G.R. No.

L-12219
March 15, 1918
AMADO
PICART,
plaintiff-appellant,
vs.
FRANK SMITH, JR., defendant-appellee.
Alejo
Mabanag
for
appellant.
G. E. Campbell for appellee.
STREET, J.:
In this action the plaintiff, Amado Picart, seeks to recover of the defendant,
Frank Smith, jr., the sum of P31,000, as damages alleged to have been
caused by an automobile driven by the defendant. From a judgment of the
Court of First Instance of the Province of La Union absolving the defendant
from liability the plaintiff has appealed.
The occurrence which gave rise to the institution of this action took place on
December 12, 1912, on the Carlatan Bridge, at San Fernando, La Union. It
appears that upon the occasion in question the plaintiff was riding on his
pony over said bridge. Before he had gotten half way across, the defendant
approached from the opposite direction in an automobile, going at the rate
of about ten or twelve miles per hour. As the defendant neared the bridge
he saw a horseman on it and blew his horn to give warning of his approach.
He continued his course and after he had taken the bridge he gave two
more successive blasts, as it appeared to him that the man on horseback
before him was not observing the rule of the road.
The plaintiff, it appears, saw the automobile coming and heard the warning
signals. However, being perturbed by the novelty of the apparition or the
rapidity of the approach, he pulled the pony closely up against the railing on
the right side of the bridge instead of going to the left. He says that the
reason he did this was that he thought he did not have sufficient time to get
over to the other side. The bridge is shown to have a length of about 75
meters and a width of 4.80 meters. As the automobile approached, the
defendant guided it toward his left, that being the proper side of the road
for the machine. In so doing the defendant assumed that the horseman
would move to the other side. The pony had not as yet exhibited fright, and
the rider had made no sign for the automobile to stop. Seeing that the pony
was apparently quiet, the defendant, instead of veering to the right while
yet some distance away or slowing down, continued to approach directly
toward the horse without diminution of speed. When he had gotten quite
near, there being then no possibility of the horse getting across to the other
side, the defendant quickly turned his car sufficiently to the right to escape
hitting the horse alongside of the railing where it as then standing; but in so
doing the automobile passed in such close proximity to the animal that it
became frightened and turned its body across the bridge with its head
toward the railing. In so doing, it as struck on the hock of the left hind leg
by the flange of the car and the limb was broken. The horse fell and its
rider was thrown off with some violence. From the evidence adduced in the
case we believe that when the accident occurred the free space where the
pony stood between the automobile and the railing of the bridge was
probably less than one and one half meters. As a result of its injuries the
horse died. The plaintiff received contusions which caused temporary
unconsciousness and required medical attention for several days.

The question presented for decision is whether or not the defendant in

maneuvering his car in the manner above described was guilty of
negligence such as gives rise to a civil obligation to repair the damage
done; and we are of the opinion that he is so liable. As the defendant
started across the bridge, he had the right to assume that the horse and
the rider would pass over to the proper side; but as he moved toward the
center of the bridge it was demonstrated to his eyes that this would not be
done; and he must in a moment have perceived that it was too late for the
horse to cross with safety in front of the moving vehicle. In the nature of
things this change of situation occurred while the automobile was yet some
distance away; and from this moment it was not longer within the power of
the plaintiff to escape being run down by going to a place of greater safety.
The control of the situation had then passed entirely to the defendant; and
it was his duty either to bring his car to an immediate stop or, seeing that
there were no other persons on the bridge, to take the other side and pass
sufficiently far away from the horse to avoid the danger of collision. Instead
of doing this, the defendant ran straight on until he was almost upon the
horse. He was, we think, deceived into doing this by the fact that the horse
had not yet exhibited fright. But in view of the known nature of horses,
there was an appreciable risk that, if the animal in question was
unacquainted with automobiles, he might get exited and jump under the
conditions which here confronted him. When the defendant exposed the
horse and rider to this danger he was, in our opinion, negligent in the eye
of the law.
The test by which to determine the existence of negligence in a particular
case may be stated as follows: Did the defendant in doing the alleged
negligent act use that person would have used in the same situation? If not,
then he is guilty of negligence. The law here in effect adopts the standard
supposed to be supplied by the imaginary conduct of the discreet
paterfamilias of the Roman law. The existence of negligence in a given case
is not determined by reference to the personal judgment of the actor in the
situation before him. The law considers what would be reckless,
blameworthy, or negligent in the man of ordinary intelligence and prudence
and determines liability by that.
The question as to what would constitute the conduct of a prudent man in a
given situation must of course be always determined in the light of human
experience and in view of the facts involved in the particular case. Abstract
speculations cannot here be of much value but this much can be profitably
said: Reasonable men govern their conduct by the circumstances which are
before them or known to them. They are not, and are not supposed to be,
omniscient of the future. Hence they can be expected to take care only
when there is something before them to suggest or warn of danger. Could a
prudent man, in the case under consideration, foresee harm as a result of
the course actually pursued? If so, it was the duty of the actor to take
precautions to guard against that harm. Reasonable foresight of harm,
followed by ignoring of the suggestion born of this prevision, is always
necessary before negligence can be held to exist. Stated in these terms, the
proper criterion for determining the existence of negligence in a given case
is this: Conduct is said to be negligent when a prudent man in the position

of the tortfeasor would have foreseen that an effect harmful to another was
sufficiently probable to warrant his foregoing conduct or guarding against
its consequences.
Applying this test to the conduct of the defendant in the present case we
think that negligence is clearly established. A prudent man, placed in the
position of the defendant, would in our opinion, have recognized that the
course which he was pursuing was fraught with risk, and would therefore
have foreseen harm to the horse and the rider as reasonable consequence
of that course. Under these circumstances the law imposed on the
defendant the duty to guard against the threatened harm.
It goes without saying that the plaintiff himself was not free from fault, for
he was guilty of antecedent negligence in planting himself on the wrong
side of the road. But as we have already stated, the defendant was also
negligent; and in such case the problem always is to discover which agent
is immediately and directly responsible. It will be noted that the negligent
acts of the two parties were not contemporaneous, since the negligence of
the defendant succeeded the negligence of the plaintiff by an appreciable
interval. Under these circumstances the law is that the person who has the
last fair chance to avoid the impending harm and fails to do so is
chargeable with the consequences, without reference to the prior
negligence of the other party.
The decision in the case of Rkes vs. Atlantic, Gulf and Pacific Co. (7 Phil.
Rep., 359) should perhaps be mentioned in this connection. This Court
there held that while contributory negligence on the part of the person
injured did not constitute a bar to recovery, it could be received in evidence
to reduce the damages which would otherwise have been assessed wholly
against the other party. The defendant company had there employed the
plaintiff, as a laborer, to assist in transporting iron rails from a barge in
Manila harbor to the company's yards located not far away. The rails were
conveyed upon cars which were hauled along a narrow track. At certain
spot near the water's edge the track gave way by reason of the combined
effect of the weight of the car and the insecurity of the road bed. The car
was in consequence upset; the rails slid off; and the plaintiff's leg was
caught and broken. It appeared in evidence that the accident was due to
the effects of the typhoon which had dislodged one of the supports of the
track. The court found that the defendant company was negligent in having
failed to repair the bed of the track and also that the plaintiff was, at the
moment of the accident, guilty of contributory negligence in walking at the
side of the car instead of being in front or behind. It was held that while the
defendant was liable to the plaintiff by reason of its negligence in having
failed to keep the track in proper repair nevertheless the amount of the
damages should be reduced on account of the contributory negligence in
the plaintiff. As will be seen the defendant's negligence in that case
consisted in an omission only. The liability of the company arose from its
responsibility for the dangerous condition of its track. In a case like the one
now before us, where the defendant was actually present and operating the
automobile which caused the damage, we do not feel constrained to
attempt to weigh the negligence of the respective parties in order to
apportion the damage according to the degree of their relative fault. It is

enough to say that the negligence of the defendant was in this case the
immediate and determining cause of the accident and that the antecedent
negligence of the plaintiff was a more remote factor in the case.
A point of minor importance in the case is indicated in the special defense
pleaded in the defendant's answer, to the effect that the subject matter of
the action had been previously adjudicated in the court of a justice of the
peace. In this connection it appears that soon after the accident in question
occurred, the plaintiff caused criminal proceedings to be instituted before a
justice of the peace charging the defendant with the infliction of serious
injuries (lesiones graves). At the preliminary investigation the defendant
was discharged by the magistrate and the proceedings were dismissed.
Conceding that the acquittal of the defendant at the trial upon the merits in
a criminal prosecution for the offense mentioned would be res adjudicata
upon the question of his civil liability arising from negligence -- a point upon
which it is unnecessary to express an opinion -- the action of the justice of
the peace in dismissing the criminal proceeding upon the preliminary
hearing can have no effect. (See U. S. vs. Banzuela and Banzuela, 31 Phil.
Rep., 564.)
From what has been said it results that the judgment of the lower court
must be reversed, and judgment is her rendered that the plaintiff recover of
the defendant the sum of two hundred pesos (P200), with costs of other
instances. The sum here awarded is estimated to include the value of the
horse, medical expenses of the plaintiff, the loss or damage occasioned to
articles of his apparel, and lawful interest on the whole to the date of this
recovery. The other damages claimed by the plaintiff are remote or
otherwise of such character as not to be recoverable. So ordered.

G.R. No. 157658

October 15, 2007
PHILIPPINE NATIONAL RAILWAYS and VIRGILIO J. BORJA,
Petitioners,
vs.
COURT OF APPEALS (Second Division), CORAZON C. AMORES, MA.
EMILIE A. MOJICA, CECILE C. SISON, DINO C. AMORES, LARISA C.
AMORES, ARMAND JINO C. AMORES and JOHN C. AMORES,
Respondents.
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the
1997 Rules of Civil Procedure, as amended, seeking to annul and set aside
the Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 54906 which
reversed the Decision2 of the Regional Trial Court (RTC) of Manila, Branch
28, in Civil Case No. 92-61987.
The factual antecedents are as follows:
In the early afternoon of April 27, 1992, Jose Amores (Amores) was
traversing the railroad tracks in Kahilum II Street, Pandacan, Manila. Before
crossing the railroad track, he stopped for a while then proceeded
accordingly.3 Unfortunately, just as Amores was at the intersection, a

