages imputed liability finds no application in
4. Twenty Thousand (P20,000.00) Pesos as caused by the former. Mayor Miguel was the present case.
Attorney's fees; a mere passenger in the Isuzu pick-up Spouses Jayme contend, inter alia, that
5. Fifty Thousand (P50,000.00) Pesos for at the time of the accident.14 (Emphasis vicarious liability attaches to Mayor Miguel.
the death of Marvin Jayme; supplied) He was not a mere passenger, but instead
6. Three Thousand (P3,000.00) as litigation The CA also reiterated the settled rule that one who had direct control and supervision
expenses; and it is the registered owner of a vehicle who over Lozano during the time of the
7. To pay the cost of this suit. is jointly and severally liable with the driver accident. According to petitioners, the
SO ORDERED.12 for damages incurred by passengers or element of direct control is not negated by
Dissatisfied with the RTC ruling, Mayor third persons as a consequence of injuries the fact that Lozano's employer was the
Miguel interposed an appeal to the CA. or death sustained in the operation of the Municipality of Koronadal. Mayor Miguel,
CA Disposition vehicle. being Lozano's superior, still had control
In his appeal, Mayor Miguel contended that Issues over the manner the vehicle was operated.
the RTC erred in ruling that he was The spouses Jayme have resorted to the Article 218016 of the Civil Code provides
Lozano's employer and, hence, solidarily present recourse and assign to the CA the that a person is not only liable for one's
liable for the latter's negligent act. Records following errors: own quasi-delictual acts, but also for those
showed that the Municipality of Koronadal I. persons for whom one is responsible for.
was the driver's true and lawful employer. THE HONORABLE COURT OF APPEALS This liability is popularly known as vicarious
Mayor Miguel also denied that he did not ERRED IN HOLDING THAT MAYOR or imputed liability. To sustain claims
exercise due care and diligence in the FERNANDO MIGUEL CANNOT BE HELD against employers for the acts of their
supervision of Lozano. The incident, LIABLE FOR THE DEATH OF MARVIN JAYME employees, the following requisites must
although unfortunate, was unexpected and WHICH CONCLUSION IS CONTRARY TO be established: (1) That the employee was
cannot be attributed to him. LAW AND THE SETTLED chosen by the employer personally or
On October 22, 2003, the CA granted the PRONOUNCEMENTS OF THIS HONORABLE through another; (2) That the service to be
appeal, disposing as follows: TRIBUNAL; rendered in accordance with orders which
WHEREFORE, the Decision appealed from is II. the employer has the authority to give at
REVERSED and SET ASIDE, insofar as THE FINDINGS OF FACTS OF THE all times; and (3) That the illicit act of the
defendant-appellant Mayor Fernando Q. HONORABLE COURT OF APPEALS ARE employee was on the occasion or by reason
Miguel is concerned, and the complaint CONTRARY TO THE FINDINGS OF THE of the functions entrusted to him.17
against him is DISMISSED. TRIAL COURT AND ARE CONTRADICTED BY Significantly, to make the employee liable
IT IS SO ORDERED.13 THE EVIDENCE ON RECORD; MOREOVER, under paragraphs 5 and 6 of Article 2180,
The CA held that Mayor Miguel should not THE CONCLUSIONS DRAWN BY THE it must be established that the injurious or
be held liable for damages for the death of HONORABLE COURT OF APPEALS ARE ALL tortuous act was committed at the time the
Marvin Jayme. Said the appellate court: BASED ON CONJECTURES AND SURMISES employee was performing his functions.18
Moreover, plaintiffs-appellees admitted AND AGAINST ACCEPTED COURSE OF Furthermore, the employer-employee
that Mayor Miguel was not the employer of JUDICIAL PROCEEDINGS WHICH relationship cannot be assumed. It is
Lozano. Thus, paragraph 9 of the complaint URGENTLY CALL FOR AN EXERCISE OF incumbent upon the plaintiff to prove the
alleged that the Municipality of THIS HONORABLE COURT'S relationship by preponderant evidence.
Koronadal was the employer of both SUPERVISION.15 In Belen v. Belen,19 this Court ruled that it
Mayor Miguel and Lozano. Not being the Our Ruling was enough for defendant to deny an
alleged employment relationship. The Municipality of Koronadal remains to be occupant of the vehicle.27 Whatever right of
defendant is under no obligation to prove Lozano's employer notwithstanding control the occupant may have over the
the negative averment. This Court said: Lozano's assignment to Mayor Miguel. driver is not sufficient by itself to justify an
It is an old and well-settled rule of the Spouses Jayme argued that Mayor Miguel application of the doctrine of vicarious
courts that the burden of proving the action had at least supervision and control over liability. Handley v. Lombardi28 is
is upon the plaintiff, and that if he fails Lozano and how the latter operated or instructive on this exception to the rule on
satisfactorily to show the facts upon which drove the Isuzu pick-up during the time of vicarious liability:
he bases his claim, the defendant is under the accident. They, however, failed to Plaintiff was not the master or principal of
no obligation to prove his exceptions. This buttress this claim. the driver of the truck, but only an
rue is in harmony with the provisions of Even assuming arguendo that Mayor intermediate and superior employee or
Section 297 of the Code of Civil Procedure Miguel had authority to give instructions or agent. This being so, the doctrine
holding that each party must prove his own directions to Lozano, he still can not be held of respondeat superior or qui facit per
affirmative allegations, etc.20 liable. In Benson v. Sorrell,23 the New alium is not properly applicable to him. His
In resolving the present controversy, it is England Supreme Court ruled that mere power to direct and control the driver was
imperative to find out if Mayor Miguel is, giving of directions to the driver does not not as master, but only by virtue of the fact
indeed, the employer of Lozano and establish that the passenger has control that they were both employed by Kruse,
therefore liable for the negligent acts of the over the vehicle. Neither does it render one and the further fact that as Kruse's agent
latter. To determine the existence of an the employer of the driver. This Court, he was delegated Kruse's authority over
employment relationship, We rely on the in Soliman, Jr. v. Tuazon,24 ruled in a the driver. x x x
four-fold test. This involves: (1) the similar vein, to wit: In the case of actionable negligence, the
employer's power of selection; (2) x x x The fact that a client company may rule is well settled both in this state and
payment of wages or other remuneration; give instructions or directions to the elsewhere that the negligence of a
(3) the employer's right to control the security guards assigned to it, does not, subordinate employee or subagent is not to
method of doing the work; and (4) the by itself, render the client responsible be imputed to a superior employee or
employer's right of suspension or as an employer of the security guards agent, but only to the master or principal.
dismissal.21 concerned and liable for their wrongful acts (Hilton v. Oliver, 204 Cal. 535 [61 A. L. R.
Applying the foregoing test, the CA and omissions. Those instructions or 297, 269 Pac. 425; Guild v. Brown, 115
correctly held that it was the Municipality directions are ordinarily no more than Cal. App. 374 [1 Pac. (2d) 528; Ellis v.
of Koronadal which was the lawful requests commonly envisaged in the Southern Ry. Co., 72 S. C. 464 [2 L. R. A.
employer of Lozano at the time of the contract for services entered into with the (N. S.) 378, 52 S. E. 228; Thurman v.
accident. It is uncontested that Lozano was security agency. x x x25 (Emphasis Pittsburg & M. Copper Co., 41 Mont. 141
employed as a driver by the municipality. supplied) [108 Pac. 588]; 2 Cor. Jur., p. 829; and see
That he was subsequently assigned to Significantly, no negligence may be the elaborate note in 61 A. L. R. 277, and
Mayor Miguel during the time of the imputed against a fellow employee particularly that part commencing at p.
accident is of no moment. This Court has, although the person may have the right to 290.) We can see no logical reason for
on several occasions, held that an control the manner of the vehicle's drawing any distinction in this regard
employer-employee relationship still exists operation.26 In the absence of an between actionable negligence and
even if the employee was loaned by the employer-employee relationship contributory negligence. x x x29
employer to another person or entity establishing vicarious liability, the driver's The rule was reiterated in Bryant v. Pacific
because control over the employee negligence should not be attributed to a Elec. Ry. Co.[30 and again in Sichterman v.
subsists.22 In the case under review, the fellow employee who only happens to be an Hollingshead Co.31
In Swanson v. McQuown,32 a case generally not liable for torts committed by WHEREFORE, the petition is DENIED and
involving a military officer who happened them in the discharge of governmental the appealed Decision AFFIRMED.
to be riding in a car driven by a subordinate functions and can only be held answerable SO ORDERED.
later involved in an accident, the Colorado only if it can be shown that they were
Supreme Court adhered to the general rule acting in proprietary capacity. In
that a public official is not liable for the permitting such entities to be sued, the
wrongful acts of his subordinates on a State merely gives the claimant the right to
vicarious basis since the relationship is not show that the defendant was not acting in
a true master-servant situation.33 The governmental capacity when the injury was
court went on to rule that the only committed or that the case comes under
exception is when they cooperate in the act the exceptions recognized by law. Failing
complained of, or direct or encourage it.34 this, the claimant cannot recover.38
In the case at bar, Mayor Miguel was Verily, liability attaches to the registered
neither Lozano's employer nor the vehicle's owner, the negligent driver and his direct
registered owner. There existed no causal employer. The CA observation along this
relationship between him and Lozano or line are worth restating:
the vehicle used that will make him Settled is the rule that the registered owner
accountable for Marvin's death. Mayor of a vehicle is jointly and severally liable
Miguel was a mere passenger at the time with the driver for damages incurred by
of the accident. passengers and third persons as a
Parenthetically, it has been held that the consequence of injuries or death sustained
failure of a passenger to assist the driver, in the operation of said vehicles.
by providing him warnings or by serving as Regardless of who the actual owner of the
lookout does not make the passenger liable vehicle is, the operator of record continues
for the latter's negligent acts.35 The driver's to be the operator of the vehicle as regards
duty is not one that may be delegated to the public and third persons, and as such is
others.36 directly and primarily responsible for the
As correctly held by the trial court, the true consequences incident (sic) to its operation
and lawful employer of Lozano is the x x x.39
Municipality of Koronadal. Unfortunately The accidental death of Marvin Jayme is a
for Spouses Jayme, the municipality may tragic loss for his parents. However, justice
not be sued because it is an agency of the demands that only those liable under our
State engaged in governmental functions laws be held accountable for Marvin's
and, hence, immune from suit. This demise. Justice can not sway in favor of
immunity is illustrated in Municipality of petitioners simply to assuage their pain and
San Fernando, La Union v. Firme,37 where loss. The law on the matter is clear: only
this Court held: the negligent driver, the driver's employer,
It has already been remarked that and the registered owner of the vehicle are
municipal corporations are suable because liable for the death of a third person
their charters grant them the competence resulting from the negligent operation of
to sue and be sued. Nevertheless, they are the vehicle.
G.R. No. 132266 December 21, 1999 On September 5, 1988, Vasquez died at the "only vicarious and not solidary" with the
CASTILEX INDUSTRIAL Cebu Doctor's Hospital. It was there that former. It reduced the award of damages
CORPORATION, petitioner, Abad signed an acknowledgment of representing loss of earning capacity from
vs. Responsible Party (Exhibit K) wherein he P778,752.00 to P214,156.80; and the
VICENTE VASQUEZ, JR. and LUISA SO agreed to pay whatever hospital bills, interest on the hospital and medical bills,
VASQUEZ, and CEBU DOCTORS' professional fees and other incidental from 3% per month to 12% per
HOSPITAL, INC., respondents. charges Vasquez may incur. annum from 5 September 1988 until fully
After the police authorities had conducted paid.
DAVIDE, JR., C.J.: the investigation of the accident, a Criminal Upon CASTILEX's motion for
The pivotal issue in this petition is whether Case was filed against Abad but which was reconsideration, the Court of Appeals
an employer may be held vicariously liable subsequently dismissed for failure to modified its decision by (1) reducing the
for the death resulting from the negligent prosecute. So, the present action for award of moral damages from P50,000 to
operation by a managerial employee of a damages was commenced by Vicente P30,000 in view of the deceased's
company-issued vehicle. Vasquez, Jr. and Luisa So Vasquez, parents contributory negligence; (b) deleting the
The antecedents, as succinctly summarized of the deceased Romeo So Vasquez, award of attorney's fees for lack of
by the Court of Appeals, are as follows: against Jose Benjamin Abad and Castilex evidence; and (c) reducing the interest on
On 28 August 1988, at around 1:30 to 2:00 Industrial Corporation. In the same action, hospital and medical bills to 6% per
in the morning, Romeo So Vasquez, was Cebu Doctor's Hospital intervened to collect annum from 5 September 1988 until fully
driving a Honda motorcycle around Fuente unpaid balance for the medical expense paid.4
Osmeña Rotunda. He was traveling given to Romeo So Vasquez.1 Hence, CASTILEX filed the instant petition
counter-clockwise, (the normal flow of The trial court ruled in favor of private contending that the Court of Appeals erred
traffic in a rotunda) but without any respondents Vicente and Luisa Vasquez in (1) applying to the case the fifth
protective helmet or goggles. He was also and ordered Jose Benjamin Abad (hereafter paragraph of Article 2180 of the Civil Code,
only carrying a Student's Permit to Drive at ABAD) and petitioner Castilex Industrial instead of the fourth paragraph thereof;
the time. Upon the other hand, Benjamin Corporation (hereafter CASTILEX) to pay (2) that as a managerial employee, ABAD
Abad [was a] manager of Appellant jointly and solidarily (1) Spouses Vasquez, was deemed to have been always acting
Castilex Industrial Corporation, registered the amounts of P8,000.00 for burial within the scope of his assigned task even
owner [of] a Toyota Hi-Lux Pick-up with expenses; P50,000.00 as moral damages; outside office hours because he was using
plate no. GBW-794. On the same date and P10,000.00 as attorney's fees; and a vehicle issued to him by petitioner; and
time, Abad drove the said company car out P778,752.00 for loss of earning capacity; (3) ruling that petitioner had the burden to
of a parking lot but instead of going around and (2) Cebu Doctor's Hospital, the sum of prove that the employee was not acting
the Osmeña rotunda he made a short cut P50,927.83 for unpaid medical and hospital within the scope of his assigned task.
against [the] flow of the traffic in bills at 3% monthly interest from 27 July Jose Benjamin ABAD merely adopted the
proceeding to his route to General Maxilom 1989 until fully paid, plus the costs of statement of facts of petitioner which holds
St. or to Belvic St. litigation.2 fast on the theory of negligence on the part
In the process, the motorcycle of Vasquez CASTILEX and ABAD separately appealed of the deceased.
and the pick-up of Abad collided with each the decision. On the other hand, respondents Spouses
other causing severe injuries to the former. In its decision3 of 21 May 1997, the Court Vasquez argue that their son's death was
Abad stopped his vehicle and brought of Appeals affirmed the ruling of the trial caused by the negligence of petitioner's
Vasquez to the Southern Islands Hospital court holding ABAD and CASTILEX liable employee who was driving a vehicle issued
and later to the Cebu Doctor's Hospital. but held that the liability of the latter is by petitioner and who was on his way home
from overtime work for petitioner; and that liability, and is thus estopped by the rate, aside from the material dates
petitioner is thus liable for the resulting records of the case, which it failed to required under Section 4 of Rule 45,
injury and subsequent death of their son on refute. petitioner CASTILEX also stated in the first
the basis of the fifth paragraph of Article We shall first address the issue raised by page of the petition the date it filed the
2180. Even if the fourth paragraph of the private respondents regarding some motion for extension of time to file the
Article 2180 were applied, petitioner alleged procedural lapses in the petition. petition.
cannot escape liability therefor. They Private respondent's contention of Now on the merits of the case.
moreover argue that the Court of Appeals petitioner's violation of Section 11 of Rule The negligence of ABAD is not an issue at
erred in reducing the amount of 13 and Section 4 of Rule 45 of the 1997 this instance. Petitioner CASTILEX
compensatory damages when the award Rules of Civil Procedure holds no water. presumes said negligence but claims that it
made by the trial court was borne both by Sec. 11 of Rule 13 provides: is not vicariously liable for the injuries and
evidence adduced during the trial regarding Sec. 11. Priorities in modes of services and subsequent death caused by ABAD.
deceased's wages and by jurisprudence on filing. — Whenever practicable, the service Petitioner contends that the fifth paragraph
life expectancy. Moreover, they point out and filing of pleadings and other papers of Article 2180 of the Civil Code should only
that the petition is procedurally not shall be done personally. Except with apply to instances where the employer is
acceptable on the following grounds: (1) respect to papers emanating from the not engaged in business or industry. Since
lack of an explanation for serving the court, a resort to other modes must be it is engaged in the business of
petition upon the Court of Appeals by accompanied by a written explanation why manufacturing and selling furniture it is
registered mail, as required under Section the service or filing was not done therefore not covered by said provision.
11, Rule 13 of the Rules of Civil Procedure; personally. A violation of this Rule may be Instead, the fourth paragraph should
and (2) lack of a statement of the dates of cause to consider the paper as not filed. apply.
the expiration of the original reglementary The explanation why service of a copy of Petitioner's interpretation of the fifth
period and of the filing of the motion for the petition upon the Court of Appeals was paragraph is not accurate. The phrase
extension of time to file a petition for done by registered mail is found on Page "even though the former are not engaged
review. 28 of the petition. Thus, there has been in any business or industry" found in the
For its part, respondent Cebu Doctor's compliance with the aforequoted provision. fifth paragraph should be interpreted to
Hospital maintains that petitioner As regards the allegation of violation of the mean that it is not necessary for the
CASTILEX is indeed vicariously liable for material data rule under Section 4 of Rule employer to be engaged in any business or
the injuries and subsequent death of 45, the same is unfounded. The material industry to be liable for the negligence of
Romeo Vasquez caused by ABAD, who was dates required to be stated in the petition his employee who is acting within the scope
on his way home from taking snacks after are the following: (1) the date of receipt of of his assigned task.5
doing overtime work for petitioner. the judgment or final order or resolution A distinction must be made between the
Although the incident occurred when ABAD subject of the petition; (2) the date of filing two provisions to determine what is
was not working anymore "the inescapable of a motion for new trial or reconsideration, applicable. Both provisions apply to
fact remains that said employee would not if any; and (3) the date of receipt of the employers: the fourth paragraph, to
have been situated at such time and place notice of the denial of the motion. Contrary owners and managers of an establishment
had he not been required by petitioner to to private respondent's claim, the petition or enterprise; and the fifth paragraph, to
do overtime work." Moreover, since need not indicate the dates of the employers in general, whether or not
petitioner adopted the evidence adduced expiration of the original reglementary engaged in any business or industry. The
by ABAD, it cannot, as the latter's period and the filing of a motion for fourth paragraph covers negligent acts of
employer, inveigle itself from the ambit of extension of time to file the petition. At any employees committed either in the service
of the branches or on the occasion of their It is undisputed that ABAD was a of proving his cause of action, fails to show
functions, while the fifth paragraph Production Manager of petitioner CASTILEX in a satisfactory manner facts which he
encompasses negligent acts of employees at the time of the tort occurrence. As to bases his claim, the defendant is under no
acting within the scope of their assigned whether he was acting within the scope of obligation to prove his exception or
task. The latter is an expansion of the his assigned task is a question of fact, defense. 10
former in both employer coverage and acts which the court a quo and the Court of Now on the issue of whether the private
included. Negligent acts of employees, Appeals resolved in the affirmative. respondents have sufficiently established
whether or not the employer is engaged in Well-entrenched in our jurisprudence is the that ABAD was acting within the scope of
a business or industry, are covered so long rule that the factual findings of the Court of his assigned tasks.
as they were acting within the scope of Appeals are entitled to great respect, and ABAD, who was presented as a hostile
their assigned task, even though even finality at times. This rule is, however, witness, testified that at the time of the
committed neither in the service of the subject to exceptions such as when the incident, he was driving a company-issued
branches nor on the occasion of their conclusion is grounded on speculations, vehicle, registered under the name of
functions. For, admittedly, employees surmises, or conjectures.9 Such exception petitioner. He was then leaving the
oftentimes wear different hats. They obtain in the present case to warrant restaurant where he had some snacks and
perform functions which are beyond their review by this Court of the finding of the had a chat with his friends after having
office, title or designation but which, Court of Appeals that since ABAD was done overtime work for the petitioner.
nevertheless, are still within the call of driving petitioner's vehicle he was acting No absolutely hard and fast rule can be
duty. within the scope of his duties as a manager. stated which will furnish the complete
This court has applied the fifth paragraph Before we pass upon the issue of whether answer to the problem of whether at a
to cases where the employer was engaged ABAD was performing acts within the range given moment, an employee is engaged in
in a business or industry such as truck of his employment, we shall first take up his employer's business in the operation of
operators6 and banks.7 The Court of the other reason invoked by the Court of a motor vehicle, so as to fix liability upon
Appeals cannot, therefore, be faulted in Appeals in holding petitioner CASTILEX the employer because of the employee's
applying the said paragraph of Article 2180 vicariously liable for ABAD's action or inaction; but rather, the result
of the Civil Code to this case. negligence, i.e., that the petitioner did not varies with each state of facts. 11
Under the fifth paragraph of Article 2180, present evidence that ABAD was not acting In Filamer Christian Institute
whether or not engaged in any business or within the scope of his assigned tasks at v. Intermediate Appellant Court, 12 this
industry, an employer is liable for the torts the time of the motor vehicle mishap. Court had the occasion to hold that acts
committed by employees within the scope Contrary to the ruling of the Court of done within the scope of the employee's
of his assigned tasks. But it is necessary to Appeals, it was not incumbent upon the assigned tasks includes "any act done by
establish the employer-employee petitioner to prove the same. It was an employee in furtherance of the interests
relationship; once this is done, the plaintiff enough for petitioner CASTILEX to deny of the employer or for the account of the
must show, to hold the employer liable, that ABAD was acting within the scope of employer at the time of the infliction of the
that the employee was acting within the his duties; petitioner was not under injury or damages."
scope of his assigned task when the tort obligation to prove this negative The court a quo and the Court of Appeals
complained of was committed. It is only averment. Ei incumbit probatio qui dicit, were one in holding that the driving by a
then that the employer may find it non qui negat (He who asserts, not he who manager of a company-issued vehicle is
necessary to interpose the defense of due denies, must prove). The Court has within the scope of his assigned tasks
diligence in the selection and supervision of consistently applied the ancient rule that if regardless of the time and circumstances.
the employee.8 the plaintiff, upon whom rests the burden
We do not agree. The mere fact that ABAD at the place where he is needed, the purposes and there is some incidental
was using a service vehicle at the time of employee is not acting within the scope of benefit to the employer. Even where the
the injurious incident is not of itself his employment even though he uses his employee's personal purpose in using the
sufficient to charge petitioner with liability employer's motor vehicle. 14 vehicle has been accomplished and he has
for the negligent operation of said vehicle The employer may, however, be liable started the return trip to his house where
unless it appears that he was operating the where he derives some special benefit from the vehicle is normally kept, it has been
vehicle within the course or scope of his having the employee drive home in the held that he has not resumed his
employment. employer's vehicle as when the employer employment, and the employer is not liable
The following are principles in American benefits from having the employee at work for the employee's negligent operation of
Jurisprudence on the employer's liability for earlier and, presumably, spending more the vehicle during the return trip. 15
the injuries inflicted by the negligence of an time at his actual duties. Where the The foregoing principles and jurisprudence
employee in the use of an employer's employee's duties require him to circulate are applicable in our jurisdiction albeit
motor vehicle: in a general area with no fixed place or based on the doctrine of respondent
I. Operation of Employer's Motor Vehicle in hours of work, or to go to and from his superior, not on the principle of bonus
Going to home to various outside places of work, pater familias as in ours. Whether the fault
or from Meals and his employer furnishes him with a or negligence of the employee is conclusive
It has been held that an employee who vehicle to use in his work, the courts have on his employer as in American law or
uses his employer's vehicle in going from frequently applied what has been called the jurisprudence, or merely gives rise to the
his work to a place where he intends to eat "special errand" or "roving commission" presumption juris tantum of negligence on
or in returning to work from a meal is not rule, under which it can be found that the the part of the employer as in ours, it is
ordinarily acting within the scope of his employee continues in the service of his indispensable that the employee was acting
employment in the absence of evidence of employer until he actually reaches home. in his employer's business or within the
some special business benefit to the However, even if the employee be deemed scope of his assigned task. 16
employer. Evidence that by using the to be acting within the scope of his In the case at bar, it is undisputed that
employer's vehicle to go to and from meals, employment in going to or from work in his ABAD did some overtime work at the
an employee is enabled to reduce his time- employer's vehicle, the employer is not petitioner's office, which was located in
off and so devote more time to the liable for his negligence where at the time Cabangcalan, Mandaue City. Thereafter, he
performance of his duties supports the of the accident, the employee has left the went to Goldie's Restaurant in Fuente
finding that an employee is acting within direct route to his work or back home and Osmeña, Cebu City, which is about seven
the scope of his employment while so is pursuing a personal errand of his own. kilometers away from petitioner's place of
driving the vehicle. 13 III. Use of Employer's Vehicle Outside business. 17 A witness for the private
II. Operation of Employer's Vehicle in Going Regular Working Hours respondents, a sidewalk vendor, testified
to An employer who loans his motor vehicle to that Fuente Osmeña is a "lively place" even
or from Work an employee for the latter's personal use at dawn because Goldie's Restaurant and
In the same vein, traveling to and from the outside of regular working hours is Back Street were still open and people were
place of work is ordinarily a personal generally not liable for the employee's drinking thereat. Moreover, prostitutes,
problem or concern of the employee, and negligent operation of the vehicle during pimps, and drug addicts littered the
not a part of his services to his employer. the period of permissive use, even where place. 18
Hence, in the absence of some special the employer contemplates that a regularly At the Goldie's Restaurant, ABAD took
benefit to the employer other than the assigned motor vehicle will be used by the some snacks and had a chat with friends.
mere performance of the services available employee for personal as well as business It was when ABAD was leaving the
restaurant that the incident in question liability for the damages caused by its
occurred. That same witness for the private employee, Jose Benjamin Abad.
respondents testified that at the time of the SO ORDERED.
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
G.R. No. 75112 August 17, 1992 2180 an injured party shall have recourse Allan Masa turned over the vehicle to
FILAMER CHRISTIAN against the servant as well as the petitioner Funtecha only after driving down a road,
INSTITUTE, petitioner, for whom, at the time of the incident, the negotiating a sharp dangerous curb, and
vs. servant was performing an act in viewing that the road was clear. (TSN, April
HON. INTERMEDIATE APPELLATE furtherance of the interest and for the 4, 1983, pp. 78-79) According to Allan's
COURT, HON. ENRIQUE P. SUPLICO, in benefit of the petitioner. Funtecha allegedly testimony, a fast moving truck with glaring
his capacity as Judge of the Regional did not steal the school jeep nor use it for lights nearly hit them so that they had to
Trial Court, Branch XIV, Roxas City and a joy ride without the knowledge of the swerve to the right to avoid a collision.
POTENCIANO KAPUNAN, school authorities. Upon swerving, they heard a sound as if
SR., respondents. After a re-examination of the laws relevant something had bumped against the
Bedona & Bedona Law Office for petitioner. to the facts found by the trial court and the vehicle, but they did not stop to check.
Rhodora G. Kapunan for private appellate court, the Court reconsiders its Actually, the Pinoy jeep swerved towards
respondents. decision. We reinstate the Court of Appeals' the pedestrian, Potenciano Kapunan who
decision penned by the late Justice was walking in his lane in the direction
GUTIERREZ, JR., J.: Desiderio Jurado and concurred in by against vehicular traffic, and hit him. Allan
The private respondents, heirs of the late Justices Jose C. Campos, Jr. and Serafin E. affirmed that Funtecha followed his advise
Potenciano Kapunan, seek reconsideration Camilon. Applying Civil Code provisions, to swerve to the right. (Ibid., p. 79) At the
of the decision rendered by this Court on the appellate court affirmed the trial court time of the incident (6:30 P.M.) in Roxas
October 16, 1990 (Filamer Christian decision which ordered the payment of the City, the jeep had only one functioning
Institute v. Court of Appeals, 190 SCRA P20,000.00 liability in the Zenith Insurance headlight.
477) reviewing the appellate court's Corporation policy, P10,000.00 moral Allan testified that he was the driver and at
conclusion that there exists an employer- damages, P4,000.00 litigation and actual the same time a security guard of the
employee relationship between the expenses, and P3,000.00 attorney's fees. petitioner-school. He further said that
petitioner and its co-defendant Funtecha. It is undisputed that Funtecha was a there was no specific time for him to be off-
The Court ruled that the petitioner is not working student, being a part-time janitor duty and that after driving the students
liable for the injuries caused by Funtecha and a scholar of petitioner Filamer. He was, home at 5:00 in the afternoon, he still had
on the grounds that the latter was not an in relation to the school, an employee even to go back to school and then drive home
authorized driver for whose acts the if he was assigned to clean the school using the same vehicle.
petitioner shall be directly and primarily premises for only two (2) hours in the Driving the vehicle to and from the house
answerable, and that Funtecha was merely morning of each school day. of the school president where both Allan
a working scholar who, under Section 14, Having a student driver's license, Funtecha and Funtecha reside is an act in furtherance
Rule X, Book III of the Rules and requested the driver, Allan Masa, and was of the interest of the petitioner-school.
Regulations Implementing the Labor Code allowed, to take over the vehicle while the Allan's job demands that he drive home the
is not considered an employee of the latter was on his way home one late school jeep so he can use it to fetch
petitioner. afternoon. It is significant to note that the students in the morning of the next school
The private respondents assert that the place where Allan lives is also the house of day.
circumstances obtaining in the present his father, the school president, Agustin It is indubitable under the circumstances
case call for the application of Article 2180 Masa. Moreover, it is also the house where that the school president had knowledge
of the Civil Code since Funtecha is no doubt Funtecha was allowed free board while he that the jeep was routinely driven home for
an employee of the petitioner. The private was a student of Filamer Christian the said purpose. Moreover, it is not
respondents maintain that under Article Institute. improbable that the school president also
had knowledge of Funtecha's possession of 1437 [1926]; Jameson v. Gavett, 71 P 2d An implementing rule on labor cannot be
a student driver's license and his desire to 937 [1937]) used by an employer as a shield to avoid
undergo driving lessons during the time Section 14, Rule X, Book III of the Rules liability under the substantive provisions of
that he was not in his classrooms. implementing the Labor Code, on which the the Civil Code.
In learning how to drive while taking the petitioner anchors its defense, was There is evidence to show that there exists
vehicle home in the direction of Allan's promulgated by the Secretary of Labor and in the present case an extra-contractual
house, Funtecha definitely was not having Employment only for the purpose of obligation arising from the negligence or
a joy ride. Funtecha was not driving for the administering and enforcing the provisions reckless imprudence of a person "whose
purpose of his enjoyment or for a "frolic of of the Labor Code on conditions of acts or omissions are imputable, by a legal
his own" but ultimately, for the service for employment. Particularly, Rule X of Book fiction, to other(s) who are in a position to
which the jeep was intended by the III provides guidelines on the manner by exercise an absolute or limited control over
petitioner school. (See L. Battistoni v. which the powers of the Labor Secretary (him)." (Bahia v. Litonjua and Leynes, 30
Thomas, Can SC 144, 1 D.L.R. 577, 80 ALR shall be exercised; on what records should Phil. 624 [1915])
722 [1932]; See also Association of be kept; maintained and preserved; on Funtecha is an employee of petitioner
Baptists for World Evangelism, Inc. v. payroll; and on the exclusion of working Filamer. He need not have an official
Fieldmen's Insurance Co., Inc. 124 SCRA scholars from, and inclusion of resident appointment for a driver's position in order
618 [1983]). Therefore, the Court is physicians in the employment coverage as that the petitioner may be held responsible
constrained to conclude that the act of far as compliance with the substantive for his grossly negligent act, it being
Funtecha in taking over the steering wheel labor provisions on working conditions, rest sufficient that the act of driving at the time
was one done for and in behalf of his periods, and wages, is concerned. of the incident was for the benefit of the
employer for which act the petitioner- In other words, Rule X is merely a guide to petitioner. Hence, the fact that Funtecha
school cannot deny any responsibility by the enforcement of the substantive law on was not the school driver or was not acting
arguing that it was done beyond the scope labor. The Court, thus, makes the within the scope of his janitorial duties does
of his janitorial duties. The clause "within distinction and so holds that Section 14, not relieve the petitioner of the burden of
the scope of their assigned tasks" for Rule X, Book III of the Rules is not the rebutting the presumption juris
purposes of raising the presumption of decisive law in a civil suit for damages tantum that there was negligence on its
liability of an employer, includes any act instituted by an injured person during a part either in the selection of a servant or
done by an employee, in furtherance of the vehicular accident against a working employee, or in the supervision over him.
interests of the employer or for the account student of a school and against the school The petitioner has failed to show proof of
of the employer at the time of the infliction itself. its having exercised the required diligence
of the injury or damage. (Manuel Casada, The present case does not deal with a labor of a good father of a family over its
190 Va 906, 59 SE 2d 47 [1950]) Even if dispute on conditions of employment employees Funtecha and Allan.
somehow, the employee driving the vehicle between an alleged employee and an The Court reiterates that supervision
derived some benefit from the act, the alleged employer. It invokes a claim includes the formulation of suitable rules
existence of a presumptive liability of the brought by one for damages for injury and regulations for the guidance of its
employer is determined by answering the caused by the patently negligent acts of a employees and the issuance of proper
question of whether or not the servant was person, against both doer-employee and instructions intended for the protection of
at the time of the accident performing any his employer. Hence, the reliance on the the public and persons with whom the
act in furtherance of his master's business. implementing rule on labor to disregard the employer has relations through his
(Kohlman v. Hyland, 210 NW 643, 50 ALR primary liability of an employer under employees. (Bahia v. Litonjua and
Article 2180 of the Civil Code is misplaced. Leynes, supra, at p. 628; Phoenix
Construction, v. Intermediate Appellate It is an admitted fact that the actual driver
Court, 148 SCRA 353 [1987]) of the school jeep, Allan Masa, was not
An employer is expected to impose upon its made a party defendant in the civil case for
employees the necessary discipline called damages. This is quite understandable
for in the performance of any act considering that as far as the injured
indispensable to the business and pedestrian, plaintiff Potenciano Kapunan,
beneficial to their employer. was concerned, it was Funtecha who was
In the present case, the petitioner has not the one driving the vehicle and presumably
shown that it has set forth such rules and was one authorized by the school to drive.
guidelines as would prohibit any one of its The plaintiff and his heirs should not now
employees from taking control over its be left to suffer without simultaneous
vehicles if one is not the official driver or recourse against the petitioner for the
prohibiting the driver and son of the consequent injury caused by a janitor doing
Filamer president from authorizing another a driving chore for the petitioner even for a
employee to drive the school vehicle. short while. For the purpose of recovering
Furthermore, the petitioner has failed to damages under the prevailing
prove that it had imposed sanctions or circumstances, it is enough that the
warned its employees against the use of its plaintiff and the private respondent heirs
vehicles by persons other than the driver. were able to establish the existence of
The petitioner, thus, has an obligation to employer-employee relationship between
pay damages for injury arising from the Funtecha and petitioner Filamer and the
unskilled manner by which Funtecha drove fact that Funtecha was engaged in an act
the vehicle. (Cangco v. Manila Railroad Co., not for an independent purpose of his own
38 Phil. 768, 772 [1918]). In the absence but in furtherance of the business of his
of evidence that the petitioner had employer. A position of responsibility on
exercised the diligence of a good father of the part of the petitioner has thus been
a family in the supervision of its satisfactorily demonstrated.
employees, the law imposes upon it the WHEREFORE, the motion for
vicarious liability for acts or omissions of its reconsideration of the decision dated
employees. (Umali v. Bacani, 69 SCRA 263 October 16, 1990 is hereby GRANTED. The
[1976]; Poblete v. Fabros, 93 SCRA 200 decision of the respondent appellate court
[1979]; Kapalaran Bus Liner v. Coronado, affirming the trial court decision is
176 SCRA 792 [1989]; Franco v. REINSTATED.
Intermediate Appellate Court, 178 SCRA SO ORDERED.
331 [1989]; Pantranco North Express, Inc.
v. Baesa, 179 SCRA 384 [1989]) The
liability of the employer is, under Article
2180, primary and solidary. However, the
employer shall have recourse against the
negligent employee for whatever damages
are paid to the heirs of the plaintiff.
G.R. No. 197626, October 03, 2018 tricycle with plate number DU 8833 was income as pharmacist, P200,000.00 as
RAUL S. IMPERIAL, Petitioner, v. HEIRS driven by Gerardo Mercado (Mercado).4 moral damages, and P20,000.00 as
OF NEIL BAYABAN, AND MARY LOU On board the tricycle were the Bayaban attorney's fees.11
BAYABAN, Respondents. Spouses, who sustained injuries.5 They In his Answer,12 Imperial denied liability,
DECISION were brought to Unciano Hospital where contending that the van was under the
LEONEN, J.: the attending physician found that Neil custody of one Rosalia Habon Pascua
The burden of proving that a negligent act suffered the following: (Pascua). According to Imperial, he lent the
of an employee was performed within the Fracture Open Type III-B, Complete van to Pascua who needed it in fixing the
scope of his or her assigned tasks rests Comminuted, Displaced, middle Third greenhouse and water line pipes in
with the plaintiff. When the plaintiff has Tibia, Fracture Closed, Complete Imperial's garden somewhere in
discharged this burden, as in this case, the comminuted displaced, Middle Third Antipolo.13 Imperial admitted that he had
presumption that the employer was Femur, right Fracture, closed complete employed Laraga as family driver14 but
negligent arises, and the employer must disp. Lateral Tibial plateau knee joint left.6 contended that he had exercised due
put forward evidence showing that he or As for Mary Lou, she was found to have diligence in the selection and supervision of
she had exercised the due diligence of a suffered the following: Laraga.15 He even allegedly sponsored
good father of a family in the selection and Fracture closed, complete, comminuted, Laraga's formal driving lessons.
supervision of the employee. Failing to Displaced distal radius left (Frykmann Furthermore, Laraga was allegedly acting
dispute this presumption renders the VIII), Dislocation, ulnocarpal/ulnoradial jt. outside the scope of his duties when the
employer solidarily liable with the left, Fracture, closed, complete, accident happened considering that it was
employee for the quasi-delict. transverse, displaced, middle-distal a Sunday, his rest day.16
This resolves a Petition for Review on 3rd Humerus right.7 Before the case proceeded to trial, Neil died
Certiorari1 filed by Raul S. Imperial For the injuries they sustained, the on May 23, 2006.17 He was substituted by
(Imperial) assailing the Court of Appeals Bayaban Spouses had to undergo therapy his heirs, namely, Mary Lou and their
March 18, 2011 Decision2 and July 11, and post-medical treatment.8 children, Donna Grace and Dan Geofrey
2011 Resolution3 in CA-G.R. CV No. 93498. The Bayaban Spouses demanded (the Heirs of Neil Bayaban).18
The Court of Appeals found Imperial compensation from Imperial, Laraga, and In its March 15, 2009 Decision,19 the
solidarity liable with his employee and Mercado for the hospital bills and loss of Regional Trial Court ruled in favor of the
driver, William Laraga (Laraga), for the income that they sustained while Bayaban Spouses. It found Laraga
damages suffered by spouses Neil Bayaban undergoing therapy and post-medical negligent and the proximate cause of the
(Neil) and Mary Lou Bayaban (Mary Lou) treatment.9 When neither Imperial, accident, i.e., overtaking another vehicle
(collectively, the Bayaban Spouses) as a Laraga, nor Mercado heeded their demand, and, in the process, colliding with the
result of Laraga's negligent operation of the the Bayaban Spouses filed a tricycle that carried the Bayaban Spouses
van owned by Imperial. Complaint10 for damages before the on the other side of the road.20 As for
On December 14, 2003, at about 3:00 Regional Trial Court of Antipolo City, Imperial, it ruled that he failed to prove
p.m., two (2) vehicles, a van and a tricycle, impleading Imperial, Laraga, and Mercado that he had exercised due diligence in the
figured in an accident along Sumulong as defendants. In their Complaint, they selection and supervision of Laraga, his
Highway, Antipolo City. The Mitsubishi L- prayed for P311,760.75 as actual employee; thus, he was presumed
300 van with plate number USX 931 was damages, US$1,900.00 per month negligent and was likewise held liable for
owned and registered under Imperial's representing Neil's unearned income as a damages to the Bayaban Spouses.21
name, and was driven by Laraga. The second-mate seaman, P7,600.00 per The Regional Trial Court held that the
month representing Mary Lou's unearned official receipts presented in evidence
substantiated the Bayaban Spouses' claim persons."27 He could not escape liability by this Court. Mary Lou and the Heirs of Neil
for reimbursement of medical and hospital arguing that it was Laraga's day off when Bayaban filed a Comment36 to which
expenses.22 However, it found the the accident happened or that the van was Imperial replied.37 Upon the directive38 of
certificates of employment inadequate to in the custody of Pascua because neither this Court, the parties filed their respective
prove the amount of their unearned Laraga nor Pascua was presented in court Memoranda.39
income.23 Nevertheless, Mary Lou, for her to confirm his assertions.28 Citing Castilex Industrial Corporation v.
own behalf, and the Heirs of Neil Bayaban The Court of Appeals likewise found that Vasquez, Jr.,40 petitioner maintains that he
were awarded P100,000.00 as temperate Imperial failed to prove that he had is not liable because respondents failed to
damages. Moral damages and exemplary exercised due diligence in the selection and discharge their burden of proving that
damages of P50,000.00 each and supervision of Laraga. Apart from his bare Laraga was acting within the scope of his
attorney's fees of P25,000.00 plus costs of allegation that he had financed the formal assigned tasks at the time of the
suit were awarded to them as well.24 driving lessons of Laraga, he failed to accident.41 Furthermore, the official
The dispositive portion of the Regional Trial present documentary evidence that he did receipts of the medical and hospital bills,
Court March 15, 2009 Decision read: so. He could not even remember the name though original, were allegedly not
WHEREFORE, premises considered, of the driving school where Laraga had authenticated as required under Rule 132,
judgment is hereby rendered in favor of allegedly enrolled.29 Section 2042 of the Rules of Court.
