Industrial Insurance v. Bondad J. Panganiban April 12, 2000 FACTS: A D.M.

Transit Bus driven by Eduardo Mendoza was speeding along South Expressway from Alabang towards Makati when it hit a jeepney (owned by Ligorio Bondad) which was at a full stop, owing to a flat tire. After bumping the rear left portion of Bondads jeepney, the bus swerved to the left and hit Grace Ladaw Morales Galant Sigma car, which was travelling northbound as well, albeit in the innermost lane. Grace Morales and petitioner filed a complaint for damages against DM Transit, Eduardo Mendoza, Pablo Bondad and Ligorio Bondad for failing to exercise and observe the diligence required by law in the management and operation of their respective vehicles and by their defendant employers. Respondents Bondads denied any responsibility or liability to petitioner and Morales, saying that the car was on full stop because of a flat tire. They contended that petitioner acted in bad faith in impleading them. RTC: Exculpated the Bondads and asked petitioner to pay them actual, moral, and exemplary damages, as well as AF CA: Affirmed the RTC ruling 1. Petitioner had no cause of action against the Bondads 2. After hitting the jeepney, the bus swerved to the left hitting the car of Morales; such facts appeared in the police report and the testimony of Ligorio supported by photographs of his jeepney which were taken immediately after the incident. The jeepney stayed in the right shoulder of the expressway as it were. 3. The proximate cause (that which, in natural and continuous sequence, unbroken by an efficient and intervening clause, produces injury without which the result would not have occurred) was the negligence of DM Transits driver, who was racing a Baliuag Transit bus ISSUE: Whether or not the award of moral and exemplary damages to respondents was proper HELD: Yes, such award was proper 1. CA was correct in concluding that respondents were compelled to litigate an unfounded suit because of petitioners negligence and lack of prudence in not verifying the facts before filing this action. 2. Petitioners suit against respondents was manifestly unjustified, as the jeepney came into contact with Morales car not because of its own motion but because the bus rammed the jeepney. The police report, testimonial evidence from the Bondads, and findings of fact of the lower courts attested to this. 3. It is absurd that respondents caused the incident, as respondents jeepney was lying motionless in the right shoulder of the highway due to a flat tire. They could not have done anything to avoid getting hit by a bus. 4. Petitioners knew that respondents were not the cause of the accident, failing to make a formal demand on them before initiating the suit. As no formal demand was made, and without clarifying the latters role in the mishap, the Bondads were constrained to go all the way from Alaminos to Manila to face trial. 5. Because of wanton disregard of facts, attorneys fees sustained AS TO MORAL DAMAGES: To sustain an award of moral damages, is must be shown that (1) that claimant suffered injury; and (2) such injury sprung from any of the cases listed in Articles 2219 and 2220 of the Civil Code. It is not enough that claimant alleges mental anguish, serious anxiety, wounded feelings, social humiliation, and the like as a result of the acts of the other party. It is necessary that such acts be shown to have been tainted with bad faith or ill motive.

Petitioner acted in bad faith by litigating an unfounded claim. It caused the Bondads lack of concentration on their job. Pablo suffered a mild stroke. AS TO EXEMPLARY DAMAGES: Awarded because petitioners dragged innocent bystanders into an unfounded litigation. Exemplary damages are imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated, or compensatory damages.