Philippine National Railways (PNR) train with locomotive number T-517

turned up and collided with the car.4
At the time of the mishap, there was neither a signal nor a crossing bar at
the intersection to warn motorists of an approaching train. Aside from the
railroad track, the only visible warning sign at that time was the defective
standard signboard "STOP, LOOK and LISTEN" wherein the sign "Listen"
was lacking while that of "Look" was bent.5 No whistle blow from the train
was likewise heard before it finally bumped the car of Amores.6 After
impact, the car was dragged about ten (10) meters beyond the center of
the crossing.7 Amores died as a consequence thereof.
On July 22, 1992, the heirs of Amores, consisting of his surviving wife and
six children, herein respondents, filed a Complaint for Damages8 against
petitioners PNR and Virgilio J. Borja (Borja), PNRs locomotive driver at the
time of the incident, before the RTC of Manila. The case was raffled to
Branch 28 and was docketed as Civil Case No. 92-61987. In their
complaint, respondents averred that the trains speedometer was defective,
and that the petitioners negligence was the proximate cause of the mishap
for their failure to take precautions to prevent injury to persons and
property despite the dense population in the vicinity. They then prayed for
actual and moral damages, as well as attorneys fees.9
In their Answer,10 the petitioners denied the allegations, stating that the
train was railroad-worthy and without any defect. According to them, the
proximate cause of the death of Amores was his own carelessness and
negligence, and Amores wantonly disregarded traffic rules and regulations
in crossing the railroad tracks and trying to beat the approaching train.
They admitted that there was no crossing bar at the site of the accident
because it was merely a barangay road.11 PNR stressed that it exercised the
diligence of a good father of a family in the selection and supervision of the
locomotive driver and train engineer, Borja, and that the latter likewise
used extraordinary diligence and caution to avoid the accident. Petitioners
further asserted that respondents had the last clear chance to avoid the
accident but recklessly failed to do so.
After trial on the merits, on August 22, 1996, the RTC rendered judgment in
favor of the petitioners, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered dismissing the complaint of the
plaintiffs and the defendants counterclaim.
The costs shall be halved and paid equally by the parties.
The counsel for the defendants is hereby ordered to inform this court who is
the legal representative of the deceased defendant, Virgilio Borja, within ten
(10) days from receipt of a copy of this decision.
SO ORDERED.12
The RTC rationalized that the proximate cause of the collision was Amores
fatal misjudgment and the reckless course of action he took in crossing the
railroad track even after seeing or hearing the oncoming train.
On appeal, the CA reversed the RTC decision, as follows:
WHEREFORE, the assailed Decision of the Regional Trial Court of Manila,
Branch 28 is hereby REVERSED. The defendants PNR and the estate of
Virgilio J. Borja are jointly and severally liable to pay plaintiffs the following:
1) The amount of P122,300.00 for the cost of damage to the car; and,

2) The amount of P50,000 as moral damages.

For lack of official receipts for funeral expenses and specimen of the last
pay slip of the deceased, the claim for reimbursement of funeral expenses
and claim for payment of support is hereby DENIED for lack of basis. Costs
against Defendants.
SO ORDERED.13
In reversing the trial courts decision, the appellate court found the
petitioners negligent. The court based the petitioners negligence on the
failure of PNR to install a semaphore or at the very least, to post a flagman,
considering that the crossing is located in a thickly populated area.
Moreover, the signboard "Stop, Look and Listen" was found insufficient
because of its defective condition as described above. Lastly, no negligence
could be attributed to Amores as he exercised reasonable diligence in
crossing the railroad track.
Aggrieved by this reversal, the petitioners filed the present petition for
review on certiorari, raising the following grounds:
I
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN
RENDERING ITS DECISION REVERSING THE DECISION OF THE REGIONAL
TRIAL COURT OF MANILA BRANCH 28, IN NOT TAKING INTO
CONSIDERATION THE PROVISION OF SECTION 42, R.A. 4136 OF THE LAND
TRANSPORTATION AND TRAFFIC CODE.
II
THE DECISION OF THE COURT OF APPEALS IS CONTRARY TO THE
EVIDENCE ON RECORD ADDUCED IN THE TRIAL ON THE MERIT IN CIVIL
CASE NO. 92-61987.14
The petitioners insist that Amores must have heard the trains whistle and
heeded the warning but, noting that the train was still a distance away and
moving slowly, he must have calculated that he could beat it to the other
side of the track before the train would arrive at the intersection. The
petitioners likewise add that the train was railroad-worthy and that its
defective speedometer did not affect the trains operation. Lastly, they
insist that evidence showed sufficient warning signs strategically installed at
the crossing to alert both motorists and pedestrians.
Respondents, on the other hand, argue that the cause of the accident was
petitioners carelessness, imprudence and laxity in failing to provide a
crossing bar and keeper at the Kahilum II railway intersection. Considering
that Kahilum II Street is in the middle of a thickly populated squatters
area, and many pedestrians cross the railroad track, notwithstanding the
fact that it is a public street and a main thoroughfare utilized in going to
Herran Street, the presence of adequate warning signals would have
prevented the untimely death of Amores. Another crucial point raised by the
respondents is the manner in which Borja applied the brakes of the train
only when the locomotive was already very near Amores car, as admitted
by witness Querimit. Finally, respondents claim that Borjas failure to blow
the locomotives horn, pursuant to the usual practice of doing the same 100
meters before reaching the Kahilum II crossing point is an earmark of
recklessness on the part of the petitioners.
The petition must fail.

The only issue to be resolved in the present case is whether the appellate
court was correct in ascribing negligence on the part of the petitioners. It
was ascertained beyond quandary that the proximate cause of the collision
is the negligence and imprudence of the petitioner PNR and its locomotive
driver, Borja, in operating the passenger train.
As the action is predicated on negligence, the relevant provision is Article
2176 of the New Civil Code, which states that:
Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence,
if there was no pre-existing contractual relation between the parties, is
called quasi-delict and is governed by the provisions of this chapter.
We have thoroughly reviewed the records of the case and we find no cogent
reason to reverse the appellate courts decision. Negligence has been
defined as "the failure to observe for the protection of the interests of
another person that degree of care, precaution, and vigilance which the
circumstances justly demand, whereby such other person suffers injury."15
Using the aforementioned philosophy, it may be reliably concluded that
there is no hard and fast rule whereby such degree of care and vigilance is
calibrated; it is dependent upon the circumstances in which a person finds
himself. All that the law requires is that it is perpetually compelling upon a
person to use that care and diligence expected of sensible men under
comparable circumstances.16
We hold that the petitioners were negligent when the collision took place.
The transcript of stenographic notes reveals that the train was running at a
fast speed because notwithstanding the application of the ordinary and
emergency brakes, the train still dragged the car some distance away from
the point of impact. Evidence likewise unveils the inadequate precautions
taken by petitioner PNR to forewarn the public of the impending danger.
Aside from not having any crossing bar, no flagman or guard to man the
intersection at all times was posted on the day of the incident. A reliable
signaling device in good condition, not just a dilapidated "Stop, Look and
Listen" signage because of many years of neglect, is needed to give notice
to the public. It is the responsibility of the railroad company to use
reasonable care to keep the signal devices in working order. Failure to do so
would be an indication of negligence.
As held in the case of Philippine National Railway v. Brunty,17 it may broadly
be stated that railroad companies owe to the public a duty of exercising a
reasonable degree of care to avoid injury to persons and property at
railroad crossings, which duties pertain both to the operation of trains and
to the maintenance of the crossings. Moreover, every corporation
constructing or operating a railway shall make and construct at all points
where such railway crosses any public road, good, sufficient, and safe
crossings, and erect at such points, at sufficient elevation from such road as
to admit a free passage of vehicles of every kind, a sign with large and
distinct letters placed thereon, to give notice of the proximity of the railway,
and warn persons of the necessity of looking out for trains.18 The failure of
the PNR to put a cross bar, or signal light, flagman or switchman, or
semaphore is evidence of negligence and disregard of the safety of the

public, even if there is no law or ordinance requiring it, because public

safety demands that said device or equipment be installed.
The petitioners insist that a train has a right-of-way in a railroad crossing
under the existing laws. They derive their theory from Section 42 (d),
Article III of R.A. 4136, otherwise known as the Land Transportation and
Traffic Code, which states that:
The driver of a vehicle upon a highway shall bring to a full stop such vehicle
before traversing any "through highway" or railroad crossing: Provided,
That when it is apparent that no hazard exists, the vehicle may be slowed
down to five miles per hour instead of bringing it to a full stop.
They claim that motorists are enjoined by law to stop, look and listen before
crossing railroad tracks and that a heavier responsibility rests upon the
motorists in avoiding accidents at level crossings.
It is true that one driving an automobile must use his faculties of seeing
and hearing when nearing a railroad crossing.1wphi1 However, the
obligation to bring to a full stop vehicles moving in public highways before
traversing any "through street" only accrues from the time the said
"through street" or crossing is so designated and sign-posted. From the
records of the case, it can be inferred that Amores exercised all the
necessary precautions required of him as to avoid injury to himself and to
others.1wphi1 The witnesses testimonies showed that Amores slackened
his speed, made a full stop, and then proceeded to cross the tracks when
he saw that there was no impending danger to his life. Under these
circumstances, we are convinced that Amores did everything, with absolute
care and caution, to avoid the collision.
It is settled that every person or motorist crossing a railroad track should
use ordinary prudence and alertness to determine the proximity of a train
before attempting to cross. We are persuaded that the circumstances were
beyond the control of Amores for no person would sacrifice his precious life
if he had the slightest opportunity to evade the catastrophe. Besides, the
authority in this jurisdiction is that the failure of a railroad company to
install a semaphore or at the very least, to post a flagman or watchman to
warn the public of the passing train amounts to negligence.191wphi1
In view of the foregoing, We will now discuss the liability of petitioner PNR.
Article 218020 of the New Civil Code discusses the liability of the employer
once negligence or fault on the part of the employee has been established.
The employer is actually liable on the assumption of juris tantum that the
employer failed to exercise diligentissimi patris families in
the selection and supervision of its employees. The liability is primary and
can only be negated by showing due diligence in the selection and
supervision of the employee, a factual matter that has not been
demonstrated.21 Even the existence of hiring procedures and supervisory
employees cannot be incidentally invoked to overturn the presumption of
negligence on the part of the employer.22
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals
dated March 31, 2003 in CA-G.R. CV No. 54906 is hereby AFFIRMED.
SO ORDERED.