Plaintiffs and against Defendants Raul However, the Court of Appeals deleted the Therefore, these receipts are not
Imperial and William Laraga, ordering the award of temperate damages because the competent evidence of the actual damages
said Defendants to pay, jointly and claim was allegedly not substantiated. It sustained by Neil and respondent Mary
severally, the following: added that temperate and actual damages Lou.43
1. Actual damages in the amount of were mutually exclusive and could not be Respondents point out Imperial's
Php462,868.83 for medical awarded at the same time.30 admission that Laraga was his employee,
expenses and Php100,000.00 for The dispositive portion of the Court of specifically, his family's stay-in driver.
lost earnings during medical Appeals March 18, 2011 Decision31 read: Thus, even though the accident happened
treatment; WHEREFORE, premises considered, the on a Sunday, they contend that "it [was]
2. Moral damages in the amount [of] instant appeal is DENIED. The assailed not far-fetched to conclude that ... Laraga
P50,000.00; Decision dated 15 March 2009 of the had always been utilized as a driver by the
3. Exemplary damages in the amount Regional Trial Court of Antipolo, Branch 73 petitioner and his family during
of P50,000.00; in Civil Case No. 04-7131 is Sundays,"44 as this is allegedly the
4. Attorney's fees, inclusive of hereby AFFIRMED with "common practice under Philippine set
appearance fees, in the amount of MODIFICATION, deleting the award of up."45 They maintain that Laraga was
Php25,000.00, plus cost of suit. temperate damages in the amount of acting within the scope of his assigned
SO ORDERED.25 P100,000.00 for lost earnings during tasks when the accident happened.46
Imperial appealed this Decision to the medical treatment. Additionally, respondents contend that
Court of Appeals.26 Nevertheless, the Court SO ORDERED.32 (Emphasis in the original) petitioner failed to prove that he exercised
of Appeals maintained his liability, ruling Imperial filed a Motion for due diligence in the selection and
that "the registered owner of a motor Reconsideration,33 which the Court of supervision of Laraga by failing to present
vehicle is primarily and directly responsible Appeals denied in its July 11, 2011 the original receipts showing that he had
for the consequences of its operation, Resolution.34 enrolled Laraga to a formal driving school.
including the negligence of the driver, with On August 23, 2011, Imperial filed a The contention that Imperial shouldered
respect to the public and all third Petition for Review on Certiorari35 before Laraga's expenses in obtaining a driver's
license is hardly the due diligence of a good those of persons for whom one is an obligation is imposed is morally culpable
father of a family required to absolve him responsible. or, on the contrary, for reasons of public
from liability as Laraga's employer.47 .... policy, to extend that liability, without
Lastly, respondents argue that original Employers shall be liable for the damages regard to the lack of moral culpability, so
receipts of medical and hospital bills are caused by their employees and household as to include responsibility for the
sufficient proof of the actual damages they helpers acting within the scope of their negligence of those persons whose acts or
have sustained; hence, they need not be assigned tasks, even though the former are omissions are imputable, by a legal fiction,
authenticated to be competent proof of not engaged in any business or industry. to others who are in a position to exercise
their claims.48 .... an absolute or limited control over them.
Based on the pleadings submitted, the The responsibility treated of in this article The legislature which adopted our Civil
Issues for this Court's resolution are the shall cease when the persons herein Code has elected to limit extra contractual
following: mentioned prove that they observed all the liability—with certain well-defined
First, whether or not the Court of Appeals diligence of a good father of a family to exceptions—to cases in which moral
shifted the burden on petitioner Raul S. prevent damage. culpability can be directly imputed to the
Imperial to prove that his employee, Articles 2176 and 2180 of the Civil Code persons to be charged. This moral
William Laraga, was not acting within the were derived from Articles 190249 and responsibility may consist in having failed
scope of his assigned tasks; and 190350 of the Spanish Civil Code of 1889. to exercise due care in one's own acts, or
Second, whether or not the original Article 2176 defines "quasi-delict" as the in having failed to exercise due care in the
receipts of the medical and hospital bills fault or negligence that causes damage to selection and control of one's agents or
presented by respondents Neil Bayaban another, there being no pre-existing servants, or in the control of persons who,
and Mary Lou Bayaban are not competent contractual relations between the parties. by reason of their status, occupy a position
evidence of the actual damages that they On the other hand, Article 2180 of dependency with respect to the person
have sustained considering that the enumerates persons who are vicariously made liable for their conduct.52
receipts were not authenticated. liable for the fault or negligence of persons Specifically for employers, they are
This Petition must be denied. over whom they exercise control, whether deemed liable or morally responsible53 for
I absolute or limited. the fault or negligence of their employees
Articles 2176 and 2180 of the Civil Code This Court explained the legal fiction of but only if the employees are acting within
provide: vicarious liability in Cangco v. Manila the scope of their assigned tasks. An act is
Article 2176. Whoever by act or omission Railroad Co.51 Though involving Articles deemed an assigned task if it is "done by
causes damage to another, there being 1902 and 1903 of the Spanish Civil Code of an employee, in furtherance of the
fault or negligence, is obliged to pay for the 1889, Cangco's explanation of the law's interests of the employer or for the account
damage done. Such fault or negligence, if rationale remains relevant considering that of the employer at the time of the infliction
there is no pre-existing contractual relation Articles 1902 and 1903, and the present of the injury or damage."54
between the parties, is called a quasi-delict Articles 2176 and 2180 are similarly Filamer Christian Institute v. Court of
and is governed by the provisions of this worded. In Cangco: Appeals55 explained when an act is within
Chapter. With respect to extra-contractual the scope of an employee's assigned tasks
.... obligation arising from negligence, whether so as to hold an employer liable under
Article 2180. The obligation imposed by of act or omission, it is competent for the Article 2180. In Filamer, Daniel Funtecha
Article 2176 is demandable not only for legislature to elect—and our Legislature (Funtecha) was a working scholar of
one's own acts or omissions, but also for has so elected—to limit such liability to Filamer Christian Institute (Filamer) and
cases in which the person upon whom such had the duty of sweeping the school
passages for two (2) hours every morning from duty when Funtecha, who was with that the act was within the scope of the
before his classes in exchange for free him, requested to drive the jeep. employee's assigned tasks. On this issue,
tuition. On October 20, 1977, at about 6:30 Negotiating a dangerous curve and blinded this Court said that the burden of proving
p.m., Funtecha was driving the Pinoy jeep by the glaring lights of a fast moving truck, the existence of an employer-employee
owned by Filamer along Roxas Avenue in Funtecha swerved to the right and relationship and that the employee was
Roxas City when the jeep struck Potenciano accidentally hit Kapunan.62 Under these acting within the scope of his or her
Kapunan, Sr. (Kapunan), a pedestrian. circumstances, this Court said that assigned tasks rests with the plaintiff under
Kapunan sustained injuries and was Funtecha "was not having a joy ride [and] the Latin maxim "ei incumbit probatio qui
hospitalized for 20 days.56 not driving for the purpose of his dicit, non qui negat" or "he who asserts,
Kapunan first filed a criminal case for enjoyment or for a 'frolic of his own' but not he who denies, must
reckless imprudence resulting in serious ultimately, for the service for which the prove."69 Therefore, it is not incumbent on
physical injuries against Funtecha, jeep was intended by the ... school."63 the employer to prove that the employee
reserving the right to file an independent An employee's act was deemed outside his was not acting within the scope of his
civil action for damages. Funtecha was assigned tasks and his employer was assigned tasks.70 Once the plaintiff
found guilty as charged and was sentenced absolved in Castilex Industrial Corporation establishes the requisite facts, the
accordingly. As for the civil action for v. Vasquez, Jr.64 In Castilex, a managerial presumption that the employer was
damages, Kapunan sued Funtecha, employee of Castilex Industrial Corporation negligent in the selection and supervision
Filamer, and the school director and (Castilex) was driving a company-issued of the employee arises, disputable with
president, Agustin Masa (Agustin).57 pick up which collided with the motorcycle evidence that the employer has observed
The Regional Trial Court58 and the Court of driven by Romeo So Vasquez, who later all the diligence of a good father of a family
Appeals59 both found Funtecha and Filamer died as a result of the accident. His parents to prevent damage.71 Though vicarious,
liable. On appeal, this Court reversed the sued the managerial employee and Castilex the liability of employers under Article 2180
lower courts and absolved Filamer for for damages.65 The trial court66 and the is personal and direct.72
finding no employer-employee relationship Court of Appeals67 held Castilex solidarily Applying the foregoing, this Court finds
between them. According to this Court, liable with the managerial employee, but that respondents have discharged the
driving the school's Pinoy jeep was outside on appeal, this Court reversed and burden of proof necessary to hold Imperial
the scope of Funtecha's employment as absolved Castilex. This Court found that vicariously liable under Article 2180 of the
sweeper within the school grounds.60 the managerial employee was not acting Civil Code.
On reconsideration,61 however, this Court within the scope of his assigned tasks when There is no question here that Laraga was
reversed itself and found Filamer solidarily the accident happened. It was 2:00 a.m., petitioner's driver, hence, his employee, as
liable with Funtecha. It found that Funtecha way beyond office hours, and the this fact was admitted by petitioner. This
resided with the family of the school managerial employee had just got out of a Court likewise finds that respondents have
president, Agustin, whose son, Allan Masa restaurant dubbed as a "haven for established that Laraga was acting within
(Allan), was the school guard and driver of prostitutes, pimps, and drug pushers and the scope of his assigned tasks at the time
the Pinoy jeep that served as school addicts."68 In other words, the activity that of the accident. It was 3:00 p.m.73 and
service. After driving the students home, the managerial employee was doing when Laraga was driving in Antipolo City, where,
Allan's duty included going back to the the accident happened was not for the as alleged by petitioner, his greenhouse
school for his shift then driving home the account of Castilex or in furtherance of the and garden were located.74 It is worth
school jeep so he could use it to fetch the employee's assigned tasks. noting that according to petitioner, he
students the next morning. On the day of One of the issues in Castilex was loaned the van to Pascua for the
the accident, Allan was on his way home determining who had the burden of proving maintenance of his greenhouse and the
repair of the water line pipes in his garden. damages incurred by the Bayaban Spouses authority, official bodies and tribunals, and
The logical conclusion is that Laraga was when the tricycle they were riding collided public officers, whether of the Philippines,
driving the van in connection with the with the van driven by petitioner's or of a foreign country; documents
upkeep of petitioner's Antipolo greenhouse employee, Laraga. It must be noted that acknowledged before a notary public
and garden. Laraga was driving the van in the accident happened because Laraga except last wills and testaments; and public
furtherance of the interests of petitioner at tried to overtake another vehicle and, in records, kept in the Philippines, of private
the time of 1 the accident. doing so, drove to the opposite lane when documents required by law to be entered
The defense that Sunday was supposedly the van collided with the approaching there. When public documents are
Laraga's day off fails to convince. There is tricycle. Laraga was negligent in operating presented in evidence, they are prima
no proof whatsoever of the truthfulness of the van. Pleyto v. Lomboy,76 cited in the facie evidence of the facts stated there,
this allegation, with Laraga not having Regional Trial Court March 15, 2009 and thus, need not be authenticated.78
appeared in court to testify on this Decision, is on point: As for private documents, i.e., those not
matter.75 A driver abandoning his proper lane for the enumerated in Rule 132, Section 19, they
With respondents having discharged their purpose of overtaking another vehicle in an must be authenticated, or their due
burden of proof, the disputable ordinary situation has the duty to see to it execution and authenticity proven, per
presumption that petitioner Imperial was that the road is clear and not to proceed if Rule 132, Section 20 of the Rules of Court,
negligent in the selection and supervision he cannot do so in safety. When a motor thus:
of Laraga arises. Contrary to petitioner's vehicle is approaching or rounding a curve, Section 20. Proof of private document. —
claim, there was no shifting of burden on there is special necessity for keeping to the Before any private document offered as
him to prove that Laraga was acting right side of the road and the driver does authentic is received in evidence, its due
outside of his assigned tasks. Rather, not have the right to drive on the left hand execution and authenticity must be proved
petitioner had to put forward evidence that side relying upon having time to turn to the either:
he had exercised due diligence in the right if a car approaching from the opposite (a) By anyone who saw the document
selection and supervision of Laraga as his direction comes into view.77 (Citation executed or written; or
driver to be relieved of liability. omitted) (b) By evidence of the genuineness of the
Unfortunately for petitioner, he miserably II signature or handwriting of the maker.
failed to dispute the presumption of Petitioner nevertheless claims that the Any other private document need only be
negligence in his selection and supervision official receipts of the medical and hospital identified as that which it is claimed to be.
of Laraga. As the Regional Trial Court and bills are not competent evidence of the Official receipts of hospital and medical
the Court of Appeals found, he only gave actual damages allegedly sustained by the expenses are not among those enumerated
self-serving testimonies without the Bayaban Spouses for not having been in Rule 132, Section 19. These official
requisite documentary proof that he had authenticated. He, therefore, cannot be receipts, therefore, are private documents
enrolled Laraga in a formal driving school. held liable for unsubstantiated claims for which may be authenticated either by
At best, he only established that he had actual damages. presenting as witness anyone who saw the
financed the fees needed for Laraga to Petitioner's argument lacks merit. document executed or written, or by
obtain his driver's license, which is hardly Under the rules of evidence, documents are presenting an evidence of the genuineness
the due diligence contemplated in Article either public or private. Public documents of the signature or handwriting of the
2180 of the Civil Code. are those exclusively enumerated in Rule maker.
Considering that petitioner failed to dispute 132, Section 19 of the Rules of Court. In insisting that respondents should have
the presumption of negligence on his part, These include written official acts, or presented as witnesses the persons who
he was correctly deemed liable for the records of the official acts of the sovereign signed the official receipts, petitioner
ignores the first manner of authenticating incapacitated to work. Under the moral damages; P50,000.00 as exemplary
private documents. Respondent Mary Lou circumstances, the P100,000.00 awarded damages; and P25,000.00 as attorney's
testified as to the circumstances of the by the Regional Trial Court is reasonable to fees, inclusive of appearance fees plus cost
accident and the expenses she and Neil had compensate them for the income that the of suit. The total amount shall earn legal
incurred as a result of it.79 The official Bayaban Spouses could have earned as a interest at the rate of six percent (6%) per
receipts were issued to her and Neil upon second-mate seaman and a pharmacist, annum from the finality of this Decision
payment of the expenses. Since the official respectively. As opposed to the Court of until full payment.85
receipts were issued to respondent Mary Appeals' ruling, temperate damages may SO ORDERED.
Lou, her testimony, therefore, is a still be awarded to respondents despite
competent evidence of the execution of the previous award of actual damages because
official receipts. the damages cover distinct pecuniary
With respondent Mary Lou testifying as to losses.83 The temperate damages awarded
the execution and issuance of the official cover the loss of earning capacity while the
receipts, they were duly authenticated, actual damages cover the medical and
contrary to petitioner's claim. There being hospital expenses.84
no question that the official receipts were In sum, respondents have proven by
all in the original, they were the best preponderance of evidence that Laraga,
evidence of their contents,80 specifically, of petitioner's employee, was acting within
the actual damages incurred by the the scope of his assigned tasks at the time
Bayaban Spouses. The Regional Trial Court of the accident. The presumption of
correctly admitted the receipts in evidence. negligence on the part of petitioner in his
III selection and supervision of Laraga as an
Furthermore, apart from the actual employee arose, a presumption that he has
damages for the hospital and medical miserably failed to dispute. Consequently,
expenses that respondents have incurred, petitioner is solidarily liable with Laraga for
this Court finds that respondents are the damages sustained by the Bayaban
entitled to temperate damages for loss of Spouses.
earning capacity. WHEREFORE, the Petition for Review on
Temperate or moderate damages, which Certiorari is DENIED. The Court of Appeals
are more than nominal but less than actual March 18, 2011 Decision in CA-G.R. CV No.
or compensatory damages, may be 93498 is AFFIRMED with
recovered when the court finds that some the MODIFICATION that the award of
pecuniary loss has been suffered, but its temperate damages to respondents Mary
amount cannot, from the nature of the Lou Bayaban and the Heirs of Neil Bayaban
case, be proved with is REINSTATED. Consequently, Raul S.
certainty.81 Temperate damages must be Imperial is ordered to pay Mary Lou
reasonable under the circumstances.82 Bayaban and the Heirs of Neil Bayaban the
While respondents failed to put forward following: P462,868.83 as actual damages
definite proof of income lost during representing medical expenses;
confinement and post-therapy, they still P100,000.00 as temperate damages for
suffered pecuniary loss when they were loss of earning capacity; P50,000.00 as
G.R. No. 205090, October 17, 2016 holiday,7 petitioner's bus, which was then SPO3 Ernesto Marfori, Fruto Sayson and
GREENSTAR EXPRESS, INC. AND being driven toward the direction of Manila Lilia Morales.
FRUTO L. SAYSON, by Sayson, collided head-on with the URC
JR., Petitioners, v. UNIVERSAL ROBINA van, which was then being driven Quezon x x x x
CORPORATION AND NISSIN province-bound by NURC's Operations
UNIVERSAL ROBINA Manager, Renante Bicomong (Bicomong). Plaintiff Fruto Sayson testified that on that
CORPORATION, Respondent. The incident occurred along Km. 76, fateful day, he was driving the plaintiff
DECISION Maharlika Highway, Brgy. San Agustin, passenger bus from Lucena City going to
DEL CASTILLO, J.: Alaminos, Laguna. Bicomong died on the Manila at a speed of more or less 60
This Petition for Review spot, while the colliding vehicles sustained kilometers per hour when he met a
on Certiorari1 seeks to set aside; a) the considerable damage. vehicular accident at Barangay San
September 26, 2012 Decision2 of the Court Agustin, Alaminos, Laguna. He saw from
of Appeals (CA) in CA-G.R. CV No, 96961 On September 23, 2003, petitioners filed a afar an L-300 UV coming from the shoulder
affirming the April 4, 2011 Decision3 of the Complaint8 against NURC to recover going on the opposite direction to Lucena
Regional Trial Court (RTC) of San Pedro, damages sustained during the collision, City. Said vehicle was already near his bus
Laguna, Branch 31 in Civil Case No. SPL- premised on negligence. The case was when it (UV) managed to return to ifs
0969; and b) the CA's December 28, 2012 docketed as Civil Case No. SPL-0969 and proper lane, then hit and swerved his
Resolution4 denying herein petitioners' assigned to Branch 31 of the RTC of San vehicle.- "He tried to prevent the collision
Motion for Reconsideration.5chanrobleslaw Pedro, Laguna, An Amended by swerving to the right but it was too late.
Complaint9 was later filed, wherein URC As a result, the left front portion of the bus
Factual Antecedents was impleaded as additional defendant. was damaged while the front portion of the
L-300 UV was totally wrecked- He and his
Petitioner Greenstar Express, Inc. URC and NURC filed their respective conductor, one.Mendoza, managed to get
(Grepistar) is a domestic corporation Answers,10 where they particularly alleged but of the bug by forcibly opening the
engaged in the business of public and claimed lack of negligence on their part automatic door which was also damaged
transportation, while petitioner Fruto L. and on the part of Bicomong. due to the impact After getting out of the
Sayson, Jr. (Sayson) is one of its bus bus, he looked for the driver of the L300
drivers, After the issues were joined, trial UV but he was informed by a bystander
proceeded. During trial, only Sayson was that he was thrown in a canal arid already
Respondents Universal Robina Corporation presented by petitioners as eyewitness to dead. For fear of possible reprisals from
(URC) and Nissin Universal Robina the collision. bystanders as experienced by most drivers
Corporation (NURC) are domestic involved in an accident, he boarded
corporations engaged in the food business. Riding of the Regional Trial Court smother bug owned by bis employer.
NURC is a subsidiary of URC. Before he left, he indorsed the matter to
On April 4, 2011, the RTC issued its hip conductor and line inspector.
URC is the registered owner of a Mitsubishi Decision, which decreed thus: Thereafter, he reported to their office at
L-300 van with plate number WRN 403 San Pedro, Laguna. He executed a
(URC van).6chanrobleslaw chanRoblesvirtualLawlibrary statement on the same day x x x and
During the trial on the merits, submitted the same to their operations
At about 6:50 a.m. on February 25, 2003, plaintiffs11 presented five witnesses department. He likewise testified that
which was then a declared national namely Josephine Gadiaza, Miguel Galvan, before the incident, he was earning
P700.00 to P900,00 a day on commission found him dead inside the L- 300 UV. He the van spun around when it was bit
basis and he drives 25 days in a month. came to know later that he was Renante causing the metal scar found on the road.
However, after the incident, he was not Bicomong. He immediately called up his
able to drive for almost two months. office and requested that funeral services On the other hand, the
for the dead man. be arranged. Thereafter, defendants12 presented three witnesses:
On cross-examination, it was established he photographed the damaged vehicles its employees Alexander Caoleng and John
that the incident happened along the (Exhibits "F" and sub-markings) and Legaspi and deceased Renante Bicomong's
Maharlika Highway along Kilometer 72. interviewed some witnesses. He made a widow, Gloria Bicomgng, These witnesses
There were no structures near the site of sketch depicting the damages suffered by were presented to prove that deceased
the incident, The highway ha§ two lanes both vehicles (Exhibit "D-2"), the L-300 IV Bicomong was acting in his personal
which can accommodate the size of the bus at the front portion (Exhibit "D-4") while capacity when the mishap happened on
about 3 meters wide and a. light vehicle. the bus at the left side of its front portion February 25, 2003 as that day had been
He was bound for Manila and had about ten (Exhibit "D-3"). Based on the sketch he declared an official holiday and the L-300
passengers. He saw the L-300 UV on the prepared, the impact happened almost at UV he was driving had not been issued to
shoulder of the opposite lane about 250 the right lane which was the bus lane him, among others.
meters away from, his bus while he was (Exhibit "D-6"). He likewise noticed some
driving [at] a speed of 60 kilometers per debris also found at the bus lane. He was Alexander Caoleng, HR. Manager of
hour. He did not sense any danger when he able to interview the bus conductor and a defendant NURC, testified that deceased
saw the vehicle from afar. He cannot drive fruit store owner in [sic] the names of Bicomong worked as the Operations
fast as there were five vehicles ahead of his Apolinar Devilla and Virgilio Adao, He did Manager of defendant NURC until his death
bus. When the L-300 UV managed to return not see the driver of the bus at the scene as evidenced by a Certificate of
to it? proper lane coming from the of the accident and he was told that he had Employment dated December 9, 2008
shoulder, it was heading directly towards left the place. Based on, his investigation, (Exhibit "I"), His last assignment was in
his direction, at a distance of more or less the possible cause of the accident was the First Cavite Industrial Estate (FCEB). He
five, meters away from his bus, He noticed swerving to the left lane [by] the driver of died in a vehicular accident in Alaminos,
that the L-300 UV was running at full speed the L-300 UV which resulted in me Laguna on February 25, 2003 which was
as he saw dust clouds. "The point of impact encroaching of the bus' lane. He reduced declared a holiday by virtue of
happened on his lane. He tried to swerve bis findings into writing in a Report dated Proclamation No. 331 (Exhibit "2"). Despite
his bus to prevent the impact but lie February 28, 2003 (Exhibits "D" and sub- having been issued his own service vehicle
admitted that at his speed, it was difficult markings). (Exhibits "3", "4" and "5"), he used the L-
for him to maneuver his vehicle 300 UV which was not officially issued to
On cross-examination, the witness him but in the name of Florante Soro-Soro,
Investigator SPO3 Ernesto Marfori of the admitted that he was not present when the defendant NURC's Logistics Manager at
Alaminos Police Station testified that at vehicles collided. The entries he made in that time (Exhibits "7" and "B"). The said
about 7:00 in the morning, he received a the blotter report were mainly based on the vehicle was used mainly to transport items
report from the Barangay Chairman of a accounts of the witnesses he was able to coming from their office at Pasig to Cavite
vehicular accident that occurred at Brgy. interview who however did not give their and vice versa (Exhibit "9").
§an Agustin, Alaminos, Laguna. He written statements. When he arrived at the
proceeded to the site with SPO2 Rolando scene of the accident, the L-300 UV was John Legaspi, Project Manager of
Alias. Upon arrival at the scene of the already on the shoulder of the road and it defendant NURC, testified that he was first
accident, he attended to the victim, but was totally wrecked. According to reports, assigned in its Cavite Plant in 1999 with
deceased Bicomaog as his immediate Regional Trial Court of Lucena City damages caused by his employee, the
supervisor being the Production Manager docketed as Civil Case No. 2.103-135. latter must have caused the damage in the
then. He last saw him in the afternoon of course of doing his assigned tasks or in the-
February 24, 2003 at about 6:00 pm when On cross-examination, she narrated that performance of his duties" (Yambao vs.
they had a short chat He (Bicomong) was aside from the Toyota Corolla service of her Zuñiga, G.R. No: 146173, December 11,
then transferring his things from his husband, he would use the L-300 UV 2003)
executive vehicle which was a Toyota whenever he had to bring bulky things
Corolla to the L-300 UY which was a home. As far as she can recall, he used the In this case, it is beyond cavil that the
company vehicle. He (Bicomong) shared L-300 UV about 5 times. deceased Renante Bicong [sic] was not in
that he would go home to Quezon Province the performance of his duty on that fateful
the following day (February 25) to give After an evaluation of the foregoing day of February 25, 2003. In the first place
money to his daughter. He knew that his testimonies and documentary evidence of that day was a holiday; there was no work
trip to Quezon was not work-related as the parties, the court had [sic] arrived at and it was not shown that he was working
February 25, 2003 was declared a holiday. the following findings and conclusions: as indeed his work assignment is
Besides, there exists no plant owned by operations manager of the company's plant
defendant NURC in the provinces of chanRoblesvirtualLawlibraryPlaintiff has no m, Cavite while the accident happened
Quezon, Laguna or Bicol as attested to by cause of action and cannot recover from while he was in Alaminos, Laguna on his
the General Manager of defendant NURC in the defendants even assuming that the way home to Candelaria, Quezon.
a Certification to that effect (Exhibit "11"). direct and proximate cause of the accident Secondly, as an operations manager, he
was the negligence of the defendant's was issued an executive car for. Ms own
On cross-examination, he distinguished the employee Renato Bicomong. use, a Toyota Corolla vehicle and he merely
use of an executive vehicle assigned to an preferred to use the L-300 UV when going
executive officer for his personal use and Pursuant to Article 2184 of the New Civil home to his family in Quezon. Even
the company vehicle which was supposed Code, the owner of a motor vehicle is assuming that the company allowed or
to be for official use only. solidarily liable with his driver if at the time tolerated this, by itself, the tolerance did
of the mishap, the owner was in the vehicle not make, the employer liable in the
Finally, Gloria Bicomong, widow of and by the use of due diligence could have absence of showing that he was using the
deceased Reynante Bicomong testified that presented (sic) the misfortune; if the vehicle in the performance of a duty or
she knew that her husband was going owner is not in the motor vehicle, the within the scope of his assigned tasks. But
home to Calendaria (sic), Quezon on provision of Article 2180 is applicable. The as clearly relayed by defendant's
February 25, 2003 because he informed defendants being juridical persons, the first witnesses, defendants have no business or
their daughter. He was on his way home paragraph of Article 2184 is obviously not plant in Quezen. The L-300 vehicle was for
when he met a vehicular-accident in applicable. the hauling of items between their Pasig
Alaminos. Laguna which claimed his life. and Cavite offices and was merely
She was informed about the accident Under Article 2180, "employers shall be borrowed by Bicomong in going to
involving her husband by a high school liable tor the damages caused by their Candelaria, Quezon on that day.
friend who was also traveling to Quezon at employees and household helpers acting
that time, She filed a criminal complaint at within the scope of their assigned tasks, The accident having occurred outside
Alaminos, Laguna but it was dismissed for even though the former are not engaged in Remnte Bicomong's assigned tasks,
reasons unknown to her. She likewise filed any business or industry. "In other words, defendant employers cannot be held liable
a civil complaint for damages before the for the employer to be liable for the to the plaintiffs, even assuming that it is
the fault of defendants' employee that was on Annexes "B" and "C" of the Complaint, high speed that alone does not mean that
the direct and proximate cause of their the. said bus sustained damage on its left the negligence of the driver was the direct
damages. side. Clearly, it was the passenger bus that and proximate cause, If it is true that the
swerved on the left lane, which was being L-300 UV ran from the right shoulder,
However, the question of whose fault or traversed by Renante Bicomong, and while climbed up to the right lane but overshoot
negligence was the direct and proximate returning to the right lane, said bus hit the [sic] it and occupied the bus' lane, the
cause of the mishap is material to the vehicle being driven by Mr. Bicomong. speed of the bus cannot be considered the
resolution of defendants' counterclaim. Thus, explaining the damage sustained by proximate and direct cause of the collision;
the said bus on its left side just below the But as stated earlier, this were [sic] merely
The rule is that the burden of proof lies on driver's seat.' conjectures and surmises of the defendants
him who claims a fact (Federico Ledesina and not proven by competent evidence.
vs. NLRC, G.R. No. 175585, October The foregoing however is a mere
19,2007). Therefore, to be able to recover interpretation or speculation and not All told, defendants were not able to prove
in their counterclaim, the defendants must supported by any account, either by an by their own evidence that the direct and
prove by preponderance of evidence that eyewitness [or by] a explanation tracing proximate cause of the collision was the
the direct and proximate cause of their the relative positions of the two vehicles in fault of plaintiffs driver. Hence, they cannot
losses was the fault of the plaintiff-driver. relation to the road at the time of impact hold plaintiffs liable for the logs of their L-
and the movements of the two vehicles 300 UV. As both parties failed to prove by
Defendants were not able to present any after the impact. For this reason, it will be their respective evidence where the fault
witness as to how the mishap occurred unfair to make an interpretation of the that occasioned their losses lie, they must
Their witnesses were limited to proving events based alone on the point of impact bear their respective losses.
that Renante Bicomong was not in the [on] the vehicles. The points of impact by
performance of his assigned task when the themselves cannot explain the positions of Anent defendants' counterclaim for
incident happened. the vehicles on the road. attorney's fees and exemplary damages,
there is no evidence to show that the filing,
A reading of their answer would reveal, Defendants Memorandum attributed the of this suit was motivated [by] malice. It
that their attribution of fault to the plaintiff- cause of the mishap to the excessive speed cannot be denied that plaintiffs suffered
driver is based only on the point of impact of the bus. In their Memorandum, the damages. The court mainly, dismissed the
of the two vehicles. Thus: defendants content [sic] that if the driver complaint for lack of cause of action as
had seen the L-3G0 UV meters away in Renante Bicomong was not performing his
chanRoblesvirtualLawlibrary front of him running along the shoulder and assigned tasks at the time of the incident.
'4.3 Based on the damage sustained by the negotiating back to its lane, the bus driver Besides, to hold them liable to defendants
passenger bus, plaintiffs' claim that would have watched out and slackened his for attorney's fees and exemplary damages
Renante Bicomong swerved on the left lane speed. Considering the damage to both the simply because they failed to come up with
and encroached on the path of the said bus vehicles and the fact that the L-300,UV sufficient evidence will be tantamount to
moments before the accident could not span [sic] and w,as thrown 40 feet away putting a price on one's right to sue.
have been true. Such claim would have from the point of impact and its driver was
resulted to a head-on collision between the thrown 14 feet away from his vehicle, WHEREFORE, judgment is hereby rendered
vehicle driven by Mr. Bicomong and the defendant argued that the bus could not be dismissing the complaint as well as the
bus; the latter would have sustained running at 60 kilometers only. But counterclaim.
damage on its front side. However, based assuming the bus indeed was running at
No costs. 'ART. 2176, Whoever by act or omission his way home to Candelaria, Quezon. There
causes damage to another, there being was no showing that on that day, Renante
SO ORDERED.13 fault or negligence, is obliged to pay for the Bicomong was given by defendants-
Ruling of the Court of Appeals damage done. Such fault or negligence, if appellees14 an assigned task, much less
there is no pre-existing contractual relation instructed to go to Quezon. As testified to
Petitioners filed an appeal before the CA, between the parties, is called a quasi-delict by Renante Bicomong's widow Gloria
docketed as CA-G.R. CV No. 96961. They and is governed by the provisions of this Bicomong, Renante Bicomong was on the
argued that Bicomong's negligence was the Chapter. road that day because he was going home
proximate cause of the collision, as the van to Candelaria, Quezon. Thus, he was then
he was 4rjvmg swerved to the opposite ART. 2180. The obligation imposed by carrying out a personal purpose and not
lane and hit the bus which was then Article 2176 is demandable not only for performing work for defendants-appellees.
traveling along its proper lane; that one's own acts or omission also for those of
Bicomong's act of occupying the bus's lane persons for whom one is responsible. Apropos is Castilex Industrial Corp. vs.
was illegal and thus constituted a traffic xxx xxx xxx Vicente Vasquez, Jr.,15 wherein the
violation; that respondents are liable for Supreme Court held that the mere fact that
damages as the registered owner of the Employers shall be liable for the damages an employee was using a service vehicle at
van and failing to exercise due diligence in caused by their employees and household the time of the injurious incident is not of
the selection and supervision of its helpers acting within the scope of their itself sufficient to charge his employer with
employee, Bicomong, Respondents, assigned tasks even though the former are liability for the operation of said vehicle
countered that the bus driven by Sayson not engaged in any business or industry.' unless it appeared that he was operating
was running at high speed when the, Under Article 2180 of the New Civil Code, the vehicle within the course or scope of bis
collision occurred, thus indicating that employers shall be held primarily and employment.
Sayson was in violation of traffic rules; and solidarily liable for damages caused by Thus:ChanRoblesVirtualawlibrary
that Say-son had the last clear chance to their employees acting within the scope of xxxx
avert collision but he failed to take the their assigned tasks. To hold the employer
necessary precaution under the liable under this provision, it must be 'The court a quo and the Court of Appeals
circumstances, by reducing his speed and shown that an employer-employee were one in holding that the driving by a
applying the brakes on time to avoid relationship exists, and that the employee messenger of a company-issued vehicle is
collision. was acting within the scope of his assigned within the scope of his assigned tasks
task when the act complained of was regardless of the time and circumstances.
On September 26, 2012, the CA rendered committed.
the assailed Decision containing the We do not agree. The mere fact that ABAD
following pronouncement: Records bear that the vehicular collision was using a service vehicle at the time of
occurred on February 25, 2003 which was the injurious incident is not of itself
chanRoblesvirtualLawlibrary declared by former Executive Secretary sufficient to charge petitioner with liability
The present case involving an action for Alberto G. Romulo, by order of former for the negligent operation of said vehicle
damages based on quasi-delict is governed President Gloria Macapagal-Arroyo, as a unless it appears mat he was operating the
by Articles 2176 and 2180 of the New Civil special national holiday, per Proclamation vehicle within the course or scope of his
Code, pertinent provisions of which read: No. 331 dated February 19, 2003. Renante employment.
Bicomong had no work on that day and at
chanRoblesvirtualLawlibrary the time the accident occurred, he was on The following are principles in American
Jurisprudence on the employer's liability for in his employer's business or within the exercised the diligence of a good father of
the injuries inflicted by the negligence of an scope of his assigned task. a family in providing ABAD with a service
employee in the use of an employer's vehicle. Thus, justice and equity require
motor vehicle. In the case at bar, it is undisputed that that petitioner be relieved of vicarious
ABAD did some overtime work at Hie liability for the consequences of the
xxxx petitioner's office, which was located in negligence of ABAD in driving its vehicle.
Cabangcalan, Mandaue City. Thereafter, he Accordingly, in the absence of showing that
III. Use of Employer's Vehicle Outside went to Goldie's Restaurant in Fuente Renante Bicomong was acting within the
Regular Working Hours Osmefia, Cebu City, which is about seven scope of his assigned task at the time of
kilometers away from petitioner's place of the vehicular collision, defendants-
An employer who loans his motor vehicle to business. A witness for the private appellees had no duty to show that they
an employee for the latter's personal use respondents, a sidewalk vendor, testified exercised the diligence of a good father of
outside of regular working hours is that Fuente Osmeña is a lively place even a family in providing Renante Bicomong
generally not liable for the employees at dawn because Goldie's Restaurant and with a service vehicle. Thus, the trial court
negligent operation of the vehicle during Back Street were still open and people were did not err in holding that:
the period of permissive use, even where drinking thereat Moreover, prostitutes,
the employer contemplates that a regularly pimps, and drug addicts littered the place. chanRoblesvirtualLawlibrary
assigned motor vehicle will be used by the xxx xxx xxx 'Under Article 2180, 'employers shall be
employee for personal as well as business liable for the damages caused by their
purposes and there is some incidental To the mind of this Court, ABAD was employees and household helpers acting
benefit to the employer. Even where the engaged in affairs of his own or was within the scope of their assigned tasks,
employee's personal purpose in using the carrying out a personal purpose not in line even though the former are not engaged in
vehicle has been accomplished and he has with his duties at the time he figured in a any business or industry. 'In other words,
started the return trip to his house where vehicular accident. It was then about 2:00 for the employer to be liable for the
the vehicle is normally kept, it has been a.m. of 28 August 1988, way beyond the damages caused by his employee, the
held that he has not resumed his normal working hours. ABAD's working day latter must have caused the damage in the
employment, and the employer is not liable had ended; his overtime work had already course of doing his assigned tasks or. in the
for the employees negligent operation of been completed. His being at a place performance of his duties.' (Yambao vs.
the vehicle during the return trip. which, as petitioner put it, was known as a Zuñiga, G.R. No. 146173, December 11,
haven for prostitutes, pimps, and drug 2003.)