G.R. No. 171636

April 7, 2009
NORMAN
A.
GAID,
Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
TINGA, J.:
Before the Court is a petition for review on certiorari1 assailing the 12 July
2005 Decision2 of the Court of Appeals and its subsequent Resolution3
denying petitioners motion for reconsideration.
Petitioner Norman A. Gaid was charged with the crime of reckless
imprudence resulting in homicide in an information which reads as follow:
That on or about 12:00 high noon of October 25, 2001, infront of the
Laguindingan National High School, Poblacion, Laguindingan, Misamis
Oriental, Philippines and within the jurisdiction of this Honorable Court, the
said accused mentioned above while driving a passengers jeepney color
white bearing plate no. KVG-771 owned by barangay captain Levy Etom has
no precautionary measure to preempt the accident, did then and there
willfully, unlawfully and feloniously ran [sic] over Michael Dayata resulting
of [sic] his untimely death as pronounced by the attending physician of
Northern Mindanao Medical Center Hospital, Cagayan de Oro City.
CONTRARY TO LAW.4
Petitioner entered a not guilty plea. Thereafter, trial ensued.
The antecedent facts are undisputed.
At around 12:00 noon on 25 October 2001, petitioner was driving his
passenger jeepney along a two-lane road where the Laguindingan National
High School is located toward the direction of Moog in Misamis Oriental. His
jeepney was filled to seating capacity.5 At the time several students were
coming out of the school premises.6 Meanwhile, a fourteen year-old
student, Michael Dayata (Dayata), was seen by eyewitness Artman
Bongolto (Bongolto) sitting near a store on the left side of the road. From
where he was at the left side of the road, Dayata raised his left hand to flag
down petitioners jeepney7 which was traveling on the right lane of the
road.8 However, neither did petitioner nor the conductor, Dennis Mellalos
(Mellalos), saw anybody flagging down the jeepney to ride at that point.9
The next thing Bongalto saw, Dayatas feet was pinned to the rear wheel of
the jeepney, after which, he laid flat on the ground behind the jeepney.10
Another prosecution witness, Usaffe Actub (Actub), who was also situated
on the left side of the street but directly in front of the school gate, heard "a
strong impact coming from the jeep sounding as if the driver forced to
accelerate in order to hurdle an obstacle."11 Dayata was then seen lying on
the ground12 and caught in between the rear tires.13 Petitioner felt that the
left rear tire of the jeepney had bounced and the vehicle tilted to the right
side.14
Mellalos heard a shout that a boy was run over, prompting him to jump off
the jeepney to help the victim. Petitioner stopped and saw Mellalos carrying
the body of the victim.15 Mellalos loaded the victim on a motorcycle and
brought him to the hospital. Dayata was first brought to the Laguindingan
Health Center, but it was closed. Mellalos then proceeded to the El Salvador
Hospital. Upon advice of its doctors, however, Dayata was brought to the

Northern Mindanao Medical Center where he was pronounced dead on

arrival.16
Dr. Tammy Uy issued an autopsy report stating cranio-cerebral injuries as
the cause of death.17 She testified that the head injuries of Dayata could
have been caused by having run over by the jeepney.18
The Municipal Circuit Trial Court (MCTC) of Laguindingan19 found petitioner
guilty beyond reasonable doubt of the crime charged. The lower court held
petitioner negligent in his driving considering that the victim was dragged
to a distance of 5.70 meters from the point of impact. He was also scored
for "not stopping his vehicle after noticing that the jeepneys left rear tire
jolted causing the vehicle to tilt towards the right."20 On appeal, the
Regional Trial Court (RTC)21 affirmed in toto the decision of the MCTC.
The Court of Appeals affirmed the trial courts judgment with modification in
that it found petitioner guilty only of simple negligence resulting in
homicide.1avvphi1.zw+
The Court of Appeals exonerated petitioner from the charge of reckless
imprudence resulting to homicide on the ground that he was not driving
recklessly at the time of the accident. However, the appellate court still
found him to be negligent when he failed "to promptly stop his vehicle to
check what caused the sudden jotting of its rear tire."22
In its 6 February 2006 Resolution, the Court of Appeals denied petitioners
motion for reconsideration.23
Hence, the instant petition.
Petitioner submits that the Court of Appeals erred in finding that "there is
(sic) absolutely lack of precaution on the part of the petitioner when he
continued even after he had noticed that the left rear tire and the jeep tilted
to its right side."24 Petitioner stressed that he, in fact, stopped his jeep
when its left rear tire bounced and upon hearing that somebody had been
ran over.
Moreover, petitioner asserts that the Court of Appeals committed a grave
abuse of discretion in convicting him of the offense of simple negligence
resulting in homicide. Assuming arguendo that he failed to promptly stop
his vehicle, petitioner maintains that no prudent man placed in the same
situation could have foreseen the vehicular accident or could have stopped
his vehicle in time when its left rear tire bounced due to the following
reasons: (1) the victim was only a trespasser; (2) petitioners attention was
focused on the road and the students outside the schools gate; and (3) the
jeepney was fully loaded with passengers and cargoes and it was impossible
for the petitioner to promptly stop his vehicle.25
The Office of the Solicitor-General (OSG) maintained that petitioner was
negligent when he continued to run towards the direction of Moog,
Laguindingan, dragging the victim a few meters from the point of impact,
despite hearing that a child had been run over.26
The presence or absence of negligence on the part of petitioner is
determined by the operative events leading to the death of Dayata which
actually comprised of two phases or stages. The first stage began when
Dayata flagged down the jeepney while positioned on the left side of the
road and ended when he was run over by the jeepney. The second stage

10

covered the span between the moment immediately after the victim was
run over and the point when petitioner put the jeepney to a halt.
During the first stage, petitioner was not shown to be negligent.
Reckless imprudence consists of voluntarily doing or failing to do, without
malice, an act from which material damage results by reason of an
inexcusable lack of precaution on the part of the person performing or
failing to perform such act.27
In Manzanares v. People,28 this Court convicted petitioner of the crime of
reckless imprudence resulting in multiple homicide and serious physical
injuries when he was found driving the Isuzu truck very fast before it
smashed into a jeepney.29 Likewise, in Pangonorom v. People,30 a public
utility driver, who was driving very fast, failed to slow down and hit a
swerving car. He was found negligent by this Court.
In the instant case, petitioner was driving slowly at the time of the accident,
as testified to by two eyewitnesses. Prosecution witness Actub affirmed this
fact on cross-examination, thus:
ATTY. MACUA:
(to the witness)
Q Mr. Witness, when the passenger jeepney passed by the gate of the
Laguindingan National High School, is it running slowly, am I correct?
A Yes, he was running slowly.31
The slow pace of the jeepney was seconded by Mellalos:
Q You testified that you heard somebody outside from the vehicle shouting
that a boy was ran over, am I correct?
A Yes, Sir.
Q Now, before you heard that shouting, did you observe any motion from
the vehicle?
A The jeep was moving slowly and I noticed that there was something that
[sic] the jeep a little bit bounced up as if a hump thats the time I heard a
shout from outside.32
Petitioner stated that he was driving at no more than 15 kilometers per
hour.33
It appears from the evidence Dayata came from the left side of the street.
Petitioner, who was driving the jeepney on the right lane, did not see the
victim flag him down. He also failed to see him go near the jeepney at the
left side. Understandably, petitioner was focused on the road ahead. In
Dayatas haste to board the jeep which was then running, his feet somehow
got pinned to the left rear tire, as narrated by Bongolto. Actub only saw
Dayata after he heard a strong impact coming from the jeep.
With the foregoing facts, petitioner can not be held liable during the first
stage. Specifically, he cannot be held liable for reckless imprudence
resulting in homicide, as found by the trial court. The proximate cause of
the accident and the death of the victim was definitely his own negligence
in trying to catch up with the moving jeepney to get a ride.
In the instant case, petitioner had exercised extreme precaution as he
drove slowly upon reaching the vicinity of the school. He cannot be faulted
for not having seen the victim who came from behind on the left side.
However, the Court of Appeals found petitioner guilty of simple negligence
resulting in homicide for failing to stop driving at the time when he noticed

11

the bouncing of his vehicle. Verily, the appellate court was referring to the
second stage of the incident.
Negligence has been defined as the failure to observe for the protection of
the interests of another person that degree of care, precaution, and
vigilance which the circumstances justly demand, whereby such other
person suffers injury.34
The elements of simple negligence: are (1) that there is lack of precaution
on the part of the offender; and (2) that the damage impending to be
caused is not immediate or the danger is not clearly manifest.35
The standard test in determining whether a person is negligent in doing an
act whereby injury or damage results to the person or property of another
is this: could a prudent man, in the position of the person to whom
negligence is attributed, foresee harm to the person injured as a reasonable
consequence of the course actually pursued? If so, the law imposes a duty
on the actor to refrain from that course or to take precautions to guard
against its mischievous results, and the failure to do so constitutes
negligence. Reasonable foresight of harm, followed by the ignoring of the
admonition born of this provision, is always necessary before negligence
can be held to exist.36
In Philippine National Construction Corporation v. Court of Appeals,37 the
petitioner was the franchisee that operates and maintains the toll facilities
in the North and South Luzon Toll Expressways. It failed to exercise the
requisite diligence in maintaining the NLEX safe for motorists. The lighted
cans and lane dividers on the highway were removed even as flattened
sugarcanes lay scattered on the ground. The highway was still wet from the
juice and sap of the flattened sugarcanes. The petitioner should have
foreseen that the wet condition of the highway would endanger motorists
passing by at night or in the wee hours of the morning.38 Consequently, it
was held liable for damages.
In an American case, Hernandez v. Lukas,39 a motorist traveling within the
speed limit and did all was possible to avoid striking a child who was then
six years old only. The place of the incident was a neighborhood where
children were playing in the parkways on prior occasions. The court ruled
that it must be still proven that the driver did not exercise due care. The
evidence showed that the driver was proceeding in lawful manner within the
speed limit when the child ran into the street and was struck by the drivers
vehicle. Clearly, this was an emergency situation thrust upon the driver too
suddenly to avoid.
In this case, the courts below zeroed in on the fact that petitioner did not
stop the jeepney when he felt the bouncing of his vehicle, a circumstance
which the appellate court equates with negligence. Petitioner contends that
he did not immediately stop because he did not see anybody go near his
vehicle at the time of the incident.40
Assuming arguendo that petitioner had been negligent, it must be shown
that his negligence was the proximate cause of the accident. Proximate
cause is defined as that which, in the natural and continuous sequence,
unbroken by any efficient, intervening cause, produces the injury, and
without which the result would not have

12

occurred.41 In order to establish a motorist's liability for the negligent

operation of a vehicle, it must be shown that there was a direct causal
connection between such negligence and the injuries or damages
complained of. Thus, negligence that is not a substantial contributing factor
in the causation of the accident is not the proximate cause of an injury.42
The head injuries sustained by Dayata at the point of impact proved to be
the immediate cause of his death, as indicated in the post-mortem
findings.43 His skull was crushed as a result of the accident. Had petitioner
immediately stopped the jeepney, it would still not have saved the life of
the victim as the injuries he suffered were fatal.
The evidence on record do not show that the jeepney dragged the victim
after he was hit and run over by the jeepney. Quite the contrary, the
evidence discloses that the victim was not dragged at all. In fact, it is the
other way around. Bongolto narrated that after the impact, he saw Dayata
left behind the jeepney.44 Actub saw Dayata in a prone position and
bleeding within seconds after impact.45 Right after the impact, Mellalos
immediately jumped out of the jeepney and saw the victim lying on the
ground.46 The distance of 5.70 meters is the length of space between the
spot where the victim fell to the ground and the spot where the jeepney
stopped as observed by the trial judge during the ocular inspection at the
scene of the accident.47
Moreover, mere suspicions and speculations that the victim could have lived
had petitioner stopped can never be the basis of a conviction in a criminal
case.48 The Court must be satisfied that the guilt of the accused had been
proven beyond reasonable doubt.49 Conviction must rest on nothing less
than a moral certainty of the guilt of the accused. The overriding
consideration is not whether the court doubts the innocence of the accused
but whether it entertains doubt as to his guilt.50
Clearly then, the prosecution was not able to establish that the proximate
cause of the victims death was petitioners alleged negligence, if at all,
even during the second stage of the incident.
If at all again, petitioners failure to render assistance to the victim would
constitute abandonment of ones victim punishable under Article 275 of the
Revised Penal Code. However, the omission is not covered by the
information. Thus, to hold petitioner criminally liable under the provision
would be tantamount to a denial of due process.
Therefore, petitioner must be acquitted at least on reasonable doubt. The
award of damages must also be deleted pursuant to Article 2179 of the Civil
Code which states that when the plaintiffs own negligence was the
immediate and proximate cause of his injury, he cannot recover damages.
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals
dated 12 July 2005 is REVERSED and SET ASIDE. Petitioner Norman A. Gaid
is ACQUITTED of the crime of Simple Negligence Resulting in Homicide as
found by the Court of Appeals and of the charge of Reckless Imprudence
Resulting in Homicide in Criminal Case No. 1937 of the MCTC of
Laguindingan, Misamis Oriental.
SO ORDERED.

13

G.R. No. L-40452 October 12, 1989

GREGORIO
GENOBIAGON,
petitioner,
vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.
Mario D. Ortiz for petitioner.
GRIO-AQUINO, J.:
This is a petition for review of the Court of Appeals' decision in CA-G.R. No.
09949-CR, dated October 10, 1974, affirming the conviction of the
petitioner of the crime of homicide thru reckless imprudence.
As found by the Court of Appeals, the facts of this case are:
On December 31,1959, at about 7:30 o'clock in the evening, a rig driven by
appellant bumped an old woman who was crossing T. Padilla St., Cebu City,
at the right side of T. Padilla Market. The appellant's rig was following
another at a distance of two meters. The old woman started to cross when
the first rig was approaching her, but as appellant's vehicle was going so
fast not only because of the steep down-grade of the road, but also because
he was trying to overtake the rig ahead of him, the appellant's rig bumped
the old woman, who as a consequence, fell at the middle of the road. The
appellant continued to drive on, but a by-stander, one Vicente Mangyao,
who just closed his store in market in order to celebrate the coming of the
New Year, and who saw the incident right before him, shouted at the
appellant to stop. He ran after appellant when the latter refused to stop.
Overtaking the appellant, Mangyao asked him why he bumped the old
woman and his answer was, 'it was the old woman that bumped him.' The
appellant went back to the place where the old woman was struck by his
rig. The old woman was unconscious, and the food and viands she was
carrying were scattered on her body. The victim was then loaded in a jeep
and brought to the hospital where she died three hours later (Exh. C). The
findings after an autopsy are as follows:
Contusion with Hematoma Left, Frontal and Occipito-Parietal Regionas
Fracture Occipito-Parietal Bone Cerebral Hemorrhage.
The deceased was an eighty-one-year old woman named Rita B. Cabrera.
(pp. 31-32, Rollo.)
Petitioner was charged with homicide thru reckless imprudence in the Court
of First Instance of Cebu (Crim. Case No. V7855). The trial court found
petitioner guilty of the felony charged and sentenced him to "suffer an
indeterminate penalty of three (3) months of arresto mayor as minimum to
one (1) year, one (1) month and eleven (11) days of prision correccional as
maximum, to indemnify the heirs of Rita Banzon Cabrera the sum of P6,000
with subsidiary imprisonment in case of insolvency, not to exceed 1/3 of the
principal penalty and to pay the costs" (p. 3, Appellant's Brief, p. 56, Rollo).
The petitioner appealed to the Court of Appeals (CA-G.R. 09949CR)which,on October 10,1974,conviction of the accused but increased his
civil liability to P12,000. The dispositive portion of its decision reads:
WHEREFORE, finding no error in the judgment appealed from except in the
amount of indemnity to be paid to the heirs of the deceased, Rita B.
Cabrera, which is the sum of P6,000.00 with subsidiary imprisonment in
case of insolvency which should be raised to P12,000.00 (People vs.

14

Pantoja, G.R. No. L-18793, October 11, 1968, 25 SCRA 468) but without
subsidiary imprisonment in case of insolvency, the same should be, as it is
hereby affirmed in all other respects with costs. (P. 37, Rollo.)
After his motion for reconsideration of the Court of Appeals' decision was
denied, he filed a petition for review in this Court, alleging that the Court of
Appeals erred:
1. in not finding that the reckless negligence of the victim was the
proximate cause of the accident which led to her death;
2. in not acquitting the petitioner on the ground of reasonable doubt; and
3. in unjustly increasing the civil liability of the petitioner from P6,000.00 to
P12,000.00, although the circumstances of the victim and the accused
(petitioner) do not warrant such increase.
It is quite evident that all the issues raised in the petition for review are
factual. Well-entrenched in our jurisprudence is the rule that findings of fact
of the trial court and the Court of Appeals are binding upon us (Bernardo
vs. Bernardo, 101 SCRA 351; Vda. De Roxas vs. IAC, 143 SCRA 77;
Republic vs. IAC, 144 SCRA 705).
The alleged contributory negligence of the victim, if any, does not
exonerate the accused. "The defense of contributory negligence does not
apply in criminal cases committed through reckless imprudence, since one
cannot allege the negligence of another to evade the effects of his own
negligence (People vs. Orbeta, CA-G.R. No. 321, March 29,1947)." (People
vs. Quinones, 44 O.G. 1520).
The petitioner's contention that the Court of Appeals unjustly increased his
civil liability to P12,000, is devoid of merit. The prevailing jurisprudence in
fact provides that indemnity for death in homicide or murder is P30,000
(People vs. De la Fuente, [1983]126 SCRA 518; People vs. Centeno, 130
SCRA 198). Accordingly, the civil liability of the petitioner is increased to
P30,000.
WHEREFORE, the appealed decision is affirmed with modification as to the
civil liability of the petitioner which is hereby increased to P30,000. Costs
against petitioner.
SO ORDERED.

G.R. No. 1719

January 23, 1907
M.
H.,
RAKES,
plaintiff-appellee,
vs.
THE ATLANTIC, GULF AND PACIFIC COMPANY, defendant-appellant.
A.
D.
Gibbs
for
appellant.
F. G. Waite, & Thimas Kepner for appellee.
TRACEY, J.:
This is an action for damages. The plaintiff, one of a gang of eight negro
laborers in the employment of the defendant, was at work transporting iron
rails from a barge in the harbor to the company's yard near the malecon in
Manila. Plaintiff claims that but one hand car was used in this work. The
defendant has proved that there were two immediately following one
another, upon which were piled lengthwise seven rails, each weighing 560
pounds, so that the ends of the rails lay upon two crosspieces or sills

15

secured to the cars, but without side pieces or guards to prevent them from
slipping off. According to the testimony of the plaintiff, the men were either
in the rear of the car or at its sides. According to that defendant, some of
them were also in front, hauling by a rope. At a certain spot at or near the
water's edge the track sagged, the tie broke, the car either canted or upset,
the rails slid off and caught the plaintiff, breaking his leg, which was
afterwards amputated at about the knee.
This first point for the plaintiff to establish was that the accident happened
through the negligence of the defendant. The detailed description by the
defendant's witnesses of the construction and quality of the track proves
that if was up to the general stranded of tramways of that character, the
foundation consisting on land of blocks or crosspieces of wood, by 8 inches
thick and from 8 to 10 feet long laid, on the surface of the ground, upon
which at a right angle rested stringers of the same thickness, but from 24
to 30 feet in length. On the across the stringers the parallel with the blocks
were the ties to which the tracks were fastened. After the road reached the
water's edge, the blocks or crosspieces were replaced with pilling, capped
by timbers extending from one side to the other. The tracks were each
about 2 feet wide and the two inside rails of the parallel tracks about 18
inches apart. It was admitted that there were no side pieces or guards on
the car; that where no ends of the rails of the track met each other and
also where the stringers joined, there were no fish plates. the defendant
has not effectually overcome the plaintiff's proof that the joints between the
rails were immediately above the joints between the underlying stringers.
The cause of the sagging of the tracks and the breaking of the tie, which
was the immediate occasion of the accident, is not clear in the evidence,
but is found by the trial court and is admitted in the briefs and in the
argument to have been the dislodging of the crosspiece or piling under the
stringer by the water of the bay raised by a recent typhoon. The
superintendent of the company attributed it to the giving way of the block
laid in the sand. No effort was made to repair the injury at the time of the
occurrence. According to plaintiffs witnesses, a depression of the track,
varying from one half inch to one inch and a half, was therafter apparent to
the eye, and a fellow workman of the plaintiff swears that the day before
the accident he called the attention of McKenna, the foreman, to it and
asked by simply straightening out the crosspiece, resetting the block under
the stringer and renewing the tie, but otherwise leaving the very same
timbers as before. It has not proven that the company inspected the track
after the typhoon or had any proper system of inspection.
In order to charge the defendant with negligence, it was necessary to show
a breach of duty on its part in failing either to properly secure the load on
iron to vehicles transporting it, or to skillfully build the tramway or to
maintain it in proper condition, or to vigilantly inspect and repair the
roadway as soon as the depression in it became visible. It is upon the
failure of the defendant to repair the weakened track, after notice of its
condition, that the judge below based his judgment.
This case presents many important matters for our decision, and first
among them is the standard of duty which we shall establish in our
jurisprudence on the part of employees toward employees.

16

The lack or the harshness of legal rules on this subject has led many
countries to enact designed to put these relations on a fair basis in the form
of compensation or liability laws or the institution of insurance. In the
absence of special legislation we find no difficulty in so applying the general
principles of our law as to work out a just result.
Article 1092 of the Civil Code provides:
Civil obligations, arising from crimes or misdemeanors, shall be governed
by the provisions of the Penal Code.
And article 568 of the latter code provides:
He who shall execute through reckless negligence an act that if done with
malice would constitute a grave crime, shall be punished.
And article 590 provides that the following shall be punished:
4. Those who by simple imprudence or negligence, without committing any
infraction of regulations, shall cause an injury which, had malice intervened,
would have constituted a crime or misdemeanor.
And finally by articles 19 and 20, the liability of owners and employers for
the faults of their servants and representatives is declared to be civil and
subsidiary in its character.
It is contented by the defendant, as its first defense to the action, that the
necessary conclusion from these collated laws is that the remedy for
injuries through negligence lies only in a criminal action in which the official
criminally responsible must be made primarily liable and his employer held
only subsidiarily to him. According to this theory the plaintiff should have
procured the arrest of the representative of the company accountable for
not repairing the tract, and on his prosecution a suitable fine should have
been imposed, payable primarily by him and secondarily by his employer.
This reasoning misconceived the plan of the Spanish codes upon this
subject. Article 1093 of the Civil Code makes obligations arising from faults
or negligence not punished by the law, subject to the provisions of Chapter
11 of Title XVI. Section 1902 of that chapter reads:
A person who by an act or omission causes damage to another when there
is fault or negligence shall be obliged to repair the damage so done.
SEC. 1903. The obligation imposed by the preceding article is demandable,
not only for personal acts and omissions, but also for those of the persons
for whom they should be responsible.
The father, and on his death or incapacity, the mother, is liable for the
damages caused by the minors who live with them.
xxx
xxx
xxx
Owners or directors of an establishment or enterprise are equally liable for
the damages caused by their employees in the service of the branches in
which the latter may be employed or in the performance of their duties.
xxx
xxx
xxx
The liability referred to in this article shall cease when the persons
mentioned therein prove that they employed all the diligence of a good
father of a family to avoid the damages.
As an answer to the argument urged in this particular action it may be
sufficient to point out that nowhere in our general statutes is the employer
penalized for failure to provide or maintain safe appliances for his workmen.
His obligation therefore is one "not punished by the law " and falls under