The foregoing principles and jurisprudence pushers and addicts, had no connection to
are applicable in our jurisdiction albeit petitioner's business; neither had it any In this case, it is.beyond cavil that the
based on the doctrine of respondent relation to his duties as a manager. Rather, deceased Renante Bicong [sic] was not in
superior, not on the principle of bonus using his service vehicle even for personal the performance of his duty on that fateful
pater familias as in ours. Whether the fault purposes was a form of a fringe benefit or day of February 25, 2003. In the first place
or negligence of the employee is conclusive one of the perks attached to his position. that day was a holiday; there was no work
on his employer as in American law or and it was not shown that he was working
jurisprudence, or merely gives rise to the Since there is paucity of evidence that as indeed his work assignment [was as]
presumption juris tantum of negligence on ABAD was acting within the scope of the operations manager of the company's plant
the part of the employer as in ours, it is functions entrusted to him, petitioner in Cavite while the accident happened while
indispensable that the employee was acting CASTILEX had no duty to show that it he was in Alaminos, Laguna on his way
home to Candelaria, Quezon. Secondly, as Civil Code;19 that Bicomong's negligence
an operations manager, he was issued an WHEREFORE, the trial court's Decision was the direct and proximate eause of the
executive car for his own use, a Toyota dated April 4, 2011 is affirmed. accident, in that he unduly occupied the
Corolla vehicle and. he merely preferred to opposite lane which the bus was lawfully
use the L-300 UV when going home to his SO ORDERED.16chanroblesvirtuallawlibrary traversing, thus resulting in the collision
family in Quezon. Even assuming that the with Greenstar's bus; that Bicomong's
company allowed or tolerated this, by Petitioners filed a Motion for driving on the opposite lane constituted a
itself, the tolerance did not make the Reconsideration, which the CA denied in its traffic violation, therefore giving rise to the
employer liable in the absence of showing subsequent December 28, 2012 presumption of negligence on his part; that
that he was using the vehicle in the Resolution. Hence, the present Petition. in view of this presumption, it became
performance of a duty or within the scope Issues incumbent upon respondents to rebut the
of his assigned tasks. But as clearly relayed same by proving that they exercised care
by defendant's witnesses, defendants have In a July 14, 2014 Resolution,17 this Court and diligence in the selection and
no business or plant in Quezon. The L-300 resolved to give due course to the Petition, supervision of their employees; that in
vehicle was for the hauling of items which contains the following assignment of their respective answers and motion to
between their Pasig and Cavite offices and errors: dismiss, respondents did not allege the
was merely borrowed by Bicomong in going defense, which they tackled only during
to Candelaria, Quezon on that day. chanRoblesvirtualLawlibrary trial, that since February 25, 2003 was a
I. declared national holiday, then Bicomong
The accident having occurred outside was not acting within the scope of his
Renante Bicomong's assigned tasks, THE HONORABLE COURT OF APPEALS assigned tasks at the time of the collision;
defendant employers cannot be held liable ERRED IN ISSUING THE ASSAILED that for failure to plead this defense or
to the plaintiffs, even assuming that it is DECISION AND RESOLUTION THAT allegation in their respective answers and
the fault of defendants' employee that was RESPONDENTS ARE NOT LIABLE TO pleadings, it is deemed waived pursuant to
the direct and proximate cause of their PETITIONERS FOR THE DAMAGES THEY Section 1, Rule 9 of the 1997 Rules of Civil
damages.' SUSTAINED CONSIDERING THAT THE Procedure20 (1997 Rules); that just the
In sum, squarely applicable in this case is ACCIDENT WAS ATTRIBUTED TO THE same, respondents failed to prove that
the well-entrenched doctrine that the NEGLIGENCE OF RENANTE BICOMONG. Bicomong was not in the official
assessment of the trial judge as to the II. performance of his duties or that the URC
issue of credibility binds the appellate court van was not officially issued to him at the
because he is in a better position to decide THE HONORABLE COURT OF APPEALS time of the accident - and for this reason,
the issue, having heard the witnesses and ERRED IN ADMITTING DEFENSES NOT the presumption of negligence was not
observed their deportment and manner of PLEADED IN THE MOTION TO DISMISS OR overturned; and that URC should be held
testifying during the trial, except when the IN RESPONDENTS' liable as the registered owner of the van.
trial court has plainly overlooked certain ANSWER. chanroblesvirtuallawlibrary
18

facts of substance and value, that, if In their Reply,21 petitioners add that while
considered, might affect the result of the Petitioners' Arguments some of the issues raised in the Petition are
case, or where the assessment is clearly factual in nature, this Court must review
shown to be arbitrary. Plaintiffs-appellants Petitioners insist that respondents should the case as the CA gravely erred in its
have not shown this case to fall under the be held liable for Bicomong's negligence appreciation of the evidence and in
exception. under Articles 2176, 2180, and 2185 of the concluding that respondents are not liable.
Finally, they argue that URC should be held caused by the vehicle on the public
liable for allowing "a non-employee to use chanRoblesvirtualLawlibrary highways, responsibility therefor can be
for his personal use the vehicle owned" by The resolution of this case must fixed on a definite individual, the registered
it. consider two (2) rules. First, Article owner.'
2180's specification that '[e]mployers
Respondents' Arguments shall be liable for the damages caused x x x x
by their employees ... acting within the
Pleading affirmance, respondents argue in scope of their assigned tasks [.]' Aguilar, Sr. v. Commercial Savings
their Comment22 that the issues raised in Second, the operation of the Bank26 recognized the seeming conflict
the Petition are factual in nature; that the registered-owner rule that registered between Article 2180 and the registered-
collision occurred on a holiday and while owners are liable for death or injuries owner rule and applied the latter.
Bicomong was. using the URC van for a caused by the operation of their
purely personal purpose, it should be. Vehicles. x x x x
sufficient to absolve respondents of liability
as evidently, Bicomong was not performing These rules appear to be in conflict when it Preference for the registered-owner rule
his official duties on that day; that the comes to cases in which the employer is became more pronounced in Del Carmen,
totality of the evidence indicates that it was also the registered owner of a vehicle. Jr. v. Bacoy:27chanrobleslaw
Sayson who was negligent in the operation Article 2180 requires proof of two things:
of Greenstar's bus when the collision first, an employment relationship between x x x x
occurred; that Bicomong was not negligent the driver and the owner; and second, that
in driving the URC van; that petitioners' the driver acted within the scope of his or Filcar Transport Services v.
objection - pertaining to their defense that her assigned tasks. On the other hand, Espinas28 stated that the registered owner
the collision occurred on a holiday, when applying the registered-owner rule only of a vehicle can no longer use the defenses
Bicomong was not considered to be at work requires the plaintiff to prove that the found in Article 2180:
- was belatedly raised; and that in any defendant-employer is the registered
case, under Section 5, Rule 10 of the 1997 owner of the vehicle. chanRoblesvirtualLawlibraryx x x x
Rules,23 their pleadings should be deemed
amended to conform to the evidence The registered-owner rule was articulated Mendoza v. Spouses Gomez29 reiterated
presented at the trial, which includes proof as early as 1957 in Erezo, et al. v. this doctrine.
that the accident occurred on a holiday and Jepte,25cralawred where this court
while Bicomong was not in the performance explained that the registration of motor However, Aguilar, Sr., Del Carmen,
of his official tasks and instead going home vehicles, as required by Section 5(a) of Filcar, and Mendoza should not be taken to
to his family in Quezon province. Republic Act No. 41365 the and mean that Article 2180 of the Civil Code
Our Ruling Transportation and Traffic Code, was should be completely discarded in cases
necessary 'not to make said registration where the registered-owner rule finds
The Court denies the Petition. the operative act by which ownership in application.
vehicles is transferred, ... but to permit the
In Caravan Travel and Tours International, use and operation of the vehicle upon any As acknowledged in Filcar, there is no
Inc. v. Abejar,24 the Court made the public highway[.]' Its 'main aim ... is to categorical statutory pronouncement in the
following relevant pronouncement: identify the owner so that if any accident Land Transportation and Traffic Code
happens, or that any damage or injury is stipulating the liability of a registered
owner. The source of a registered owner's to show that no liability under Article that on the day of the collision -or on
liability is not a distinct statutory provision, 2180 has arisen. February 25, 2003 - URC was the
but remains to be Articles 2176 and 2180 registered owner of the URC van, although
of the Civil Code: This disputable presumption, insofar as the it appears that it was designated for use by
registered owner of the vehicle in relation NURC, as it was officially assigned to the
chanRoblesvirtualLawlibrary to the actual driver is concerned, latter's Logistics Manager, Florante Soro-
While Republic Act No. 4136 or the Land recognizes that between the owner and the Soro (Soro-Soro); that Bicomong was the
Transportation and Traffic Code does not victim, it is the former that should carry the Operations Manager of NURC and assigned
contain any provision on the liability of costs of moving forward with the evidence. to the First Cavite Industrial Estate; that
registered owners in case of motor vehicle The victim is, in many cases, a hapless there was no work as the day was declared
mishaps, Article 2176, in relation with pedestrian or motorist with hardly any a national holiday; that Bicomong was on
Article 2180, of the Civil Code imposes an means to uncover the employment his way home to his family in Quezon
obligation upon Filcar, as registered owner, relationship of the owner and the driver, or province; that the URC van was not
to answer for the damages caused to any act that the owner may have done in assigned to Bicompng as well, but solely for
Espinas' car. relation to that employment. Soro-Soro's official use; that the company
Thus, it is imperative to apply the service vehicle officially assigned to
registered-owner rule in a manner that The registration of the vehicle, on the other Bicomong was a Toyota Corolla, which he
harmonizes it with Articles 2176 and 2180 hand, is accessible to the public. left at the Cavite plant and instead, he used
of the Civil Code. Rules must be construed the URC van; and that other than the
in a manner that will harmonize them with Here, respondent presented a copy of the Cavite plant, there is no other NURC plant
other rules so as to form a uniform and Certificate of Registration of the van that in the provinces of Quezon, Laguna or
consistent system of jurisprudence. In light hit Reyes. The Certificate attests to Bicol.
of this, the words used in Del Carmen are petitioner's ownership of the van.
particularly notable. There, this court Petitioner itself did not dispute its Applying the above pronouncement in
stated that Article 2180 'should defer to' ownership of the van. Consistent with the the Caravan Travel and Tours case, it must
the registered-owner rule. It never stated rule we have just stated, a presumption be said that when by evidence the
that Article 2180 should be totally that the requirements of Article 2180 have ownership of the van and Bicomong's
abandoned. been satisfied arises. It is now up to employment were proved, the presumption
petitioner to establish that it incurred no of negligence on respondents' part
Therefore, the appropriate approach is liability under Article 2180. This it can do attached, as the registered owner of the
that in cases where both the by presenting proof of any of the van. and as Bicomong's employer. Hie
registered-owner rule and Article following: first, that it had no burden of proof then shifted to respondents
2180 apply, the plaintiff must first employment relationship with to show that no liability under Article 2180
establish that the employer is the Bautista; second, that Bautista acted arose. This may be done by proof of any of
registered owner of the vehicle in outside the scope of his assigned the following:
question. Once the plaintiff tasks; or third, that it exercised the
successfully proves ownership, there diligence of a good father of a family in chanRoblesvirtualLawlibrary
arises a disputable presumption that the selection and supervision of 1. That they had no employment
the requirements of Article 2180 have Bautista. (Emphasis supplied) relationship with Bicomong; or
been proven. As a consequence, the
burden of proof shifts to the defendant In the present case, it has been established 2. That Bicomong acted outside the scope
of his assigned tasks; or the court on the basis of such evidence given the circumstances and information
which may embody new issues not raised that he had immediately prior to the
3. That they exercised the diligence of a in the pleadings, or serve as a basis for a accident. From the trial court's findings and
good father of a family in the selection and higher award of damages. Although the evidence on record, it would appear that
supervision of Bicomong. pleading may not have been amended to immediately prior to the collision, which
conform to the evidence submitted during took place very early in the morning - or at
In denying liability, respondents claimed in trial, judgment may nonetheless be around 6:50 a.m., Sayson saw that the
their respective answers the defense of rendered, not simply on the basis of the URC van was traveling fast Quezon-bound
absence of negligence on their part. During issues alleged but also on the basis of on the shoulder of the opposite lane about
trial, they presented evidence to the effect issues discussed and the assertions of fact 250 meters away from him; that at this
that on the day of the collision, which was proved in the course of trial. The court may point, Sayson was driving the Greenstar
a declared national non-working holiday, treat the pleading as if it had been bus Manila-bound at 60 kilometers per
Bicomong was not perforating Ms work, but amended to conform to the evidence, hour; that Sayson knew that the URC van
was on his way home to Quezon on a although it had not been actually so was traveling fast as it was creating dust
personal undertaking, that is, to give amended, x x x30 clouds from traversing the shoulder of the
money to his daughter and spend the opposite lane; that Sayson saw the URC
holiday with his family; and that the vehicle Respondents succeeded in overcoming the van get back into its proper lane but
he was driving was not an NURC vehicle, presumption of negligence, having shown directly toward him; that despite being
nor was it assigned to him, but was that when the collision took place, apprised of the foregoing information,
registered to URC and assigned to its Bicomong was not in the performance of Sayson, instead of slowing down,
Logistics Manager, Soro-Soro, Petitioners his work; that he was in possession of a maintained his speed and tried to swerve
object to this, claiming that this defense service vehicle that did not belong to his the Greenstar bus, but found it difficult to
was not alleged in the respondents' employer NURC, but to URC, and which do so at his speed; that the collision or
respective answers. The Court disagrees, vehicle was not officially assigned to him, point of impact occurred right in the middle
The failure to allege these facts in the but to another employee; that his use of of the road;32 and that Sayson absconded
answers does not preclude, respondents the URC van was unauthorized - even if he from the scene immediately after the
from proving them during trial; these facts had used the same vehicle in furtherance collision.
are precisely illustrative of their defense of of a personal undertaking in the past,31 this
absence of negligence. Just the same, does not amount to implied permission; From the foregoing facts, one might think
petitioners' failure to object to the that the accident occurred on a holiday and that from the way he was driving
respondents' presentation of such evidence while Bicomong was on his way home to his immediately before the collision took place,
below is tantamount to a waiver; Section family in Quezon province; and that Bicomong could have fallen asleep or ill at
5, Rule 10 of the 1997 Rules - on Bicomong had no official business the wheel, which led him to gradually steer
amendments to conform to or authorize whatsoever in his hometown in Quezon, or the URC van toward the shoulder of the
presentation of evidence - will have to in Laguna where the collision occurred, his highway; and to get back to the road after
apply, but the failure to amend the area of operations being limited to the realizing his mistake, Bicomong must have
pleadings does not affect the result of the Cavite area. overreacted, thus overcompensating or
trial of these issues. oversteering to the left, or toward the
The failure of a party to amend a pleading On the other hand, the evidence suggests opposite lane and right into Sayson's bus.
to conform to the evidence adduced during that the collision could have been avoided Given the premise of dozing off or falling ill,
trial does not preclude an adjudication by if Sayson exercised care and prudence, this explanation is not far-fetched. The
collision occurred very early in the morning current speed and course, and for this
in Alaminos, Laguna. Sayson himself reason., the inevitable took place: An However, Sayson took no defensive
testified that he found Bicomong driving on experienced driver who is. presented with maneuver whatsoever in spite of the fact
the service road or shoulder of the highway the same facts would have adopted an that he saw Bicomong drive his van in a
250 meters away, which must have been attitude consistent with a desire to precarious manner, as far as 250 meters
unpaved, as it caused dust clouds to rise on preserve life and property; for common away - or at a point in time and space
the heels of the URC van. And these dust carriers, the diligence demanded is of the where Sayson had all the opportunity to
clouds stole Sayson's attention, leading highest degree. prepare and avert a possible collision. The
him to conclude that the van was running The law exacts from common carriers (i.e., collision was certainly foreseen and
at high speed. At any rate, the evidence those persons, corporations, firms, or avoidable but Sayson took no measures to
places the point of impact very near the associations engaged in the business of avoid it. Rather than exhibit concern for the
middle of the road or just within Sayson's carrying or transporting passengers or welfare of his passengers and the driver of
lane. In other words, the collision took goods or both, by land, water, or air, for the oncoming vehicle, who might have
place with Bicomong barely encroaching on compensation, offering their services to the fallen asleep or suddenly fallen ill at the
Sayson's lane. This means that prior to and public) the highest degree of diligence (i.e., wheel, Sayson coldly and uncaringly stood
at the time of collision, Sayson did not take extraordinary diligence) in ensuring the his ground^ closed his eyes, and left
any defensive maneuver to prevent the safety of its passengers. Articles 1733 and everything to fate, without due regard for
accident and minimize the impending 1755 of the Civil Code the consequences. Such a suicidal mindset
damage to life and property, which resulted state:ChanRoblesVirtualawlibrary cannot be tolerated, for the grave danger it
in the collision in the middle of the Art. 1733. Common carriers, from the poses to the public and passengers availing
highway, where a vehicle would normally nature of their business and for reasons of of petitioners' services. To add insult to
be traversing. If Sayson took defensive public policy, are bound to observe injury, Sayson hastily fled the scene of the
measures, the point of impact should have extraordinary, diligence in the vigilance collision instead of rendering assistance to
occurred further inside his lane or not at over the goods and for the safety of the the victims - thus exhibiting a selfish, cold-
the front of the bus - but at its side, which passengers transported by them, according blooded attitude and utter lack of concern
should have shown that Sayson either to all the circumstances of each case. motivated by the self-centered desire to
slowed down or swerved to the right to escape liability, inconvenience, and
avoid a collision. Art. 1755. A common carrier is bound to possible detention by the authorities,
carry the passengers safely as far as rather than secure the well-being of the
Despite having seen Bicomong drive the human care arid foresight can provide, victims of his own negligent act.
URC van in a precarious manner while the using the utmost diligence of very cautious x x x The doctrine of last clear chance
same was still a good 250 meters away persons, with a due regard for all the provides that where both parties are
from his bus, Sayson did not take the circumstances. negligent but the negligent act of one is
necessary precautions, as by reducing In this relation, Article 1756 of the Civil appreciably later in point of time than that
speed and adopting a defensive stance to Code provides that '[i]n case of death of or of the other, or where it is impossible to
avert any untoward incident that may occur injuries to passengers, common carriers determine whose fault or negligence
from Bicomong's manner of driving. This is are presumed to have been at fault or to brought about the occurrence of the
precisely his testimony during trial. When have acted negligently, unless they prove incident, the one who had the last clear
the van began to swerve toward his bus, he that they observed extraordinary diligence opportunity to avoid the impending harm
did not reduce speed nor swerve his bus to as prescribed in Articles 1733 and 1755. but failed to do so, is chargeable with the
avoid collision. Instead, he maintained his xxx'33chanroblesvirtuallawlibrary consequences arising therefrom. Stated
differently, the rule is that the antecedent
negligence of a person does not preclude
recovery of damages caused by the
supervening negligence of the latter, who
had the last fair chance to prevent the
impending harm by the exercise of due
diligence, x x x34

Petitioners might object to the treatment of

their case in the foregoing manner, what
with the additional finding that Sayson was
negligent under the circumstances. But
their Petition, "once accepted by this
Court, throws the entire case open to
review, and xxx this Court has the
authority to review matters not specifically
raised or assigned as error by the parties,
if their consideration is necessary in
arriving at a just resolution of the
case."35chanrobleslaw

WHEREFORE, the Petition is DENIED.

The September 26, 2012 Decision and
December 28, 2012 Resolution of the Court
of Appeals in CA-G.R. CV No. 96961
are AFFIRMED in toto.

SO ORDERED.chanRo
G.R. No. 188493, December 13, 2017 transport them from the wharf to the the road was only four (4) meters and 24
VIVIAN B. TORREON AND FELOMINA F. poblacion of Jetafe. A cargo truck entered inches wide, rough, and full of potholes,
ABELLANA, Petitioners, v. GENEROSO the wharf and their fellow passengers Aparra lost control of the truck and they fell
APARRA, JR., FELIX CABALLES, AND boarded it. Abellana, Rodolfo, and his off the wharf.9
CARMELO SIMOLDE, Respondents. daughters chose not to board the already- Consequently, Rodolfo and Monalisa died
DECISION overcrowded truck. Instead, they waited while Johanna and Abellana were injured.10
LEONEN, J.: for a different vehicle to bring them to the On April 3, 1990, Vivian and Abellana filed
Lack of documentary evidence is not fatal poblacion. However, they were informed a criminal complaint for Reckless
to a claim for the deceased's lost earning that only the cargo truck, which was also Imprudence resulting to Double Homicide,
capacity. Testimony from a competent owned and operated by Simolde, would Multiple Serious Physical Injuries and
witness familiar with his salary is a enter the wharf.6 Damage to Property against Aparra and
sufficient basis to determine the Approximately 10 minutes later, the same Caballes,11 docketed as Criminal Case No.
deceased's income before his death. cargo truck returned to the wharf. Again, 6555 before the Regional Trial Court,
This is a Petition for Review on fellow passengers from M/B Island Traders Tagbilaran City, Bohol.12
Certiorari1 under Rule 45 of the 1997 Rules started embarking it. This time, Rodolfo, On January 4, 1991, Vivian and Abellana
of Court, praying that the April 3, 2008 Monalisa, Johanna, and Abellana also filed a separate complaint for damages
Decision2 and the May 28, 2009 boarded it. Abellana was seated in front, against Simolde, Caballes, and
Resolution3 of the Court of Appeals in CA- while Rodolfo and his daughters were with Aparra13 docketed as Civil Case No. 3593
G.R. CV No. 71090 be partially modified. the rest of the passengers at the back of before Branch 3, Regional Trial Court,
Petitioner Vivian B. Torreon (Vivian) prays the truck. Because there were no proper Butuan City.14
that: (1) an award of actual or seats at the back of the truck, the 30 or Simolde, Caballes, and Aparra filed a
compensatory damages for loss of earning more passengers were either standing or Motion to Dismiss and to Suspend
capacity worth P2,079,675.00 be granted; sitting on their bags.7 Proceedings (Motion to Dismiss) in Civil
(2) the award of moral damages be While passengers were getting on the Case No. 3593. They argued that when
increased to P1,000,000.00; (3) the award truck, Simolde called Felix Caballes Abellana instituted Criminal Case No. 6555
of exemplary damages be increased to (Caballes), the official truck driver. before the Regional Trial Court of Bohol,
P1,000,000.00; and (4) the awarded Caballes approached Simolde but left the she failed to make a reservation to file an
attorney's fees and litigation expenses be engine running. While Simolde and independent civil action for damages. Thus,
increased to P100,000.00 and P50,000.00, Caballes were talking, Generoso Aparra, Jr. Abellana was barred from instituting the
respectively.4 (Aparra), Simolde's chief diesel mechanic, civil action.15
On November 1, 1989, Vivian's husband, started driving the truck. Upon seeing the On January 22, 1992, the Regional Trial
Rodolfo Torreon (Rodolfo), and daughters, truck move, Caballes rushed to the truck Court of Butuan City denied the Motion to
Monalisa Torreon (Monalisa) and Johanna and sat beside Aparra. However, instead of Dismiss. However, upon reconsideration,
Ava Torreon (Johanna), arrived with taking control of the vehicle, Caballes the Regional Trial Court dismissed the
Felomina Abellana (Abellana) at the allowed Aparra to drive.8 case, ruling that the civil action was
municipal wharf of Jetafe, Bohol. They Shortly thereafter, Aparra maneuvered the impliedly instituted with Criminal Case No.
came from Cebu City aboard M/B Island truck to the right side of the road to avoid 6555.16
Traders, a motor boat owned and operated hitting a parked bicycle. But as he turned, Abellana and Vivian filed a Petition for
by Carmelo Simolde (Simolde).5 Aparra had to swerve to the left to avoid Certiorari before the Court of Appeals,
After they disembarked from the motor hitting Marcelo Subiano, who was allegedly assailing the dismissal of the case. On June
boat, they looked for a vehicle that would standing on the side of the road. Because 18, 1993, the Court of Appeals reinstated
Civil Case No. 3593 but only with respect documentary [,] [t]his Court does hereby Appeals deleted the award of actual
to Vivian.17 render judgment in favor of the plaintiffs damages for Rodolfo's loss of earning
During the trial for the civil case, SPO2 and against defendants and hereby capacity. According to the Court of
Federico T. Torniado (SPO2 Torniado) ordering the defendants as follows: Appeals, documentary evidence should be
testified that he was the "acting traffic 1. To pay jointly and severally to presented to substantiate a claim for loss
investigator of the PNP" assigned to the plaintiffs the amount of of earning capacity. The dispositive portion
case.18 According to SPO2 Torniado, he had P300,000.00 as actual damages; of the Court of Appeals Decision read:
previously seen the pick-up truck transport 2. To pay jointly and severally to WHEREFORE, in view of the foregoing, the
passengers from the wharf to the plaintiffs the sum of P50,000.00 as decision of the Court a quo in Civil Case No.
poblacion.19 The road, which was four (4) moral damages; and to pay in 3593 is SET ASIDE and another one is
meters wide, could only accommodate one solidum to plaintiffs by way of RENDERED ordering appellants Carmelo T.
(1) vehicle. Other than the truck, there litigation expenses in the sum of Simolde, Felix Caballes and Generoso
were no other vehicles that came in and out P10,000.00; Aparra, Jr., to pay, solidarity, appellee
of the wharf.20 He further testified that on 3. To pay in solidum into plaintiffs Vivian Torreon the amount of Fifty
the day of the accident, he asked to see [Vivian] Torreon and Felomina Thousand (P50,000.00) Pesos as civil
Aparra's license but Aparra only presented Abellana the sum of P25,000.00 and indemnity for the death of Rod[o]lfo
a student driver's permit.21 P10,000.00 by way of Attorney's Torreon; another Fifty Thousand
Abellana testified that Rodolfo was the fees; and (P50,000.00) Pesos as civil indemnity for
General Manager of her businesses in 4. To pay in solidum into plaintiffs the the death of Monalisa Torreon; Twenty-five
Butuan City. As manager, Rodolfo was in sum of P10,000.00 as exemplary Thousand (P25,000.00) Pesos as
charge of three (3) drugstores, an damages. temperate or moderate damages for
apartment, and rice fields. He was earning SO ORDERED.24 pecuniary loss sustained due to the death
a basic salary of P1 0,000.00 and received Simolde, Caballes, and Aparra filed a of Rod[o]lfo Torreon and another Twenty-
a 20% commission on the profit of the Notice of Appeal on November 27, 2000.25 five Thousand (P25,000.00) Pesos as
businesses, thus, earning more or less On April 3, 2008, the Court of Appeals temperate or moderate damages for
P15,000.00. Abellana claimed that she promulgated a Decision26 holding Simolde pecuniary loss sustained due to the death
could not present her accounting books to solidarity liable with Caballes and Aparra. of Monalisa Torreon; Fifty Thousand
the court because she had already disposed According to the Court of Appeals, Caballes (P50,000.00) Pesos as moral damages;
of them.22 and Aparra were clearly negligent in Ten Thousand (P10,000.00) Pesos as
On November 17, 2000, the Regional Trial transporting the passengers. Given that exemplary damages; Ten Thousand . . .
Court ruled that Caballes and Aparra the road was narrow and fall of pot holes, (P10,000.00) Pesos as attorney's fees and
committed acts constituting a quasi- it was apparent that an experienced driver Twenty[-]Five Thousand (P25,000.00)
delict.23 Since these acts were the was needed to safely navigate the vehicle Pesos as litigation expenses, with legal
proximate cause of the deaths of Rodolfo out of the wharf. In allowing Aparra to drive interest at the rate of SIX PERCENT(6%)
and Monalisa and the injuries sustained by the truck despite having only a student per annum starting from the date of the
Abellana and Johanna, Simolde, Caballes, driver's permit, Caballes risked the lives of promulgation of the court a quo's
and Aparra were held liable for damages. the passengers on board the truck. The Decision or from 17 November 2000. A
The dispositive portion of the trial court Court of Appeals also held Simolde TWELVE PERCENT (12%) interest, in lieu of
Decision stated: solidarity liable with his employees for SIX PERCENT (6%), shall be imposed on
Wherefore, on the basis therefore of the failing to exercise due diligence in such amount upon finality of this decision
foregoing evidence, both [testimonial and supervising them.27 However, the Court of until actual payment thereof.
SO ORDERED.28 Hence, this Petition was filed before this wharf."41 He has the capacity to pay the
Vivian and Abellana filed a Motion for Court. increased amounts petitioner Vivian is
Partial Reconsideration,29 asking the Court Petitioner Vivian argues that the Court of praying for. Lastly, the length of the
of Appeals to modify its April 3, 2008 Appeals gravely erred in deleting the litigation, which spanned almost two (2)
Decision by increasing the award of the compensatory damages awarded for decades at the time this petition was filed
damages to the following amounts: Rodolfo's loss of earning capacity. 32 She to this Court, has whittled down the real
posits that Abellana's testimony is enough value of the monetary award.42
(a) Php2,079,675.00, as
to prove Rodolfo's income. As Rodolfo's On the other hand, respondents argue that
compensatory damages for loss or
employer, Abellana had direct and personal the Court of Appeals committed no
impairment of earning capacity
knowledge of the compensation that he reversible error in the assailed Decision.
(lucro cesant); instead of
was receiving prior to his death; thus, she They claim that there is no sufficient proof
Php25,000.00.
is qualified to testify on his to sustain the award of
income.33 Petitioner Vivian cites Philippine damages.43 Respondents also contend that
Airlines, Inc. v. Court of Appeals34 to point the inclusion of Abellana as a petitioner is
(b) Php300,000.00 as actual damages out that the Court of Appeals gravely erred baseless. The Court of Appeals in CA-G.R.
for funeral and burial expenses; or in concluding that Abellana's testimony, SP No. 28859 already ruled that the
in the alternative, a reasonable or without any documentary evidence, did not present case is reinstated only with respect
just amount as temperate suffice to claim damages for lack of earning to Vivian.44
damages. capacity.35 Based on Abellana's testimony, In its February 17, 2010 Resolution, this
Rodolfo had an estimated gross monthly Court required petitioners to file a Reply to
income of P15,000.00 or an annual gross respondents' Comment.45
income of P195,000.00.36 Using the On April 28, 2010, petitioners filed their
(c) Php1,000,000.00 as moral formula laid down in Negros Navigation
37
Reply and claimed that Abellana's inclusion
damages; instead of Co., Inc. v. Court of Appeals,38 Rodolfo's as a petitioner is "a non-issue."46 Abellana
Php50,000.00. lost earnings would amount to was only joined as a petitioner because she
P2,079,675.00.39 was already a co-petitioner in the lower
Petitioner Vivian cites four (4) reasons why courts. However, as seen "in the prayer of
the damages awarded to her should be the Petition for Review, Felomina Abellana
(d) Php1,000,000.00 as exemplary increased. First, she points to the gravity of is not mentioned as being entitled [to]
damages; instead of the loss she suffered. The difficulties she payment for damages from respondents."47
Php10,000.00. has gone through, following the death of The issues for this Court's resolution are as
her husband and her young daughter, are follows:
immeasurable and deserve a higher First, whether or not actual damages for
compensation. Second, the degree of the loss of earning capacity should be awarded
(e) Php100,000.00 and Php50,000.00
negligence committed by respondents, as to petitioner Vivian B. Torreon; and
as attorney's fees and litigation
affirmed by the Court of Appeals, is gross Second, whether or not the value of the
expenses; instead of
and inexcusable, thereby warranting other awarded damages should be
Php10,000.00 and Php25,000.00,
harsher penalties.40 Third, Simolde has an increased.
respectively[.]30
undisputable substantial financial capacity Before proceeding with the discussion
In its May 28, 2009 Resolution,31 the Court to pay more. Allegedly, Simolde has a regarding civil damages, this Court will
of Appeals denied the motion. "virtual monopoly of the business at Jetafe briefly discuss Abellana's standing in this
case. Notably, the Court of Appeals already Except as otherwise provided in these was guilty; and (3) the connection of cause
ruled on this matter. However, since Rules, no filing fees shall be required for and effect between such negligence and
respondents raised it in their Comment,48 it actual damages. the damages.52
is best to address this concern. No counterclaim, cross-claim or third-party This Court affirms the finding of the Court
I complaint may be filed by the accused in of Appeals that Caballes and Aparra were
On April 3, 1990, petitioners instituted a the criminal case, but any cause of action grossly negligent in transporting the
criminal case against respondents. which could have been the subject thereof passengers. The Court of Appeals ruled:
However, petitioner Abellana did not may be litigated in a separate civil action. Records bore that after appellant Aparra
reserve her right to file a separate civil The Court of Appeals in CA-G.R. SP No. took over the control of the wheel of the
action for damages arising from the 28859 correctly reinstated the present case cargo truck and drove the same, appellant
crime.49 Rule 111, Section 1(a) of the Rules only with regard to Vivian. When Abellana Caballes merely rushed to get on the truck
of Court provides: did not reserve her right to institute a and only sat beside appellant Aparra.
Section 1. Institution of criminal and civil separate civil action, her cause of action for Appellant Caballes, despite the fact that
actions. — (a) When a criminal action is damages was deemed impliedly instituted appellant Aparra possessed only a student
instituted, the civil action for the recovery with the criminal case. Rule 111, Section 3 driver's permit, allowed him to continue
of civil liability arising from the offense of the Rules of Court prohibits offended driving the truck. Moreover, We cannot
charged shall be deemed instituted with parties from recovering damages twice for glean from the records that appellant
the criminal action unless the offended the act being prosecuted in the criminal Caballes cautioned appellant Aparra while
party waives the civil action, reserves the action.50 Thus, Abellana is now barred from the latter was driving the truck. It must be
right to institute it separately or institutes instituting this case. pointed out that the cargo truck had more
the civil action prior to the criminal action. This Court now moves to the discussion than thirty (30) passengers on board at its
The reservation of the right to institute regarding damages. back, who were either just standing or
separately the civil action shall be made II sitting on their bags, with nothing to hold
before the prosecution starts presenting its Article 2176 of the Civil Code provides that on for support, while the truck was moving.
evidence and under circumstances those who commit acts constituting a Furthermore, the road was only four (4)
affording the offended party a reasonable quasi-delict are liable to pay damages: meters wide, rough and with many pot
opportunity to make such reservation. Article 2176. Whoever by act or omission holes. Obviously, these circumstances
When the offended party seeks to enforce causes damage to another, there being warrant that the driver be somebody of
civil liability against the accused by way of fault or negligence, is obliged to pay for the competence and experience in
moral, nominal, temperate, or exemplary damage done. Such fault or negligence, if maneuvering a vehicle under such a
damages without specifying the amount there is no pre-existing contractual relation precarious condition. Therefore, the acts of
thereof in the complaint or information, the between the parties, is called a quasi-delict appellant Aparra in taking the wheel and of
filing fees therefor shall constitute a first and is governed by the provisions of this appellant Caballes in allowing the former to
lien on the judgment awarding such Chapter. take the wheel are plain manifestations of
damages. Vergara v. Court of Appeals51 enumerated negligence.53
Where the amount of damages, other than the elements necessary to establish a Caballes was grossly negligent in allowing
actual, is specified in the complaint or quasi-delict case: Aparra to drive the truck despite being an
information, the corresponding filing fees These requisites are: (1) damages to the inexperienced driver. Aparra's inexperience
shall be paid by the offended party upon plaintiff; (2) negligence, by act or caused the accident that led to the deaths
the filing thereof in court. omission, of which defendant, or some of Rodolfo and Monalisa. It is undisputed
person for whose-acts he must respond, that the deaths of Vivian's husband and
daughter caused damage to her. Clearly, (culpa in vigilando) of its employees. To the employer.55 (Emphasis supplied,
the requisites for a quasi-delict are present avoid liability or a quasi-delict committed citations omitted)
in this case. by his employee, an employer must In an effort to decry liability, Simolde
In addition to Caballes and Aparra, the law overcome the presumption by presenting insists that the passengers boarded the
also holds their employer, Simolde, liable. convincing proof that he exercised the care truck without his knowledge and despite
Article 2180 of the Civil Code provides that and diligence of a good father of a family in his objections. He testified as follows:
an employer is vicariously liable with his the selection and supervision of his
Q: You mentioned that this truck was
employees for any damage they cause employee.
being used by different passengers
while performing their duties. There is no question that petitioner, who is
to load their cargoes to different
Article 2180. The obligation imposed by the owner/operator of M/V Delsan Express,
destinations, and of course when
Article 2176 is demandable not only for is also the employer of Capt. Jusep who at
the passengers would load their
one's own acts or omissions, but also for the time of the incident acted within the
cargoes, they would join in the
those of persons for whom one is scope of his duty. The defense raised by
truck?
responsible. petitioner was that it exercised due
.... diligence in the selection of Capt. Jusep
Employers shall be liable for the because the latter is a licensed and
damages caused by their employees competent Master Mariner. It should be A: It depends on the condition at their
and household helpers acting within stressed, however, that the required own risk.
the scope of their assigned tasks, even diligence of a good father of a family
though the former are not engaged in pertains not only to the selection, but
any business or industry. also to the supervision of
.... employees. It is not enough that the Q: Regardless whether at their own
The responsibility treated of in this article employees chosen be competent and risk, you would admit that there
shall cease when the persons herein qualified, inasmuch as the employer is still was also passengers boarding the
mentioned prove that they observed all the required to exercise due diligence in truck at the same time that the
diligence of a good father of a family to supervising its employees. cargoes are being loaded and
prevent damage. (Emphasis supplied) In Fabre, Jr. v. Court of Appeals, it was transported to their respective
Delsan Transport Lines, Inc. v. C & A held that due diligence in supervision destinations?
Construction, Inc.54 explained that when requires the formulation of rules and
an employee's negligence causes injury to regulations for the guidance of
another, a presumption against the employees and the issuance of proper
employer arises. To avoid liability, the instructions as well as actual A: No, only cargoes, that is strictly
employer must prove he exercised due implementation and monitoring of given and instructed to the driver.
diligence in selecting as well as supervising consistent compliance with the rules.
his employees. Corollarily, in Ramos v. Court of Appeals,
Whenever an employee's negligence the Court stressed that once negligence
Q: Now, Mr. Simolde, you said it was
causes damage or injury to another, there on the part of the employees is shown,
at their own risk when the
instantly arises a presumption juris the burden of proving that he observed
passengers boarded the cargo
tantum that the employer failed to the diligence in the selection and
truck when this truck transported
exercise diligentissimi patris familias in the supervision of its employees shifts to
the cargoes to their destinations,
selection (culpa in eligiendo) or supervision
 His failure to control the behavior of his
do you mean to say that no passengers, because by the nature
employees makes him liable for the
passengers were on board that of the looks of the truck, how could
consequences of their actions. Thus,
particular vehicle? the passenger board the vehicle,
Simolde is solidarity liable with Caballes
and where can they sit down on the
and Aparra for the payment of the damages
side, there is no bench.
granted by law.
A: You know, you cannot, although The Civil Code holds Simolde liable for the
you try to impose this, but you damages that his actions have
know in the provinces like that, Q: Let us clarify this, Mr. Simolde, you caused.57 Article 2206 specifically applies
especially there are only few earlier admitted that there were when a death occurs as a result of a crime
jeepney for transportation, even occasions, because of the absence or a quasi-delict:
cargo trucks are being boarded by of cargo trucks and passenger Article 2206. The amount of damages
the passengers in spite of the fact vehicles in the area, the passengers for death caused by a crime or quasi-
that the driver says no passengers, would board the cargo truck even delict shall be at least Three thousand
no passengers, you know, those without your knowledge or your pesos, even though there may have been
things are pakikisama, but my consent? mitigating circumstances. In addition:
strict implementation is that the
(1) The defendant shall be liable
truck is only good for services for
for the loss of the earning
the cargoes and the cargo that is
A: Yes, sir. capacity of the deceased, and
being loaded there is already
the indemnity shall be paid to the
included on the freight-on-board
heirs of the latter; such indemnity
the vessel, so that truck is used for
shall in every case be assessed and
servicing cargo.
Q: In other words, there were awarded by the court, unless the
occasions, of course you acquired deceased on account of permanent
knowledge of this, when the truck physical disability not caused by
Q: Based on your observations, you was transporting cargoes, the defendant, had no earning
mentioned that this cargo truck passengers would join in the truck? capacity at the time of his death;
picture of which has been identified
as Exh. "6", was used to transport
cargo, now, in one occasion, how
A: No, only cargoes. I don't know if (2) If the deceased was obliged to
many passengers would ride
when the truck is already out of give support according to the
without your notice, can you make
sight, it depends on the driver.56 provisions of Article 291, the
an estimate?
recipient who is not an heir called
Instead of helping his defense, Simolde's
to the decedent's inheritance by
testimony proves his failure to supervise
the law of testate or intestate
his employees. Simolde should have been
A: I cannot tell you any facts about succession, may demand support
more diligent in ensuring that his
that, because for me, I have not from the person causing the death,
employees acted within the parameters of
received any information that the for a period not exceeding five
their jobs. He should have taken steps to
truck has been boarded with ensure that his instructions were followed.
 3. As moral damages for mental anguish, In Pestaño v. Spouses Sumayang,61 this
years, the exact duration to be
— an amount to be fixed by the court. This Court applied Article 2206 of the Civil Code
fixed by the court;
may be recovered even by the illegitimate and awarded compensation for the
descendants and ascendants of the deceased's lost earning capacity in addition
deceased. to the award of civil indemnity. The
(3) The spouse, legitimate and 4. As exemplary damages, when the indemnity for the deceased's lost earning
illegitimate descendants and crime is attended by one or more capacity is meant to compensate the heirs
ascendants of the deceased may aggravating circumstances, — an amount for the income they would have received
demand moral damages for to be fixed in the discretion of the court, had the deceased continued to live.62
mental anguish by reason of the the same to be considered separate from Pleyto v. Lomboy63 provided the formula to
death of the deceased. (Emphasis fines. compute a deceased's earning capacity:
supplied) 5. As attorney's fees and expenses of It is well-settled in jurisprudence that the
litigation, — the actual amount thereof, factors that should be taken into account in
The same rules on damages are applicable (but only when a separate civil action to determining the compensable amount of
whether or not the death occurred as a recover civil liability has been filed or when lost earnings are: (1) the number of years
result of a crime or a quasi-delict. To exemplary damages are awarded) for which the victim would otherwise have
summarize, the heirs are entitled to 6. Interests in the proper cases. lived; and (2) the rate of loss sustained by
recover: 7. It must be emphasized that the the heirs of the deceased. Jurisprudence
1. As indemnity for the death of the indemnities for loss of earning provides that the first factor, i.e., life
victim of the offense — P12,000.00, capacity of the deceased and for moral expectancy, is computed by applying the
without the need of any evidence or proof damages are recoverable separately formula (2/3 x [80 - age at death]) adopted
of damages, and even though there may from and in addition to the fixed sum in the American Expectancy Table of
have been mitigating circumstances of P12,000.00 corresponding to the Mortality or the Actuarial Combined
attending the commission of the offense indemnity for the sole fact of death, Experience Table of Mortality. As to the
[now P50,000.00]. and that these damages may, however, be second factor, it is computed by multiplying
2. As indemnity for loss of earning respectively increased or lessened the life expectancy by the net earnings of
capacity of the deceased — an amount to according to the mitigating or aggravating the deceased, i.e., the total earnings less
be fixed by the court according to the circumstances, except items 1 and 4 expenses necessary in the creation of such
circumstances of the deceased related to above, for obvious reasons.58 (Emphasis earnings or income and less living and
his actual income at the time of death and supplied) other incidental expenses. The net earning
his probable life expectancy, the said Civil or death indemnity is mandatory and is ordinarily computed at fifty percent
indemnity to be assessed and awarded by granted to the heirs of the victim without (50%) of the gross earnings. Thus, the
the court as a matter of duty, unless the need of proof other than the commission of formula used by this Court in computing
deceased had no earning capacity at said the crime.59 Initially fixed by the Civil Code loss of earning capacity is: Net Earning
time on account of permanent disability not at P3,000.00, the amount of the indemnity Capacity = [2/3 x (80 - age at time of
caused by the accused. If the deceased was is currently fixed at P50,000.00.60 death) x (gross annual income -
obliged to give support, under Art. 291, Thus, respondents are liable to pay reasonable and necessary living
Civil Code, the recipient who is not an heir, Rodolfo's heirs P50,000.00. They are liable expenses)].64 (Emphasis supplied,
may demand support from the accused for to pay another P50,000.00 to answer for citations omitted)
not more than five years, the exact the death of Monalisa.
duration to be fixed by the court.
The reason behind the formula for loss of Court of Appeals, documentary evidence basis that it is not proven by documentary
earning capacity was discussed in Villa Rey should be presented to substantiate a claim evidence.
Transit, Inc. v. Court of Appeals:65 for the deceased's lost income.67 Testimonial evidence, if not questioned for
[The award of damages for loss of earning This Court disagrees. credibility, bears the same weight as
capacity is] concerned with the In civil cases, Vivian is only required to documentary evidence. Testimonies given
determination of the losses or damages establish her claim by a preponderance of by the deceased's spouse, parent, or child
sustained by the Private respondents, as evidence. Allowing testimonial evidence to should be given weight because these
dependents and intestate heirs of the prove loss of earning capacity is consistent individuals are presumed to know the
deceased, and that said damages consist, with the nature of civil actions.68 Rule 133, income of their spouse, child, or parent.
not of the full amount of his earnings, but Section 1 of the Rules of Court provides: If the amount of income testified to seemed
of the support they received or would have Section 1. Preponderance of evidence, how incredible or unrealistic, the defense could
received from him had he not died in determined. — In civil cases, the party always raise their objections and discredit
consequence of the negligence of having the burden of proof must establish the witness or, better yet, present evidence
petitioner's agent. In fixing the amount of his case by a preponderance of evidence. that would outweigh the evidence of the
that support, We must reckon with the In determining where the preponderance prosecution.69
"necessary expenses of his own living", or superior weight of evidence on the This Court has previously accepted a
which should be deducted from his issues involved lies, the court may consider competent witness' testimony to determine
earnings. Thus, it has been consistently all the facts and circumstances of the case, the deceased's income. In Pleyto v.
held that earning capacity, as an element the witnesses' manner of testifying, their Lomboy,70 this Court used the testimony of
of damages to one's estate for his death by intelligence, their means and opportunity the deceased's widow as basis to estimate
wrongful act is necessarily his net earning of knowing the facts to which they are his earning capacity:
capacity or his capacity to acquire money, testifying, the nature of the facts to which Petitioners' claim that no substantial proof
"less the necessary expense for his own they testify, the probability or improbability was presented to prove Ricardo Lomboy's
living." Stated otherwise, the amount of their testimony, their interest or want of gross income lacks merit. Failure to present
recoverable is not loss of the entire interest, and also their personal credibility documentary evidence to support a claim
earning, but rather the loss of that portion so far as the same may legitimately appear for loss of earning capacity of the deceased
of the earnings which the beneficiary would upon the trial. The court may also consider need not be fatal to its cause. Testimonial
have received. In other words, only net the number of witnesses, though the evidence suffices to establish a basis for
earnings, not gross earning, are to be preponderance is not necessarily with the which the court can make a fair and
considered that is, the total of the earnings greater number. reasonable estimate of the loss of earning
less expenses necessary in creation of such In determining if this quantum of proof is capacity. Hence, the testimony of
earnings or income and less living and met, this Court is not required to respondent Maria Lomboy, Ricardo's
other incidental expenses.66 (Citations exclusively consider documentary widow, that her husband was earning a
omitted) evidence: monthly income of P8,000 is sufficient to
The formula provided in these cases is Nothing in the Rules of Court requires that establish a basis for an estimate of
presumptive, i.e., it should be applied in only documentary evidence is allowed in damages for loss of earning
the absence of proof in terms of statistics civil cases. All that is required is the capacity.71 (Citation omitted)
and actuarial presented by the plaintiff. satisfaction of the quantum of evidence, In a torts case, this Court also accepted
The Court of Appeals deleted the award of that is, preponderance of evidence. In testimony from co-workers of the deceased
actual damages granted to petitioner for addition, the Civil Code does not prohibit a to establish his income before his death.
Rodolfo's lost earnings. According to the claim for loss of earning capacity on the
The witnesses Mate and Reyes, who were
A: Yes, later, he was the general A: I have my rice fields in Los Angeles.
respectively the manager and auditor of
manager in my business in Butuan
Allied Overseas Trading Company and ....
City.
Padilla Shipping Company, were competent
to testify on matters within their personal Q: What were these business [es]? Q: Did you keep the payroll of
knowledge because of their positions, such Rod[o]lfo Torreon?
as the income and salary of the deceased, A: Three drug stores.
Nicanor A. Padilla (Sec. 30, Rule 130, Rules A: At this time, almost five years, I
of Court). As observed by the Court of Q: Can you identify the drug stores at think I have thrown that away
Appeals, since they were cross-examined that time? already, the records.
by petitioner's counsel, any objections to
their competence and the admissibility of A: Yes[,] sir. Q: From your estimate, how much
their testimonies, were deemed waived. income was he receiving?
The payrolls of the companies and the Q: What are the names?
decedent's income tax returns could, it is A: His basic salary is P10,000.00 a
A: All Farmacia Buena. Farmacia month and he is receiving 20%
true, have constituted the best evidence of
Bue[n]a located in G. Flores Ave., commission on the net profit.
his salaries, but there is no rule
Farmacia Buena located in A.D.
disqualifying competent officers of the
Curato St., and the other one in Q: How about for the other
corporation from testifying on the
Langihan. businesses, did he also receive
compensation of the deceased as an
share?
officer of the same corporation, and in
Q: What happened to these
any event, no timely objection was made
drugstores? A: Sometimes.
to their testimonies.72
If co-workers were deemed competent to A: At that time, I immediately sold my Q: How much do you think was
testify on the compensation that the store in Curato St., a few months Rod[o]lfo Torreon earning at that
deceased was receiving, all the more after the death of Rod[o]lfo time?
should an employer be allowed to testify on Torreon.
the amount she was paying her deceased A: More or less P15,000.00 and I think
employee. Q: Aside from the drug stores, what he was receiving commission from
Abellana testified that at the time of his other business you have at that the salesmen.73
death, deceased Rodolfo was earning time in 1989?
P15,000.00 per month: The simplified formula to compute loss of
A: I have an apartment. earning capacity was given in the ponencia
Q: Prior to the death of Rodolfo of People v. Wahiman:74
Torreon, do you know where he Q: And Rod[o]lfo Torreon was? [2/3 x 80 - age] x [gross annual income -
was working? necessary expenses equivalent to 50% of
A: He was the one supervising. the gross annual income]75
A: He was working under me. The concurring opinion in Wahiman was
Q: Aside from this apartment, what instructive on how to properly apply this
Q: You said he was working under else? formula:
you?
This is a step-by-step guide to compute an Loss of Earning Capacity = wrongdoing.83 Specifically, in cases of
award for loss of earning capacity. P1,919,700.00 quasi-delicts, it is granted if the respondent
(1) Subtract the age of the deceased from Respondents are liable to acted with gross negligence.84
80. pay P1,919,700.00 to compensate for the Kierulf v. Court of Appeals85 summarized
(2) Multiply the answer in (1) by 2, and income Rodolfo's heirs would have received the requirements for exemplary damages
divide it by 3 (these operations, are had he lived. to be awarded:
interchangeable). On the other hand, Vivian failed to prove Exemplary damages are designed to permit
(3) Multiply 50% to the annual gross the actual damages she suffered for the the courts to mould behavior that has
income of the deceased. death of her daughter, Monalisa. Vivian socially deleterious consequences, and its
(4) Multiply the answer in (2) by the merely testified as to the funeral and burial imposition is required by public policy to
answer in (3). This is the loss of earning expenses she incurred without producing suppress the wanton acts of an offender.
capacity to be awarded. any receipt or other evidence to support However, it cannot be recovered as a
When the evidence on record only shows her claim.78 Consequently, she cannot be matter of right. It is based entirely on the
monthly gross income, annual gross entitled to an award of actual damages on discretion of the court. Jurisprudence sets
income is derived from multiplying the account of Monalisa's loss. certain requirements before exemplary
monthly gross income by 12. When the III damages may be awarded, to wit:
daily wage is the only information provided With regard to the award of moral (1) (T)hey may be imposed by way of
during trial, such amount may be multiplied damages, this Court affirms the Court of example or correction only in addition,
by 260, or the number of usual workdays Appeals' ruling to grant it. Article 2206 of among others, to compensatory damages,
in a year, to arrive at annual gross the Civil Code expressly grants moral and cannot be recovered as a matter of
income.76 damages in addition to the award of civil right, their determination depending upon
At the time of his death, Rodolfo was 48 indemnity.79 the amount of compensatory damages that
years old and was earning P15,000.00 In her petition, Vivian maintains that the may be awarded to the claimant;
monthly.77 To determine his annual gross amount of moral damages granted her (2) the claimant must first establish his
income, this Court multiplied his gross should be increased. This Court is not right to moral, temperate, liquidated or
monthly income by 12 to get the result of convinced. Although the Civil Code80 grants compensatory damages; and
P180,000.00. compensation for the mental anguish (3) the wrongful act must be accompanied
Computing for life expectancy, or steps 1 suffered by the heirs for the loss of their by bad faith, and the award would be
and 2, results: loved one, this award is not meant to allowed only if the guilty party acted in a
Life Expectancy = 2/3 x (80 - 48) enrich the petitioner at the expense of the wanton, fraudulent, reckless, oppressive or
Life Expectancy = 2/3 x (32) respondents.81 malevolent manner.86 (Citations omitted)
Life Expectancy = 21.33 years The Court of Appeals correctly granted The Court of Appeals correctly imposed
Applying his life expectancy and annual P50,000.00 as moral damages to the heirs exemplary damages against respondents.
gross income to the general formula, or of Rodolfo. An award of P50,000.00 is also Each respondent clearly acted with gross
step 3: awarded to the heirs of Monalisa. negligence. Aparra drove without a license
Loss of Earning Capacity = Life Expectancy In addition, this Court affirms the award for and jeopardized the life of the cargo truck
x 1/2 annual gross income exemplary damages. Exemplary damages passengers. Caballes not only allowed
Loss of Earning Capacity = 21.33 x are imposed by way of example or to Aparra to drive on a perilous road but he
(P180,000.00/2) correct a wrongful conduct.82 It is imposed also permitted passengers to board the
Loss of Earning Capacity = 21.33 x as a punishment for highly reprehensible cargo truck despite knowing that the
P90,000.00 conduct, meant to deter serious vehicle was not designed to transport
people. Simolde was also grossly negligent The Court of Appeals used as a is made (at which time the
for tolerating his employees' negligent guide Eastern Shipping v. Court of quantification of damages may be
behaviors. Had Simolde been more diligent Appeals,88 which provided: deemed to have been reasonably
in supervising his employees, his driver II. With regard particularly to an ascertained). The actual base for the
would not have allowed passengers to award of interest in the concept of computation of legal interest shall, in
board the truck and his mechanic would not actual and compensatory damages, any case, be on the amount of finally
have attempted to drive a vehicle he was the rate of interest, as well as the adjudged.
not equipped to handle. accrual thereof, is imposed, as follows: 3. When the judgment of the court
Thus, to ensure that such behavior will not 1. When the obligation is breached, and it awarding a sum of money becomes final
be repeated, respondents are directed to consists in the payment of a sum of money, and executory, the rate of legal interest,
pay P10,000.00 as exemplary damage to i.e., a loan or forbearance of money, the whether the case falls under paragraph 1
the heirs of Rodolfo and Monalisa. interest due should be that which may have or paragraph 2, above, shall be 12% per
With respect to the award of litigation been stipulated in writing. Furthermore, annum from such finality until its
expenses and attorney's fees, the Civil the interest due shall itself earn legal satisfaction, this interim period being
Code allows attorney's fees to be awarded interest from the time it is judicially deemed to be by then an equivalent to a
if, as in this case, exemplary damages are demanded. In the absence of stipulation, forbearance of credit.89 (Emphasis
imposed. the rate of interest shall be 12% per annum supplied, citations omitted)
Considering the protracted litigation of this to be computed from default, i.e., from Interest by way of damages, also known as
dispute, an award of P100,000.00 as judicial or extrajudicial demand under and moratory interest, is allowed in actions for
attorney fees and P50,000.00 for litigation subject to the provisions of Article 1169 of breach of contract or tort.90 Since the
expenses are awarded to Vivian. the Civil Code. obligation in this case stems from a quasi-
Finally, there is a need to modify the 2. When a[n] obligation, not delict and not from a loan or forbearance of
interest imposed by the Court of Appeals. constituting a loan or forbearance of money, the interest awarded falls under
In its Decision, the Court of Appeals money, is breached, an interest on the the second paragraph illustrated in Eastern
imposed 6% interest on the award of amount of damages awarded may be Shipping. This is in line with Article 2211 of
damages and a 12% interest on the imposed at the discretion of the court the Civil Code which states that this Court
judgment award: at the rate of 6% per annum. No may impose "interest as a part of the
In addition, We impose the legal interest at interest, however, shall be adjudged damages" in quasi-delict cases.91 Awarding
the rate of SIX PERCENT (6%) per annum on unliquidated claims or damages this interest is discretionary upon the
of the total amount of damages awarded by except when or until the demand can courts.92
this Court in the amount of Two Hundred be established with reasonable This is different from interest on interest
Forty Five Thousand (P245,000.00) Pesos, certainty. Accordingly, where the imposed under Article 221293 of the Civil
starting from the date of the promulgation demand is established with reasonable Code. Interest on interest is mandatory
of the court a quo's Decision or from 17 certainty, the interest shall begin to and is imposed as penalty for the delay in
November 2000 and the rate of TWELVE run from the time the claim is made the payment of a sum of money.94
PERCENT (12%) interest per annum, in lieu judicially or extrajudicially (Art. 1169, Guided by Eastern Shipping, the Court of
of SIX PERCENT (6%), upon finality of the Civil Code) but when such certainty Appeals imposed a 6% interest on the
decision of this Court. This is in line with cannot be so reasonably established at award of damages starting from November
the ruling of the Supreme Court in Eastern the time the demand is made, the 17, 2000, the date of the promulgation of
Shipping Lines, Inc. versus Court of interest shall begin to run only from the Regional Trial Court Decision. However,
Appeals[.]87 the date of the judgment of the court this award is not proper.
Generally, the Civil Code does not allow Section 1. The rate of interest for the loan Consequently, the guidelines laid down
interest upon unliquidated claims or or forbearance of any money, goods or in Eastern Shipping have been amended as
damages to be recovered unless they can credits and the rate allowed in judgments, follows:
be established with reasonable in the absence of an express contract as to I. When an obligation, regardless of its
certainty.95 The rationale for this is such rate of interest, shall be six percent source, i.e., law, contracts, quasi-
because it would be unfair to require the (6%) per annum. contracts, delicts or quasi-delicts is
liable person to pay interest on a sum that Section 2. In view of the above, Subsection breached, the contravenor can be held
is yet to be determined. However, the X305.1 of the Manual of Regulations for liable for damages. The provisions under
courts, in the interest of justice, may Banks and Sections 4305Q.1, 4305S.3 and Title XVIII on "Damages" of the Civil Code
impose interest on unliquidated claims or 4303P.1 of the Manual of Regulations for govern in determining the measure of
damages upon judgment. Non-Bank Financial Institutions are hereby recoverable damages.
In this case, there is no need to impose a amended accordingly. II. With regard particularly to an award of
moratory interest. Actual damages to This Circular shall take effect on 1 July interest in the concept of actual and
compensate for the deceased's lost 2013. compensatory damages, the rate of
earnings are already granted. Payment for Thus, from the foregoing, in the absence of interest, as well as the accrual thereof, is
Rodolfo's lost earning capacity should be an express stipulation as to the rate of imposed, as follows:
enough to cover the actual damages interest that would govern the parties, the 1. When the obligation is breached, and it
suffered by his heirs. rate of legal interest for loans or consists in the payment of a sum of money,
On the other hand, pursuant to Eastern forbearance of any money, goods or credits i.e., a loan or forbearance of money, the
Shipping, the Court of Appeals correctly and the rate allowed in judgments shall no interest due should be that which may have
imposed an interest on the judgment longer be twelve percent (12%) per annum been stipulated in writing. Furthermore,
award. However, the 12% interest should — as reflected in the case of Eastern the interest due shall itself earn legal
be modified. Following Bangko Sentral ng Shipping Lines and Subsection X305.1 of interest from the time it is judicially
Pilipinas- Monetary Board Circular No. 796 the Manual of Regulations for Banks and demanded. In the absence of stipulation,
dated May 16, 2013, the rate of legal Sections 4305Q.I, 4305S.3 and 4303P.1 of the rate of interest shall be 6% per annum
interest is now 6%. Nacar v. Gallery the Manual of Regulations for Non-Bank to be computed from default, i.e., from
Frames96 is instructive: Financial Institutions, before its judicial or extrajudicial demand under and
Recently, however, the Bangko Sentral ng amendment by BSP-MB Circular No. 799 — subject to the provisions of Article 1169 of
Pilipinas Monetary Board (BSP-MB), in its but will now be six percent (6%) per annum the Civil Code.
Resolution No. 796 dated May 16, 2013, effective July 1, 2013. It should be noted, 2. When an obligation, not constituting a
approved the amendment of Section 2 of nonetheless, that the new rate could only loan or forbearance of money, is breached,
Circular No. 905, Series of 1982 and, be applied prospectively and not an interest on the amount of damages
accordingly, issued Circular No. 799, Series retroactively. Consequently, the twelve awarded may be imposed at the discretion
of 2013, effective July 1, 2013, the percent (12%) per annum legal interest of the court at the rate of 6% per annum.
pertinent portion of which reads: shall apply only until June 30, 2013. Come No interest, however, shall be adjudged on
The Monetary Board, in its Resolution No. July 1, 2013 the new rate of six percent unliquidated claims or damages, except
796 dated 16 May 2013, approved the (6%) per annum shall be the prevailing when or until the demand can be
following revisions governing the rate of rate of interest when established with reasonable certainty.
interest in the absence of stipulation in loan applicable. (Citations omitted)
97
Accordingly, where the demand is
contracts, thereby amending Section 2 of established with reasonable certainty, the
Circular No. 905, Series of 1982: interest shall begin to run from the time the
claim is made judicially or extrajudicially a. P50,000.00 as civil indemnity for
(Art. 1169, Civil Code), but when such the death of Rodolfo Torreon;
certainty cannot be so reasonably b. P50,000.00 as civil indemnity for
established at the time the demand is the death of Monalisa Torreon;
made, the interest shall begin to run only c. P1,919,700.00 as actual damages
from the date the judgment of the court is for Rodolfo Torreon's lost earning
made (at which time the quantification of capacity;
damages may be deemed to have been d. P100,000.00 as moral damages
reasonably ascertained). The actual base composed of P50,000.00 for
for the computation of legal interest shall, Rodolfo Torreon's heirs and
in any case, be on the amount finally P50,000.00 for Monalisa Torreon's
adjudged. heirs;
3. When the judgment of the court e. P10,000.00 as exemplary damages;
awarding a sum of money becomes f. P100,000.00 as attorney fees; and
final and executory, the rate of legal g. P50,000.00 as litigation expenses.
interest, whether the case falls under An interest at the legal rate of six percent
paragraph 1 or paragraph 2, above, (6%) per annum shall also be imposed on
shall be 6% per annum from such the total judgment award computed from
finality until its satisfaction, this the finality of this decision until its actual
interim period being deemed to be by payment.
then an equivalent to a forbearance of SO ORDERED.
credit.98 (Emphasis supplied)
Since the judgment of this Court has not
yet become final and executory, the
interest rate applicable to the judgment
award is 6% and not 12% as imposed by
the Court of Appeals.
The interest on the judgment award
discussed in Eastern Shipping is reckoned
from finality of the judgment until full
payment. It is designed to penalize non-
payment of the judgment award. Thus, if
the liable party immediately pays, no
interest will be imposed.
WHEREFORE, the April 3, 2008 Decision
of the Court of Appeals in CA-G.R. CV No.
71090 is MODIFIED. Respondents
Carmelo T. Simolde, Felix Caballes, and
Generoso Aparra, Jr., are ORDERED to
pay solidarity petitioner Vivian B. Torreon
the amounts of:
G.R. No. 155990 September 12, (Universal Aquarius Chapter), hereinafter (26) As a consequence of the companion
2007 referred to as Obrero Filipino, sent a Notice blockade on plaintiff Marman's premises,
UNIVERSAL AQUARIUS, INC. and of Strike to Universal. its business operations were paralyzed;
CONCHITA TAN, petitioners, On the same date, Resources informed the (27) Plaintiff Universal's and plaintiff
vs. Regional Office of the Department of Labor Marman's operations continue to be at a
Q.C. HUMAN RESOURCES and Employment that the officers and standstill, causing damages in the form of
MANAGEMENT members of Obrero Pilipino are its unearned sales x x x
CORPORATION, respondent *. employees and not employees of Universal. (31) Defendant Resources represented
DECISION Five days later, or on December 19, 2000, itself to be able to provide temporary
AUSTRIA-MARTINEZ, J.: Capocyon and 36 other union officers and workers who are competent to assist in
Before the Court is a Petition for Review members3 of Obrero Pilipino, picketed, plaintiff Universal's plant operations; it held
on Certiorari under Rule 45 of the Rules of barricaded and obstructed the entry and itself out as a manpower firm with a pool of
Court assailing the Decision1 dated August exit of Universal's Antipolo City chemical what can generally be described as law-
23, 2002 of the Court of Appeals (CA) in plant and intercepted Universal's delivery abiding workers, as that is essential in its
CA-G.R. SP No. 65570 and the CA trucks thereby disrupting its business business of job-contracting;
Resolution2 dated October 22, 2002 which operations. Marman's depot, which (32) Defendant Resources instead sent a
denied petitioners' Motion for adjoined Universal's plant, suffered a band of scoundrels who allowed
Reconsideration. similar fate. themselves to be misdirected and
The facts: On December 27, 2000, Universal and Tan misguided by Capocyan, an attorney (?),
Universal Aquarius, Inc. (Universal) is filed a Complaint against the strikers and and "national president" of Obrero Pilipino
engaged in the manufacture and Resources before the Regional Trial Court, (?)
distribution of chemical products in Metro Branch 74, Antipolo City (RTC) for breach x x x5
Manila. It operates a chemical plant in of contract and damages suffered due to On January 3, 2001, Universal forged an
Antipolo City. Conchita Tan (Tan), as a the disruption of their respective business Agreement (To End Labor Dispute)
proprietor under the name and style of operations, docketed as Civil Case No. 00- with Obrero Pilipino.6 Thus, the strike
Marman Trading (Marman), is engaged in 6029.4 The Complaint alleges, in part: which affected the business operations of
the trading, delivery and distribution of (17) On December 19, 2000, at about 2:00 Universal and Marman ended. Universal
chemical products in Metro Manila, with a o'clock in the morning, in gross violation of and Tan then filed a Notice of Dismissal as
depot in Antipolo City adjoining Universal's all applicable laws, rules and regulations, against the strikers.7
chemical plant. defendants Capocyan, et al., willfully, On January 8, 2001, Resources filed a
Q.C. Human Resources Management unlawfully and feloniously picketed, Motion to Dismiss on the grounds that the
Corporation (Resources) is engaged in barricaded and otherwise obstructed entry complaint stated no cause of action against
supplying manpower to various and exit to and from the main gate of it; that, assuming the existence of such
establishments. It supplied Universal with plaintiff Universal's plant; x x x cause of action, the same was lost upon
about seventy-four (74) temporary (23) In a parallel move, and a companion dismissal of the case against the individual
workers to assist Universal in the operation activity to their unlawful obstruction of defendants; and lack of jurisdiction.8
of its chemical plant in Antipolo City. plaintiff Universal's premises, Capocyan, et In an Order dated February 2, 2001, the
On December 13, 2000, Rodolfo Capocyan al., likewise picketed , obstructed and RTC denied the Motion to
(Capocyan), claiming to be the general otherwise barricaded the premises of Dismiss. Resources filed a Motion for
9

counsel/national president of the labor plaintiff Marman, whose depot adjoined Reconsideration10 but it was denied by the
organization called Obrero Pilipino that of plaintiff Universal; x x x RTC in its Order dated May 11, 2001.11
On July 11, 2001, Resources filed a petition The present petition is anchored on the 2. An obligation on the part of the named
for certiorari and prohibition with the following grounds: defendant to respect or not to violate such
CA.12 On August 23, 2002, the CA rendered The Honorable Court of Appeals seriously right; and
a Decision which set aside the Orders dated erred in dismissing Civil Case No. 00-6829 3. Act or omission on the part of such
February 2, 2001 and May 11, 2001 of the for lack of cause of action. defendant in violation of the right of the
RTC and dismissed the complaint for lack The Honorable Court of Appeals seriously plaintiff or constituting a breach of the
of cause of action.13 The CA held that: erred in holding that the lower court obligation of the defendant to the plaintiff
It was very clear from the allegations in the committed grave abuse of discretion for which the latter may maintain an action
complaint that the claims of plaintiffs tantamount to lack of jurisdiction when he for recovery of damages or other
(private respondents in this case) stemmed denied the motion to dismiss filed by appropriate relief.20
from the strike, which resulted in the respondent Resources.17 It is only upon the occurrence of the last
disruption of their business operations. Universal and Tan aver that the complaint element that a cause of action arises,
From the four corners of the complaint, it stated a cause of action against Resources giving the plaintiff the right to maintain an
was apparent that the right of the plaintiffs that would warrant cognizance by the RTC; action in court for recovery of damages or
to operate their business was violated the allegations of the complaint clearly other appropriate relief.21
when the defendants, Rodolfo Capocyan point out that Universal is suing Resources In Hongkong and Shanghai Banking
and company, staged the strike in the for the latter's failure to supply the former Corporation Limited v. Catalan, this Court
22

premises of Universal Aquarius and with temporary workers who will help in its held:
Marman, thereby disrupting the plant's business. The elementary test for failure to state a
operations. Q.C. Human Resources On the other hand, Resources contends cause of action is whether the complaint
Management Corporation (the petitioner in that the complaint stated no cause of alleges facts which if true would justify the
this case) was made defendant in the action against it since there is nothing in relief demanded. Stated otherwise, may
complaint only because it was the employer the allegations thereof that it participated the court render a valid judgment upon the
of the strikers. However, subsequent in the acts committed by its employees. facts alleged therein? The inquiry is into the
events erased the cause of action of The petition is partly impressed with merit. sufficiency, not the veracity of the material
plaintiffs, that is, when Universal Aquarius Section 1(g) Rule 1618 of the 1997 Rules of allegations. If the allegations in the
agreed to end the dispute by giving Civil Procedure makes it clear that failure complaint furnish sufficient basis on which
financial assistance to the striking workers to make a sufficient allegation of a cause of it can be maintained, it should not be
and the dismissal of the case against them. action in the complaint warrants the dismissed regardless of the defense that
With this turn of events, the trial court had dismissal thereof. Section 2, Rule 2 of the may be presented by the defendants.23
no more issue to resolve, and the dismissal 1997 Rules of Civil Procedure defines a Verily, it is beside the point whether or not
of the complaint against the strikers cause of action as the act or omission by the allegations in the complaint are true,
necessarily warranted the dismissal of the which a party violates the right of another. for with a motion to dismiss complaint
complaint against Q.C. Human Resources It is the delict or the wrongful act or based on lack of cause of action, the
Management Corporation because plaintiffs omission committed by the defendant in movant only hypothetically admits the
had no more cause of action against it.14 violation of the primary right of the truth of the facts alleged in the complaint;
Universal and Tan filed a Motion for plaintiff.19 Its essential elements are as that is, assuming arguendo that the facts
Reconsideration15 but it was denied by the follows: alleged are true, those allegations are
CA in its Resolution dated October 22, 1. A right in favor of the plaintiff by insufficient for the court to render a valid
2002.16 whatever means and under whatever law it judgment upon the same in accordance
arises or is created; with the prayer of the complaint.24
The complaint does not have to establish or employer incurs no liability when an
allege facts proving the existence of a employee’s conduct, act or omission is
cause of action at the outset; this will have beyond the range of
to be done at the trial on the merits of the employment.29 Unquestionably, when
case.25 To sustain a motion to dismiss for Resources' employees staged a strike, they
lack of cause of action, the complaint must were acting on their own, beyond the range
show that the claim for relief does not of their employment. Thus, Resources
exist, rather than that a claim has been cannot be held liable for damages caused
defectively stated, or is ambiguous, by the strike staged by its employees.
indefinite or uncertain.26 WHEREFORE, the petition is PARTLY
Anent Universal's claim for breach for GRANTED. The Decision dated August 23,
contract and damages, the Court is 2002 and Resolution dated October 22,
convinced that the Complaint sufficiently 2002 of the Court of Appeals in CA-G.R. SP
states a cause of action against Resources. No. 65570 are REVERSED and SET
The Complaint alleged that Universal had a ASIDE insofar only as the dismissal of the
contract of employment of temporary complaint in Civil Case No. 00-6029 for lack
workers with Resources; and that of cause of action of Universal Aquarius,
Resources violated said contract by Inc. against Q.C. Human Resources
supplying it with unfit, maladjusted Management Corporation is concerned.
individuals who staged a strike and The complaint against the latter
disrupted its business operations. Given is REINSTATED. The Regional Trial Court,
these hypothetically admitted facts, the Branch 74, Antipolo City is DIRECTED to
RTC, in the exercise of its original and continue with the proceedings on the cause
exclusive jurisdiction,27 could have of action of Universal Aquarius, Inc. against
rendered judgment over the dispute. Q.C. Human Resources Management
However, with regard to Tan's claim for Corporation.
damages, the Court finds that she has no The dismissal of the complaint in Civil Case
cause of action against Resources. A No. 00-6029 for lack of cause of action of
thorough reading of the allegations of the Conchita Tan against Q.C. Human
Complaint reveals that Tan's claim for Resources Management Corporation
damages clearly springs from the strike is AFFIRMED.
effected by the employees of Resources. It SO ORDERED.
is settled that an employer's liability for
acts of its employees attaches only when
the tortious conduct of the employee
relates to, or is in the course of, his
employment.28 The question then is
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. An
G.R. No. 119121 August 14, 1998 Consequently, in view of the foregoing employer liable for torts committed by his
NATIONAL POWER consideration, judgment is hereby employees within the scope of their
CORPORATION, petitioner, rendered ordering PHESCO, Inc. and assigned task, there must exist an
vs. Gavino Ilumba upon receipt hereof: employer-employee relationship. (Martin
COURT OF APPEALS, Fifteenth Division 1. To pay jointly and severally the plaintiffs vs. Court of Appeals, 205 SCRA 591).
and PHESCO thru the Dansalan College the sum of WHEREFORE, we REVERSE the appealed
INCORPORATED, respondents. P954,154.55 representing the actual or decision. In lieu thereof, the Court renders
compensatory damages incurred by the judgment sentencing defendant National
plaintiffs; and Power Corporation to pay plaintiffs the sum
ROMERO, J.: 2. To pay the sum of P50,000.00 of P174,889.20 plus P20,000.00 as
On July 22, 1979, a convoy of four (4) representing Attorney's fees. attorney's fees and costs.
dump trucks owned by the National Power SO ORDERED. SO ORDERED.
Corporation (NPC) left Marawi city bound Dissatisfied, PHESCO appealed to the Court Chagrined by the sudden turnaround, NPC
for Iligan city. Unfortunately, enroute to its of Appeals, which on November 10, 1994 filed a motion for reconsideration of said
destination, one of the trucks with plate no reversed the trial court's judgment. We decision which was, however, denied on
RFT-9-6-673 driven by a certain Gavino quote the pertinent portion of the decision: February 9, 1995. 1 Hence, this petition.
Ilumba figured in a head-on-collision with A "labor only" contractor is considered The principal query to be resolved is, as
a Toyota Tamaraw. The incident resulted in merely as an agent of the employer between NPC and PHESCO, who is the
the death of three (3) persons riding in the (Deferia vs. National Labor Relations employer of Ilumba, driver of the
Toyota Tamaraw, as well as physical Commission, 194 SCRA 525). A finding that dumptruck which figured in the accident
injuries to seventeen other passengers. a contractor is a "labor only" contractor is and which should, therefore, would be
On June 10, 1980, the heirs of the victims equivalent to a finding that there is an liable for damages to the victims.
filed a complaint for damages against employer-employee relationship between Specifically, NPC assigns the sole error
National Power Corporation (NPC) and the owner of the project and the employees that:
PHESCO Incorporated (PHESCO) before the of the "labor only" contractor (Industrial THE COURT OF APPEALS DECISION
then Court of First Instance of Lanao del Timer Corporation vs. National Labor FINDING THAT PETITIONER NPC AS THE
Norte, Marawi City. When defendant Relations Commission, 202 SCRA 465). So, EMPLOYER OF THE DRIVER GAVINO
PHESCO filed its answer to the complaint it even if Phesco hired driver Gavino Ilumba, ILUMBA, AND CONSEQUENTLY
contended that it was not the owner of the as Phesco is admittedly a "labor only" SENTENCING IT TO PAY THE ACTUAL AND
dump truck which collided with the Toyota contractor of Napocor the statute itself COMPENSATORY DAMAGES SUSTAINED BY
Tamaraw but NPC. Moreover, it asserted establishes an employer-employee COMPLAINTS, IS NOT IN ACCORD WITH
that it was merely a contractor of NPC with relationship between the employer THE LAW OR WITH THE APPLICABLE
the main duty of supplying workers and (Napocor) and the employee (driver RULINGS OF THIS HONORABLE COURT. 2
technicians for the latter's projects. On the Ilumba) of the labor only contractor As earlier stated, NPC denies that the
other hand, NPC denied any liability and (Phesco). (Ecal vs. National Labor Relations driver of the dump truck was its employee.
countered that the driver of the dump truck Commission, 195 SCRA 224). It alleges that it did not have the power of
was the employee of PHESCO. Consequently, we hold Phesco not liable for selection and dismissal nor the power of
After trial on the merits, the trial court the tort of driver Gavino Ilumba, as there control over Ilumba. 3 PHESCO,
rendered a decision dated July 25, 1988 was no employment relationship between meanwhile, argues that it merely acted as
absolving NPC of any liability. The Phesco and driver Gavino Ilumba. Under a "recruiter" of the necessary workers for
dispositive portion reads: Article 2180 of the Civil Code, to hold the and in behalf of NPC. 4
Before we decide who is the employer of PHESCO were subject to confirmation by employer) who enters into an agreement
Ilumba, it is evidently necessary to NPC. 8 Then too, it cannot be ignored that with a job contractor, either for the
ascertain the contractual relationship if PHESCO enters into any sub-contract or performance of a specified work or for the
between NPC and PHESCO. Was the lease, again NPC's concurrence is supply of manpower, assumes
relationship one of employer and job needed. 9 Another consideration is that responsibility over the employees of the
(independent) contractor or one of even in the procurement of tools and latter. 15
employer and "labor only" contractor? equipment that will be used by PHESCO, However, NPC maintains that even
Job (independent) contracting is present if NPC's favorable recommendation is still assuming that a "labor only" contract exists
the following conditions are met: (a) the necessary before these tools and between it and PHESCO, its liability will not
contractor carries on an independent equipment can be purchased. 10
Notably, it extend to third persons who are injured
business and undertakes the contract work is NPC that will provide the money or due to the tortious acts of the employee of
on his own account under his own funding that will be used by PHESCO to the "labor-only" contractor. 16 Stated
responsibility according to his own manner undertake the project. 11 Furthermore, it otherwise, its liability shall only be limited
and method, free from the control and must be emphasized that the project being to violations of the Labor Code and not
direction of his employer or principal in all undertaken by PHESCO, i.e., construction quasi-delicts.
matters connected with the performance of of power energy facilities, is related to To bolster its position, NPC cites Section
the work except to the result thereof; and NPC's principal business of power 9(b), Rule VII, Book III of the Omnibus
(b) the contractor has substantial capital or generation. In sum, NPC's control over Rules Implementing the Labor Code which
investments in the form of tools, PHESCO in matters concerning the reads:
equipment, machineries, work premises performance of the latter's work is evident. (b) Labor only contracting as defined
and other materials which are necessary in It is enough that NPC has the right to wield herein is hereby prohibited and the person
the conduct of his business. 5 Absent these such power to be considered as the acting as contractor shall be considered
requisites, what exists is a "labor only" employer. 12 merely as an agent or intermediary of the
contract under which the person acting as Under this factual milieu, there is no doubt employer who shall be responsible to the
contractor is considered merely as an agent that PHESCO was engaged in "labor-only" workers in the same manner and extent as
or intermediary of the principal who is contracting vis-à-vis NPC and as such, it is if the latter were directly employed by him.
responsible to the workers in the same considered merely an agent of the latter. In In other words, NPC posits the theory that
manner and to the same extent as if they labor-only contracting, an employer- its liability is limited only to compliance
had been directly employed by employee relationship between the with the substantive labor provisions on
him. 6 Taking into consideration the above principal employer and the employees of working conditions, rest periods, and
distinction and the provisions of the the "labor-only" contractor is created. wages and shall not extend to liabilities
"Memorandum of Understanding" entered Accordingly, the principal employer is suffered by third parties, viz.:
into by PHESCO and NPC, we are convinced responsible to the employees of the "labor- Consequently, the responsibilities of the
that PHESCO was engaged in "labor only" only" contractor as if such employees had employer contemplated in a "labor only"
contracting. been directly employed by the principal contract, should, consistent with the terms
It must be noted that under the employer. 13 Since PHESCO is only a expressed in the rule, be restricted "to the
Memorandum, NPC had mandate to "labor-only" contractor, the workers it workers." The same can not be expanded
approve the "critical path network and rate supplied to NPC, including the driver of the to cover liabilities for damages to third
of expenditure to be undertaken by ill-fated truck, should be considered as persons resulting from the employees'
PHESCO. 7 Likewise, the manning schedule employees of NPC. 14 After all, it is tortious acts under Article 2180 of the Civil
and pay scale of the workers hired by axiomatic that any person (the principal Code. 17
The reliance is misplaced. It bears work. The chauffeur and the two persons who committed the negligence which gave
stressing that the action was premised on on the truck were the employees of Ora, rise to the action. 22
the recovery of damages as a result of the contractor, but Ora, the contractor, was Finally, NPC, even if it truly believed that it
quasi-delict against both NPC and PHESCO, an employee of Norton & Harrison Co., was not the employer of the driver, could
hence, it is the Civil Code and not the Labor charged with the duty of directing the still have disclaimed any liability had it
Code which is the applicable law in loading and transportation of the lumber. raised the defense of due diligence in the
resolving this case. And it was the negligence in loading the selection or supervision of PHESCO and
To be sure, the pronouncement of this lumber and the use of minors on the truck Ilumba. 23 However, for some reason or
Court in Filamer Christian Institute v. which caused the death of the unfortunate another, NPC did not invoke said defense.
IAC, 18 is most instructive: boy. On the facts and the law, Ora was not Hence, by opting not to present any
The present case does not deal with a labor an independent contractor, but was the evidence that it exercised due diligence in
dispute on conditions of employment servant of the defendant, and for his the supervision of the activities of PHESCO
between an alleged employee and an negligence defendant was responsible. and Ilumba, NPC has foreclosed its right to
alleged employer. It invokes a claim Given the above considerations, it is interpose the same on appeal in conformity
brought by one for damages for injury apparent that Article 2180 of the Civil Code with the rule that points of law, theories,
caused by the patently negligent acts of a and not the Labor Code will determine the issues of facts and arguments not raised in
person, against both doer-employee and liability of NPC in a civil suit for damages the proceedings below cannot be ventilated
his employer. Hence, the reliance on the instituted by an injured person for any for the first time on
implementing rule on labor to disregard the negligent act of the employees of the "labor appeal. 24 Consequently, its liability
primary liability of an employer under only" contractor. This is consistent with the stands.