17

civil rather than criminal jurisprudence. But the answer may be a broader
one. We should be reluctant, under any conditions, to adopt a forced
construction of these scientific codes, such as is proposed by the defendant,
that would rob some of these articles of effect, would shut out litigants their
will from the civil courts, would make the assertion of their rights
dependent upon the selection for prosecution of the proper criminal
offender, and render recovery doubtful by reason of the strict rules of proof
prevailing in criminal actions. Even if these articles had always stood alone,
such a construction would be unnecessary, but clear light is thrown upon
their meaning by the provisions of the Law of Criminal Procedure of Spain
(Ley de Enjuiciamiento Criminal), which, though n ever in actual force in
these Islands, was formerly given a suppletory or explanatory effect. Under
article 111 of this law, both classes of action, civil and criminal, might be
prosecuted jointly or separately, but while the penal action was pending the
civil was suspended. According to article 112, the penal action once started,
the civil remedy should be sought therewith, unless it had been waived by
the party injured or been expressly reserved by him for civil proceedings for
the future. If the civil action alone was prosecuted, arising out of a crime
that could be enforced by only on private complaint, the penal action
thereunder should be extinguished. These provisions are in harmony with
those of articles 23 and 133 of our Penal Code on the same subject.
An examination of this topic might be carried much further, but the citations
of these articles suffices to show that the civil liability was not intended to
be merged in the criminal nor even to be suspended thereby, except as
expressly provided by law. Where an individual is civilly liable for a
negligent act or omission, it is not required that the inured party should
seek out a third person criminally liable whose prosecution must be a
condition precedent to the enforcement of the civil right.
Under article 20 of the Penal Code the responsibility of an employer may be
regarded as subsidiary in respect of criminal actions against his employees
only while they are process of prosecution, or in so far as they determinate
the existence of the criminal act from which liability arises, and his
obligation under the civil law and its enforcement in the civil courts is not
barred thereby unless by election of the injured person. Inasmuch as no
criminal in question, the provisions of the Penal Code can not affect this
action. This construction renders it unnecessary to finally determine here
whether this subsidiary civil liability in penal actions survived the laws that
fully regulated it or has been abrogated by the American civil and criminal
procedure now in force in the Philippines.
The difficulty in construing the articles of the code above cited in this case
appears from the briefs before us to have arisen from the interpretation of
the words of article 1093, "fault or negligence not punished by law," as
applied to the comprehensive definition of offenses in articles 568 and 590
of the Penal Code. It has been shown that the liability of an employer
arising out of his relation to his employee who is the offender is not to be
regarded as derived from negligence punished by the law, within the
meaning of articles 1092 and 1093. More than this, however, it can not be
said to fall within the class of acts unpunished by the law, the consequences
of which are regulated by articles 1902 and 1903 of the Civil Code. The acts

18

to which these articles are applicable are understood to be those and

growing out of preexisting duties of the parties to one another. But were
relations already formed give rise to duties, whether springing from
contract or quasi contract, then breaches of those duties are subject to
articles 1101, 1103, and 1104, of the same code. A typical application of
the distinction may be found in the consequences of a railway accident due
to defective machinery supplied by the employer. His liability to his
employee would arise out of the contract of employment, that to the
passengers out of the contract for passage. while that to that injured
bystander would originate in the negligent act itself. This distinction is thus
clearly set forth by Manresa in his commentary on article 1093.
We are with reference to such obligations, that culpa, or negligence, may
be understood in two difference senses; either as culpa, substantive and
independent, which on account of its origin arises in an obligation between
two persons not formerly bound by any other obligation; or as an incident
in the performance of an obligation; or as already existed, which can not be
presumed to exist without the other, and which increases the liability
arising from the already exiting obligation.
Of these two species of culpa the first one mentioned, existing by itself,
may be also considered as a real source of an independent obligation, and,
as chapter 2, title 16 of this book of the code is devoted to it, it is logical to
presume that the reference contained in article 1093 is limited thereto and
that it does not extend to those provisions relating to the other species of
culpa (negligence), the nature of which we will discuss later. (Vol. 8, p. 29.)
And in his commentary on articles 1102 and 1104 he says that these two
species of negligence may be somewhat inexactly described as contractual
and extra-contractual, the letter being the culpa aquiliana of the Roman law
and not entailing so strict an obligation as the former. This terminology is
unreservedly accepted by Sanchez-Roman (Derecho Civil, fourth section,
Chapter XI, Article II, No. 12), and the principle stated is supported be
decisions of the supreme court of Spain, among them those of November
20, 1896 (80 Jurisprudencia Civil, No. 151), and June 27, 1894 (75
Jurisprudencia Civil, No. 182). The contract is one for hire and not one of
mandate. (March 10, 1897, 81 Jurisprudencia Civil, No. 107.)
Spanish Jurisprudencia prior to the adoption of the Working Men's Accident
Law of January 30, 1900, throws uncertain light on the relation between
master and workman. Moved by the quick industrial development of their
people, the courts of France early applied to the subject the principles
common to the law of both countries, which are lucidly discussed by the
leading French commentators.
The original French theory, resting the responsibility of owners of industrial
enterprises upon articles 1382, 1383, and 1384 of the Code Napoleon,
corresponding in scope to articles 1902 and 1903 of the Spanish Code, soon
yielded to the principle that the true basis is the contractual obligation of
the employer and employee. (See 18 Dalloz, 196, Title Travail, 331.)
Later the hardships resulting from special exemptions inserted in contracts
for employment led to the discovery of a third basis for liability in an article
of he French Code making the possessor of any object answerable for
damage done by it while in his charge. Our law having no counterpart of

19

this article, applicable to every kind of object, we need consider neither the
theory growing out of it nor that of "professional risk" more recently
imposed by express legislation, but rather adopting the interpretation of our
Civil Code above given, find a rule for this case in the contractual
obligation. This contractual obligation, implied from the relation and
perhaps so inherent in its nature to be invariable by the parties, binds the
employer to provide safe appliances for the use of the employee, thus
closely corresponding to English and American Law. On these principles it
was the duty of the defendant to build and to maintain its track in
reasonably sound condition, so as to protect its workingmen from
unnecessary danger. It is plain that in one respect or the other it failed in
its duty, otherwise the accident could not have occurred; consequently the
negligence of the defendant is established.
Another contention of the defense is that the injury resulted to the plaintiff
as a risk incident to his employment and, as such, one assumed by him. It
is evident that this can not be the case if the occurrence was due to the
failure to repair the track or to duly inspect, it for the employee is not
presumed to have stipulated that the employer might neglect his legal duty.
Nor may it be excused upon the ground that the negligence leading to the
accident was that of a fellow-servant of the injured man. It is not apparent
to us that the intervention of a third person can relieve the defendant from
the performance of its duty nor impose upon the plaintiff the consequences
of an act or omission not his own. Sua cuique culpa nocet. This doctrine,
known as "the fellow-servant, rule," we are not disposed to introduce into
our jurisprudence. Adopted in England by Lord Abinger in the case of
Prescott vs. Fowler (3 Meeson & Welsby, 1) in 1837, it has since been
effectually abrogated by "the Employers' Liability Acts" and the
"Compensation Law." The American States which applied it appear to be
gradually getting rid of it; for instance, the New York State legislature of
1906 did away with it in respect to railroad companies, and had in hand a
scheme for its total abolition. It has never found place in the civil law of
continental Europe. (Dalloz, vol. 39, 1858, Title Responsibilite, 630, and
vol. 15, 1895, same title, 804. Also more recent instances in FuzierHerman, Title Responsibilite Civile, 710.)
The French Cour de Cassation clearly laid down the contrary principle in its
judgment of June 28, 1841, in the case of Reygasse, and has since adhered
to it.
The most controverted question in the case is that of the negligence of the
plaintiff, contributing to the accident, to what extent it existed in fact and
what legal effect is to be given it. In two particulars is he charged with
carelessness:
First. That having noticed the depression in the track he continued his
work; and
Second. That he walked on the ends of the ties at the side of the car
instead of along the boards, either before or behind it.
As to the first point, the depression in the track night indicate either a
serious or a rival difficulty. There is nothing in the evidence to show that
the plaintiff did or could see the displaced timber underneath the sleeper.
The claim that he must have done so is a conclusion drawn from what is

20

assumed to have been a probable condition of things not before us, rather
than a fair inference from the testimony. While the method of construction
may have been known to the men who had helped build the road, it was
otherwise with the plaintiff who had worked at this job less than two days.
A man may easily walk along a railway without perceiving a displacement of
the underlying timbers. The foreman testified that he knew the state of the
track on the day of the accident and that it was then in good condition, and
one Danridge, a witness for the defendant, working on the same job, swore
that he never noticed the depression in the track and never saw any bad
place in it. The sagging of the track this plaintiff did perceive, but that was
reported in his hearing to the foreman who neither promised nor refused to
repair it. His lack of caution in continuing at his work after noticing the
slight depression of the rail was not of so gross a nature as to constitute
negligence, barring his recovery under the severe American rule. On this
point we accept the conclusion of the trial judge who found as facts that
"the plaintiff did not know the cause of the one rail being lower than then
other" and "it does not appear in this case that the plaintiff knew before the
accident occurred that the stringers and rails joined in the same place."
Were we not disposed to agree with these findings they would,
nevertheless, be binding upon us, because not "plainly and manifestly
against the weight of evidence," as those words of section 497, paragraph 3
of the Code of Civil Procedure were interpreted by the Supreme Court of the
United States in the De la Rama case (201 U. S., 303).
In respect of the second charge of negligence against the plaintiff, the
judgment below is not so specific. While the judge remarks that the
evidence does not justify the finding that the car was pulled by means of a
rope attached to the front end or to the rails upon it, and further that the
circumstances in evidence make it clear that the persons necessary to
operate the car could not walk upon the plank between the rails and that,
therefore, it was necessary for the employees moving it to get hold upon it
as best they could, there is no specific finding upon the instruction given by
the defendant to its employees to walk only upon the planks, nor upon the
necessity of the plaintiff putting himself upon the ties at the side in order to
get hold upon the car. Therefore the findings of the judge below leave the
conduct of the plaintiff in walking along the side of the loaded car, upon the
open ties, over the depressed track, free to our inquiry.
While the plaintiff and his witnesses swear that not only were they not
forbidden to proceed in this way, but were expressly directed by the
foreman to do so, both the officers of the company and three of the
workmen testify that there was a general prohibition frequently made
known to all the gang against walking by the side of the car, and the
foreman swears that he repeated the prohibition before the starting of this
particular load. On this contradiction of proof we think that the
preponderance is in favor of the defendant's contention to the extent of the
general order being made known to the workmen. If so, the disobedience of
the plaintiff in placing himself in danger contributed in some degree to the
injury as a proximate, although not as its primary cause. This conclusion
presents sharply the question, What effect is to be given such an act of