Article 2180 of the Civil Code is misplaced. ruling that a finding that a contractor was WHEREFORE, in view of the foregoing, the
An implementing rule on labor cannot be a "labor-only" contractor is equivalent to a assailed decision of the Court of Appeals
used by an employer as a shield to avoid finding that an employer-employee dated November 10, 1994 and its
liability under the substantive provisions of relationship existed between the owner accompanying resolution dated February 9,
the Civil Code. (principal contractor) and the "labor-only" 1995 are AFFIRMED without prejudice to
Corollarily from the above doctrine, the contractor, including the latter's the right of NPC to demand from PHESCO
ruling in Cuison v. Norton & Harrison workers. 20 and Ilumba reimbursement of the damages
Co., 19 finds applicability in the instant With respect to the liability of NPC as the it would be adjudged to pay to
case, viz.: direct employer, Article 2180 of the Civil complainants. No costs.
It is well to repeat that under the civil law Code explicitly provides: SO ORDERED.
an employer is only liable for the Employers shall be liable for the damages
negligence of his employees in the caused by their employees and household
discharge of their respective duties. The helpers acting within the scope of their
defense of independent contractor would assigned tasks, even though the former are
be a valid one in the Philippines just as it not engaged in any business or industry.
would be in the United States. Here Ora In this regard, NPC's liability is direct,
was a contractor, but it does not primary and solidary with PHESCO and the
necessarily follow that he was an driver. 21 Of course, NPC, if the judgment
independent contractor. The reason for this for damages is satisfied by it, shall have
distinction is that the employer retained recourse against PHESCO and the driver
the power of directing and controlling the
G.R. No. 115024 February 7, something wrong with her tires; she P180,000.00, including loss of expected
1996 stopped at a lighted place where there earnings.
MA. LOURDES VALENZUELA, petitioner, were people, to verify whether she had a Defendant Richard Li denied that he was
vs. flat tire and to solicit help if needed. Having negligent. He was on his way home,
COURT OF APPEALS, RICHARD LI and been told by the people present that her travelling at 55 kph; considering that it was
ALEXANDER COMMERCIAL, rear right tire was flat and that she cannot raining, visibility was affected and the road
INC., respondents. reach her home in that car's condition, she was wet. Traffic was light. He testified that
x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x- parked along the sidewalk, about 1-1/2 he was driving along the inner portion of
x-x-x-x-x-x-x-x-x-x-x-x-x feet away, put on her emergency lights, the right lane of Aurora Blvd. towards the
G.R. No. 117944 February 7, alighted from the car, and went to the rear direction of Araneta Avenue, when he was
1996 to open the trunk. She was standing at the suddenly confronted, in the vicinity of A.
RICHARD LI, petitioner, left side of the rear of her car pointing to Lake Street, San Juan, with a car coming
vs. the tools to a man who will help her fix the from the opposite direction, travelling at 80
COURT OF APPEALS and LOURDES tire when she was suddenly bumped by a kph, with "full bright lights". Temporarily
VALENZUELA, respondents. 1987 Mitsubishi Lancer driven by defendant blinded, he instinctively swerved to the
DECISION Richard Li and registered in the name of right to avoid colliding with the oncoming
KAPUNAN, J.: defendant Alexander Commercial, Inc. vehicle, and bumped plaintiff's car, which
These two petitions for review Because of the impact plaintiff was thrown he did not see because it was midnight blue
on certiorari under Rule 45 of the Revised against the windshield of the car of the in color, with no parking lights or early
Rules of Court stem from an action to defendant, which was destroyed, and then warning device, and the area was poorly
recover damages by petitioner Lourdes fell to the ground. She was pulled out from lighted. He alleged in his defense that the
Valenzuela in the Regional Trial Court of under defendant's car. Plaintiff's left leg left rear portion of plaintiff's car was
Quezon City for injuries sustained by her in was severed up to the middle of her thigh, protruding as it was then "at a standstill
a vehicular accident in the early morning of with only some skin and sucle connected to diagonally" on the outer portion of the right
June 24, 1990. The facts found by the trial the rest of the body. She was brought to lane towards Araneta Avenue (par. 18,
court are succinctly summarized by the the UERM Medical Memorial Center where Answer). He confirmed the testimony of
Court of Appeals below: she was found to have a "traumatic plaintiff's witness that after being bumped
This is an action to recover damages based amputation, leg, left up to distal thigh the car of the plaintiff swerved to the right
on quasi-delict, for serious physical injuries (above knee)". She was confined in the and hit another car parked on the sidewalk.
sustained in a vehicular accident. hospital for twenty (20) days and was Defendants counterclaimed for damages,
Plaintiff's version of the accident is as eventually fitted with an artificial leg. The alleging that plaintiff was reckless or
follows: At around 2:00 in the morning of expenses for the hospital confinement negligent, as she was not a licensed driver.
June 24, 1990, plaintiff Ma. Lourdes (P120,000.00) and the cost of the artificial The police investigator, Pfc. Felic Ramos,
Valenzuela was driving a blue Mitsubishi leg (P27,000.00) were paid by defendants who prepared the vehicular accident report
lancer with Plate No. FFU 542 from her from the car insurance. and the sketch of the three cars involved in
restaurant at Marcos highway to her home In her complaint, plaintiff prayed for moral the accident, testified that the plaintiff's car
at Palanza Street, Araneta Avenue. She damages in the amount of P1 million, was "near the sidewalk"; this witness did
was travelling along Aurora Blvd. with a exemplary damages in the amount of not remember whether the hazard lights of
companion, Cecilia Ramon, heading P100,000.00 and other medical and related plaintiff's car were on, and did not notice if
towards the direction of Manila. Before expenses amounting to a total of there was an early warning device; there
reaching A. Lake Street, she noticed was a street light at the corner of Aurora
Blvd. and F. Roman, about 100 meters (c) P30,000.00, a month for unrealized his beerhouse located at Aurora Boulevard
away. It was not mostly dark, i.e. "things profits in plaintiff's two (2) beauty salons after A. Lake Street, at or about 2:00 a.m.
can be seen" (p. 16, tsn, Oct. 28, 1991). from July, 1990 until the date of this of June 24, 1990 when his attention was
A witness for the plaintiff, Rogelio decision; caught by a beautiful lady (referring to the
Rodriguez, testified that after plaintiff 3. P1,000,000.00, in moral damages; plaintiff) alighting from her car and opening
alighted from her car and opened the trunk 4. P50,000.00, as exemplary damages; the trunk compartment; he noticed the car
compartment, defendant's car came 5. P60,000.00, as reasonable attorney's of Richard Li "approaching very fast ten
approaching very fast ten meters from the fees; and (10) meters away from the scene";
scene; the car was "zigzagging". The rear 6. Costs. defendant's car was zigzagging", although
left side of plaintiff's car was bumped by As a result of the trial court's decision, there were no holes and hazards on the
the front right portion of defendant's car; defendants filed an Omnibus Motion for street, and "bumped the leg of the plaintiff"
as a consequence, the plaintiff's car New Trial and for Reconsideration, citing who was thrown against the windshield of
swerved to the right and hit the parked car testimony in Criminal Case O.C. No. defendant's care, causing its destruction.
on the sidewalk. Plaintiff was thrown to the 804367 (People vs. Richard Li), tending to He came to the rescue of the plaintiff, who
windshield of defendant's car, which was show that the point of impact, as depicted was pulled out from under defendant's car
destroyed, and landed under the car. He by the pieces of glass/debris from the and was able to say "hurting words" to
stated that defendant was under the parties' cars, appeared to be at the center Richard Li because he noticed that the
influence of liquor as he could "smell it very of the right lane of Aurora Blvd. The trial latter was under the influence of liquor,
well" (pp. 43, 79, tsn, June 17, 1991). court denied the motion. Defendants because he "could smell it very well" (p.
After trial, the lower court sustained the forthwith filed an appeal with the 36, et. seq., tsn, June 17, 1991). He knew
plaintiff's submissions and found defendant respondent Court of Appeals. In a Decision that plaintiff owned a beerhouse in Sta.
Richard Li guilty of gross negligence and rendered March 30, 1994, the Court of Mesa in the 1970's, but did not know either
liable for damages under Article 2176 of Appeals found that there was "ample basis plaintiff or defendant Li before the
the Civil Code. The trial court likewise held from the evidence of record for the trial accident.
Alexander Commercial, Inc., Li's employer, court's finding that the plaintiff's car was In agreeing with the trial court that the
jointly and severally liable for damages properly parked at the right, beside the defendant Li was liable for the injuries
pursuant to Article 2180. It ordered the sidewalk when it was bumped by sustained by the plaintiff, the Court of
defendants to jointly and severally pay the defendant's car."1 Dismissing the Appeals, in its decision, however, absolved
following amounts: defendants' argument that the plaintiff's the Li's employer, Alexander Commercial,
1. P41,840.00, as actual damages, car was improperly parked, almost at the Inc. from any liability towards petitioner
representing the miscellaneous expenses center of the road, the respondent court Lourdes Valenzuela and reduced the
of the plaintiff as a result of her severed left noted that evidence which was supposed to amount of moral damages to P500,000.00.
leg; prove that the car was at or near center of Finding justification for exemplary
2. The sums of (a) P37,500.00, for the the right lane was never presented during damages, the respondent court allowed an
unrealized profits because of the stoppage the trial of the case.2 The respondent court award of P50,000.00 for the same, in
of plaintiff's Bistro La Conga restaurant furthermore observed that: addition to costs, attorney's fees and the
three (3) weeks after the accident on June Defendant Li's testimony that he was other damages. The Court of Appeals,
24, 1990; (b) P20,000.00, a month, as driving at a safe speed of 55 km./hour is likewise, dismissed the defendants'
unrealized profits of the plaintiff in her self serving; it was not corroborated. It was counterclaims. 3

Bistro La Conga restaurant, from August, in fact contradicted by eyewitness Consequently, both parties assail the
1990 until the date of this judgment and Rodriguez who stated that he was outside respondent court's decision by filing two
separate petitions before this Court. the owner-operator of an establishment attempt was made to question .his
Richard Li, in G.R. No. 117944, contends located just across the scene of the competence or the accuracy of his
that he should not be held liable for accident. On trial, he testified that he statement that defendant was driving "very
damages because the proximate cause of observed a car being driven at a "very fast" fast". This was the same statement he gave
the accident was Ma. Lourdes Valenzuela's speed, racing towards the general direction to the police investigator after the incident,
own negligence. Alternatively, he argues of Araneta Avenue.6 Rodriguez further as told to a newspaper report (Exh. "P").
that in the event that this Court finds him added that he was standing in front of his We see no compelling basis for
negligent, such negligence ought to be establishment, just ten to twenty feet away disregarding his testimony.
mitigated by the contributory negligence of from the scene of the accident, when he The alleged inconsistencies in Rodriguez'
Valenzuela. saw the car hit Valenzuela, hurtling her testimony are not borne out by an
On the other hand, in G.R. No. 115024, Ma. against the windshield of the defendant's examination of the testimony. Rodriguez
Lourdes Valenzuela assails the respondent Mitsubishi Lancer, from where she testified that the scene of the accident was
court's decision insofar as it absolves eventually fell under the defendant's car. across the street where his beerhouse is
Alexander Commercial, Inc. from liability Spontaneously reacting to the incident, he located about ten to twenty feet away (pp.
as the owner of the car driven by Richard crossed the street, noting that a man 35-36, tsn, June 17, 1991). He did not
Li and insofar as it reduces the amount of reeking with the smell of liquor had state that the accident transpired
the actual and moral damages awarded by alighted from the offending vehicle in order immediately in front of his establishment.
the trial court.4 to survey the incident.7 Equally important, The ownership of the Lambingan se
As the issues are intimately related, both Rodriguez declared that he observed Kambingan is not material; the business is
petitions are hereby consolidated. Valenzuela's car parked parallel and very registered in the name of his mother, but
It is plainly evident that the petition for near the sidewalk,8 contrary to Li's he explained that he owns the
review in G.R. No. 117944 raises no allegation that Valenzuela's car was close establishment (p. 5, tsn, June 20, 1991).
substantial questions of law. What it, in to the center of the right lane. We agree Moreover, the testimony that the
effect, attempts to have this Court review that as between Li's "self-serving" streetlights on his side of Aurora Boulevard
are factual findings of the trial court, as asseverations and the observations of a were on the night the accident transpired
sustained by the Court of Appeals finding witness who did not even know the (p. 8) is not necessarily contradictory to
Richard Li grossly negligent in driving the accident victim personally and who the testimony of Pfc. Ramos that there was
Mitsubishi Lancer provided by his company immediately gave a statement of the a streetlight at the corner of Aurora
in the early morning hours of June 24, incident similar to his testimony to the Boulevard and F. Roman Street (p. 45, tsn,
1990. This we will not do. As a general rule, investigator immediately after the incident, Oct. 20, 1991).
findings of fact of the Court of Appeals are the latter's testimony deserves greater With respect to the weather condition,
binding and conclusive upon us, and this weight. As the court emphasized: Rodriguez testified that there was only a
Court will not normally disturb such factual The issue is one of credibility and from Our drizzle, not a heavy rain and the rain has
findings unless the findings of fact of the own examination of the transcript, We are stopped and he was outside his
said court are palpably unsupported by the not prepared to set aside the trial court's establishment at the time the accident
evidence on record or unless the judgment reliance on the testimony of Rodriguez transpired (pp. 64-65, tsn, June 17, 1991).
itself is based on a misapprehension of negating defendant's assertion that he was This was consistent with plaintiff's
facts.5 driving at a safe speed. While Rodriguez testimony that it was no longer raining
In the first place, Valenzuela's version of drives only a motorcycle, his perception of when she left Bistro La Conga (pp. 10-11,
the incident was fully corroborated by an speed is not necessarily impaired. He was tsn, April 29, 1991). It was defendant Li
uninterested witness, Rogelio Rodriguez, subjected to cross-examination and no who stated that it was raining all the way
in an attempt to explain why he was thoroughfare like Aurora Boulevard, Li Since, according to him, in his narration to
travelling at only 50-55 kph. (p. 11, tsn, would have had ample time to react to the the San Juan Police, he put on his brakes
Oct. 14, 1991). As to the testimony of Pfc. changing conditions of the road if he were when he saw the plaintiff's car in front of
Ramos that it was raining, he arrived at the alert - as every driver should be - to those him, but that it failed as the road was wet
scene only in response to a telephone call conditions. Driving exacts a more than and slippery, this goes to show again, that,
after the accident had transpired (pp. 9-10, usual toll on the senses. Physiological "fight contrary to his claim, he was, indeed,
tsn, Oct. 28, 1991). We find no substantial or flight" 10 mechanisms are at work, running very fast. For, were it otherwise,
inconsistencies in Rodriguez's testimony provided such mechanisms were not dulled he could have easily completely stopped
that would impair the essential integrity of by drugs, alcohol, exhaustion, drowsiness, his car, thereby avoiding the bumping of
his testimony or reflect on his honesty. We etc.11 Li's failure to react in a manner which the plaintiff, notwithstanding that the road
are compelled to affirm the trial court's would have avoided the accident could was wet and slippery. Verily, since, if,
acceptance of the testimony of said therefore have been only due to either or indeed, he was running slow, as he
eyewitness. both of the two factors: 1) that he was claimed, at only about 55 kilometers per
Against the unassailable testimony of driving at a "very fast" speed as testified by hour, then, inspite of the wet and slippery
witness Rodriguez we note that Li's Rodriguez; and 2) that he was under the road, he could have avoided hitting the
testimony was peppered with so many influence of alcohol.12 Either factor working plaintiff by the mere expedient or applying
inconsistencies leading us to conclude that independently would have diminished his his brakes at the proper time and distance.
his version of the accident was merely responsiveness to road conditions, since It could not be true, therefore, as he now
adroitly crafted to provide a version, normally he would have slowed down prior claims during his testimony, which is
obviously self-serving, which would to reaching Valenzuela's car, rather than be contrary to what he told the police
exculpate him from any and all liability in in a situation forcing him to suddenly apply immediately after the accident and is,
the incident. Against Valenzuela's his brakes. As the trial court noted (quoted therefore, more believable, that he did not
corroborated claims, his allegations were with approval by respondent court): actually step on his brakes but simply
neither backed up by other witnesses nor Secondly, as narrated by defendant swerved a little to the right when he saw
by the circumstances proven in the course Richard Li to the San Juan Police the on-coming car with glaring headlights,
of trial. He claimed that he was driving immediately after the incident, he said that from the opposite direction, in order to
merely at a speed of 55 kph. when "out of while driving along Aurora Blvd., out of avoid it.
nowhere he saw a dark maroon lancer right nowhere he saw a dark maroon lancer right For, had this been what he did, he would
in front of him, which was (the) plaintiff's in front of him which was plaintiff's car, not have bumped the car of the plaintiff
car". He alleged that upon seeing this indicating, again, thereby that, indeed, he which was properly parked at the right
sudden "apparition" he put on his brakes to was driving very fast, oblivious of his beside the sidewalk. And, it was not even
no avail as the road was slippery.9 surroundings and the road ahead of him, necessary for him to swerve a little to the
One will have to suspend disbelief in order because if he was not, then he could not right in order to safely avoid a collision with
to give credence to Li's disingenuous and have missed noticing at a still far distance the on-coming car, considering that Aurora
patently self-serving asseverations. The the parked car of the plaintiff at the right Blvd. is a double lane avenue separated at
average motorist alert to road side near the sidewalk which had its the center by a dotted white paint, and
conditions will have no difficulty applying emergency lights on, thereby avoiding there is plenty of space for both cars, since
the brakes to a car traveling at the speed forcefully bumping at the plaintiff who was her car was running at the right lane going
claimed by Li. Given a light rainfall, the then standing at the left rear edge of her towards Manila on the on-coming car was
visibility of the street, and the road car. also on its right lane going to Cubao.13
conditions on a principal metropolitan
Having come to the conclusion that Li was impending danger, is not guilty of be both a threat to her safety and to other
negligent in driving his company-issued negligence if he fails to undertake what motorists. In the instant case, Valenzuela,
Mitsubishi Lancer, the next question for us subsequently and upon reflection may upon reaching that portion of Aurora
to determine is whether or not Valenzuela appear to be a better solution, unless the Boulevard close to A. Lake St., noticed that
was likewise guilty of contributory emergency was brought by his own she had a flat tire. To avoid putting herself
negligence in parking her car alongside negligence.17 and other motorists in danger, she did what
Aurora Boulevard, which entire area Li Applying this principle to a case in which was best under the situation. As narrated
points out, is a no parking zone. the victims in a vehicular accident swerved by respondent court: "She stopped at a
We agree with the respondent court that to the wrong lane to avoid hitting two lighted place where there were people, to
Valenzuela was not guilty of contributory children suddenly darting into the street, verify whether she had a flat tire and to
negligence. we held, in Mc Kee vs. Intermediate solicit help if needed. Having been told by
Contributory negligence is conduct on the Appellate Court,18 that the driver therein, the people present that her rear right tire
part of the injured party, contributing as a Jose Koh, "adopted the best means was flat and that she cannot reach her
legal cause to the harm he has suffered, possible in the given situation" to avoid home she parked along the sidewalk, about
which falls below the standard to which he hitting the children. Using the "emergency 1 1/2 feet away, behind a Toyota Corona
is required to conform for his own rule" the Court concluded that Koh, in spite Car."20 In fact, respondent court noted, Pfc.
protection.14 Based on the foregoing of the fact that he was in the wrong lane Felix Ramos, the investigator on the scene
definition, the standard or act to which, when the collision with an oncoming truck of the accident confirmed that Valenzuela's
according to petitioner Li, Valenzuela ought occurred, was not guilty of negligence.19 car was parked very close to the
to have conformed for her own protection While the emergency rule applies to those sidewalk.21 The sketch which he prepared
was not to park at all at any point of Aurora cases in which reflective thought, or the after the incident showed Valenzuela's car
Boulevard, a no parking zone. We cannot opportunity to adequately weigh a partly straddling the sidewalk, clear and at
agree. threatening situation is absent, the conduct a convenient distance from motorists
Courts have traditionally been compelled to which is required of an individual in such passing the right lane of Aurora Boulevard.
recognize that an actor who is confronted cases is dictated not exclusively by the This fact was itself corroborated by the
with an emergency is not to be held up to suddenness of the event which absolutely testimony of witness Rodriguez.22
the standard of conduct normally applied to negates thoroughful care, but by the over- Under the circumstances described,
an individual who is in no such situation. all nature of the circumstances. A woman Valenzuela did exercise the standard
The law takes stock of impulses of driving a vehicle suddenly crippled by a flat reasonably dictated by the emergency and
humanity when placed in threatening or tire on a rainy night will not be faulted for could not be considered to have
dangerous situations and does not require stopping at a point which is both contributed to the unfortunate
the same standard of thoughtful and convenient for her to do so and which is not circumstances which eventually led to the
reflective care from persons confronted by a hazard to other motorists. She is not amputation of one of her lower extremities.
unusual and oftentimes threatening expected to run the entire boulevard in The emergency which led her to park her
conditions. 15
search for a parking zone or turn on a dark car on a sidewalk in Aurora Boulevard was
Under the "emergency rule" adopted by street or alley where she would likely find not of her own making, and it was evident
this Court in Gan vs. Court of Appeals,16 an no one to help her. It would be hazardous that she had taken all reasonable
individual who suddenly finds himself in a for her not to stop and assess the precautions.
situation of danger and is required to act emergency (simply because the entire Obviously in the case at bench, the only
without much time to consider the best length of Aurora Boulevard is a no-parking negligence ascribable was the negligence
means that may be adopted to avoid the zone) because the hobbling vehicle would of Li on the night of the accident.
"Negligence, as it is commonly understood employer. In denying liability on the part of employer at the time of the infliction of the
is conduct which creates an undue risk of Alexander Commercial, the respondent injury or damage (Filamer Christian
harm to others."23 It is the failure to court held that: Institute vs. Intermediate Appellate Court,
observe that degree of care, precaution, There is no evidence, not even defendant 212 SCRA 637). An employer is expected
and vigilance which the circumstances Li's testimony, that the visit was in to impose upon its employees the
justly demand, whereby such other person connection with official matters. His necessary discipline called for in the
suffers injury.24 We stressed, in Corliss functions as assistant manager sometimes performance of any act "indispensable to
vs. Manila Railroad Company,25 that required him to perform work outside the the business and beneficial to their
negligence is the want of care required by office as he has to visit buyers and employer" (at p. 645).
the circumstances. company clients, but he admitted that on In light of the foregoing, We are unable to
The circumstances established by the the night of the accident he came from BF sustain the trial court's finding that since
evidence adduced in the court below plainly Homes Paranaque he did not have defendant Li was authorized by the
demonstrate that Li was grossly negligent "business from the company" (pp. 25-26, company to use the company car "either
in driving his Mitsubishi Lancer. It bears ten, Sept. 23, 1991). The use of the officially or socially or even bring it home",
emphasis that he was driving at a fast company car was partly required by the he can be considered as using the company
speed at about 2:00 A.M. after a heavy nature of his work, but the privilege of car in the service of his employer or on the
downpour had settled into a drizzle using it for non-official business is a occasion of his functions. Driving the
rendering the street slippery. There is "benefit", apparently referring to the fringe company car was not among his functions
ample testimonial evidence on record to benefits attaching to his position. as assistant manager; using it for non-
show that he was under the influence of Under the civil law, an employer is liable for official purposes would appear to be a
liquor. Under these conditions, his chances the negligence of his employees in the fringe benefit, one of the perks attached to
of effectively dealing with changing discharge of their respective duties, the his position. But to impose liability upon the
conditions on the road were significantly basis of which liability is not respondeat employer under Article 2180 of the Civil
lessened. As Presser and Keaton superior, but the relationship of pater Code, earlier quoted, there must be a
emphasize: familias, which theory bases the liability of showing that the damage was caused by
[U]nder present day traffic conditions, any the master ultimately on his own their employees in the service of the
driver of an automobile must be prepared negligence and not on that of his servant employer or on the occasion of their
for the sudden appearance of obstacles and (Cuison v. Norton and Harrison Co., 55 Phil. functions. There is no evidence that
persons on the highway, and of other 18). Before an employer may be held liable Richard Li was at the time of the accident
vehicles at intersections, such as one who for the negligence of his employee, the act performing any act in furtherance of the
sees a child on the curb may be required to or omission which caused damage must company's business or its interests, or at
anticipate its sudden dash into the street, have occurred while an employee was in least for its benefit. The imposition of
and his failure to act properly when they the actual performance of his assigned solidary liability against defendant
appear may be found to amount to tasks or duties (Francis High School vs. Alexander Commercial Corporation must
negligence.26 Court of Appeals, 194 SCRA 341). In therefore fail.27
Li's obvious unpreparedness to cope with defining an employer's liability for the acts We agree with the respondent court that
the situation confronting him on the night done within the scope of the employee's the relationship in question is not based on
of the accident was clearly of his own assigned tasks, the Supreme Court has the principle of respondeat superior, which
making. held that this includes any act done by an holds the master liable for acts of the
We now come to the question of the liability employee, in furtherance of the interests of servant, but that of pater familias, in which
of Alexander Commercial, Inc. Li's the employer or for the account of the the liability ultimately falls upon the
employer, for his failure to exercise the Ordinarily, evidence demonstrating that during private use after normal office
diligence of a good father of the family in the employer has exercised diligent hours?
the selection and supervision of his supervision of its employee during the Most pharmaceutical companies, for
employees. It is up to this point, however, performance of the latter's assigned tasks instance, which provide cars under the first
that our agreement with the respondent would be enough to relieve him of the plan, require rigorous tests of road
court ends. Utilizing the bonus pater liability imposed by Article 2180 in relation worthiness from their agents prior to
familias standard expressed in Article 2180 to Article 2176 of the Civil Code. The turning over the car (subject of company
of the Civil Code, 28 we are of the opinion employer is not expected to exercise maintenance) to their representatives. In
that Li's employer, Alexander Commercial, supervision over either the employee's other words, like a good father of a family,
Inc. is jointly and solidarily liable for the private activities or during the performance they entrust the company vehicle only after
damage caused by the accident of June 24, of tasks either unsanctioned by the former they are satisfied that the employee to
1990. or unrelated to the employee's tasks. The whom the car has been given full use of the
First, the case of St. Francis High School case at bench presents a situation of a said company car for company or private
vs. Court of Appeals29 upon which different character, involving a practice purposes will not be a threat or menace to
respondent court has placed undue utilized by large companies with either himself, the company or to others. When a
reliance, dealt with the subject of a school their employees of managerial rank or their company gives full use and enjoyment of a
and its teacher's supervision of students representatives. company car to its employee, it in effect
during an extracurricular activity. These It is customary for large companies to guarantees that it is, like every good
cases now fall under the provision on provide certain classes of their employees father, satisfied that its employee will use
special parental authority found in Art. 218 with courtesy vehicles. These company the privilege reasonably and responsively.
of the Family Code which generally cars are either wholly owned and In the ordinary course of business, not all
encompasses all authorized school maintained by the company itself or are company employees are given the privilege
activities, whether inside or outside school subject to various plans through which of using a company-issued car. For large
premises. employees eventually acquire their companies other than those cited in the
Second, the employer's primary liability vehicles after a given period of service, or example of the preceding paragraph, the
under the concept of pater after paying a token amount. Many privilege serves important business
familias embodied by Art 2180 (in relation companies provide liberal "car plans" to purposes either related to the image of
to Art. 2176) of the Civil Code is quasi- enable their managerial or other success an entity intends to present to its
delictual or tortious in character. His employees of rank to purchase cars, which, clients and to the public in general, or - for
liability is relieved on a showing that he given the cost of vehicles these days, they practical and utilitarian reasons - to enable
exercised the diligence of a good father of would not otherwise be able to purchase on its managerial and other employees of rank
the family in the selection and supervision their own. or its sales agents to reach clients
of its employees. Once evidence is Under the first example, the company conveniently. In most cases, providing a
introduced showing that the employer actually owns and maintains the car up to company car serves both purposes. Since
exercised the required amount of care in the point of turnover of ownership to the important business transactions and
selecting its employees, half of the employee; in the second example, the car decisions may occur at all hours in all sorts
employer's burden is overcome. The is really owned and maintained by the of situations and under all kinds of guises,
question of diligent supervision, however, employee himself. In furnishing vehicles to the provision for the unlimited use of a
depends on the circumstances of such employees, are companies totally company car therefore principally serves
employment. absolved of responsibility when an accident the business and goodwill of a company
involving a company-issued car occurs and only incidentally the private purposes
of the individual who actually uses the car, serving. Assuming he really came from his As a result of the accident, Ma. Lourdes
the managerial employee or company sales officemate's place, the same could give rise Valenzuela underwent a traumatic
agent. As such, in providing for a company to speculation that he and his officemate amputation of her left lower extremity at
car for business use and/or for the purpose had just been from a work-related function, the distal left thigh just above the knee.
of furthering the company's image, a or they were together to discuss sales and Because of this, Valenzuela will forever be
company owes a responsibility to the public other work related strategies. deprived of the full ambulatory functions of
to see to it that the managerial or other In fine, Alexander Commercial, inc. has not her left extremity, even with the use of
employees to whom it entrusts virtually demonstrated, to our satisfaction, that it state of the art prosthetic technology. Well
unlimited use of a company issued car are exercised the care and diligence of a good beyond the period of hospitalization (which
able to use the company issue capably and father of the family in entrusting its was paid for by Li), she will be required to
responsibly. company car to Li. No allegations were undergo adjustments in her prosthetic
In the instant case, Li was an Assistant made as to whether or not the company devise due to the shrinkage of the stump
Manager of Alexander Commercial, Inc. In took the steps necessary to determine or from the process of healing.
his testimony before the trial court, he ascertain the driving proficiency and These adjustments entail costs, prosthetic
admitted that his functions as Assistant history of Li, to whom it gave full and replacements and months of physical and
Manager did not require him to unlimited use of a company car.31 Not occupational rehabilitation and therapy.
scrupulously keep normal office hours as having been able to overcome the burden During her lifetime, the prosthetic devise
he was required quite often to perform of demonstrating that it should be absolved will have to be replaced and re-adjusted to
work outside the office, visiting prospective of liability for entrusting its company car to changes in the size of her lower limb
buyers and contacting and meeting with Li, said company, based on the principle effected by the biological changes of
company clients. 30 These meetings, of bonus pater familias, ought to be jointly middle-age, menopause and aging.
clearly, were not strictly confined to routine and severally liable with the former for the Assuming she reaches menopause, for
hours because, as a managerial employee injuries sustained by Ma. Lourdes example, the prosthetic will have to be
tasked with the job of representing his Valenzuela during the accident. adjusted to respond to the changes in bone
company with its clients, meetings with Finally, we find no reason to overturn the resulting from a precipitate decrease in
clients were both social as well as work- amount of damages awarded by the calcium levels observed in the bones of all
related functions. The service car assigned respondent court, except as to the amount post-menopausal women. In other words,
to Li by Alexander Commercial, Inc. of moral damages. In the case of moral the damage done to her would not only be
therefore enabled both Li - as well as the damages, while the said damages are not permanent and lasting, it would also be
corporation - to put up the front of a highly intended to enrich the plaintiff at the permanently changing and adjusting to the
successful entity, increasing the latter's expense of a defendant, the award should physiologic changes which her body
goodwill before its clientele. It also nonetheless be commensurate to the would normally undergo through the
facilitated meeting between Li and its suffering inflicted. In the instant case we years. The replacements, changes, and
clients by providing the former with a are of the opinion that the reduction in adjustments will require corresponding
convenient mode of travel. moral damages from an amount of adjustive physical and occupational
Moreover, Li's claim that he happened to be P1,000,000.00 to P800,000,00 by the therapy. All of these adjustments, it has
on the road on the night of the accident Court of Appeals was not justified been documented, are painful.
because he was coming from a social visit considering the nature of the resulting The foregoing discussion does not even
with an officemate in Paranaque was a bare damage and the predictable sequelae of scratch the surface of the nature of the
allegation which was never corroborated in the injury. resulting damage because it would be
the court below. It was obviously self- highly speculative to estimate the amount
of psychological pain, damage and injury
which goes with the sudden severing of a
vital portion of the human body. A
prosthetic device, however technologically
advanced, will only allow a reasonable
amount of functional restoration of the
motor functions of the lower limb. The
sensory functions are forever lost. The
resultant anxiety, sleeplessness,
psychological injury, mental and physical
pain are inestimable.
As the amount of moral damages are
subject to this Court's discretion, we are of
the opinion that the amount of
P1,000,000.00 granted by the trial court is
in greater accord with the extent and
nature of the injury - physical and
psychological - suffered by Valenzuela as a
result of Li's grossly negligent driving of his
Mitsubishi Lancer in the early morning
hours of the accident.
WHEREFORE, PREMISES CONSIDERED, the
decision of the Court of Appeals is modified
with the effect of REINSTATING the
judgment of the Regional Trial Court.
SO ORDERED.
G.R. No. 214567 loan proceeds as interim or bridge asserted that she neither applied for an
DRA. MERCEDES OLIVER, Petitioner, financing interest. Together with the additional loan of P4.5 million nor
vs. interest income, the principal amount authorized the withdrawal of P7 million.
PHILIPPINE SAVINGS BANK and LILIA previously withdrawn from Oliver’s bank She also discovered another loan for
CASTRO, Respondents. account would be deposited back to her P1,396,310.45, acquired on January 5,
DECISION account. Meanwhile, Castro would earn a 1999 and allegedly issued in connection
MENDOZA, J.: commission of 10% from the interest. with the P10 million credit line.
This is a petition for review Their arrangement went on smoothly for In Oliver’s passbook, 7 there were no
on certiorari seeking to reverse and set months. Due to the frequency of bank entries from December 17, 1998 to
aside the October 25, 2013 Decision1 and transactions, Oliver even entrusted her December 27, 1998. The transaction
the September 12, 2014 Resolution2 of the passbook to Castro. Because Oliver earned history register, however, showed several
Court of Appeals (CA) in CA-G.R. CV No. substantial profit, she was further transactions on these very same dates
95656, which reversed the July 22, 2010 convinced by Castro to avail of an including the crediting of P4.5 million and
Order3 of the Regional Trial Court, Branch additional credit line in the amount of P10 the debiting of P7 million on December 21,
276, Muntinlupa City (RTC) in Civil Case million. The said credit line was secured by 1998. Oliver then learned that the
No. 99-278, a case for injunction and a real estate mortgage on her house and additional P4.5 million and P1,396,310.45
damages. lot in Ayala Alabang covered by Transfer loans were also secured by the real estate
Petitioner Mercedes Oliver (Oliver) was a Certificate of Title (TCT) No. 137796.5 mortgage,8 dated January 8, 1998,
depositor of respondent Philippine Savings Oliver instructed Castro to pay P2 million covering the same property in Ayala
Bank (PSBank) with account number monthly to PSBank starting on September Alabang. Oliver received two collection
2812-07991-6. dent Lilia 3, 1998 so that her credit line for P10 letters,9 dated May 13, 1999 and June 18,
Castro (Castro) was the Assistant Vice million would be fully paid by January 3, 1999, from PSBank referring to the non-
President of the Acting Branch 1999. payment of unpaid loans, to wit: (1)
Manager of PSBank San Pedro, Laguna. Beginning September 1998, Castro P4,491,250.00 from the additional loan and
Oliver’s Position stopped rendering an accounting for Oliver. (2) P1,396,310.45 from the P10 million
In her Complaint,4 dated October 5, 1999, The latter then demanded the return of her credit line.10 In response, Oliver protested
Oliver alleged that sometime in 1997, she passbook. When Castro showed her the that she neither availed of the said loans
made an initial deposit of P12 million into passbook sometime in late January or early nor authorized the withdrawal of P7 million
her PSBank account. During that time, February 1995, she noticed several from her account.11 She also claimed that
Castro convinced her to loan out her erasures and superimpositions therein. She the P10 million loan from her credit line was
deposit as interim or bridge financing for became very suspicious of the many already paid in full.12
the approved loans of bank borrowers who erasures pertaining to the December 1998 On July 14, 1999, a final demand
were waiting for the actual release of their entries so she requested a copy of her letter13 was sent to Oliver by PSBank,
loan proceeds. transaction history register from PSBank. requiring her to pay the unpaid loans.
Under this arrangement, Castro would first When her transaction history register6 was Oliver, however, still refused to pay.
show the approved loan documents to shown to her, Oliver was surprised to Subsequently, Oliver received a notice of
Oliver. Thereafter, Castro would withdraw discover that the amount of P4,491,250.00 sale14 involving the property in Ayala
the amount needed from Oliver’s account. (estimated at P4.5 million) was entered Alabang, issued by Notary Public Jose
Upon the actual release of the loan by into her account on December 21, 1998. Celestino Torres on September 15, 1999.
PSBank to the borrower, Castro would then While a total of P7 million was withdrawn The said notice informed her of the
charge the rate of 4% a month from the from her account on the same day, Oliver impending extra-judicial foreclosure and
sale of her house and lot to be held on Castro asserted that, on December 21, According to the RTC, PSBank and Castro
October 21, 1999. 1998, upon Oliver’s instruction, a total of should not be held liable for the loan of
As a result, Oliver filed the subject P7 million was withdrawn from the latter’s P4.5 million and the withdrawal of the P7
complaint against PSBank and Castro. account and was then deposited to the million. Castro was able to submit the Debit
Castro’s Position account of one Ben Lim (Lim) on the same Credit Memo24 and the Savings Account
In her Answer,15 Castro admitted that she date. Lim was a businessman who Check Deposit Slip25 to prove that there
and Oliver agreed that the latter would lend borrowed money from Oliver. Castro knew were some previous loan transactions
out money to borrowers at 4% to 5% him because he was also a depositor and between Oliver and Lim. Considering that
interest per month provided that the borrower of PSBank San Pedro Branch.19 neither PSBank nor Castro obtained the P7
former would screen them. She also As to the amount of P1,396,310.45, Castro million, there was no obligation on their
acknowledged having been instructed by explained that it was a separate and part to return the amount.
Oliver to pay the bank P2 million every personal loan obtained by her from Oliver. Moreover, the trial court stated that Oliver
month to settle the P10 million credit line. To secure the payment of such obligation, failed to controvert PSBank’s allegation
Nonetheless, Castro informed Oliver that Castro mortgaged a property located in that she had unpaid loan obligations. Thus,
the payment thereof was subject to the Camella Homes III in Tunasan, Muntinlupa it concluded that PSBank had the right to
availability of funds in her account. She City. foreclose the mortgaged property.
disclosed that she made some alterations Castro admitted that on October 19, 1999, The fallo reads:
and erasures in Oliver’s passbook so as to she was terminated by PSBank because of WHEREFORE, finding lack of merit, the
reconcile the passbook with the computer certain problems regarding client instant case is hereby DISMISSED.
printout of the bank, but denied any accommodation and loss of confidence.20 Accordingly, the Writ of Preliminary
attempt to hide the passbook as she was PSBank’s Position Injunction is hereby LIFTED and SET
able to return it sometime in January 1999. In its defense, PSBank averred that Oliver ASIDE.