21

contributory negligence? Does it defeat a recovery, according to the

American rule, or is it to be taken only in reduction of damages?
While a few of the American States have adopted to a greater or less extent
the doctrine of comparative negligence, allowing a recovery by a plaintiff
whose own act contributed to his injury, provided his negligence was slight
as compared with that of the defendant, and some others have accepted
the theory of proportional damages, reducing the award to a plaintiff in
proportion to his responsibility for the accident, yet the overwhelming
weight of adjudication establishes the principle in American jurisprudence
that any negligence, however slight, on the part of the person injured which
is one of the causes proximately contributing to his injury, bars his
recovery. (English and American Encyclopedia of law, Titles "Comparative
Negligence" and Contributory Negligence.")
In Grant Trunk Railway Company vs. Ives (144 U. S., 408, at page 429) the
Supreme Court of the United States thus authoritatively states the present
rule of law:
Although the defendant's' negligence may have been the primary cause of
the injury complained of, yet an action for such injury can not be
maintained if the proximate and immediate cause of the injury can be
traced to the want of ordinary care and caution in the person injured;
subject to this qualification, which has grown up in recent years (having
been first enunciated in Davies vs. Mann, 10 M. & W., 546) that the
contributory negligence of the party injured will not defeat the action if it be
shown that the defendant might, by the exercise of reasonable care and
prudence, have avoided the consequences of the injured party's negligence.
There are may cases in the supreme court of Spain in which the defendant
was exonerated, but when analyzed they prove to have been decided either
upon the point that he was not negligent or that the negligence of the
plaintiff was the immediate cause of the casualty or that the accident was
due to casus fortuitus. Of the first class in the decision of January 26, 1887
(38 Jurisprudencia Criminal, No. 70), in which a railway employee, standing
on a car, was thrown therefrom and killed by the shock following the
backing up of the engine. It was held that the management of the train and
engine being in conformity with proper rules of the company, showed no
fault on its part.
Of the second class are the decision of the 15th of January, the 19th of
February, and the 7th of March, 1902, stated in Alcubilla's Index of that
year; and of the third class the decision of the 4th of June, 1888 (64
Jurisprudencia Civil, No. 1), in which the breaking down of plaintiff's dam by
the logs of the defendant impelled against it by the Tajo River, was held
due to a freshet as a fortuitous cause.
The decision of the 7th of March, 1902, on which stress has been laid,
rested on two bases, one, that the defendant was not negligent, because
expressly relieved by royal order from the common obligation imposed by
the police law of maintaining a guard at the road crossing; the other,
because the act of the deceased in driving over level ground with
unobstructed view in front of a train running at speed, with the engine
whistle blowing was the determining cause of the accident. It is plain that
the train was doing nothing but what it had a right to do and that the only

22

fault lay with the injured man. His negligence was not contributory, it was
sole, and was of such an efficient nature that without it no catastrophe
could have happened.
On the other hand, there are many cases reported in which it seems plain
that the plaintiff sustaining damages was not free from contributory
negligence; for instance, the decision of the 14th of December, 1894 (76
Jurisprudencia Civil, No. 134), in which the owner of a building was held
liable for not furnishing protection to workmen engaged in hanging out
flags, when the latter must have perceived beforehand the danger
attending the work.
None of those cases define the effect to be given the negligence of a
plaintiff which contributed to his injury as one of its causes, though not the
principal one, and we are left to seek the theory of the civil law in the
practice of other countries.
In France in the case of Marquant, August 20, 1879, the cour de cassation
held that the carelessness of the victim did not civilly relieve the person
without whose fault the accident could not have happened, but that the
contributory negligence of the injured man had the effect only of reducing
the damages. The same principle was applied in the case of Recullet,
November 10, 1888. and that of Laugier of the 11th of November, 1896.
(Fuzier-Herman, Title Responsibilite Cirile, 411, 412.) Of like tenor are
citations in Dalloz (vol. 18, 1806, Title Trail, 363, 364, and vol. 15, 1895,
Title Responsibilite, 193, 198).
In the Canadian Province of Quebee, which has retained for the most part
the French Civil Law, now embodied in a code following the Code Napoleon,
a practice in accord with that of France is laid down in many cases collected
in the annotations to article 1053 of the code edited by Beauchamps, 1904.
One of these is Luttrell vs. Trottier, reported in La Revue de Jurisprudence,
volume 6, page 90, in which the court of Kings bench, otherwise known as
the court of appeals, the highest authority in the Dominion of Canada on
points of French law, held that contributory negligence did not exonerate
the defendants whose fault had been the immediate cause of the accident,
but entitled him to a reduction of damages. Other similar cases in the
provincial courts have been overruled by appellate tribunals made up of
common law judges drawn from other provinces, who have preferred to
impose uniformally throughout the Dominion the English theory of
contributory negligence. Such decisions throw no light upon the doctrines of
the civil law. Elsewhere we find this practice embodied in legislation; for
instance, section 2 of article 2398 of the Code of Portugal reads as follows:
If in the case of damage there was fault or negligence on the part of the
person injured or in the part of some one else, the indemnification shall be
reduced in the first case, and in the second case it shall be appropriated in
proportion to such fault or negligence as provided in paragraphs 1 and 2 of
section 2372.
And in article 1304 of the Austrian Code provides that the victim who is
partly changeable with the accident shall stand his damages in proportion to
his fault, but when that proportion is incapable of ascertainment, he shall
share the liability equally with the person principally responsible. The
principle of proportional damages appears to be also adopted in article 51 of

23

the Swiss Code. Even in the United States in admirality jurisdictions, whose
principles are derived from the civil law, common fault in cases of collision
have been disposed of not on the ground of contradictor negligence, but on
that of equal loss, the fault of the one part being offset against that of the
other. (Ralli vs. Troop, 157 U. S. 386; 97.)
The damage of both being added together and the sum equally divided, a
decree is entered in favor of the vessel sustaining the greater loss against
the other for the excess of her damages over one-half of the aggregate
sum. (The Manitoba, 122 U. S., 97)
Exceptional practice appears to prevail in maritime law in other
jurisdictions. The Spanish Code of Commerce, article 827, makes each
vessel for its own damage when both are the fault; this provision restricted
to a single class of the maritime accidents, falls for short of a recognition of
the principle of contributory negligence as understood in American Law,
with which, indeed, it has little in common. This is a plain from other
articles of the same code; for instance, article 829, referring to articles 826,
827, and 828, which provides: "In the cases above mentioned the civil
action of the owner against the person liable for the damage is reserved, as
well as the criminal liability which may appear."
The rule of the common law, a hard and fast one, not adjustable with
respects of the faults of the parties, appears to have grown out the original
method of trial by jury, which rendered difficult a nice balancing of
responsibilities and which demanded an inflexible standard as a safeguard
against too ready symphaty for the injured. It was assumed that an exact
measure of several concurring faults was unattainable.
The reason why, in cases of mutual concurring negligence, neither party
can maintain an action against the other, is, not the wrong of the one is set
off against the wrong of the other; it that the law can not measure how
much of the damage suffered is attributable to the plaintiff's own fault. If he
were allowed to recover, it might be that he would obtain from the other
party compensation for hiss own misconduct. (Heil vs. Glanding, 42 Penn.
St. Rep., 493, 499.)
The parties being mutually in fault, there can be no appointment of
damages. The law has no scales to determine in such cases whose
wrongdoing weighed most in the compound that occasioned the mischief.
(Railroad vs. Norton, 24 Penn. St. 565, 469.)
Experience with jury trials in negligence cases has brought American courts
to review to relax the vigor of the rule by freely exercising the power of
setting aside verdicts deemed excessive, through the device of granting
new trials, unless reduced damages are stipulated for, amounting to a
partial revision of damages by the courts. It appears to us that the control
by the court of the subject matter may be secured on a moral logical basis
and its judgment adjusted with greater nicety to the merits of the litigants
through the practice of offsetting their respective responsibilities. In the
civil law system the desirable end is not deemed beyond the capacity of its
tribunals.
Whatever may prove to be the doctrine finally adopted in Spain or in other
countries under the stress and counter stress of novel schemers of
legislation, we find the theory of damages laid down in the judgment the

24

most consistent with the history and the principals of our law in these
Islands and with its logical development.
Difficulty seems to be apprehended in deciding which acts of the injured
party shall be considered immediate causes of the accident. The test is
simple. Distinction must be between the accident and the injury, between
the event itself, without which there could have been no accident, and
those acts of the victim not entering into it, independent of it, but
contributing under review was the displacement of the crosspiece or the
failure to replace it. this produced the event giving occasion for damages
that is, the shinking of the track and the sliding of the iron rails. To this
event, the act of the plaintiff in walking by the side of the car did not
contribute, although it was an element of the damage which came to
himself. Had the crosspiece been out of place wholly or partly thorough his
act of omission of duty, the last would have been one of the determining
causes of the event or accident, for which he would have been responsible.
Where he contributes to the principal occurrence, as one of its determining
factors, he can not recover. Where, in conjunction with the occurrence, he
contributes only to his own injury, he may recover the amount that the
defendant responsible for the event should pay for such injury, less a sum
deemed a suitable equivalent for his own imprudence.
Accepting, though with some hesitation, the judgment of the trial court,
fixing the damage incurred by the plaintiff at 5,000 pesos, the equivalent of
2,500 dollars, United States money, we deduct therefrom 2,500 pesos, the
amount fairly attributable to his negligence, and direct judgment to be
entered in favor of the plaintiff for the resulting sum of 2,500 pesos, with
cost of both instances, and ten days hereafter let the case be remanded to
the court below for proper action. So ordered.

G.R. No. 129792 December 21, 1999

JARCO MARKETING CORPORATION, LEONARDO KONG, JOSE TIOPE
and
ELISA
PANELO,
petitioners,
vs.
HONORABLE COURT OF APPEALS, CONRADO C. AGUILAR and
CRISELDA R. AGUILAR, respondents.
DAVIDE, JR., J.:
In this petition for review on certiorari under Rule 45 of the Rules of Court,
petitioners seek the reversal of the 17 June 1996 decision 1 of the Court of
Appeals in C.A. G.R. No. CV 37937 and the resolution 2 denying their
motion for reconsideration. The assailed decision set aside the 15 January
1992 judgment of the Regional Trial Court (RTC), Makati City, Branch 60 in
Civil Case No. 7119 and ordered petitioners to pay damages and attorney's
fees to private respondents Conrado and Criselda (CRISELDA) Aguilar.
Petitioner Jarco Marketing Corporation is the owner of Syvel's Department
Store, Makati City. Petitioners Leonardo Kong, Jose Tiope and Elisa Panelo
are the store's branch manager, operations manager, and supervisor,
respectively. Private respondents are spouses and the parents of Zhieneth
Aguilar (ZHIENETH).