Castro also denied the deceit imputed applied for a credit line of P10 million which SO ORDERED.26
against her. She asserted that their was granted by the bank and which Oliver seasonably filed her motion for
arrangement was not "interim or bridge secured by a real estate mortgage. reconsideration.27 She insisted that the P7
financing" inasmuch as the loans were Because Oliver failed to pay the P10 million million was unlawfully withdrawn. She
entirely new and distinct from that granted loan, she obtained another loan in the claimed that what happened in this case
by PSBank. When Oliver’s clients amount of P4.5 million, as evidenced by a was a "cash savings withdrawal" and
multiplied, Castro advised her to apply for promissory note. Days later, she again that there should have been a
a credit line of P10 million. The said credit acquired a separate loan amounting to corresponding withdrawal slip for such
line was first approved in December 1997 P1,396,310.45 as shown by another transaction. Also, if indeed the P7 million
with a term of one year.16 promissory note. Both loans were secured was withdrawn from her account and was
Sometime in August 1998, Castro informed by a real estate mortgage, dated January credited to the account of Lim, the deposit
Oliver about the impending expiration of 8, 1998, and the proceeds thereof were slip for his account should have been
her credit line. Subsequently, Oliver issued as proved by the release presented.
applied for another loan in the amount of tickets,21 dated December 21, 1998 and The RTC Order
P4.5 million as evidenced by a promissory January 5, 1999, respectively.22 On July 22, 2010, the RTC resolved the
note,17 dated December 21, 1998. On The RTC Decision motion and issued an order reversing its
January 5, 1999, another promissory In its March 30, 2010 Decision,23 the RTC earlier decision. According to the RTC,
note18 was executed by Oliver to cover a dismissed the complaint and rendered Oliver’s assertion that the withdrawal was
loan in the amount of P1,396,310.45. judgment in favor of PSBank and Castro. made without her consent prevailed in the
absence of any proof to the contrary. 3. P100,000.00 as attorney’s fees; and ISSUES
The cash savings withdrawal slips should 4. P100,000.00 as exemplary damages I
have been offered in evidence by either Moreover, the Writ of Preliminary WHETHER OR NOT THE COURT OF
PSBank or Castro to settle the issue of Injunction is hereby made permanent. APPEALS GRAVELY ERRED IN RULING
whether the amount of P7 million was SO ORDERED.29 THAT THE PETITIONER FAILED TO
actually withdrawn by Oliver or by her Aggrieved, Castro and PSBank appealed SHOW COMPELLING EVIDENCE TO
authorized representative or agent. before the CA. PROVE THAT FRAUD ATTENDED THE
The RTC also rejected the position of The CA Decision PROCESSING AND RELEASE OF THE
PSBank and Castro that the erasures and On October 25, 2013, the CA granted the LOAN OF P4.5 MILLION AS WELL AS
alterations in Oliver’s passbook were made appeal. It reversed the July 22, 2010 of the THE WITHDRAWAL OF P7 MILLION
simply to reconcile the same with the RTC order and reinstated its March 30, PESOS FROM HER ACCOUNT.
transaction history register of the bank 2010 decision. The appellate court found II
because even after the alleged corrections, no compelling evidence to prove that fraud WHETHER OR NOT THE COURT OF
the said documents still contained different attended the processing and release of the APPEALS GRAVELY ERRED WHEN IT
entries. Although Oliver and Lim had P4.5 million loan as well as the withdrawal RULED THAT THERE WAS NO
previous transactions, none of them of P7 million from Oliver’s account. The CA EVIDENCE TO PROVE THAT THE SUM
pertained to the P7 million purportedly found that Oliver admitted signing the loan OF P7 MILLION WAS DEBITED FROM
transferred on December 21, 1998. documents, the promissory notes and the THE ACCOUNT OF PETITIONER SANS
With regard to PSBank, the RTC stated that release tickets pertaining to the obligations HER AUTHORIZATION.
it failed to exercise utmost diligence in that she had contracted with PSBank. In III
safekeeping Oliver’s deposit. Had it not addition, the CA stated that Oliver also WHETHER OR NOT THE COURT OF
been for the unauthorized, withdrawal failed to establish her assertion that she APPEALS GRAVELY ERRED WHEN IT
which was attributable to the bank and was manipulated and defrauded into RULED THAT THE RESPONDENTS
Castro, the P4.5 million and the signing the said loan documents. TREATED THE PETITIONER’S ACCOUNT
P1,396,310.45 loans would not have The CA also found that PSBank exercised WITH EXTRAORDINARY DILIGENCE.
remained outstanding, considering that the extraordinary diligence in handling Oliver’s IV
improperly withdrawn P7 million was more account, thus, the awards of damages were WHETHER OR NOT THE COURT OF
than sufficient to discharge those deleted. The dispositive portion of the CA APPEALS GRAVELY ERRED WHEN IT
liabilities.28 The dispositive portion of the decision reads: FAILED TO HOLD THAT THE
order reads: WHEREFORE, the Appeal is hereby RESPONDENTS ARE JOINTLY AND
WHEREFORE, premises considered, the GRANTED. The Order dated 22 July 2010 of SEVERALLY LIABLE TO THE
Motion for Reconsideration is hereby the Regional Trial Court of Muntinlupa City, PETITIONER FOR DAMAGES. 31

GRANTED. The Decision dated March 30, Branch 276, is REVERSED and SET ASIDE, In her petition for review,32 Oliver insisted
2010 is hereby reconsidered and set aside. and another one entered REINSTATING the that she had no knowledge of any loan
In lieu thereof, a new one is hereby Decision dated March 30, 2010, in Civil released because she never availed of any
rendered ordering the defendants Lilia Case No. 99-278. new loan from PSBank. Neither the P4.5
Castro and Philippine Savings Bank to SO ORDERED.30 million loan nor the cash withdrawal of P7
jointly and solidarily pay plaintiff Dra. Oliver filed her motion for reconsideration million was reflected in her passbook.
Mercedes Oliver, the sums of but the same was denied in the CA Oliver further argued that the burden of
1. P1,111,850.77 as actual damages; Resolution, dated September 12, 2014. proving that the withdrawal was made with
2. P100,000.00 as moral damages; Hence, this petition. her authority would lie on the part of
PSBank and Castro. The cash savings withdrawn with her authority. She also For months, the agency between Oliver and
withdrawal slip containing the signature of reiterated that Lim should have been Castro benefited both parties. Oliver,
Oliver should have been presented in court. presented as a witness to substantiate their through Castro’s representations, was able
While the respondents claimed that the defense that he actually received the to obtain loans, relend them to borrowers,
amount withdrawn was lent to Lim, the amount of P7 million. and earn interests; while Castro acquired
latter was never called to the witness stand The Court’s Ruling commissions from the transactions. Oliver
as PSBank and Castro opted not to present The petition is impressed with merit. even gave Castro her passbook to facilitate
him in court. Castro, aside from her self- There was an implied agency the transactions.
serving testimony, failed to present any between Oliver and Castro; the Accordingly, the laws on agency apply to
concrete proof to show that Oliver indeed loans were properly acquired their relationship. Article 1881 of the New
lent the withdrawn P7 million cash to Lim. A contract of agency may be inferred from Civil Code provides that the agent must act
Finally, Oliver averred that the erasures all the dealings between Oliver and Castro. within the scope of his authority. He may
and alterations in her passbook undeniably Agency can be express or implied from the do such acts as may be conducive to the
established that Castro manipulated the acts of the principal, from his silence or lack accomplishment of the purpose of the
same to conceal the loan release and the of action, or his failure to repudiate the agency. Thus, as long as the agent acts
cash withdrawal from her account. agency knowing that another person is within the scope of the authority given by
In her Comment,33 Castro countered that acting on his behalf without his principal, the actions of the former shall
the CA had more opportunity and facilities authority.36 The question of whether an bind the latter.
to examine the facts. Hence, there was no agency has been created is ordinarily a Oliver claims that the P4.5 million loan,
reason to depart from the rule that the question which may be established in the released on December 21, 1998, and the
findings of fact of the CA were final and same way as any other fact, either by P1,396,310.45 loan, released on January
conclusive and could not be reviewed on direct or circumstantial evidence. The 5, 1999, were not acquired with her
appeal. She asserted that there was no question is ultimately one of intention.37 consent. Castro and PSBank, on the other
proof that the P7 million was withdrawn In this case, Oliver and Castro had a hand, countered that these loans were
without Oliver’s authority. She added that business agreement wherein Oliver would obtained with Oliver’s full consent. The
Oliver was an astute businesswoman who obtain loans from the bank, through the Court finds that the said loans were
knew her clients and bank deposits and help of Castro as its branch manager; and acquired with Oliver’s authority. The
who was knowledgeable of her bank after acquiring the loan proceeds, Castro promissory notes39 and the release
transactions and was aware of her loaned would lend the acquired amount to tickets for the said loans bore her
40

amounts from the bank. prospective borrowers who were waiting signatures. She failed to prove that her
In its Comment,34 PSBank asserted that for the actual release of their loan signatures appearing on the loan
the issues and arguments propounded by proceeds. Oliver would gain 4% to 5% documents were forged. Hence, the loan
Oliver had been judiciously passed upon. interest per month from the loan proceeds documents were reliable and these proved
On the stated facts alone, the petition, of her borrowers, while Castro would earn that the loans were processed by Castro
which was akin to a motion for a commission of 10% from the interests. within the scope of her authority. As the
reconsideration, should be denied outright Clearly, an agency was formed because loans were validly obtained, PSBank
for being pro forma. Castro bound herself to render some correctly stated that Oliver had incurred a
In her Reply,35 Oliver faulted PSBank and service in representation or on behalf of debt of P4.5 million and P1,396,310.45, or
Castro for failing to present the cash Oliver, in the furtherance of their business a total of P5,888,149.33.
withdrawal slip which would show her pursuit.38 P7 million was
signature to prove that the money was improperly withdrawn;
agent acted beyond her Q: You are not definite? Your statement that there was a series of dealings from
scope of authority here it is categorical. It’s on page 9 of 17 December 17, 1998 to December 23, 1998.
Although it was proven that Oliver in the Judicial Affidavit, the question is When compared with Oliver’s passbook,
authorized the loans, in the aggregate "What happened after the 4.5 million Pesos the latter showed that the next transaction
amount of P5,888,149.33, there was loan was credited to the Plaintiff’s account" from December 16, 1998 was on December
nothing in the records which proved that And your answer was, "Upon Plaintiff’s 28, 1998. It was also obvious to the naked
she also allowed the withdrawal of P7 instruction Seven (7) million was eye that the December 28, 1998 entry in
million from her bank account. Oliver withdrawn from her account. My question the passbook was altered. As aptly
vehemently denied that she gave any is, this phrase, upon plaintiff’s instruction, observed by the RTC, nowhere in the
authority whatsoever to either Castro or who did the Plaintiff’s (sic) instruct, was it testimony of Castro could be gathered that
PSBank to withdraw the said amount. In you? she made a detailed, plausible and
her judicial affidavit before the RTC, Castro A: I cannot remember, sir because I still acceptable explanation as to why she had
initially claimed that Oliver authorized the have other officers other than me, who to make numerous corrections in the
withdrawal of P7 million from her bank were assisting me during that time, so it entries in the passbook.44 Even after the
account, to wit: could be the instruction even I said upon corrections allegedly done to reconcile the
Q: Do you know when was this 4.5 million the instruction of the plaintiff, but I records, the passbook and the transaction
pesos loan was credited to plaintiff’s cannot remember if I was the one who history register still contained different
deposit account? received the instruction from the entries.
A: Based on the Transaction Ledge of PS plaintiff. It could be other officers of Curiously, though she asserts that Oliver
Bank, the 4.5 million pesos was credit to mine during that time, sir. obtained a loan of P4.5 million and
plaintiff’s deposit account on 21 December Q: May I remind you, this is Seven (7) authorized the withdrawal of P7
21 1998 million Pesos? million,45 Castro could not explain why
Q: What happened after the 4.5 million A: Yes, sir.42 these transactions were not reflected in the
pesos loan was credited to plaintiff’s [Emphasis Supplied] passbook which was in her possession.
account? Verily, Castro, as agent of Oliver and as Bearing in mind that the alleged
A: Upon plaintiff’s instruction, 7 million branch manager of PS Bank, utterly failed unauthorized withdrawal happened on
was withdrawn from her account including to secure the authorization of Oliver to December 21, 1998, while Castro was
her loaned amount to be deposited at Mr. withdraw such substantial amount. As a questionably withholding the passbook, the
Ben Lim’s account at PS Bank, San Pedro standard banking practice intended Court is of the impression that she
Branch.41 precisely to prevent unauthorized and manipulated the entries therein to conceal
[Emphasis Supplied] fraudulent withdrawals, a bank manager the P7 million withdrawal.
During her cross-examination, however, must verify with the client-depositor to Further, Castro claims that Oliver
Castro could no longer remember whether authenticate and confirm that he or she has instructed her to withdraw the P7 million
Oliver gave her the authority to withdraw validly authorized such withdrawal.43 from her bank account and to deposit the
the P7 million from her account. The Castro’s lack of authority to withdraw the same in Lim’s account. Glaringly, Lim was
transcript of stenographic notes reads: P7 million on behalf of Oliver became more not presented as a witness to substantiate
Q: You said here, your statement here, apparent when she altered the passbook to her defense. Even though she testified that
"Upon Plaintiff’s instruction". So, my hide such transaction. It must be the P7 million transfer from Oliver’s
question is, who did the Plaintiff instruct remembered that Oliver entrusted her account to Lim’s was duly documented,
you, was it you? passbook to Castro. In the transaction Castro never presented a single
A: I cannot remember, sir. history register for her account, it was clear
documentary proof of that specific as promptly as possible. This has to be Finally, in Cagungun v. Planters
transaction. done if the account is to reflect at any given Development Bank,52 a case very similar to
The Court is convinced that Castro went time the amount of money the depositor the present one, the depositors therein
beyond the scope of her authority in can dispose of as he sees fit, confident that entrusted their passbook to the bank
withdrawing the P7 million from Oliver’s the bank will deliver it as and to whomever employees for some specific transactions.
bank account. Her flimsy excuse that the he directs. A blunder on the part of the The bank employees went beyond their
said amount was transferred to the account bank, such as the dishonor of a check authority and were able to withdraw from
of a certain Lim deserves scant without good reason, can cause the the depositors’ account without the latter’s
consideration. Hence, Castro must be held depositor not a little embarrassment if not consent. The bank was held liable therein
liable for prejudicing Oliver.46 also financial loss and perhaps even civil for the acts of its employees because it
PSBank failed to and criminal litigation.49 failed to safeguard the accounts of its
exercise the highest Time and again, the Court has emphasized depositors.
degree of diligence that the bank is expected to ensure that the In the case at bench, it must be determined
required of banking depositor’s funds shall only be given to him whether the P7 million was withdrawn from
institutions or his authorized representative. the bank with the authority of Oliver. As
Aside from Castro, PSBank must also be In Producers Bank of the Phil. v. Court of testified to by Castro, every withdrawal
held liable because it failed to exercise Appeals,50 the Court held that the usual from the bank was duly evidenced by a
utmost diligence in the improper banking procedure was that withdrawals of cash withdrawal slip, a copy of which is
withdrawal of the P7 million from Oliver’s savings deposits could only be made by given both to the bank and to its
bank account. persons whose authorized signatures were client.53 Contrary to the position of the CA
In the case of banks, the degree of in the signature cards on file with the bank. and that of the respondents, Oliver cannot
diligence required is more than that of a In the said case, the bank therein allowed be required to produce the cash withdrawal
good father of a family. Considering the an unauthorized person to withdraw from slip for the said transaction because,
fiduciary nature of their relationship with its depositor’s savings account, thus, it precisely, she consistently denied
their depositors, banks are duty bound to failed to exercise the required diligence of giving authority to withdraw such
treat the accounts of their clients with the banks and must be held liable. amount from her account.
highest degree of care. The point is that as With respect to withdrawal slips, the Court Necessarily, the party that must have
a business affected with public interest and declared in Philippine National Bank v. access to such crucial document would
because of the nature of its functions, the Pike51 that "[o]rdinarily, banks allow either be PSBank or Castro. They must
bank is under obligation to treat the withdrawal by someone who is not the present the said cash withdrawal slip, duly
accounts of its depositors with meticulous account holder so long as the account signed by Oliver, to prove that the
care, always having in mind the fiduciary holder authorizes his representative to withdrawal of P7 million was indeed
nature of their relationship.47 withdraw and receive from his account by sanctioned. Unfortunately, both PSBank
In Simex International v. Court of signing on the space provided particularly and Castro failed to present the cash
Appeals,48 the Court held that the for such transactions, usually found at the withdrawal slip.
depositor expected the bank to treat his back of withdrawal slips." There, the bank During the trial, the counsel of PSBank
account with the utmost fidelity, whether violated its fiduciary duty because it conceded that the cash withdrawal slip for
such account consisted only of a few allowed a withdrawal by a representative the P7 million transaction could not be
hundred pesos or of millions. The bank even though the authorization portion of located, to quote:
must record every single transaction the withdrawal slip was not signed by the ATTY DEJARESCO: Your Honor, excuse me
accurately, down to the last centavo, and depositor. just a comment for the record we asked for
two (2) years, Your Honor to subpoena this ATTY. DEJARESCO: preponderance of evidence. Once the
from the bank, the bank never produce Q: Can you show poof of the withdrawal plaintiff establishes his case, the burden of
(sic) the withdrawal slip two (2) years (sic), slip? evidence shifts to the defendant, who, in
Your Honor, this case was delayed by the A: The withdrawal slip. turn, bears the burden to establish his
previous Court for two (2) years. Your Q: I’m asking you do you have proof? defense.56
Honor, no withdrawal slip was produced by A: None, sir. Here, Oliver alleged that she did not
the bank, Your Honor. I would just like to Q: You cannot produce in Court in authorize the withdrawal of P7 million from
place it on record. support of your Judicial Affidavit? her account. To establish her allegation,
COURT: Were there subpoenas issued by A: None. Oliver presented the following: (1) the
the bank, was there an order? Q: And you cannot produce that in Court? transaction history register which showed
ATTY. DEJARESCO: Yes Your Honor, I think A: As far as the withdrawal slip as for the withdrawal of P7 million from her
the good counsel was the counsel at that myself, none.55 account on December 21, 1998; (2) the
time would you able to confirm that it took [Emphasis Supplied] passbook which contained alterations to
us two (2) years to subpoena and From the foregoing, there was a clear conceal the withdrawal on December 21,
subpoena (sic) this withdrawal slip because showing of PSBank’s failure to exercise the 1998 while in the possession of Castro; and
there must be an authority to withdraw, degree of diligence that it ought to have (3) testimonial evidence that she did not
and it there is a signature of the plaintiff, exercised in dealing with its clients. It could allow the withdrawal of the said
we will admit that. not prove that the withdrawal of P7 million amount.57 The Court is of the view that
ATTY. CORPUZ: I remember having was duly authorized by Oliver. As a banking Oliver had sufficiently discharged her
manifested that the withdrawal slip institution, PSBank was expected to ensure burden in proving that P7 million was
cannot be located. that such substantial amount should only withdrawn from her account without her
ATTY. DEJARESCO: Let’s put that on be transacted with the consent and authorization. Hence, the burden was
record, Your Honor. authority of Oliver. PSBank, however, shifted to the respondents to refute the
ATTY. CORPUS: (sic) I remember having reneged on its fiduciary duty by allowing an allegation of Oliver.
made that manifestation, Your Honor. encroachment upon its depositor’s account As discussed above, both Castro and
COURT: That’s the reason why no without the latter’s permission. Hence, PSBank failed to establish the burden of
document was produced in Court by the PS PSBank must be held liable for such their defense. They failed to present proof
Bank? improper transaction. that Oliver authorized the said transaction.
ATTY. CORPUS: (sic) With respect to the PSBank and Castro They could have presented either the cash
withdrawal slip only, Your Honor on failed to discharge their withdrawal slip for the P7 million on
December 21. burden and must be held December 21, 1999 or Lim’s testimony to
ATTY. DEJARESCO: Of that Seven (7) solidarily liable prove the transfer of funds to the latter’s
million from the account. The party who alleges a fact has the burden account, but they did neither. Without an
COURT: Make that on record. of proving it. Section 1, Rule 131 of the iota of proof to substantiate the validity of
ATTY. CORPUS: Yes, Your Honor.54 Rules of Court defines "burden of proof" as the said transaction, the respondents
[Emphasis Supplied] "the duty of a party to present evidence on unlawfully deprived Oliver of her funds.
Castro, as agent of Oliver, could not the facts in issue necessary to establish his Indeed, the bank should be solidarily liable
produce either the said withdrawal slip claim or defense by the amount of evidence with its employee for the damages
allegedly authorizing the withdrawal of the required by law." In civil cases, the burden committed to its depositor.58 Under Article
P7 million, her testimony is quoted as of proof rests upon the plaintiff, who is 2180 of the Civil Code, employers shall be
follows: required to establish his case by a held primarily and solidarily liable for
damages caused by their employees acting and Castro still owing her P1,111,850.77, persons. A decreased amount of
within the scope of their assigned tasks. which must be suitably paid in the form of P50,000.00 attorney's fees should be
Castro, as acting branch manager of actual damages. sufficient.
PSBank ,was able to facilitate the The award of moral damages must also be WHEREFORE, the petition
questionable transaction as she was also upheld. Specifically, in culpa contractual or is GRANTED. The October 25, 2013
entrusted with Oliver’s passbook. In other breach of contract, like in the present case, Decision and the September 12, 2014
words, Castro was the representative of moral damages are recoverable only if the Resolution of the Court of Appeals in CA-
PSBank, and, at the same time, the agent defendant has acted fraudulently or in bad G.R. CV No. 95656 are REVERSED and
of Oliver, earning commissions from their faith, or is found guilty of gross negligence SET ASIDE. The July 22, 2010 Order of the
transactions. Oddly, PSBank, either amounting to bad faith, or in wanton Regional Trial Court, Branch 276,
consciously or through sheer negligence, disregard of his contractual obligations. Muntinlupa City in Civil Case No. 99-278 is
allowed the double dealings of its employee Verily, the breach must be wanton, hereby REINSTATED with
with its client. Such carelessness and lack reckless, malicious, or in bad faith, the MODIFICATION that the award of
of protection of the depositors from its own oppressive or abusive.59 exemplary damages and attorney's fees be
employees led to the unlawful withdrawal Here, Castro and PSBank were utterly decreased to P50,000.00 each.
of the P7 million from Oliver’s account. reckless in allowing the withdrawal of a All awards shall earn interests at the rate
Although Castro was eventually terminated huge amount from Oliver's account without of six percent (6%) per annum from the
by PSBank because of certain problems her consent.1âwphi1 The bank's finality of this decision.
regarding client accommodation and loss of negligence is a result of lack of due care SO ORDERED.
confidence, the damage to Oliver had and caution required of managers and
already been done. Thus, both Castro and employees of a firm engaged in a business
PSBank must be held solidarily liable. so sensitive and demanding.60 Hence, the
Award of damages; award of Pl00,000.00 as moral damages is
invalid foreclosure warranted.
To recapitulate, the loans of Oliver from The award of exemplary damages is also
PSBank which were secured by real estate proper due to the failure of Castro and
mortages amounted to P5,888,149.33. PSBank to prevent the unauthorized
Finding PSBank and Castro solidarily liable withdrawal from Oliver's account. The law
to Oliver in the amount of P7 million allows the grant of exemplary damages to
because it was improperly withdrawn from set an example for public good.61 The
her bank account, the Court agrees with Court, however, finds that the amount of
the RTC that had it not been for the said exemplary damages must be decreased to
unauthorized withdrawal, Oliver’s debts P50,000.00.
amounting to P5,888,149.33 would have Finally; the Court agrees with the RTC that
been satisfied. Castro and PSBank should be held solidarily
Consequently, PSBank’s foreclosure of the liable for attorney's fees. Article 2208 of
real estate mortgage covering the two (2) the Civil Code is clear that attorney's fees
loans in the total amount of P5,888,149.33 may be recovered when exemplary
was improper. With PSBank being found damages are awarded or when the plaintiff,
liable to Oliver for P7 million, after through the defendant's act or omission,
offsetting her loans would have PSBank has been compelled to litigate with thirds
G.R. No. L-11154 March 21, 1916 a motorcycle, was going toward the and the would be exposed to infection, for
E. MERRITT, plaintiff-appellant, western part of Calle Padre Faura, passing which reason it was of the most serious
vs. along the west side thereof at a speed of nature.
GOVERNMENT OF THE PHILIPPINE ten to twelve miles an hour, upon crossing At another examination six days before the
ISLANDS, defendant-appellant. Taft Avenue and when he was ten feet from day of the trial, Dr. Saleeby noticed that
Crossfield and O'Brien for plaintiff. the southwestern intersection of said the plaintiff's leg showed a contraction of
Attorney-General Avanceña for defendant.. streets, the General Hospital ambulance, an inch and a half and a curvature that
TRENT, J.: upon reaching said avenue, instead of made his leg very weak and painful at the
This is an appeal by both parties from a turning toward the south, after passing the point of the fracture. Examination of his
judgment of the Court of First Instance of center thereof, so that it would be on the head revealed a notable readjustment of
the city of Manila in favor of the plaintiff for left side of said avenue, as is prescribed by the functions of the brain and nerves. The
the sum of P14,741, together with the the ordinance and the Motor Vehicle Act, patient apparently was slightly deaf, had a
costs of the cause. turned suddenly and unexpectedly and light weakness in his eyes and in his mental
Counsel for the plaintiff insist that the trial long before reaching the center of the condition. This latter weakness was always
court erred (1) "in limiting the general street, into the right side of Taft Avenue, noticed when the plaintiff had to do any
damages which the plaintiff suffered to without having sounded any whistle or difficult mental labor, especially when he
P5,000, instead of P25,000 as claimed in horn, by which movement it struck the attempted to use his money for
the complaint," and (2) "in limiting the time plaintiff, who was already six feet from the mathematical calculations.
when plaintiff was entirely disabled to two southwestern point or from the post place According to the various merchants who
months and twenty-one days and fixing the there. testified as witnesses, the plaintiff's mental
damage accordingly in the sum of P2,666, By reason of the resulting collision, the and physical condition prior to the accident
instead of P6,000 as claimed by plaintiff in plaintiff was so severely injured that, was excellent, and that after having
his complaint." according to Dr. Saleeby, who examined received the injuries that have been
The Attorney-General on behalf of the him on the very same day that he was discussed, his physical condition had
defendant urges that the trial court erred: taken to the General Hospital, he was undergone a noticeable depreciation, for he
(a) in finding that the collision between the suffering from a depression in the left had lost the agility, energy, and ability that
plaintiff's motorcycle and the ambulance of parietal region, a would in the same place he had constantly displayed before the
the General Hospital was due to the and in the back part of his head, while accident as one of the best constructors of
negligence of the chauffeur; (b) in holding blood issued from his nose and he was wooden buildings and he could not now
that the Government of the Philippine entirely unconscious. earn even a half of the income that he had
Islands is liable for the damages sustained The marks revealed that he had one or secured for his work because he had lost
by the plaintiff as a result of the collision, more fractures of the skull and that the 50 per cent of his efficiency. As a
even if it be true that the collision was due grey matter and brain was had suffered contractor, he could no longer, as he had
to the negligence of the chauffeur; and (c) material injury. At ten o'clock of the night before done, climb up ladders and
in rendering judgment against the in question, which was the time set for scaffoldings to reach the highest parts of
defendant for the sum of P14,741. performing the operation, his pulse was so the building.
The trial court's findings of fact, which are weak and so irregular that, in his opinion, As a consequence of the loss the plaintiff
fully supported by the record, are as there was little hope that he would live. His suffered in the efficiency of his work as a
follows: right leg was broken in such a way that the contractor, he had to dissolved the
It is a fact not disputed by counsel for the fracture extended to the outer skin in such partnership he had formed with the
defendant that when the plaintiff, riding on manner that it might be regarded as double engineer. Wilson, because he was
incapacitated from making mathematical at once arises whether the Government is authorized and directed to appear at the
calculations on account of the condition of legally-liable for the damages resulting trial on the behalf of the Government of
his leg and of his mental faculties, and he therefrom. said Islands, to defendant said Government
had to give up a contract he had for the Act No. 2457, effective February 3, 1915, at the same.
construction of the Uy Chaco building." reads: SEC. 2. This Act shall take effect on its
We may say at the outset that we are in full An Act authorizing E. Merritt to bring suit passage.
accord with the trial court to the effect that against the Government of the Philippine Enacted, February 3, 1915.
the collision between the plaintiff's Islands and authorizing the Attorney- Did the defendant, in enacting the above
motorcycle and the ambulance of the General of said Islands to appear in said quoted Act, simply waive its immunity from
General Hospital was due solely to the suit. suit or did it also concede its liability to the
negligence of the chauffeur. Whereas a claim has been filed against the plaintiff? If only the former, then it cannot
The two items which constitute a part of Government of the Philippine Islands by be held that the Act created any new cause
the P14,741 and which are drawn in Mr. E. Merritt, of Manila, for damages of action in favor of the plaintiff or
question by the plaintiff are (a) P5,000, the resulting from a collision between his extended the defendant's liability to any
award awarded for permanent injuries, and motorcycle and the ambulance of the case not previously recognized.
(b) the P2,666, the amount allowed for the General Hospital on March twenty-fifth, All admit that the Insular Government (the
loss of wages during the time the plaintiff nineteen hundred and thirteen; defendant) cannot be sued by an individual
was incapacitated from pursuing his Whereas it is not known who is responsible without its consent. It is also admitted that
occupation. We find nothing in the record for the accident nor is it possible to the instant case is one against the
which would justify us in increasing the determine the amount of damages, if any, Government. As the consent of the
amount of the first. As to the second, the to which the claimant is entitled; and Government to be sued by the plaintiff was
record shows, and the trial court so found, Whereas the Director of Public Works and entirely voluntary on its part, it is our duty
that the plaintiff's services as a contractor the Attorney-General recommended that to look carefully into the terms of the
were worth P1,000 per month. The court, an Act be passed by the Legislature consent, and render judgment accordingly.
however, limited the time to two months authorizing Mr. E. Merritt to bring suit in The plaintiff was authorized to bring this
and twenty-one days, which the plaintiff the courts against the Government, in action against the Government "in order to
was actually confined in the hospital. In order that said questions may be decided: fix the responsibility for the collision
this we think there was error, because it Now, therefore, between his motorcycle and the ambulance
was clearly established that the plaintiff By authority of the United States, be it of the General Hospital and to determine
was wholly incapacitated for a period of six enacted by the Philippine Legislature, that: the amount of the damages, if any, to
months. The mere fact that he remained in SECTION 1. E. Merritt is hereby authorized which Mr. E. Merritt is entitled on account
the hospital only two months and twenty- to bring suit in the Court of First Instance of said collision, . . . ." These were the two
one days while the remainder of the six of the city of Manila against the questions submitted to the court for
months was spent in his home, would not Government of the Philippine Islands in determination. The Act was passed "in
prevent recovery for the whole time. We, order to fix the responsibility for the order that said questions may be decided."
therefore, find that the amount of damages collision between his motorcycle and the We have "decided" that the accident was
sustained by the plaintiff, without any fault ambulance of the General Hospital, and to due solely to the negligence of the
on his part, is P18,075. determine the amount of the damages, if chauffeur, who was at the time an
As the negligence which caused the any, to which Mr. E. Merritt is entitled on employee of the defendant, and we have
collision is a tort committed by an agent or account of said collision, and the Attorney- also fixed the amount of damages
employee of the Government, the inquiry General of the Philippine Islands is hereby sustained by the plaintiff as a result of the
collision. Does the Act authorize us to hold the state's liability for the negligent acts of the mill property of said George
that the Government is legally liable for its officers or agents, the court said: Apfelbacher, the fish hatchery of the State
that amount? If not, we must look No claim arises against any government is of Wisconsin on the Bark River, and the mill
elsewhere for such authority, if it exists. favor of an individual, by reason of the property of Evan Humphrey at the lower
The Government of the Philippine Islands misfeasance, laches, or unauthorized end of Nagawicka Lake, and relative to the
having been "modeled after the Federal exercise of powers by its officers or agents. use of the waters of said Bark River and
and State Governments in the United (Citing Gibbons vs. U. S., 8 Wall., 269; Nagawicka Lake, all in the county of
States," we may look to the decisions of the Clodfelter vs. State, 86 N. C., 51, 53; 41 Waukesha, Wisconsin.
high courts of that country for aid in Am. Rep., 440; Chapman vs. State, 104 In determining the scope of this act, the
determining the purpose and scope of Act Cal., 690; 43 Am. St. Rep., 158; Green vs. court said:
No. 2457. State, 73 Cal., 29; Bourn vs. Hart, 93 Cal., Plaintiff claims that by the enactment of
In the United States the rule that the state 321; 27 Am. St. Rep., 203; Story on this law the legislature admitted liability on
is not liable for the torts committed by its Agency, sec. 319.) the part of the state for the acts of its
officers or agents whom it employs, except As to the scope of legislative enactments officers, and that the suit now stands just
when expressly made so by legislative permitting individuals to sue the state as it would stand between private parties.
enactment, is well settled. "The where the cause of action arises out of It is difficult to see how the act does, or was
Government," says Justice Story, "does not either fort or contract, the rule is stated in intended to do, more than remove the
undertake to guarantee to any person the 36 Cyc., 915, thus: state's immunity from suit. It simply gives
fidelity of the officers or agents whom it By consenting to be sued a state simply authority to commence suit for the purpose
employs, since that would involve it in all waives its immunity from suit. It does not of settling plaintiff's controversies with the
its operations in endless embarrassments, thereby concede its liability to plaintiff, or estate. Nowhere in the act is there a
difficulties and losses, which would be create any cause of action in his favor, or whisper or suggestion that the court or
subversive of the public interest." extend its liability to any cause not courts in the disposition of the suit shall
(Claussen vs. City of Luverne, 103 Minn., previously recognized. It merely gives a depart from well established principles of
491, citing U. S. vs. Kirkpatrick, 9 Wheat, remedy to enforce a preexisting liability law, or that the amount of damages is the
720; 6 L. Ed., 199; and Beers vs. States, and submits itself to the jurisdiction of the only question to be settled. The act opened
20 How., 527; 15 L. Ed., 991.) court, subject to its right to interpose any the door of the court to the plaintiff. It did
In the case of Melvin vs. State (121 Cal., lawful defense. not pass upon the question of liability, but
16), the plaintiff sought to recover In Apfelbacher vs. State (152 N. W., 144, left the suit just where it would be in the
damages from the state for personal advanced sheets), decided April 16, 1915, absence of the state's immunity from suit.
injuries received on account of the the Act of 1913, which authorized the If the Legislature had intended to change
negligence of the state officers at the state bringing of this suit, read: the rule that obtained in this state so long
fair, a state institution created by the SECTION 1. Authority is hereby given to and to declare liability on the part of the
legislature for the purpose of improving George Apfelbacher, of the town of state, it would not have left so important a
agricultural and kindred industries; to Summit, Waukesha County, Wisconsin, to matter to mere inference, but would have
disseminate information calculated to bring suit in such court or courts and in done so in express terms. (Murdock Grate
educate and benefit the industrial classes; such form or forms as he may be advised Co. vs. Commonwealth, 152 Mass., 28; 24
and to advance by such means the material for the purpose of settling and determining N.E., 854; 8 L. R. A., 399.)
interests of the state, being objects similar all controversies which he may now have In Denning vs. State (123 Cal., 316), the
to those sought by the public school with the State of Wisconsin, or its duly provisions of the Act of 1893, relied upon
system. In passing upon the question of authorized officers and agents, relative to and considered, are as follows:
All persons who have, or shall hereafter injuries in the management of the canals of branches of public service and in the
have, claims on contract or for negligence such as the plaintiff had sustained, Chief appointment of its agents; on the contrary,
against the state not allowed by the state Justice Ruger remarks: "It must be we must presuppose all foresight humanly
board of examiners, are hereby authorized, conceded that the state can be made liable possible on its part in order that each
on the terms and conditions herein for injuries arising from the negligence of branch of service serves the general weal
contained, to bring suit thereon against the its agents or servants, only by force of an that of private persons interested in its
state in any of the courts of this state of some positive statute assuming such operation. Between these latter and the
competent jurisdiction, and prosecute the liability." state, therefore, no relations of a private
same to final judgment. The rules of It being quite clear that Act No. 2457 does nature governed by the civil law can arise
practice in civil cases shall apply to such not operate to extend the Government's except in a case where the state acts as a
suits, except as herein otherwise provided. liability to any cause not previously judicial person capable of acquiring rights
And the court said: recognized, we will now examine the and contracting obligations. (Supreme
This statute has been considered by this substantive law touching the defendant's Court of Spain, January 7, 1898; 83 Jur.
court in at least two cases, arising under liability for the negligent acts of its officers, Civ., 24.)
different facts, and in both it was held that agents, and employees. Paragraph 5 of That the Civil Code in chapter 2, title 16,
said statute did not create any liability or article 1903 of the Civil Code reads: book 4, regulates the obligations which
cause of action against the state where The state is liable in this sense when it acts arise out of fault or negligence; and
none existed before, but merely gave an through a special agent, but not when the whereas in the first article thereof. No.
additional remedy to enforce such liability damage should have been caused by the 1902, where the general principle is laid
as would have existed if the statute had not official to whom properly it pertained to do down that where a person who by an act or
been enacted. (Chapman vs. State, 104 the act performed, in which case the omission causes damage to another
Cal., 690; 43 Am. St. Rep., 158; Melvin vs. provisions of the preceding article shall be through fault or negligence, shall be
State, 121 Cal., 16.) applicable. obliged to repair the damage so done,
A statute of Massachusetts enacted in 1887 The supreme court of Spain in defining the reference is made to acts or omissions of
gave to the superior court "jurisdiction of scope of this paragraph said: the persons who directly or indirectly cause
all claims against the commonwealth, That the obligation to indemnify for the damage, the following articles refers to
whether at law or in equity," with an damages which a third person causes to this persons and imposes an identical
exception not necessary to be here another by his fault or negligence is based, obligation upon those who maintain fixed
mentioned. In construing this statute the as is evidenced by the same Law 3, Title relations of authority and superiority over
court, in Murdock Grate Co. vs. 15, Partida 7, on that the person obligated, the authors of the damage, because the
Commonwealth (152 Mass., 28), said: by his own fault or negligence, takes part law presumes that in consequence of such
The statute we are discussing disclose no in the act or omission of the third party who relations the evil caused by their own fault
intention to create against the state a new caused the damage. It follows therefrom or negligence is imputable to them. This
and heretofore unrecognized class of that the state, by virtue of such provisions legal presumption gives way to proof,
liabilities, but only an intention to provide of law, is not responsible for the damages however, because, as held in the last
a judicial tribunal where well recognized suffered by private individuals in paragraph of article 1903, responsibility for
existing liabilities can be adjudicated. consequence of acts performed by its acts of third persons ceases when the
In Sipple vs. State (99 N. Y., 284), where employees in the discharge of the functions persons mentioned in said article prove
the board of the canal claims had, by the pertaining to their office, because neither that they employed all the diligence of a
terms of the statute of New York, fault nor even negligence can be presumed good father of a family to avoid the
jurisdiction of claims for damages for on the part of the state in the organization damage, and among these persons, called
upon to answer in a direct and not a agent who is an employee of the acting For the foregoing reasons, the judgment
subsidiary manner, are found, in addition administration and who on his own appealed from must be reversed, without
to the mother or the father in a proper responsibility performs the functions which costs in this instance. Whether the
case, guardians and owners or directors of are inherent in and naturally pertain to his Government intends to make itself legally
an establishment or enterprise, the state, office and which are regulated by law and liable for the amount of damages above set
but not always, except when it acts through the regulations." (Supreme Court of Spain, forth, which the plaintiff has sustained by
the agency of a special agent, doubtless May 18, 1904; 98 Jur. Civ., 389, 390.) reason of the negligent acts of one of its
because and only in this case, the fault or That according to paragraph 5 of article employees, by legislative enactment and
negligence, which is the original basis of 1903 of the Civil Code and the principle laid by appropriating sufficient funds therefor,
this kind of objections, must be presumed down in a decision, among others, of the we are not called upon to determine. This
to lie with the state. 18th of May, 1904, in a damage case, the matter rests solely with the Legislature and
That although in some cases the state responsibility of the state is limited to that not with the courts.
might by virtue of the general principle set which it contracts through a special agent,
forth in article 1902 respond for all the duly empowered by a definite order or
damage that is occasioned to private commission to perform some act or
parties by orders or resolutions which by charged with some definite purpose which
fault or negligence are made by branches gives rise to the claim, and not where the
of the central administration acting in the claim is based on acts or omissions
name and representation of the state itself imputable to a public official charged with
and as an external expression of its some administrative or technical office who
sovereignty in the exercise of its executive can be held to the proper responsibility in
powers, yet said article is not applicable in the manner laid down by the law of civil
the case of damages said to have been responsibility. Consequently, the trial court
occasioned to the petitioners by an in not so deciding and in sentencing the
executive official, acting in the exercise of said entity to the payment of damages,
his powers, in proceedings to enforce the caused by an official of the second class
collections of certain property taxes owing referred to, has by erroneous
by the owner of the property which they interpretation infringed the provisions of
hold in sublease. articles 1902 and 1903 of the Civil Code.
That the responsibility of the state is (Supreme Court of Spain, July 30, 1911;
limited by article 1903 to the case wherein 122 Jur. Civ., 146.)
it acts through a special agent (and a It is, therefore, evidence that the State
special agent, in the sense in which these (the Government of the Philippine Islands)
words are employed, is one who receives a is only liable, according to the above
definite and fixed order or commission, quoted decisions of the Supreme Court of
foreign to the exercise of the duties of his Spain, for the acts of its agents, officers
office if he is a special official) so that in and employees when they act as special
representation of the state and being agents within the meaning of paragraph 5
bound to act as an agent thereof, he of article 1903, supra, and that the
executes the trust confided to him. This chauffeur of the ambulance of the General
concept does not apply to any executive Hospital was not such an agent.
G.R. No. L-20322 May 29, 1968 answer the complaint, therein defendant In its decision of August 21, 1962, the
REPUBLIC OF THE Irrigation Service Unit was declared in appellate court sustained the propriety of
PHILIPPINES, petitioner, default. the disputed garnishment-order, and
vs. On June 3, 1960, the Republic of the dismissed the Government's petition, on
HON. PERFECTO R. PALACIO, as Judge Philippines, through the Solicitor General, the basis of the finding by the trial court
of the Court of First Instance of moved for the dismissal of the complaint, that the Irrigation Service Unit, "formerly
Camarines Sur, claiming that defendant Irrigation Service an office under the Department of
MACARIO M. OFILADA, as ex-officio Unit has no juridical personality to sue and Agriculture and Natural Resources created
Sheriff of Manila, and ILDEFONSO be sued. By order of June 11, 1960, this by virtue of a 'Memorandum of Agreement
ORTIZ, respondents. motion was denied, on the ground that the on the Irrigation Pump Program of the
Office of the Solicitor General for petitioner. said defendant although a mere agency of Philippines', signed by the Chairman of the
Luis Contreras for respondents. the Republic of the Philippines, is engaged PHILCUSA (now NEC), Chief of the MSA
REYES, J.B.L., J.: in the private business of selling irrigation Mission (now AID) and the Secretary of
This is a petition for review of the decision pumps and construction materials on Agriculture and Natural Resources, and
of the Court of Appeals (in CA-G.R. No. installment plan. The Solicitor General's presently under the Department of Public
30915), dismissing the original action for motion for reconsideration of the aforesaid Works and Communications to which it was
certiorari and prohibition filed with said order was also denied on July 19, 1960. No transferred", is engaged in a private
Court by herein petitioner Republic of the appeal appears to have been taken. business of purchase and sale of irrigation
Philippines, to restrain the enforcement of On January 29, 1962, the Solicitor General pumps and systems. Consequently,
a writ of execution (issued by the Court of was served with copy of the writ of according to the Court of Appeals, and
First Instance of Camarines Sur in its Civil execution issued by the court against the following the ruling in the case of National
Case No. 4886) on the trust fund in the defendants in the above-mentioned civil Airports Corporation vs. Teodoro, et al., L-
account of the Irrigation Service Unit with case; and, on February 16, 1962, an order 5122, April 30, 1952 (91 Phil. 203), by thus
the Philippine National Bank. of garnishment was served by the Sheriff engaging in private business, the
There is no controversy as to the following of Manila against the deposits and/or pump Government, through the Irrigation Service
facts: irrigation trust fund in the account of the Unit, had actually consented to the suit.
On April 2, 1960, Ildefonso Ortiz instituted Irrigation Service Unit at the Philippine Hence, the present petition for review filed
in the Court of First Instance of Camarines National Bank, Manila, to cover the sum of by the Republic of the Philippines.
Sur Civil Case No. 4886, against the P14,874.40.1 The issue presented by this case is whether
Handong Irrigation Association, Inc., a On March 8, 1962, the Solicitor General, on or not the pump irrigation trust fund,
corporation with principal place of business behalf of the Republic of the Philippines, deposited with the Philippine National Bank
in Libmanan, Camarines Sur, and the filed with the lower court an urgent motion in the account of the Irrigation Service
Irrigation Service Unit, an office or agency to lift the order of garnishment, for the Unit, may be garnished to satisfy a money-
under the Department of Public Works and reason that the funds subject matter judgment against the latter. This issue in
Communications, to recover possession, thereof are public funds and exempt from turn calls for a determination of the nature
with damages, of a 958 square meter-lot attachment or execution. Upon denial of of said trust fund, i.e., whether it is a fund
located in Handong, San Juan, Libmanan, this motion, as well as of the motion for belonging to the National Government
Camarines Sur, which the Irrigation reconsideration of said denial, the Solicitor (which was not a party to Civil Case No.
Association allegedly entered and General commenced the present certiorari 4886), as maintained by herein petitioner,
occupied, at the instance of its co- and prohibition proceeding in the Court of or purely the proceeds of a private venture
defendant. For failure to appear and Appeals.1ªvvphi1.nêt
by the government, as claimed by the supplied under the Agreement or otherwise survey and design, (c) the cost of fuel and
respondents. accruing to it as a result of the import of oil financed for the first crop season, if any,
For a better understanding of the nature, such commodities or service; and of any (d) ten per cent of the total of a and b to
function and operation of the Irrigation advance deposits which the Philippine cover the cost of administration, technical
Service Unit (ISU) which is necessary for government may make in the Special assistance furnished by the ISU, inspection
the proper resolution of the issue herein Account (Sec. 1, paragraphs 2[a], [b] and and collection, and (e) the compensating
involved, it is worthwhile to recall that this [c], Annex to Memo. Agreement of April 27, use tax to the Philippine Government.
office was originally created under the 1951). Later, on the basis of a Interest is also payable under each
Department of Agriculture and Natural supplemental agreement (No. 2, contract at the rate of six percent per
Resources by virtue of a Memorandum Counterpart Project No. 409 — Pump annum on any unpaid balance of the total
Agreement between the governments of Irrigation), the Pump Irrigation Trust Fund amount of the contract.
the Philippines and the United States, was established in the Philippine National 2. All principal and interest payments
dated August 13, 1952. It was later Bank, to which all authorized releases to received by the ISU from farmers'
transferred to the Department of Public the ISU3 from the Counterpart Fund — associations shall be deposited
Works and Communications as an office Special Account, to finance the peso-cost of immediately in the Trust Fund. The
directly under the Office of the Secretary, the Irrigation Pump Project, were separate account established by the project
"to prosecute to completion the transferred. This is the fund on which the agreement for Counterpart Project 409,
rehabilitation of pump systems transferred disputed writ of execution for money entitled "Irrigation Pump Sales Proceeds
from the former Irrigation Pump judgment rendered against the ISU, is Account" is hereby abolished and any
Administration of the Department of being enforced. deposits therein will be immediately
Agriculture and Natural A reading of the records and documents transferred to the Trust Fund.
Resources,2 including the settlement of the submitted to the Court of Appeals will 3. Whenever the total value of all deposits
obligations of said administration." The readily show that the sales of irrigation made to the Trust Fund from contract
budgetary requirements to carry out the pumps to farmers by ISU are governed by principal and interest payments exceeds
objectives of the project were to be the terms of the Supplemental Agreement the value of total releases made to the
financed by withdrawals from the No. 2 to Counterpart Project No. 409 Trust Fund from the Counterpart Fund-
Counterpart Fund-Special Account. (signed by representatives of the Philippine Special Account, these excess deposits
(Memorandum Agreement of June, 1954.) and U. S. governments) hereunder copied shall be transferred from the Trust Fund to
This Counterpart Fund-Special Account in full: the Counter Fund-Special Account. Such
referred to above was established in the C. Disposition of Proceeds from Payments transfers shall be considered as "proceeds
Central Bank by the Government of the under Contracts of Sale of sale" and "advance deposits" as provided
Philippines and made up of deposits in 1. Under the Guiding Principles of the in Annex Section 1, (b) and (c) of the
pesos commensurate with the indicated Irrigation Pump Project, pumps are sold to Bilateral Agreement between the Republic
dollar cost to the Government of the United farmers' associations under conditional of the Philippines and the United States of
States of economic and technical sales contracts. Periodic payments to ISU America.
assistance made available to the by each association are required. The total It was also provided therein that the
Philippines, pursuant to the Bilateral payment required under the contract is payments by the farmers' associations on
Agreement between the Philippines and the stated in the contract and is equal to the conditional sales agreements specified in
United States of April 27, 1951; of deposits sum of (a) the landed cost of equipment at paragraph C-2, above, will be considered in
accruing to it (Philippine government) from the installation site, (b) the cost of the preparation, and shall form part, of the
the sale of commodities or services installation and construction including ISU annual budget, which will finance the
costs of supply and equipment purchases, Even though the rule as to immunity of a of the Civil Code of the Philippines, that the
the installation and construction of pump state from suit is relaxed, the power of the State is liable only for torts caused by its
units, and the operating expenses of ISU courts ends when the judgment is special agents, specially commissioned to
for which appropriated funds are not rendered. Although the liability of the state carry out the acts complained of outside of
available. (Para. B-1). has been judicially ascertained, the state is such agent's regular duties (Merritt vs.
It is clear from the foregoing that the ISU at liberty to determine for itself whether to Insular Government, supra; Rosete vs.
is not only an office in the Government of pay the judgment or not, and execution can Auditor General, 81 Phil. 453). There being
the Republic of the Philippines, created to not issue on a judgment against the state. no proof that the making of the tortious
promote a specific economic policy of said Such statutes do not authorize a seizure of inducement was authorized, neither the
government, but also that its activity (of state property to satisfy judgments State nor its funds can be made liable
selling irrigation pumps to farmers on recovered, and only convey implication therefor.
installment basis) is not intended to earn that the legislature will recognize such WHEREFORE, the decision of the Court of
profit or financial gain to its operator. The judgment as final and make provision for Appeals under review is reversed and set
mere fact that interests are being collected the satisfaction thereof. (49 Am. Jur., Sec. aside, and the order of garnishment issued
on the balance of the unpaid cost of the 104, pp. 312-320.) by the Sheriff of Manila on the Pump
purchased pumps does not convert this Judgments against a state, in cases where Irrigation Trust Fund in the account of the
economic project of the government into a it has consented to be sued, generally Irrigation Service Unit, with the Philippine
corporate activity. As previously pointed operate merely to liquidate and establish National Bank, is hereby declared null and
out, the installment payments and plaintiff's claim in the absence of express void. The writ of preliminary injunction
interests receivable from the farmers are to provision; otherwise they can not be heretofore issued is made permanent. No
be used to replenish the counterpart funds enforced by processes of law; and it is for costs.
utilized in furtherance of the operation of the legislature to provide for their payment
the project. in such manner as it sees fit. (59 C.J. sec.
Although evidently acknowledging the 501, p. 331; 81 C.J.S., sec. 232, p. 1343.)
nature of the Pump Irrigation Trust Fund as It needs no stressing that to allow the
a public fund, the Court of Appeals levying under execution of the ISU funds
nevertheless sustained the garnishment would amount to diverting them from the
order, on the ground that the ISU, by purpose originally contemplated by the
engaging in the private business of P.I.U.S. Bilateral Agreement, and would
purchasing and selling irrigation pumps on amount to a disbursement without any
installment basis, has waived its proper appropriation as required by law.
governmental immunity and, by A second infirmity of the decision under
implication, consented to the suit. appeal originates from its ignoring the fact
It is apparent that this decision of the Court that the initial complaint against the
of Appeals suffers from the erroneous Irrigation Service Unit was that it had
assumption that because the State has induced the Handong Irrigation
waived its immunity, its property and funds Association, Inc., to invade and occupy the
become liable to seizure under the legal land of the plaintiff Ildefonso Ortiz. The ISU
process. This emphatically is not the law liability thus arose from tort and not from
(Merritt vs. Insular Government, 34 Phil. contract; and it is a well-entrenched rule in
311). this jurisdiction, embodied in Article 2180
G.R. No. 167797 June 15, 2015 employers (sic) of the driver Jessie Rillera WHEREFORE, it is most respectfully prayed
METRO MANILA TRANSIT y Gaceta. that after notice and hearing a judgment be
CORPORATION, Petitioner, 6. On October 14, 1994, at around 7:45 rendered ordering the defendants jointly
vs. P.M., while Plaintiff was riding on a Honda and severally to pay Plaintiffs the following
REYNALDO CUEVAS and JUNNEL Motocycle, with a companion at the back, sums of money:
CUEVAS, represented by REYNALDO along South Superhighway, in front of 1) ₱200,000.00 more or less, representing
CUEVAS, Respondents. Magallanes Supermarket in Makati, Metro actual medical expenses;
DECISION Manila, a few meters away from the 2) ₱18,940.00 representing the cost of
BERSAMIN, J.: approaches of Magallanes Overpass repair of the damaged motorcycle
The registered owner of a motor vehicle complex, coming from the South and 3) ₱300,000.00 as moral damage(s)
whose operation causes injury to another is heading toward the North, the defendants’ 4) ₱100,000.00 as exemplary damage(s)
legally liable to the latter. But it is error not driver Jessie Rillera Y Gaceta, driving the 5) ₱50,000.00 as nominal damage(s)
to allow the registered owner to recover MMTC/Mina’s Transit Passenger bus with 6) ₱15,000.00 as litigation expenses
reimbursement from the actual and Plate No. NXM-449-TB-pil 94, heading in 7) ₱30,000.00 as attorney’s fees
present owner by way of its cross-claim. the same direction and following Plain tiff’s 8) to pay the cost of the suit.3
Antecedents motorcycle, recklessly and carelessly In its answer with compulsory counterclaim
Metro Manila Transit Corporation (MMTC) attempted to overtake Plaintiff’s Motorcycle and cross-claim,4 MMTC denied liability,
and Mina's Transit Corporation (Mina's on the right side of the lane, in the course and averred that although it retained the
Transit) entered into an agreement to sell of which the said Jessie Rillera side swiped ownership of the bus, the actual operator
dated August 31, 1990,1 whereby the latter the Plaintiff as the said Jessie Rillera and employer of the bus driver was Mina’s
bought several bus units from the former accelerated speed; Transit; and that, in support of its cross-
at a stipulated price. They agreed that 7. As a result, plaintiff Junnel Cuevas and claim against Mina’s Transit, a provision in
MMTC would retain the ownership of the his companion were thrown to the road and the agreement to sell mandated Mina ’s
buses until certain conditions were met, Plaintiff’s right leg was severely fractured, Transport to hold it free from liability
but in the meantime Mina's Transit could and the Honda Motorcycle owned by arising from the use and operation of the
operate the buses within Metro Manila. plaintiff Reynaldo Cuevas was extensively bus units.5
On October 14, 1994, one of the buses damaged; On its part, Mina’s Transit contended that
subject of the agreement to sell, bearing 8. Plaintiff Junnel Cuevas and his it was not liable because: (a) it exercised
plate number NXM-449-TB-pil 94, hit and companion were then brought to the due diligence in the selection and
damaged a Honda Motorcycle owned by Philippine General Hospital along Taft supervision of its employees; (b) its bus
Reynaldo and driven by Junnel. Reynaldo Avenue in Manila, where the said Plaintiff driver exercised due diligence; and (c)
and Junnel sued MMTC and Mina’s Transit had to undergo several operations on his Junnel’s negligence was the cause of the
for damages in the Regional Trial Court right leg; but in spite of the several accident.
(RTC) in Cavite, docketed as Civil Case No. operations which he had undergone, Meanwhile, Mina’s Transit filed a third-
N-6127, pertinently alleging and praying as Plaintiff Junnel Cuevas, even up to now, is party complaint against its insurer, Perla
follows: unable to walk on his own without the aid Compania de Seguros, Inc. (Perla), seeking
5. Defendants Metro Manila Transit of crutches and is still scheduled for more reimbursement should it be adjudged
Corporation and Mina’s Transit are operations; a xerox copy of his medical liable, pursuant to its insurance policy
registered joint-owners or operators of an certificate is hereto attached as Annex A issued by Perla with the following
MMTC/Minas Transit passenger bus with hereof;2 coverage: (a) third-party liability of
Plate No. NXM-449-TB-pil 94, and is the ₱50,000.00 as the maximum amount; and
(b) third-party damage to property of evidence was presented to prove it. The enunciated in the 1957 ruling in Erezo, et
₱20,000.00 as the maximum amount.6 RTC, however, did not rule on the propriety al. v. Jepte,12 where the Court pronounced:
In its answer to the third-party complaint, of the cross-claim. Registration is required not to make said
Perla denied liability as insurer because On appeal, the CA affirmed the RTC’s registration the operative act by which
Mina’s Transit had waived its recourse by decision.11 ownership in vehicles is transferred, as in
failing to notify Perla of the incident within Issue land registration cases, because the
one year from its occurrence, as required Hence, this appeal, in which MMTC posits administrative proceeding of registration
by Section 384 of the Insurance Code.7 It the sole issue of whether or not it was liable does not bear any essential relation to the
submitted that even assuming that the for the injuries sustained by the contract of sale between the parties
claim had not yet prescribed, its liability respondents despite the provision in the (Chinchilla vs. Rafael and Verdaguer, 39
should be limited to the maximum of agreement to se ll that shielded it from Phil. 888), but to permit the use and
₱50,000.00 for third-party liability and liability. operation of the vehicle upon any public
₱20,000.00 for third-party damage.8 Ruling of the Court highway (section 5 [a], Act No. 3992, as
After trial, the RTC rendered judgment in The appeal is partly meritorious. amended.) The main aim of motor vehicle
favor of the respondents on September 17, MMTC urges the revisit of the register ed- registration is to identify the owner so that
19999 ordering petitioner Metro Manila owner rule in order to gain absolution from if any accident happens, or that any
Transit Corporation (MMTC) and its co- liability. It contends that although it damage or injury is caused by the vehicle
defendant Mina’s Transit Corporation retained ownership of the bus at the time on the public highways, responsibility
(Mina’s Transit) to pay damages in favor of of the vehicular accident, the actual therefore can be fixed on a definite
respondents Reynaldo Cuevas and Junnel operation was transferred to Mina’s individual, the registered owner. Instances
Cuevas to wit: Transit; that for it to be held liable for the are numerous where vehicles running on
WHEREFORE, premises considered, acts of the bus driver, the existence of an public highways caused accidents or
defendants Metro Manila Transit employer-employee relationship between injuries to pedestrians or other vehicles
Corporation and Mina’s Transit Corporation them must be established; and that without positive identification of the owner
are hereby held solidarily liable for the because the bus driver was not its or drivers, or with very scant means of
payment to the plaintiffs of the following: employee, it was not liable for his negligent identification. It is to forestall these
a. ₱115,436.50 as actual damages; act. circumstances, so inconvenient or
b. ₱100,000.00 as moral damages The contentions of MMTC cannot persuade. prejudicial to the public, that the motor
c. ₱50,000.00 as exemplary damages; and In view of MMTC’s admission in its vehicle registration is primarily ordained, in
d. ₱20,000.00 as attorney’s fees. pleadings that it had remained the the interest of the determination of persons
Costs are also adjudged against registered owner of the bus at the time of responsible for damages or injuries caused
defendants. the incident, it could not escape liability for on public highways.
SO ORDERED.10 the personal injuries and property damage "‘One of the principal purposes of motor
The RTC concluded that the proximate suffered by the Cuevases. This is because vehicles legislation is identification of the
cause of the mishap was the negligence of of the registered-owner rule, whereby the vehicle and of the operator, in case of
the bus driver; that following Article 2180 registered owner of the motor vehicle accident; and another is that the
of the Civil Code, his employers should be involved in a vehicular accident could be knowledge that means of detection are
solidarily liable; that MMTC and Mina’s held liable for the consequences. The always available may act as a deterrent
Transit, being the joint owners of the bus, registered-owner rule has remained good from lax observance of the law and of the
were liable; and that the third-party law in this jurisdiction considering its rules of conservative and safe operation.
complaint was dismissed because no impeccable and timeless rationale, as Whatever purpose there may be in these
statutes, it is subordinate at the last to the Lim under a Lease Agreement, which Indeed, MMTC could not evade liability by
primary purpose of rendering it certain that agreement has been overtaken by a Deed passing the buck to Mina’s Transit. The
the violator of the law or of the rules of of Sale entered into by Equitable and stipulation in the agreement to sell did not
safety shall not escape because of lack of Ecatine Corporation (Ecatine). Equitable bind third parties like the Cuevases, who
means to discover him.’ The purpose of the argued that it cannot be held liable for were expected to simply rely on the data
statute is thwarted, and the displayed damages because the tractor had already contained in the registration certificate of
number becomes a ‘snare and delusion,’ if been sold to Ecatine at the time of the the erring bus.
courts would entertain such defenses as accident and the negligent driver was not Although the registered-owner rule might
that put forward by appellee in this case. its employee but of Ecatine. seem to be unjust towards MMTC, the law
No responsible person or corporation could In upholding the liability of Equitable, as did not leave it without any remedy or
be held liable for the most outrageous acts registered owner of the tractor, this Court recourse.1âwphi1 According to Filcar
of negligence, if they should be allowed to said that "regardless of sales made of a Transport Services v. Espinas ,14 MMTC
place a ‘middleman’ between them and the motor vehicle, the registered owner is the could recover from Mina’s Transit, the
public, and escape liability by the manner lawful operator insofar as the public and actual employer of the negligent driver,
in which they recompense their servants." third persons are concerned; consequently, under the principle of unjust enrichment,
(King vs. Brenham Automobile Co., 145 it is directly and primarily responsible for by means of a cross-claim seeking
S.W. 278, 279.) the consequences of its operation." The reimbursement of all the amounts that it
The Court has reiterated the registered- Court further stated that " [i]n could be required to pay as damages
owner rule in other rulings, like in Filcar contemplation of law, the owner/operator arising from the driver’s negligence. A
Transport Services v. Espinas ,13 to wit: of record is the employer of the driver, the cross-claim is a claim by one party against
It is well settled that in case of motor actual operator and employer being a co-party arising out of the transaction or
vehicle mishaps, the registered owner of considered as merely its agent. " Thus, occurrence that is the subject matter either
the motor vehicle is considered as the Equitable, as the registered owner of the of the original action or of a counterclaim
employer of the tortfeasor-driver , and is tractor, was considered under the law on therein, and may include a claim that the
made primarily liable for the tort quasi delict to be the employer of the party against whom it is asserted is or may
committed by the latter under Article 2176, driver, Raul Tutor; Ecatine, Tutor’s actual be liable to the cross-claimant for all or part
in relation with Article 2180, of the Civil employer, was deemed merely as an agent of a claim asserted in the action against the
Code. of Equitable. cross-claimant.15
In Equitable Leasing Corporation v. Suyom, Thus, it is clear that for the purpose of MMTC set up its cross-claim against Mina's
we ruled that in so far as third persons are holding the registered owner of the motor Transit precisely to ensure that Mina's
concerned, the registered owner of the vehicle primarily and directly liable for Transit would reimburse whatever liability
motor vehicle is the employer of the damages under Article 2176, in relation would be adjudged against MMTC. Yet, it is
negligent driver, and the actual employer with Article 2180, of the Civil Code, the a cause of concern for the Court that the
is considered merely as an agent of such existence of an employer-employee RTC ignored to rule on the propriety of
owner . relationship, as it is understood in labor MMTC's cross-claim. Such omission was
In that case, a tractor registered in the relations law, is not required. It is sufficient unwarranted, inasmuch as Mina's Transit
name of Equitable Leasing Corporation ( to establish that Filcar is the registered did not dispute the cross-claim, or did not
Equitable ) figured in an accident, killing owner of the motor vehicle causing damage specifically deny the agreement to sell with
and seriously injuring several persons. As in order that it may be held vicariously MMTC, the actionable document on which
part of its defense, Equitable claimed that liable under Article 2180 of the Civil Code. the cross-claim was based. Even more
the tractor was initially leased to Mr. Edwin telling was the fact that Mina's Transit did
not present controverting evidence to
disprove the cross-claim as a matter of
course if it was warranted for it to do so.
Under the circumstances, the RTC should
have granted the cross-claim to prevent
the possibility of a multiplicity of suits, and
to spare not only the MMTC but also the
other parties in the case from further
expense and bother. Compounding the
RTC's uncharacteristic omission was the
CA's oversight in similarly ignoring the
cross-claim. The trial and the appellate
courts should not forget that a cross-claim
is like the complaint and the counterclaim
that the court must rule upon.
WHEREFORE, the Court AFFIRMS the
decision promulgated on June 28, 2004
subject to the MODIFICATION that the
cross-claim of Metro Manila Transit
Corporation against Mina's Transit
Corporation is GRANTED, and,
ACCORDINGLY, Mina's Transit Corporation
is
ORDERED to reimburse to Metro Manila
Transit Corporation whatever amounts the
latter shall pay to the respondents
pursuant to the judgment of the Regional
Trial Court in Civil Case No. N-6127.
No pronouncement on costs of suit.
SO ORDERED.
G.R. No. 174156 June 20, 2012 and the case was raffled to Branch 13. In ₱20,000.00 as exemplary damages; and
FILCAR TRANSPORT the complaint, Espinas demanded that ₱20,000.00 as attorney’s fees. The MeTC
SERVICES, Petitioner, Filcar and Carmen Flor pay the amount of ruled that Filcar, as the registered owner of
vs. ₱97,910.00, representing actual damages the vehicle, is primarily responsible for
JOSE A. ESPINAS, Respondent. sustained by his car. damages resulting from the vehicle’s
DECISION Filcar argued that while it is the registered operation.
BRION, J.: owner of the car that hit and bumped The RTC Decision
We resolve the present petition for review Espinas’ car, the car was assigned to its The Regional Trial Court (RTC) of Manila,
on certiorari1 filed by petitioner Filcar Corporate Secretary Atty. Candido Flor, the Branch 20, in the exercise of its appellate
Transport Services (Filcar), challenging the husband of Carmen Flor. Filcar further jurisdiction, affirmed the MeTC
decision2 and the resolution3 of the Court of stated that when the incident happened, decision.5 The RTC ruled that Filcar failed to
Appeals (CA) in CA-G.R. SP No. 86603. the car was being driven by Atty. Flor’s prove that Floresca was not its employee
The facts of the case, gathered from the personal driver, Timoteo Floresca. as no proof was adduced that Floresca was
records, are briefly summarized below. Atty. Flor, for his part, alleged that when personally hired by Atty. Flor. The RTC
On November 22, 1998, at around 6:30 the incident occurred, he was attending a agreed with the MeTC that the registered
p.m., respondent Jose A. Espinas was birthday celebration at a nearby hotel, and owner of a vehicle is directly and primarily
driving his car along Leon Guinto Street in it was only later that night when he noticed liable for the damages sustained by third
Manila. Upon reaching the intersection of a small dent on and the cracked signal light persons as a consequence of the negligent
Leon Guinto and President Quirino Streets, of the car. On seeing the dent and the or careless operation of a vehicle registered
Espinas stopped his car. When the signal crack, Atty. Flor allegedly asked Floresca in its name. The RTC added that the victim
light turned green, he proceeded to cross what happened, and the driver replied that of recklessness on the public highways is
the intersection. He was already in the it was a result of a "hit and run" while the without means to discover or identify the
middle of the intersection when another car was parked in front of Bogota on Pedro person actually causing the injury or
car, traversing President Quirino Street and Gil Avenue, Manila. damage. Thus, the only recourse is to
going to Roxas Boulevard, suddenly hit and Filcar denied any liability to Espinas and determine the owner, through the vehicle’s
bumped his car. As a result of the impact, claimed that the incident was not due to its registration, and to hold him responsible
Espinas’ car turned clockwise. The other fault or negligence since Floresca was not for the damages.
car escaped from the scene of the incident, its employee but that of Atty. Flor. Filcar The CA Decision
but Espinas was able to get its plate and Carmen Flor both said that they always On appeal, the CA partly granted the
number. exercised the due diligence required of a petition in CA-G.R. SP No. 86603; it
After verifying with the Land good father of a family in leasing or modified the RTC decision by ruling that
Transportation Office, Espinas learned that assigning their vehicles to third parties. Carmen Flor, President and General
the owner of the other car, with plate The MeTC Decision Manager of Filcar, is not personally liable to
number UCF-545, is Filcar. The MeTC, in its decision dated January 20, Espinas. The appellate court pointed out
Espinas sent several letters to Filcar and to 2004,4 ruled in favor of Espinas, and that, subject to recognized exceptions, the
its President and General Manager Carmen ordered Filcar and Carmen Flor, jointly and liability of a corporation is not the liability
Flor, demanding payment for the damages severally, to pay Espinas ₱97,910.00 as of its corporate officers because a
sustained by his car. On May 31, 2001, actual damages, representing the cost of corporate entity – subject to well-
Espinas filed a complaint for damages repair, with interest at 6% per annum from recognized exceptions – has a separate and
against Filcar and Carmen Flor before the the date the complaint was filed; distinct personality from its officers and
Metropolitan Trial Court (MeTC) of Manila, ₱50,000.00 as moral damages; shareholders. Since the circumstances in
the case at bar do not fall under the deaths caused by the operation of his Based on the above-cited article, the
exceptions recognized by law, the CA vehicle. obligation to indemnify another for damage
concluded that the liability for damages Filcar filed a motion for reconsideration caused by one’s act or omission is imposed
cannot attach to Carmen Flor. which the CA denied in its Resolution dated upon the tortfeasor himself, i.e., the
The CA, however, affirmed the liability of July 6, 2006. person who committed the negligent act or
Filcar to pay Espinas damages. According Hence, the present petition. omission. The law, however, provides for
to the CA, even assuming that there had The Issue exceptions when it makes certain persons
been no employer-employee relationship Simply stated, the issue for the liable for the act or omission of another.
between Filcar and the driver of the consideration of this Court is: whether One exception is an employer who is made
vehicle, Floresca, the former can be held Filcar, as registered owner of the motor vicariously liable for the tort committed by
liable under the registered owner rule. vehicle which figured in an accident, may his employee. Article 2180 of the Civil Code
The CA relied on the rule that the be held liable for the damages caused to states:
registered owner of a vehicle is directly and Espinas. Article 2180. The obligation imposed by
primarily responsible to the public and to Our Ruling Article 2176 is demandable not only for
third persons while the vehicle is being The petition is without merit. one’s own acts or omissions, but also for
operated. Citing Erezo, et al. v. Jepte, 6 the Filcar, as registered owner, is deemed the those of persons for whom one is
CA said that the rationale behind the rule is employer of the driver, Floresca, and is responsible.
to avoid circumstances where vehicles thus vicariously liable under Article 2176 in xxxx
running on public highways cause relation with Article 2180 of the Civil Code Employers shall be liable for the damages
accidents or injuries to pedestrians or other It is undisputed that Filcar is the registered caused by their employees and household
vehicles without positive identification of owner of the motor vehicle which hit and helpers acting within the scope of their
the owner or drivers, or with very scant caused damage to Espinas’ car; and it is on assigned tasks, even though the former are
means of identification. In Erezo, the Court the basis of this fact that we hold Filcar not engaged in any business or industry.
said that the main aim of motor vehicle primarily and directly liable to Espinas for xxxx
registration is to identify the owner, so that damages. The responsibility treated of in this article
if a vehicle causes damage or injury to As a general rule, one is only responsible shall cease when the persons herein
pedestrians or other vehicles, responsibility for his own act or omission.9 Thus, a person mentioned prove that they observed all the
can be traced to a definite individual and will generally be held liable only for the diligence of a good father of a family to
that individual is the registered owner of torts committed by himself and not by prevent damage.
the vehicle.7 another. This general rule is laid down in Under Article 2176, in relation with Article
The CA did not accept Filcar’s argument Article 2176 of the Civil Code, which 2180, of the Civil Code, an action
that it cannot be held liable for damages provides to wit: predicated on an employee’s act or
because the driver of the vehicle was not Article 2176. Whoever by act or omission omission may be instituted against the
its employee. In so ruling, the CA cited the causes damage to another, there being employer who is held liable for the
case of Villanueva v. Domingo8 where the fault or negligence, is obliged to pay for the negligent act or omission committed by his
Court said that the question of whether the damage done. Such fault or negligence, if employee.
driver was authorized by the actual owner there is no pre-existing contractual relation Although the employer is not the actual
is irrelevant in determining the primary and between the parties, is called a quasi-delict tortfeasor, the law makes him vicariously
direct responsibility of the registered owner and is governed by the provisions of this liable on the basis of the civil law principle
of a vehicle for accidents, injuries and Chapter. of pater familias for failure to exercise due
care and vigilance over the acts of one’s
subordinates to prevent damage to argued that it cannot be held liable for vehicle is explained by the principle behind
another.10 In the last paragraph of Article damages because the tractor had already motor vehicle registration, which has been
2180 of the Civil Code, the employer may been sold to Ecatine at the time of the discussed by this Court in Erezo, and cited
invoke the defense that he observed all the accident and the negligent driver was not by the CA in its decision:
diligence of a good father of a family to its employee but of Ecatine. The main aim of motor vehicle registration
prevent damage. In upholding the liability of Equitable, as is to identify the owner so that if any
As its core defense, Filcar contends that registered owner of the tractor, this Court accident happens, or that any damage or
Article 2176, in relation with Article 2180, said that "regardless of sales made of a injury is caused by the vehicle on the public
of the Civil Code is inapplicable because it motor vehicle, the registered owner is the highways, responsibility therefor can be
presupposes the existence of an employer- lawful operator insofar as the public and fixed on a definite individual, the registered
employee relationship. According to Filcar, third persons are concerned; consequently, owner. Instances are numerous where
it cannot be held liable under the subject it is directly and primarily responsible for vehicles running on public highways caused
provisions because the driver of its vehicle the consequences of its operation."12 The accidents or injuries to pedestrians or other
at the time of the accident, Floresca, is not Court further stated that "[i]n vehicles without positive identification of
its employee but that of its Corporate contemplation of law, the owner/operator the owner or drivers, or with very scant
Secretary, Atty. Flor. of record is the employer of the driver, the means of identification. It is to forestall
We cannot agree. It is well settled that in actual operator and employer being these circumstances, so inconvenient or
case of motor vehicle mishaps, the considered as merely its agent."13 Thus, prejudicial to the public, that the motor
registered owner of the motor vehicle is Equitable, as the registered owner of the vehicle registration is primarily ordained, in
considered as the employer of the tractor, was considered under the law on the interest of the determination of persons
tortfeasor-driver, and is made primarily quasi delict to be the employer of the responsible for damages or injuries caused
liable for the tort committed by the latter driver, Raul Tutor; Ecatine, Tutor’s actual on public highways. [emphasis ours]
under Article 2176, in relation with Article employer, was deemed merely as an agent Thus, whether there is an employer-
2180, of the Civil Code. of Equitable. employee relationship between the
In Equitable Leasing Corporation v. Thus, it is clear that for the purpose of registered owner and the driver is
Suyom,11 we ruled that in so far as third holding the registered owner of the motor irrelevant in determining the liability of the
persons are concerned, the registered vehicle primarily and directly liable for registered owner who the law holds
owner of the motor vehicle is the employer damages under Article 2176, in relation primarily and directly responsible for any
of the negligent driver, and the actual with Article 2180, of the Civil Code, the accident, injury or death caused by the
employer is considered merely as an agent existence of an employer-employee operation of the vehicle in the streets and
of such owner. relationship, as it is understood in labor highways.
In that case, a tractor registered in the relations law, is not required. It is sufficient As explained by this Court in Erezo, the
name of Equitable Leasing Corporation to establish that Filcar is the registered general public policy involved in motor
(Equitable) figured in an accident, killing owner of the motor vehicle causing damage vehicle registration is the protection of
and seriously injuring several persons. As in order that it may be held vicariously innocent third persons who may have no
part of its defense, Equitable claimed that liable under Article 2180 of the Civil Code. means of identifying public road
the tractor was initially leased to Mr. Edwin Rationale for holding the registered owner malefactors and, therefore, would find it
Lim under a Lease Agreement, which vicariously liable difficult – if not impossible – to seek
agreement has been overtaken by a Deed The rationale for the rule that a registered redress for damages they may sustain in
of Sale entered into by Equitable and owner is vicariously liable for damages accidents resulting in deaths, injuries and
Ecatine Corporation (Ecatine). Equitable caused by the operation of his motor other damages; by fixing the person held
primarily and directly liable for the motor vehicle.1awp++i1 Thus, for as long maintaining road safety, thereby
damages sustained by victims of road as Filcar is the registered owner of the car reinforcing the aim of the State to promote
mishaps, the law ensures that relief will involved in the vehicular accident, it could the responsible operation of motor vehicles
always be available to them. not escape primary liability for the by its citizens.
To identify the person primarily and directly damages caused to Espinas. This does not mean, however, that Filcar is
responsible for the damages would also The public interest involved in this case left without any recourse against the actual
prevent a situation where a registered must not be underestimated. Road safety employer of the driver and the driver
owner of a motor vehicle can easily escape is one of the most common problems that himself. Under the civil law principle of
liability by passing on the blame to another must be addressed in this country. We are unjust enrichment, the registered owner of
who may have no means to answer for the not unaware of news of road accidents the motor vehicle has a right to be
damages caused, thereby defeating the involving reckless drivers victimizing our indemnified by the actual employer of the
claims of victims of road accidents. We take citizens. Just recently, such pervasive driver of the amount that he may be
note that some motor vehicles running on recklessness among most drivers took the required to pay as damages for the injury
our roads are driven not by their registered life of a professor of our state caused to another.
owners, but by employed drivers who, in university.14 What is most disturbing is that The set-up may be inconvenient for the
most instances, do not have the financial our existing laws do not seem to deter registered owner of the motor vehicle, but
means to pay for the damages caused in these road malefactors from committing the inconvenience cannot outweigh the
case of accidents. acts of recklessness. more important public policy being
These same principles apply by analogy to We understand that the solution to the advanced by the law in this case which is
the case at bar. Filcar should not be problem does not stop with legislation. An the protection of innocent persons who
permitted to evade its liability for damages effective administration and enforcement may be victims of reckless drivers and
by conveniently passing on the blame to of the laws must be ensured to reinforce irresponsible motor vehicle owners.
another party; in this case, its Corporate discipline among drivers and to remind WHEREFORE, the petition is DENIED. The
Secretary, Atty. Flor and his alleged driver, owners of motor vehicles to exercise due decision dated February 16, 2006 and the
Floresca. Following our reasoning in diligence and vigilance over the acts of resolution dated July 6, 2006 of the Court
Equitable, the agreement between Filcar their drivers to prevent damage to others. of Appeals are AFFIRMED. Costs against
and Atty. Flor to assign the motor vehicle Thus, whether the driver of the motor petitioner Filcar Transport Services.
to the latter does not bind Espinas who was vehicle, Floresca, is an employee of Filcar SO ORDERED.
not a party to and has no knowledge of the is irrelevant in arriving at the conclusion
agreement, and whose only recourse is to that Filcar is primarily and directly liable for
the motor vehicle registration. the damages sustained by Espinas. While
Neither can Filcar use the defenses Republic Act No. 4136 or the Land
available under Article 2180 of the Civil Transportation and Traffic Code does not
Code - that the employee acts beyond the contain any provision on the liability of
scope of his assigned task or that it registered owners in case of motor vehicle
exercised the due diligence of a good father mishaps, Article 2176, in relation with
of a family to prevent damage - because Article 2180, of the Civil Code imposes an
the motor vehicle registration law, to a obligation upon Filcar, as registered owner,
certain extent, modified Article 2180 of the to answer for the damages caused to
Civil Code by making these defenses Espinas’ car. This interpretation is
unavailable to the registered owner of the consistent with the strong public policy of
G.R. No. 170631, February 10, 2016 east-bound lane, opposite Reyes.13 To Trial Court granted her Motion.29
CARAVAN TRAVEL AND TOURS avoid an incoming vehicle, the van swerved
INTERNATIONAL, to its left and hit Reyes.14 Alex Espinosa After trial, the Regional Trial Court found
INC., Petitioner, v. ERMILINDA R. (Espinosa), a witness to the accident, went that Bautista was grossly negligent in
ABEJAR, Respondent. to her aid and loaded her in the back of the driving the vehicle.30 It awarded damages
DECISION van.15 Espinosa told the driver of the van, in favor of Abejar, as follows:
LEONEN, J.: Jimmy Bautista (Bautista), to bring Reyes chanRoblesvirtualLawlibrary
The plaintiff may first prove the employer's to the hospital.16 Instead of doing so, WHEREFORE, considering that the
ownership of the vehicle involved in a Bautista appeared to have left the van [respondent] was able to provide by
mishap by presenting the vehicle's parked inside a nearby subdivision with preponderance of evidence her cause of
registration in evidence. Thereafter, a Reyes still in the van.17 Fortunately for action against the defendants, judgment is
disputable presumption that the Reyes, an unidentified civilian came to help hereby rendered ordering defendants
requirements for an employer's liability and drove Reyes to the hospital.18 JIMMY BAUTISTA and CARAVAN TRAVEL
under Article 21801 of the Civil Code have and TOURS[,] INC., to jointly and solidarity
been satisfied will arise. The burden of Upon investigation, it was found that the pay the plaintiff, the following, to wit:
evidence then shifts to the defendant to registered owner of the van was chanRoblesvirtualLawlibrary
show that no liability under Article 2180 Caravan.19 Caravan is a corporation 1. The amount of P35,000.00 representing
has ensued. This case, thus, harmonizes engaged in the business of organizing actual damages;
the requirements of Article 2180, in travels and tours.20 Bautista was Caravan's
relation to Article 2176 2 of the Civil Code, employee assigned to drive the van as its 2. The amount of P300,000.00 as moral
and the so-called registered-owner rule as service driver.21 damages;
established in this court's rulings in Aguilar,
Sr. v. Commercial Savings Bank,3Del Caravan shouldered the hospitalization 3. The amount of P30,000.00 as exemplary
Carmen, Jr. v. Bacoy,4Filcar Transport expenses of Reyes.22 Despite medical damages;
Services v. Espinas,5 and Mendoza v. attendance, Reyes died two (2) days after
Spouses Gomez.6 the accident.23 4. The amount of P50,000.00 as and by
way of attorney's fees; and
Through this Petition for Review on Respondent Ermilinda R. Abejar (Abejar),
Certiorari,7 Caravel Travel and Tours Reyes' paternal aunt and the person who 5. The cost of suit.
International, Inc. (Caravan) prays that the raised her since she was nine (9) years SO
Decision8 dated October 3, 2005 and the old,24 filed before the Regional Trial Court ORDERED.31ChanRoblesVirtualawlibrary
Resolution9 dated November 29, 2005 of of Parañaque a Complaint25 for damages Caravan's Motion for Reconsideration32 was
the Court of Appeals Twelfth Division be against Bautista and Caravan. In her denied through the October 20, 2003
reversed and set aside.10 Complaint, Abejar alleged that Bautista Order33 of the Regional Trial Court.
was an employee of Caravan and that
On July 13, 2000, Jesmariane R. Reyes Caravan is the registered owner of the van The Court of Appeals affirmed with
(Reyes) was walking along the west-bound that hit Reyes.26 modification the Regional Trial Court's July
lane of Sampaguita Street, United 31, 2003 Decision and October 20, 2003
Parañaque Subdivision IV, Parañaque Summons could not be served on Order, as follows:
City.11 A Mitsubishi L-300 van with plate Bautista.27 Thus, Abejar moved to drop chanRoblesvirtualLawlibrary
number PKM 19512 was travelling along the Bautista as a defendant.28 The Regional
WHEREFORE, premises considered, the
instant appeal is DENIED for lack of merit.