25

In the afternoon of 9 May 1983, CRISELDA and ZHIENETH were at the 2nd
floor of Syvel's Department Store, Makati City. CRISELDA was signing her
credit card slip at the payment and verification counter when she felt a
sudden gust of wind and heard a loud thud. She looked behind her. She
then beheld her daughter ZHIENETH on the floor, her young body pinned by
the bulk of the store's gift-wrapping counter/structure. ZHIENETH was
crying and screaming for help. Although shocked, CRISELDA was quick to
ask the assistance of the people around in lifting the counter and retrieving
ZHIENETH from the floor. 3
ZHIENETH was quickly rushed to the Makati Medical Center where she was
operated on. The next day ZHIENETH lost her speech and thereafter
communicated with CRISELDA by writing on a magic slate. The injuries she
sustained took their toil on her young body. She died fourteen (14) days
after the accident or on 22 May 1983, on the hospital bed. She was six
years old. 4
The cause of her death was attributed to the injuries she sustained. The
provisional medical certificate 5 issued by ZHIENETH's attending doctor
described the extent of her injuries:
Diagnoses:
1. Shock, severe, sec. to intra-abdominal injuries due to blunt injury
2. Hemorrhage, massive, intraperitoneal sec. to laceration, (L) lobe liver
3. Rupture, stomach, anterior & posterior walls
4. Complete transection, 4th position, duodenum
5. Hematoma, extensive, retroperitoneal
6. Contusion, lungs, severe
CRITICAL
After the burial of their daughter, private respondents demanded upon
petitioners the reimbursement of the hospitalization, medical bills and wake
and funeral expenses 6 which they had incurred. Petitioners refused to pay.
Consequently, private respondents filed a complaint for damages, docketed
as Civil Case No. 7119 wherein they sought the payment of P157,522.86 for
actual damages, P300,000 for moral damages, P20,000 for attorney's fees
and an unspecified amount for loss of income and exemplary damages.
In their answer with counterclaim, petitioners denied any liability for the
injuries and consequent death of ZHIENETH. They claimed that CRISELDA
was negligent in exercising care and diligence over her daughter by allowing
her to freely roam around in a store filled with glassware and appliances.
ZHIENETH too, was guilty of contributory negligence since she climbed the
counter, triggering its eventual collapse on her. Petitioners also emphasized
that the counter was made of sturdy wood with a strong support; it never
fell nor collapsed for the past fifteen years since its construction.
Additionally, petitioner Jarco Marketing Corporation maintained that it
observed the diligence of a good father of a family in the selection,
supervision and control of its employees. The other petitioners likewise
raised due care and diligence in the performance of their duties and
countered that the complaint was malicious for which they suffered
besmirched reputation and mental anguish. They sought the dismissal of
the complaint and an award of moral and exemplary damages and
attorney's fees in their favor.

26

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

27

had been in existence for several years without any prior accident and was
deliberately placed at a corner to avoid such accidents. Truth to tell, they
acted without fault or negligence for they had exercised due diligence on
the matter. In fact, the criminal case 10 for homicide through simple
negligence filed by private respondents against the individual petitioners
was dismissed; a verdict of acquittal was rendered in their favor.
The Court of Appeals, however, decided in favor of private respondents and
reversed the appealed judgment. It found that petitioners were negligent in
maintaining a structurally dangerous counter. The counter was shaped like
an inverted "L" 11 with a top wider than the base. It was top heavy and the
weight of the upper portion was neither evenly distributed nor supported by
its narrow base. Thus, the counter was defective, unstable and dangerous;
a downward pressure on the overhanging portion or a push from the front
could cause the counter to fall. Two former employees of petitioners had
already previously brought to the attention of the management the danger
the counter could cause. But the latter ignored their concern. The Court of
Appeals faulted the petitioners for this omission, and concluded that the
incident that befell ZHIENETH could have been avoided had petitioners
repaired the defective counter. It was inconsequential that the counter had
been in use for some time without a prior incident.
The Court of Appeals declared that ZHIENETH, who was below seven (7)
years old at the time of the incident, was absolutely incapable of negligence
or other tort. It reasoned that since a child under nine (9) years could not
be held liable even for an intentional wrong, then the six-year old
ZHIENETH could not be made to account for a mere mischief or reckless
act. It also absolved CRISELDA of any negligence, finding nothing wrong or
out of the ordinary in momentarily allowing ZHIENETH to walk while she
signed the document at the nearby counter.
The Court of Appeals also rejected the testimonies of the witnesses of
petitioners. It found them biased and prejudiced. It instead gave credit to
the testimony of disinterested witness Gonzales. The Court of Appeals then
awarded P99,420.86 as actual damages, the amount representing the
hospitalization expenses incurred by private respondents as evidenced by
the hospital's statement of account. 12 It denied an award for funeral
expenses for lack of proof to substantiate the same. Instead, a
compensatory damage of P50,000 was awarded for the death of ZHIENETH.
We quote the dispositive portion of the assailed decision, 13 thus:
WHEREFORE, premises considered, the judgment of the lower court is SET
ASIDE and another one is entered against [petitioners], ordering them to
pay jointly and severally unto [private respondents] the following:
1. P50,000.00 by way of compensatory damages for the death of Zhieneth
Aguilar, with legal interest (6% p.a.) from 27 April 1984;
2. P99,420.86 as reimbursement for hospitalization expenses incurred; with
legal interest (6% p.a.) from 27 April 1984;
3. P100,000.00 as moral and exemplary damages;
4. P20,000.00 in the concept of attorney's fees; and
5. Costs.
Private respondents sought a reconsideration of the decision but the same
was denied in the Court of Appeals' resolution 14 of 16 July 1997.

28

Petitioners now seek the reversal of the Court of Appeals' decision and the
reinstatement of the judgment of the trial court. Petitioners primarily argue
that the Court of Appeals erred in disregarding the factual findings and
conclusions of the trial court. They stress that since the action was based
on tort, any finding of negligence on the part of the private respondents
would necessarily negate their claim for damages, where said negligence
was the proximate cause of the injury sustained. The injury in the instant
case was the death of ZHIENETH. The proximate cause was ZHIENETH's act
of clinging to the counter. This act in turn caused the counter to fall on her.
This and CRISELDA's contributory negligence, through her failure to provide
the proper care and attention to her child while inside the store, nullified
private respondents' claim for damages. It is also for these reasons that
parents are made accountable for the damage or injury inflicted on others
by their minor children. Under these circumstances, petitioners could not be
held responsible for the accident that befell ZHIENETH.
Petitioners also assail the credibility of Gonzales who was already separated
from Syvel's at the time he testified; hence, his testimony might have been
tarnished by ill-feelings against them.
For their part, private respondents principally reiterated their arguments
that neither ZHIENETH nor CRISELDA was negligent at any time while
inside the store; the findings and conclusions of the Court of Appeals are
substantiated by the evidence on record; the testimony of Gonzales, who
heard ZHIENETH comment on the incident while she was in the hospital's
emergency room should receive credence; and finally, ZHIENETH's part of
the res gestae declaration "that she did nothing to cause the heavy
structure to fall on her" should be considered as the correct version of the
gruesome events.
We deny the petition.
The two issues to be resolved are: (1) whether the death of ZHIENETH was
accidental or attributable to negligence; and (2) in case of a finding of
negligence, whether the same was attributable to private respondents for
maintaining a defective counter or to CRISELDA and ZHIENETH for failing to
exercise due and reasonable care while inside the store premises.
An accident pertains to an unforeseen event in which no fault or negligence
attaches to the defendant. 15 It is "a fortuitous circumstance, event or
happening; an event happening without any human agency, or if happening
wholly or partly through human agency, an event which under the
circumstances is unusual or unexpected by the person to whom it happens."
16

On the other hand, negligence is the omission to do something which a

reasonable man, guided by those considerations which ordinarily regulate
the conduct of human affairs, would do, or the doing of something which a
prudent and reasonable man would not do. 17 Negligence is "the failure to
observe, for the protection of the interest of another person, that degree of
care, precaution and vigilance which the circumstances justly demand,
whereby such other person suffers injury." 18
Accident and negligence are intrinsically contradictory; one cannot exist
with the other. Accident occurs when the person concerned is exercising

29

ordinary care, which is not caused by fault of any person and which could
not have been prevented by any means suggested by common prudence. 19
The test in determining the existence of negligence is enunciated in the
landmark case of Plicart v. Smith, 20 thus: Did the defendant in doing the
alleged negligent act use that reasonable care and caution which an
ordinarily prudent person would have used in the same situation? If not,
then he is guilty of negligence. 21
We rule that the tragedy which befell ZHIENETH was no accident and that
ZHIENETH's death could only be attributed to negligence.
We quote the testimony of Gerardo Gonzales who was at the scene of the
incident and accompanied CRISELDA and ZHIENETH to the hospital:
Q While at the Makati Medical Center, did you hear or notice anything while
the child was being treated?
A At the emergency room we were all surrounding the child. And when the
doctor asked the child "what did you do," the child said "nothing, I did not
come near the counter and the counter just fell on me."
Q (COURT TO ATTY. BELTRAN)
You want the words in Tagalog to be translated?
ATTY. BELTRAN
Yes, your Honor.
COURT
Granted. Intercalate "wala po, hindi po ako lumapit doon. Basta
bumagsak." 22
This testimony of Gonzales pertaining to ZHIENETH's statement formed
(and should be admitted as) part of the res gestae under Section 42, Rule
130 of the Rules of Court, thus:
Part of res gestae. Statements made by a person while a startling
occurrence is taking place or immediately prior or subsequent thereto with
respect to the circumstances thereof, may be given in evidence as part of
the res gestae. So, also, statements accompanying an equivocal act
material to the issue, and giving it a legal significance, may be received as
part of the res gestae.
It is axiomatic that matters relating to declarations of pain or suffering and
statements made to a physician are generally considered declarations and
admissions. 23 All that is required for their admissibility as part of the res
gestae is that they be made or uttered under the influence of a startling
event before the declarant had the time to think and concoct a falsehood as
witnessed by the person who testified in court. Under the circumstances
thus described, it is unthinkable for ZHIENETH, a child of such tender age
and in extreme pain, to have lied to a doctor whom she trusted with her
life. We therefore accord credence to Gonzales' testimony on the matter,
i.e., ZHIENETH performed no act that facilitated her tragic death. Sadly,
petitioners did, through their negligence or omission to secure or make
stable the counter's base.
Gonzales' earlier testimony on petitioners' insistence to keep and maintain
the structurally unstable gift-wrapping counter proved their negligence,
thus:
Q When you assumed the position as gift wrapper at the second floor, will
you please describe the gift wrapping counter, were you able to examine?