The assailed Decision dated 31 July 2003
and Order dated 20 October 2003 of the
Regional Trial Court, City of Para[ñ]aque,
Branch 258, in Civil Case No. 00-0447
are AFFIRMED with the
following MODIFICATIONS:
1. Moral Damages is REDUCED to Php
200,000.00;
2. Death Indemnity of Php 50,000.00
is awarded;
3. The Php 35,000.00 actual damages,
Php 200,000.00 moral damages,
Php 30,000.00 exemplary damages
and Php 50,000.00 attorney's fees
shall earn interest at the rate of
6% per annum computed from 31
July 2003, the date of the [Regional
Trial Court's] decision; and upon
finality of this Decision, all the
amounts due shall earn interest at
the rate of 12% per annum, in lieu
of 6% per annum, until full
payment; and
4. The Php 50,000.00 death indemnity
shall earn interest at the rate of
6% per annum computed from the
date of promulgation of this
Decision; and upon finality of this
Decision, the amount due shall earn
interest at the rate of 12% per
annum, in lieu of 6% per annum,
until full payment.
Costs against [Caravan].

SO ORDERED
G.R. No. 170631, February 10, 2016 east-bound lane, opposite Reyes.13 To Trial Court granted her Motion.29
CARAVAN TRAVEL AND TOURS avoid an incoming vehicle, the van swerved
INTERNATIONAL, to its left and hit Reyes.14 Alex Espinosa After trial, the Regional Trial Court found
INC., Petitioner, v. ERMILINDA R. (Espinosa), a witness to the accident, went that Bautista was grossly negligent in
ABEJAR, Respondent. to her aid and loaded her in the back of the driving the vehicle.30 It awarded damages
DECISION van.15 Espinosa told the driver of the van, in favor of Abejar, as follows:
LEONEN, J.: Jimmy Bautista (Bautista), to bring Reyes chanRoblesvirtualLawlibrary
The plaintiff may first prove the employer's to the hospital.16 Instead of doing so, WHEREFORE, considering that the
ownership of the vehicle involved in a Bautista appeared to have left the van [respondent] was able to provide by
mishap by presenting the vehicle's parked inside a nearby subdivision with preponderance of evidence her cause of
registration in evidence. Thereafter, a Reyes still in the van.17 Fortunately for action against the defendants, judgment is
disputable presumption that the Reyes, an unidentified civilian came to help hereby rendered ordering defendants
requirements for an employer's liability and drove Reyes to the hospital.18 JIMMY BAUTISTA and CARAVAN TRAVEL
under Article 21801 of the Civil Code have and TOURS[,] INC., to jointly and solidarity
been satisfied will arise. The burden of Upon investigation, it was found that the pay the plaintiff, the following, to wit:
evidence then shifts to the defendant to registered owner of the van was chanRoblesvirtualLawlibrary
show that no liability under Article 2180 Caravan.19 Caravan is a corporation 1. The amount of P35,000.00 representing
has ensued. This case, thus, harmonizes engaged in the business of organizing actual damages;
the requirements of Article 2180, in travels and tours.20 Bautista was Caravan's
relation to Article 2176 2 of the Civil Code, employee assigned to drive the van as its 2. The amount of P300,000.00 as moral
and the so-called registered-owner rule as service driver.21 damages;
established in this court's rulings in Aguilar,
Sr. v. Commercial Savings Bank,3Del Caravan shouldered the hospitalization 3. The amount of P30,000.00 as exemplary
Carmen, Jr. v. Bacoy,4Filcar Transport expenses of Reyes.22 Despite medical damages;
Services v. Espinas,5 and Mendoza v. attendance, Reyes died two (2) days after
Spouses Gomez.6 the accident.23 4. The amount of P50,000.00 as and by
way of attorney's fees; and
Through this Petition for Review on Respondent Ermilinda R. Abejar (Abejar),
Certiorari,7 Caravel Travel and Tours Reyes' paternal aunt and the person who 5. The cost of suit.
International, Inc. (Caravan) prays that the raised her since she was nine (9) years SO
Decision8 dated October 3, 2005 and the old,24 filed before the Regional Trial Court ORDERED.31ChanRoblesVirtualawlibrary
Resolution9 dated November 29, 2005 of of Parañaque a Complaint25 for damages Caravan's Motion for Reconsideration32 was
the Court of Appeals Twelfth Division be against Bautista and Caravan. In her denied through the October 20, 2003
reversed and set aside.10 Complaint, Abejar alleged that Bautista Order33 of the Regional Trial Court.
was an employee of Caravan and that
On July 13, 2000, Jesmariane R. Reyes Caravan is the registered owner of the van The Court of Appeals affirmed with
(Reyes) was walking along the west-bound that hit Reyes.26 modification the Regional Trial Court's July
lane of Sampaguita Street, United 31, 2003 Decision and October 20, 2003
Parañaque Subdivision IV, Parañaque Summons could not be served on Order, as follows:
City.11 A Mitsubishi L-300 van with plate Bautista.27 Thus, Abejar moved to drop chanRoblesvirtualLawlibrary
number PKM 19512 was travelling along the Bautista as a defendant.28 The Regional
WHEREFORE, premises considered, the signatory, a certain Julian Peñaloza
instant appeal is DENIED for lack of merit. Hence, this Petition was filed. (Peñaloza), was not presented in court, and
The assailed Decision dated 31 July 2003 Caravan was denied the right to cross-
and Order dated 20 October 2003 of the Caravan argues that Abejar has no examine him.44 Caravan argues that the
Regional Trial Court, City of Para[ñ]aque, personality to bring this suit because she is statements in the Certification constitute
Branch 258, in Civil Case No. 00-0447 not a real party in interest. According to hearsay.45 It also contends that based on
are AFFIRMED with the Caravan, Abejar does not exercise legal or Article 2206(3)46 of the Civil Code, Abejar
following MODIFICATIONS: substitute parental authority. She is also is not entitled to moral damages.47 It
1. Moral Damages is REDUCED to Php not the judicially appointed guardian or the insists that moral and exemplary damages
200,000.00; only living relative of the deceased.36 She should not have been awarded to Abejar
2. Death Indemnity of Php 50,000.00 is also not "the executor or administrator of because Caravan acted in good
is awarded; the estate of the deceased."37 According to faith.48 Considering that moral and
3. The Php 35,000.00 actual damages, Caravan, only the victim herself or her exemplary damages are unwarranted,
Php 200,000.00 moral damages, heirs can enforce an action based on culpa Caravan claims that the award of
Php 30,000.00 exemplary damages aquiliana such as Abejar's action for attorney's fees should have also been
and Php 50,000.00 attorney's fees damages.38 removed.49
shall earn interest at the rate of
6% per annum computed from 31 Caravan adds that Abejar offered no Lastly, Caravan argues that it should not be
July 2003, the date of the [Regional documentary or testimonial evidence to held solidarily liable with Bautista since
Trial Court's] decision; and upon prove that Bautista, the driver, acted Bautista was already dropped as a party. 50
finality of this Decision, all the "within the scope of his assigned
amounts due shall earn interest at tasks"39 when the accident Abejar counters that Caravan failed to
the rate of 12% per annum, in lieu occurred.40 According to Caravan, provide proof that it exercised the requisite
of 6% per annum, until full Bautista's tasks only pertained to the diligence in the selection and supervision of
payment; and transport of company personnel or Bautista.51 She adds that the Court of
4. The Php 50,000.00 death indemnity products, and when the accident occurred, Appeals' ruling that Caravan is solidarily
shall earn interest at the rate of he had not been transporting personnel or liable with Bautista for moral damages,
6% per annum computed from the delivering products of and for the exemplary damages, civil indemnity ex
date of promulgation of this company.41 delicto, and attorney's fees should be
Decision; and upon finality of this upheld.52 Abejar argues that since Caravan
Decision, the amount due shall earn Caravan also argues that "it exercised the is the registered owner of the van, it is
interest at the rate of 12% per diligence of a good father of a family in the directly, primarily, and solidarity liable for
annum, in lieu of 6% per annum, selection and supervision of its the tortious acts of its driver.53
until full payment. employees."42
Costs against [Caravan]. For resolution are the following issues:
Caravan further claims that Abejar should
SO not have been awarded moral damages, First, whether respondent Ermilinda R.
ORDERED.34ChanRoblesVirtualawlibrary actual damages, death indemnity, Abejar is a real party in interest who may
Caravan filed a Motion for Reconsideration, exemplary damages, and attorney's bring an action for damages against
but it was denied in the Court of Appeals' fees.43 It questions the Certificate provided petitioner Caravan Travel and Tours
assailed November 29, 2005 Resolution.35 by Abejar as proof of expenses since its International, Inc. on account of
Jesmariane R. Reyes' death; and prosecuted, he [or she] must appear to be the same authority over the person of the
the present real owner of the right sought child as the parents. (Emphasis supplied)
Second, whether petitioner should be held to be enforced."55 Respondent's capacity to Both of Reyes' parents are already
liable as an employer, pursuant to Article file a complaint against petitioner stems deceased.57 Reyes' paternal grandparents
2180 of the Civil Code. from her having exercised substitute are also both deceased.58 The whereabouts
parental authority over Reyes. of Reyes' maternal grandparents are
We deny the Petition. unknown.59 There is also no record that
I Article 216 of the Family Code identifies the Reyes has brothers or sisters. It was under
persons who exercise substitute parental these circumstances that respondent took
Having exercised substitute parental authority: custody of Reyes when she was a child,
authority, respondent suffered actual loss chanRoblesvirtualLawlibrary assumed the role of Reyes' parents, and
and is, thus, a real party in interest in this Art. 216. In default of parents or a judicially thus, exercised substitute parental
case. appointed guardian, the following persons authority over her.60 As Reyes' custodian,
shall exercise substitute parental authority respondent exercised the full extent of the
In her Complaint, respondent made over the child in the order indicated: statutorily recognized rights and duties of
allegations that would sustain her action a parent. Consistent with Article 22061 of
for damages: that she exercised substitute (1) The surviving grandparent, as provided the Family Code, respondent supported
parental authority over Reyes; that Reyes' in Art. 214;56 Reyes' education62 and provided for her
death was caused by the negligence of personal needs.63 To echo respondent's
petitioner and its driver; and that Reyes' (2) The oldest brother or sister, over words in her Complaint, she treated Reyes
death caused her damage.54 Respondent twenty-one years of age, unless unfit or as if she were her own daughter. 64
properly filed an action based on quasi- disqualified; and
delict. She is a real party in interest. Respondent's right to proceed against
(3) The child's actual custodian, over petitioner, therefore, is based on two
Rule 3, Section 2 of the 1997 Rules of Civil twenty-one years of age, unless unfit or grounds.
Procedure defines a real party in interest: disqualified.
chanRoblesvirtualLawlibrary First, respondent suffered actual personal
RULE 3. Parties to Civil Actions Whenever the appointment or a judicial loss. With her affinity for Reyes, it stands
guardian over the property of the child to reason that when Reyes died,
. . . . becomes necessary, the same order of respondent suffered the same anguish that
preference shall be observed. (Emphasis a natural parent would have felt upon the
SECTION 2. Parties in Interest. — A real supplied) loss of one's child. It is for this injury — as
party in interest is the party who stands to Article 233 of the Family Code provides for authentic and personal as that of a natural
be benefited or injured by the judgment in the extent of authority of persons parent — that respondent seeks to be
the suit, or the party entitled to the avails exercising substitute parental authority, indemnified.
of the suit. Unless otherwise authorized by that is, the same as those of actual
law or these Rules, every action must be parents: Second, respondent is capacitated to do
prosecuted or defended in the name of the chanRoblesvirtualLawlibrary what Reyes' actual parents would have
real party in interest. Art. 233. The person exercising substitute been capacitated to do.
"To qualify a person to be a real party in parental authority shall have
interest in whose name an action must be In Metro Manila Transit Corporation v.
Court of Appeals,65Tapdasan, Jr. v. accommodate even plaintiffs who are not
People,66 and Aguilar, Sr. v. Commercial relatives of the deceased, thus:74 Respondent's Complaint is anchored on an
Savings Bank,67 this court allowed natural This Court said: "Article 1902 of the Civil employer's liability for quasi-delict
parents of victims to recover damages for Code declares that any person who by an provided in Article 2180, in relation to
the death of their children. Inasmuch as act or omission, characterized by fault or Article 2176 of the Civil Code. Articles 2176
persons exercising substitute parental negligence, causes damage to another and 2180 read:
authority have the full range of shall be liable for the damage done ... a chanRoblesvirtualLawlibrary
competencies of a child's actual parents, person is liable for damage done to another ARTICLE 2176. Whoever by act or omission
nothing prevents persons exercising by any culpable act; and by any culpable causes damage to another, there being
substitute parental authority from similarly act is meant any act which is blameworthy fault or negligence, is obliged to pay for the
possessing the right to be indemnified for when judged by accepted legal standards. damage done. Such fault or negligence, if
their ward's death. The idea thus expressed is undoubtedly there is no pre-existing contractual relation
broad enough to include any rational between the parties, is called a quasi-delict
We note that Reyes was already 18 years conception of liability for the tortious acts and is governed by the provisions of this
old when she died. Having reached the age likely to be developed in any society." The Chapter.
of majority, she was already emancipated word "damage" in said article,
upon her death. While parental authority is comprehending as it does all that are . . . . .
terminated upon embraced in its meaning, includes any and
emancipation,68 respondent continued to all damages that a human being may suffer ARTICLE 2180. The obligation imposed by
support and care for Reyes even after she in any and all the manifestations of his life: article 2176 is demandable not only for
turned 18.69 Except for the legal physical or material, moral or one's own acts or omissions, but also for
technicality of Reyes' emancipation, her psychological, mental or spiritual, financial, those of persons for whom one is
relationship with respondent remained the economic, social, political, and religious. responsible.
same. The anguish and damage caused to
respondent by Reyes' death was no It is particularly noticeable that Article The father and, in case of his death or
different because of Reyes' emancipation. 1902 stresses the passive subject of the incapacity, the mother, are responsible for
obligation to pay damages caused by his the damages caused by the minor children
In any case, the termination of fault or negligence. The article does not who live in their company.
respondent's parental authority is not an limit or specify the active subjects, much
insurmountable legal bar that precludes less the relation that must exist between Guardians are liable for damages caused by
the filing of her Complaint. In interpreting the victim of the culpa aquiliana and the the minors or incapacitated persons who
Article 190270 of the old Civil Code, which person who may recover damages, thus are under their authority and live in their
is substantially similar to the first sentence warranting the inference that, in principle, company.
of Article 217671 of the Civil Code, this anybody who suffers any damage from
court in The Receiver For North Negros culpa aquiliana, whether a relative or The owners and managers of an
Sugar Company, Inc. v. Ybañez, et not of the victim, may recover damages establishment or enterprise are likewise
al.72 ruled that brothers and sisters may from the person responsible responsible for damages caused by their
recover damages, except moral damages, therefor[.]75 (Emphasis supplied, citations employees in the service of the branches in
for the death of their sibling.73 This court omitted) which the latter are employed or on the
declared that Article 1902 of the old Civil II occasion of their functions.
Code (now Article 2176) is broad enough to
Employers shall be liable for the damages vehicles.76 manager of Castilex Industrial Corporation
caused by their employees and household (Castilex). Castilex was also the registered
helpers acting within the scope of their These rules appear to be in conflict when it owner of a Toyota Hi-Lux pick-up truck.
assigned tasks, even though the former are comes to cases in which the employer is While Abad was driving the pick-up truck,
not engaged in any business or industry. also the registered owner of a vehicle. it collided with a motorcycle driven by
Article 2180 requires proof of two things: Romeo Vasquez (Vasquez). Vasquez died a
The State is responsible in like manner first, an employment relationship between few days after. Vasquez's parents filed a
when it acts through a special agent; but the driver and the owner; and second, that case for damages against Abad and
not when the damage has been caused by the driver acted within the scope of his or Castilex.83 Castilex denied liability, arguing
the official to whom the task done properly her assigned tasks. On the other hand, that Abad was acting in his private capacity
pertains, in which case what is provided in applying the registered-owner rule only at the time of the accident.84
article 2176 shall be applicable. requires the plaintiff to prove that the
defendant-employer is the registered This court absolved Castilex of liability,
Lastly, teachers or heads of establishments owner of the vehicle. reasoning that it was incumbent upon the
of arts and trades shall be liable for plaintiff to prove that the negligent
damages caused by their pupils and The registered-owner rule was articulated employee was acting within the scope of his
students or apprentices, so long as they as early as 1957 in Erezo, et al. v. assigned tasks.85 Vasquez's parents failed
remain in their custody. Jepte,77 where this court explained that the to prove this.86 This court outlined the
registration of motor vehicles, as required process necessary for an employer to be
The responsibility treated of in this article by Section 5(a)78 of Republic Act No. 4136, held liable for the acts of its employees and
shall cease when the persons herein the Land Transportation and Traffic Code, applied the process to the case:
mentioned prove that they observed all the was necessary "not to make said chanRoblesvirtualLawlibrary
diligence of a good father of a family to registration the operative act by which Under the fifth paragraph of Article 2180,
prevent damage. (Emphasis supplied) ownership in vehicles is transferred, . . . whether or not engaged in any business or
Contrary to petitioner's position, it was not but to permit the use and operation of the industry, an employer is liable for the torts
fatal to respondent's cause that she herself vehicle upon any public highway[.]" 79 Its committed by employees within the scope
did not adduce proof that Bautista acted "main aim . . . is to identify the owner so of his assigned tasks. But it is necessary to
within the scope of his authority. It was that if any accident happens, or that any establish the employer-employee
sufficient that Abejar proved that petitioner damage or injury is caused by the vehicle relationship; once this is done, the plaintiff
was the registered owner of the van that on the public highways, responsibility must show, to hold the employer liable,
hit Reyes. therefor can be fixed on a definite that the employee was acting within the
individual, the registered owner."80 scope of his assigned task when the tort
The resolution of this case must consider complained of was committed. It is only
two (2) rules. First, Article 2180's Erezo notwithstanding, Castilex Industrial then that the employer may find it
specification that "[e]mployers shall be Corporation v. Vasquez, Jr.81 relied on necessary to interpose the defense of due
liable for the damages caused by their Article 2180 of the Civil Code even though diligence in the selection and supervision of
employees . . . acting within the scope of the employer was also the registered the employee.
their assigned tasks[.]" Second, the owner of the vehicle.82 The registered-
operation of the registered-owner rule that owner rule was not mentioned. . . . .
registered owners are liable for death or
injuries caused by the operation of their In Castilex, Benjamin Abad (Abad) was a Since there is paucity of evidence that
ABAD was acting within the scope of the by this court.91Aguilar, Sr. reiterated the car involved in the vehicular accident, it
functions entrusted to him, petitioner following pronouncements made in Erezo in could not escape primary liability for the
CASTILEX had no duty to show that it ruling that the bank, as the registered death of petitioner's son.94 (Emphasis
exercised the diligence of a good father of owner of the vehicle, was primarily liable to supplied)
a family in providing ABAD with a service the plaintiff:92 Preference for the registered-owner rule
vehicle. Thus, justice and equity require The main aim of motor vehicle registration became more pronounced in Del Carmen,
that petitioner be relieved of vicarious is to identify the owner so that if any Jr. v. Bacoy:95
liability for the consequences of the accident happens, or that any damage or Without disputing the factual finding of the
negligence of ABAD in driving its vehicle. injury is caused by the vehicle on the public [Court of Appeals] that Allan was still his
(Emphasis supplied, citations highways, responsibility therefor can be employee at the time of the accident, a
omitted)87ChanRoblesVirtualawlibrary fixed on a definite individual, the registered finding which we see no reason to disturb,
Aguilar, Sr. v. Commercial Savings owner.... Oscar Jr. contends that Allan drove the
Bank recognized the seeming conflict jeep in his private capacity and thus, an
between Article 2180 and the registered- .... employer's vicarious liability for the
owner rule and applied the latter.88 employee's fault under Article 2180 of the
A victim of recklessness on the public Civil Code cannot apply to him.
In Aguilar, Sr., a Mitsubishi Lancer, highways is usually without means to
registered in the name of Commercial discover or identify the person actually The contention is no longer novel.
Savings Bank and driven by the bank's causing the injury or damage. He has no In Aguilar Sr. v. Commercial Savings Bank,
assistant vice-president Ferdinand Borja, means other than by a recourse to the the car of therein respondent bank caused
hit Conrado Aguilar, Jr. The impact killed registration in the Motor Vehicles Office to the death of Conrado Aguilar, Jr. while
Conrado Aguilar, Jr. His father, Conrado determine who is the owner. The protection being driven by its assistant vice
Aguilar, Sr. filed a case for damages that the law aims to extend to him would president. Despite Article 2180, we still
against Ferdinand Borja and Commercial become illusory were the registered owner held the bank liable for damages for the
Savings Bank. The Regional Trial Court given the opportunity to escape liability by accident as said provision should defer
found Commercial Savings Bank solidarity disproving his to the settled doctrine concerning
liable with Ferdinand Borja.89 ownership.93ChanRoblesVirtualawlibrary accidents involving registered motor
Thus, Aguilar, Sr. concluded: vehicles, i.e., that the registered owner of
However, the Court of Appeals disagreed chanRoblesvirtualLawlibrary any vehicle, even if not used for public
with the trial court's Decision and In our view, respondent bank, as the service, would primarily be responsible to
dismissed the complaint against the registered owner of the vehicle, is primarily the public or to third persons for injuries
bank. The Court of Appeals reasoned that liable for Aguilar, Jr.'s death. The Court of caused the latter while the vehicle was
Article 2180 requires the plaintiff to prove Appeals erred when it concluded that the being driven on the highways or streets.
that at the time of the accident, the bank was not liable simply because (a) We have already ratiocinated that:
employee was acting within the scope of his petitioner did not prove that Borja was chanRoblesvirtualLawlibrary
or her assigned tasks. The Court of Appeals acting as the bank's vice president at the The main aim of motor vehicle registration
found no evidence that Ferdinand Borja time of the accident; and (b) Borja had, is to identify the owner so that if any
was acting as the bank's assistant vice- according to respondent bank, already accident happens, or that any damage or
president at the time of the accident. 90 bought the car at the time of the injury is caused by the vehicle on the public
mishap. For as long as the respondent highways, responsibility therefor can be
The Court of Appeals' ruling was reversed bank remained the registered owner of the fixed on a definite individual, the registered
owner. Instances are numerous where As acknowledged in Filcar, there is no consequence, the burden of proof shifts to
vehicles running on public highways caused categorical statutory pronouncement in the the defendant to show that no liability
accidents or injuries to pedestrians or other Land Transportation and Traffic Code under Article 2180 has arisen.
vehicles without positive identification of stipulating the liability of a registered
the owner or drivers, or with very scant owner.101 The source of a registered This disputable presumption, insofar as the
means of identification. It is to forestall owner's liability is not a distinct statutory registered owner of the vehicle in relation
these circumstances, so inconvenient or provision, but remains to be Articles 2176 to the actual driver is concerned,
prejudicial to the public, that the motor and 2180 of the Civil Code: recognizes that between the owner and the
vehicle registration is primarily ordained, in chanRoblesvirtualLawlibrary victim, it is the former that should carry the
the interest of the determination of persons While Republic Act No. 4136 or the Land costs of moving forward with the evidence.
responsible for damages or injuries caused Transportation and Traffic Code does not The victim is, in many cases, a hapless
on public highways.96 (Emphasis supplied, contain any provision on the liability of pedestrian or motorist with hardly any
citations omitted) registered owners in case of motor vehicle means to uncover the employment
Filcar Transport Services v. mishaps, Article 2176, in relation with relationship of the owner and the driver, or
Espinas97 stated that the registered owner Article 2180, of the Civil Code imposes an any act that the owner may have done in
of a vehicle can no longer use the defenses obligation upon Filcar, as registered owner, relation to that employment.
found in Article 2180:98 to answer for the damages caused to
Neither can Filcar use the defenses Espinas' car.102ChanRoblesVirtualawlibrary The registration of the vehicle, on the other
available under Article 2180 of the Civil Thus, it is imperative to apply the hand, is accessible to the public.
Code - that the employee acts beyond the registered-owner rule in a manner that
scope of his assigned task or that it harmonizes it with Articles 2176 and 2180 Here, respondent presented a copy of the
exercised the due diligence of a good father of the Civil Code. Rules must be construed Certificate of Registration105 of the van that
of a family to prevent damage - because in a manner that will harmonize them with hit Reyes.106 The Certificate attests to
the motor vehicle registration law, to a other rules so as to form a uniform and petitioner's ownership of the van.
certain extent, modified Article 2180 of the consistent system of jurisprudence.103 In Petitioner itself did not dispute its
Civil Code by making these defenses light of this, the words used in Del ownership of the van. Consistent with the
unavailable to the registered owner of the Carmen are particularly notable. There, rule we have just stated, a presumption
motor vehicle. Thus, for as long as Filcar is this court stated that Article 2180 "should that the requirements of Article 2180 have
the registered owner of the car involved in defer to"104 the registered-owner rule. It been satisfied arises. It is now up to
the vehicular accident, it could not escape never stated that Article 2180 should be petitioner to establish that it incurred no
primary liability for the damages caused to totally abandoned. liability under Article 2180. This it can do
Espinas.99ChanRoblesVirtualawlibrary by presenting proof of any of the following:
Mendoza v. Spouses Gomez100 reiterated Therefore, the appropriate approach is that first, that it had no employment
this doctrine. in cases where both the registered-owner relationship with Bautista; second, that
rule and Article 2180 apply, the plaintiff Bautista acted outside the scope of his
However, Aguilar, Sr., Del Carmen, Filcar, must first establish that the employer is the assigned tasks; or third, that it exercised
and Mendoza should not be taken to mean registered owner of the vehicle in question. the diligence of a good father of a family in
that Article 2180 of the Civil Code should Once the plaintiff successfully proves the selection and supervision of Bautista.107
be completely discarded in cases where the ownership, there arises a disputable
registered-owner rule finds application. presumption that the requirements of On the first, petitioner admitted that
Article 2180 have been proven. As a Bautista was its employee at the time of
the accident.108 requirements have been satisfied. Mere
....
disavowals are not proof that suffice to
On the second, petitioner was unable to overturn a presumption. To this end,
prove that Bautista was not acting within evidence must be adduced. However, Q : Do you recall what kind of
the scope of his assigned tasks at the time petitioner presented no positive evidence driver's license is this?
of the accident. When asked by the court to show that Bautista was acting in his
why Bautista was at the place of the private capacity at the time of the incident.
accident when it occurred, Sally Bellido, A : The Land Transportation
petitioner's accountant and On the third, petitioner likewise failed to Office.
supervisor, 109
testified that she did not prove that it exercised the requisite
"have the personal capacity to answer [the diligence in the selection and supervision of
Q : Is it a professional driver's
question]"110 and that she had no Bautista.
license or non-proffesional
knowledge to answer it:
[sic] driver's license?
chanRoblesvirtualLawlibrary In its selection of Bautista as a service
driver, petitioner contented itself with
COURT : Madam Witness, do you
Bautista's submission of a non- A : Non-professional.
know the reason why
professional driver's license. 112
Hence, in
your driver, Jimmy
Sally Balledo's cross-examination:
Bautista, at around
chanRoblesvirtualLawlibrary Q : You are not sure?
10:00 o' clock in the
morning of July 13, 2000 Q : . . . when he was promoted
was in the vicinity of as service driver, of course, COURT : Non professional,
Barangay Marcelo Green, there were certain professional?
United Parañaque requirements and among
Subdivision 4? other else, you made
mention about a driver's A : It's a non-
license. professional.113 (Emphasis
WITNESS : I don't have the personal supplied)
capacity to answer that,
Sir. A : Yes, Sir. Employing a person holding a non-
professional driver's license to operate
another's motor vehicle violates Section 24
Q : So you don't have any Q : Would you be able to show of the Land Transportation and Traffic
knowledge why he was to this Honorable Court Code, which provides:
there? whether indeed this person chanRoblesvirtualLawlibrary
did submit a driver's license SEC. 24. Use of driver's license and badge.
to your company? — ...
A : Yes, Sir.111 (Emphasis
supplied) . . . .
A : Yes, Sir.
Sally Bellido's testimony does not affect the
presumption that Article 2180's No owner of a motor vehicle shall engage,
employ, or hire any person to operate such
motor vehicle, unless the person sought to
be employed is a duly licensed professional In order that the defense of due diligence Petitioner's argument that it should be
driver. in the selection and supervision of excused from liability because Bautista was
Evidently, petitioner did not only fail to employees may be deemed sufficient and already dropped as a party is equally
exercise due diligence when it selected plausible, it is not enough to emptily unmeritorious. The liability imposed on the
Bautista as service driver; it also invoke the existence of said company registered owner is direct and
committed an actual violation of law. guidelines and policies on hiring and primary. 117
It does not depend on the
supervision. As the negligence of the inclusion of the negligent driver in the
To prove that it exercised the required employee gives rise to the presumption of action. Agreeing to petitioner's assertion
diligence in supervising Bautista, petitioner negligence on the part of the employer, the would render impotent the rationale of the
presented copies of several memoranda latter has the burden of proving that it has motor registration law in fixing liability on
and company rules.114 These, however, are been diligent not only in the selection of a definite person.
insufficient because petitioner failed to employees but also in the actual
prove actual compliance. Metro Manila supervision of their work. The mere Bautista, the driver, was not an
Transit Corporation v. Court of allegation of the existence of hiring indispensable party under Rule 3, Section
Appeals115 emphasized that to establish procedures and supervisory policies, 7118 of the 1997 Rules of Civil Procedure.
diligence in the supervision of employees, without anything more, is decidedly not Rather, he was a necessary party under
the issuance of company policies must be sufficient to overcome presumption. Rule 3, Section 8.119 Instead of insisting
coupled with proof of compliance: that Bautista — who was nothing more
chanRoblesvirtualLawlibrary We emphatically reiterate our holding, as a than a necessary party — should not have
Due diligence in the supervision of warning to all employers, that "(t)he mere been dropped as a defendant, or that
employees, on the other hand, includes the formulation of various company policies on petitioner, along with Bautista, should have
formulation of suitable rules and safety without showing that they were been dropped, petitioner (as a co-
regulations for the guidance of employees being complied with is not sufficient to defendant insisting that the action must
and the issuance of proper instructions exempt petitioner from liability arising from proceed with Bautista as party) could have
intended for the protection of the negligence of its employees. It is opted to file a cross-claim against Bautista
public and persons with whom the incumbent upon petitioner to show that in as its remedy.
employer has relations through his or its recruiting and employing the erring driver
employees and the imposition of necessary the recruitment procedures and company The 1997 Rules of Civil Procedure spell out
disciplinary measures upon employees in policies on efficiency and safety were the rules on joinder of indispensable and
case of breach or as may be warranted to followed." Paying lip-service to these necessary parties. These are intended to
ensure the performance of acts injunctions or merely going through the afford "a complete determination of all
indispensable to the business of and motions of compliance therewith will possible issues, not only between the
beneficial to their employer. To this, we warrant stern sanctions from the parties themselves but also as regards to
add that actual implementation and Court. 116
(Emphasis supplied, citations other persons who may be affected by the
monitoring of consistent compliance with omitted) judgment."120
said rules should be the constant concern For failing to overturn the presumption that
of the employer, acting through the requirements of Article 2180 have been However, while an exhaustive resolution of
dependable supervisors who should satisfied, petitioner must be held liable. disputes is desired in every case, the
regularly report on their supervisory III distinction between indispensable parties
functions. and necessary parties delineates a court's
capacity to render effective judgment. As go forward. Certificate124 issued and signed by a certain
defined by Rule 3, Section 7, indispensable Peñaloza showing that respondent paid
parties are "[p]arties in interest without A person is not an indispensable party, Peñaloza P35,000.00 for funeral expenses.
whom no final determination can be had of however, if his interest in the controversy
an action[.]" Thus, their non-inclusion is or subject matter is separable from the Contrary to petitioner's claim, this
debilitating: "the presence of indispensable interest of the other parties, so that it will Certificate is not hearsay. Evidence is
parties is a condition for the exercise of not necessarily be directly or injuriously hearsay when its probative value is based
juridical power and when an indispensable affected by a decree which does complete on the personal knowledge of a person
party is not before the court, the action justice between them. Also, a person is not other than the person actually
should be dismissed."121 an indispensable party if his presence testifying. 125
Here, the Certificate sought to
would merely permit complete relief establish that respondent herself paid
In contrast, a necessary party's presence is between him and those already parties to Peñaloza P35,000.00 as funeral expenses
not imperative, and his or her absence is the action, or if he has no interest in the for Reyes' death:126
not debilitating. Nevertheless, it is subject matter of the action. It is not a 3. Na ang aking kontrata ay
preferred that they be included in order sufficient reason to declare a person to be nagkakahalaga ng P35,000-00 [sic]
that relief may be complete. an indispensable party that his presence sa lahat ng nagamit na materiales
will avoid multiple at labor nito kasama ang lote na
The concept of indispensable parties, as litigation.123ChanRoblesVirtualawlibrary ibinayad sa akin ni Gng. ERMILINDA
against parties whose inclusion only allows Petitioner's interest and liability is distinct REYES ABEJAR na siyang aking
complete relief, was explained in Arcelona from that of its driver. Regardless of kakontrata sa pagsasagawa ng
v. Court of Appeals:122 petitioner's employer-employee naturang
An indispensable party is a party who has relationship with Bautista, liability attaches paglilibingan.127 (Emphasis
such an interest in the controversy or to petitioner on account of its being the supplied)
subject matter that a final adjudication registered owner of a vehicle that figures in It was respondent herself who identified
cannot be made, in his absence, without a mishap. This alone suffices. A the Certificate. She testified that she
injuring or affecting that interest, a party determination of its liability as owner can incurred funeral expenses amounting to
who has not only an interest in the subject proceed independently of a consideration P35,000.00, that she paid this amount to
matter of the controversy, but also has an of how Bautista conducted himself as a Peñaloza, and that she was present when
interest of such nature that a final decree driver. While certainly it is desirable that a Peñaloza signed the Certificate:
cannot be made without affecting his determination of Bautista's liability be chanRoblesvirtualLawlibrary
interest or leaving the controversy in such made alongside that of the owner of the
[ATTY. Did you incur any expenses?
a condition that its final determination may van he was driving, his non-inclusion in
LIM] :
be wholly inconsistent with equity and good these proceedings does not absolutely
conscience. It has also been considered hamper a judicious resolution of
that an indispensable party is a person in respondent's plea for relief. A: Meron po.
whose absence there cannot be a IV
determination between the parties already
before the court which is effective, The Court of Appeals committed no Q: How much did you spend for
complete, or equitable. Further, an reversible error when it awarded actual the death of Jesmarian [sic]
indispensable party is one who must be damages to respondent. Respondent's Reyes?
included in an action before it may properly claim for actual damages was based on the
 court unless they are patently unsupported
A: 'Yun pong P35,000.00 na Q: Did you see him sign this?
by evidence or unless the judgment is
pagpapalibing at saka...
grounded on a misapprehension of
A: Opo.128 (Emphasis supplied) facts.130 Considering that petitioner has not
Q: You said that you spent presented any evidence disputing the
Respondent had personal knowledge of the findings of the lower courts regarding
P35,000.00. Do you have any
facts sought to be proved by the Bautista's negligence, these findings
evidence or proof that you
Certificate, i.e. that she spent P35,000.00 cannot be disturbed in this appeal. The
spent that amount?
for the funeral expenses of Reyes. Thus, evidentiary bases for the award of civil
the Certificate that she identified and indemnity and exemplary damages stand.
A: Meron po. testified to is not hearsay. It was not an As such, petitioner must pay the exemplary
error to admit this Certificate as evidence damages arising from the negligence of its
and basis for awarding P35,000.00 as driver.131 For the same reasons, the award
Q: Showing to you this sort of actual damages to respondent. of P50,000.00 by way of civil indemnity is
certification. What relation
justified.132
has this... The Court of Appeals likewise did not err in
awarding civil indemnity and exemplary The award of moral damages is likewise
damages. proper.
A: 'Yan po' yung contractor
nagumawa.
Article 2206 of the Civil Code provides: Article 2206(3) of the Civil Code provides:
chanRoblesvirtualLawlibrary chanRoblesvirtualLawlibrary
Q: Contractor of what? ARTICLE 2206. The amount of damages for ARTICLE 2206. The amount of damages
death caused by a crime or quasi- for death caused by a crime or quasi-
delict shall be at least three thousand delict shall be at least three thousand
A: 'Yan po' yung mismong pesos, even though there may have been pesos, even though there may have been
binilhan ko ng lupa at nitso. mitigating circumstances[.] mitigating circumstances. In addition:
Further, Article 2231 of the Civil Code
provides: . . . .
.... chanRoblesvirtualLawlibrary
ARTICLE 2231. In quasi-delicts, exemplary
damages may be granted if the defendant (3) The spouse, legitimate and
ATTY. There is a signature at the top
acted with gross negligence. illegitimate descendants and
LIM : of the printed name Julian
Both the Court of Appeals and the Regional ascendants of the deceased may
Penalosa [sic]. Whose
Trial Court found Bautista grossly negligent demand moral damages for mental
signature is this?
in driving the van and concluded that anguish by reason of the death of
Bautista's gross negligence was the the deceased. (Emphasis supplied)
A: 'Yan po' yung mismong proximate cause of Reyes' death.
For deaths caused by quasi-delict, the
contractor. Negligence and causation are factual
recovery of moral damages is limited to the
issues.129 Findings of fact, when
spouse, legitimate and illegitimate
established by the trial court and affirmed
.... descendants, and ascendants of the
by the Court of Appeals, are binding on this
deceased.133
 meaning of Article 2206(3) of the Civil legal interest shall, in any case, be
Persons exercising substitute parental Code. Hence, respondent is entitled to on the amount finally adjudged.
authority are to be considered ascendants moral damages. 3. When the judgment of the court
for the purpose of awarding moral awarding a sum of money becomes
damages. Persons exercising substitute As exemplary damages have been awarded final and executory, the rate of legal
parental authority are intended to stand in and as respondent was compelled to interest, whether the case falls
place of a child's parents in order to ensure litigate in order to protect her interests, she under paragraph 1 or paragraph 2,
the well-being and welfare of a is rightly entitled to attorney's fees. 144 above, shall be 6% per annum from
child.134 Like natural parents, persons such finality until its satisfaction,
exercising substitute parental authority are However, the award of interest should be this interim period being deemed to
required to, among others, keep their modified. This modification must be be by then an equivalent to a
wards in their company,135 provide for their consistent with Nacar v. Gallery forbearance of credit.146 (Emphasis
upbringing,136 show them love and Frames,145 in which we ruled: supplied)
affection, 137
give them advice and chanRoblesvirtualLawlibrary WHEREFORE, the Decision of the Court of
counsel,138 and provide them with 2. When an obligation, not constituting Appeals dated October 3, 2005
companionship and understanding.139 For a loan or forbearance of money, is is AFFIRMED with the
their part, wards shall always observe breached, an interest on the following MODIFICATIONS: (a) actual
respect and obedience towards the person amount of damages awarded may damages in the amount of P35,000.00 shall
exercising parental authority.140 The law be imposed at the discretion of the earn interest at the rate of 6% per annum
forges a relationship between the ward and court at the rate of 6% per annum. from the time it was judicially or
the person exercising substitute parental No interest, however, shall be extrajudicially demanded from petitioner
authority such that the death or injury of adjudged on unliquidated claims or Caravan Travel and Tours International,
one results in the damage or prejudice of damages, except when or until the Inc. until full satisfaction; (b) moral
the other. demand can be established with damages, exemplary damages, and
reasonable certainty. attorney's fees shall earn interest at the
Moral damages are awarded to compensate Accordingly, where the demand is rate of 6% per annum from the date of the
the claimant for his or her actual injury, established with reasonable Regional Trial Court Decision until full
and not to penalize the certainty, the interest shall begin to satisfaction; and (c) civil indemnity shall
wrongdoer.141 Moral damages enable the run from the time the claim is made earn interest at the rate of 6% per annum
injured party to alleviate the moral judicially or extrajudicially (Art. from the date of the Court of Appeals
suffering resulting from the defendant's 1169, Civil Code), but when such Decision until full satisfaction.
actions.142 It aims to restore — to the certainty cannot be so reasonably
extent possible — "the spiritual status quo established at the time the demand SO ORDERED.cralawlawlibrary
ante[.]"143 is made, the interest shall begin to
run only from the date the
Given the policy underlying Articles 216 judgment of the court is made (at
and 220 of the Family Code as well as the which time the quantification of
purposes for awarding moral damages, a damages may be deemed to have
person exercising substitute parental been reasonably ascertained). The
authority is rightly considered an actual base for the computation of
ascendant of the deceased, within the