30

A Because every morning before I start working I used to clean that counter
and since not nailed and it was only standing on the floor, it was shaky.
xxx xxx xxx
Q Will you please describe the counter at 5:00 o'clock [sic] in the afternoon
on [sic] May 9 1983?
A At that hour on May 9, 1983, that counter was standing beside the
verification counter. And since the top of it was heavy and considering that
it was not nailed, it can collapse at anytime, since the top is heavy.
xxx xxx xxx
Q And what did you do?
A I informed Mr. Maat about that counter which is [sic] shaky and since Mr.
Maat is fond of putting display decorations on tables, he even told me that I
would put some decorations. But since I told him that it not [sic] nailed and
it is shaky he told me "better inform also the company about it." And since
the company did not do anything about the counter, so I also did not do
anything about the counter. 24 [Emphasis supplied]
Ramon Guevarra, another former employee, corroborated the testimony of
Gonzales, thus:
Q Will you please described [sic] to the honorable Court the counter where
you were assigned in January 1983?
xxx xxx xxx
A That counter assigned to me was when my supervisor ordered me to
carry that counter to another place. I told him that the counter needs
nailing and it has to be nailed because it might cause injury or accident to
another since it was shaky.
Q When that gift wrapping counter was transferred at the second floor on
February 12, 1983, will you please describe that to the honorable Court?
A I told her that the counter wrapper [sic] is really in good [sic] condition; it
was shaky. I told her that we had to nail it.
Q When you said she, to whom are you referring to [sic]?
A I am referring to Ms. Panelo, sir.
Q And what was the answer of Ms. Panelo when you told her that the
counter was shaky?
A She told me "Why do you have to teach me. You are only my subordinate
and you are to teach me?" And she even got angry at me when I told her
that.
xxx xxx xxx
Q From February 12, 1983 up to May 9, 1983, what if any, did Ms. Panelo
or any employee of the management do to that (sic)
xxx xxx xxx
Witness:
None, sir. They never nailed the counter. They only nailed the counter after
the accident happened. 25 [Emphasis supplied]
Without doubt, petitioner Panelo and another store supervisor were
personally informed of the danger posed by the unstable counter. Yet,
neither initiated any concrete action to remedy the situation nor ensure the
safety of the store's employees and patrons as a reasonable and ordinary
prudent man would have done. Thus, as confronted by the situation

31

petitioners miserably failed to discharge the due diligence required of a

good father of a family.
On the issue of the credibility of Gonzales and Guevarra, petitioners failed
to establish that the former's testimonies were biased and tainted with
partiality. Therefore, the allegation that Gonzales and Guevarra's
testimonies were blemished by "ill feelings" against petitioners since they
(Gonzales and Guevarra) were already separated from the company at the
time their testimonies were offered in court was but mere speculation
and deserved scant consideration.
It is settled that when the issue concerns the credibility of witnesses, the
appellate courts will not as a general rule disturb the findings of the trial
court, which is in a better position to determine the same. The trial court
has the distinct advantage of actually hearing the testimony of and
observing the deportment of the witnesses. 26 However, the rule admits of
exceptions such as when its evaluation was reached arbitrarily or it
overlooked or failed to appreciate some facts or circumstances of weight
and substance which could affect the result of the case. 27 In the instant
case, petitioners failed to bring their claim within the exception.
Anent the negligence imputed to ZHIENETH, we apply the conclusive
presumption that favors children below nine (9) years old in that they are
incapable of contributory negligence. In his book, 28 former Judge Cezar S.
Sangco stated:
In our jurisdiction, a person under nine years of age is conclusively
presumed to have acted without discernment, and is, on that account,
exempt from criminal liability. The same presumption and a like exemption
from criminal liability obtains in a case of a person over nine and under
fifteen years of age, unless it is shown that he has acted with discernment.
Since negligence may be a felony and a quasi-delict and required
discernment as a condition of liability, either criminal or civil, a child under
nine years of age is, by analogy, conclusively presumed to be incapable of
negligence; and that the presumption of lack of discernment or incapacity
for negligence in the case of a child over nine but under fifteen years of age
is a rebuttable one, under our law. The rule, therefore, is that a child under
nine years of age must be conclusively presumed incapable of contributory
negligence as a matter of law. [Emphasis supplied]
Even if we attribute contributory negligence to ZHIENETH and assume that
she climbed over the counter, no injury should have occurred if we accept
petitioners' theory that the counter was stable and sturdy. For if that was
the truth, a frail six-year old could not have caused the counter to collapse.
The physical analysis of the counter by both the trial court and Court of
Appeals and a scrutiny of the evidence 29 on record reveal otherwise, i.e., it
was not durable after all. Shaped like an inverted "L," the counter was
heavy, huge, and its top laden with formica. It protruded towards the
customer waiting area and its base was not secured. 30
CRISELDA too, should be absolved from any contributory negligence.
Initially, ZHIENETH held on to CRISELDA's waist, later to the latter's hand.
31
CRISELDA momentarily released the child's hand from her clutch when
she signed her credit card slip. At this precise moment, it was reasonable
and usual for CRISELDA to let go of her child. Further, at the time

32

ZHIENETH was pinned down by the counter, she was just a foot away from
her mother; and the gift-wrapping counter was just four meters away from
CRISELDA. 32 The time and distance were both significant. ZHIENETH was
near her mother and did not loiter as petitioners would want to impress
upon us. She even admitted to the doctor who treated her at the hospital
that she did not do anything; the counter just fell on her.
WHEREFORE, in view of all the foregoing, the instant petition is DENIED and
the challenged decision of the Court of Appeals of 17 June 1996 in C.A. G.R.
No. CV 37937 is hereby AFFIRMED.
Costs against petitioners.
SO ORDERED.

G.R. No. L-32611

November 3, 1930
CULION ICE, FISH AND ELECTRIC CO., INC., plaintiff-appellee,
vs.
PHILIPPINE MOTORS CORPORATION, defendant-appellant.
Gibbs
and
McDonough
for
appellant.
Benj. S. Ohnick for appellee.
STREET, J.:
This action was instituted in the Court of First Instance of Manila by the
Culion Ice, Fish & Electric Co., Inc., for the purpose of recovering from the
Philippine Motors Corporation the sum of P11,350, with interest and costs.
Upon hearing the cause the trial court gave judgment in favor of the
plaintiff to recover of the defendant the sum of P9,850, with interest at 6
per centum per annum from March 24,1927, the date of the filing of the
complaint, until satisfaction of the judgment, with costs. From this
judgment the defendant appealed.
The plaintiff and defendant are domestic corporations; and at the time of
the incident with which we are here concerned, H.D. Cranston was the
representative of the plaintiff in the City of Manila. At the same time the
plaintiff was the registered owner of the motor schooner Gwendoline, which
was used in the fishing trade in the Philippine Islands. In January, 1925,
Cranston decided, if practicable, to have the engine on the Gwendoline
changed from a gasoline consumer to a crude oil burner, expecting thereby
to effect economy in the cost of running the boat. He therefore made known
his desire to McLeod & Co., a firm dealing in tractors, and was told by Mc
Kellar, of said company, that he might make inquiries of the Philippine
Motors Corporations, which had its office on Ongpin Street, in the City of
Manila. Cranston accordingly repaired to the office of the Philippine Motors
Corporation and had a conference with C.E. Quest, its manager, who agreed
to do the job, with the understanding that payment should be made upon
completion of the work.
The Philippine Motors Corporation was at this time engaged in business as
an automobile agency, but, under its charter, it had authority to deal in all
sorts of machinery engines and motors, as well as to build, operate, buy
and sell the same and the equipment therof. Quest, as general manager,
had full charge of the corporations in all its branches.

33

As a result of the aforesaid interview, Quest, in company with Cranston,

visited the Gwendoline while it lay at anchor in the Pasig River, and the
work of effecting the change in the engine was begun and conducted under
the supervision of Quest, chiefly by a mechanic whom Quest took with him
to the boat. In this work Quest had the assistance of the members of the
crew of the Gwendoline, who had been directed by Cranston to place
themselves under Quest's directions.
Upon preliminary inspection of the engine, Quest came to the conclusion
that the principal thing necessary to accomplish the end in view was to
install a new carburetor, and a Zenith carburetor was chosen as the one
most adapted to the purpose. After this appliance had been installed, the
engine was tried with gasoline as a fuel, supplied from the tank already in
use. The result of this experiment was satisfactory. The next problem was
to introduce into the carburetor the baser fuel, consisting of a low grade of
oil mixed with distillate. For this purpose a temporary tank to contain the
mixture was placed on deck above and at a short distance from the
compartment covering the engine. This tank was connected with the
carburetor by a piece of tubing, which was apparently not well fitted at the
point where it was connected with the tank. Owing to this fact the fuel
mixture leaked from the tank and dripped sown into the engine
compartment. The new fuel line and that already in use between the
gasoline tank and carburetor were so fixed that it was possible to change
from the gasoline fuel to the mixed fuel. The purpose of this arrangement
was to enable the operator to start the engine on gasoline and then, after
the engine had been operating for a few moments, to switch to the new fuel
supply. lawphil.net
In the course of the preliminary work upon the carburetor and its
connections, it was observed that the carburetor was flooding, and that the
gasoline, or other fuel, was trickling freely from the lower part to the
carburetor to the floor. This fact was called to Quest's attention, but he
appeared to think lightly of the matter and said that, when the engine had
gotten to running well, the flooding would disappear.
After preliminary experiments and adjustments had been made the boat
was taken out into the bay for a trial run at about 5 p.m. or a little later, on
the evening of January 30,1925. The first part of the course was covered
without any untoward development, other than he fact that the engine
stopped a few times, owing no doubt to the use of an improper mixture of
fuel. In the course of the trial Quest remained outside of the engine
compartment and occupied himself with making distillate, with a view to
ascertaining what proportion of the two elements would give best results in
the engine.
As the boat was coming in from this run, at about 7:30 p.m. and when
passing near Cavite, the engine stopped, and connection again had to be
made with the gasoline line to get a new start. After this had been done the
mechanic, or engineer, switched to the tube connecting with the new
mixture. A moment later a back fire occurred in the cylinder chamber. This
caused a flame to shoot back into the carburetor, and instantly the
carburetor and adjacent parts were covered with a mass of flames, which
the members of the crew were unable to subdue. They were therefore

34

compelled, as the fire spread, to take to a boat, and their escape was safely
effected, but the Gwendoline was reduced to a mere hulk. The salvage
from, the wreck, when sold, brought only the sum of P150. The value of the
boat, before the accident occured, as the court found, was P10,000.
A study of the testimony lead us to the conclusion that the loss of this boat
was chargeable to the negligence and lack of skill of Quest. The temporary
tank in which the mixture was prepared was apparently at too great an
elevation from the carburetor, with the result that when the fuel line was
opened, the hydrostatic pressure in the carburetor was greater than the
delicate parts of the carburetor could sustain. This was no doubt the cause
of the flooding of the carburetor; and the result was that; when the back
fire occurred, the external parts of the carburetor, already saturated with
gasoline, burst into flames, whence the fire was quickly communicated to
the highly inflammable material near-by. Ordinarily a back fire from an
engine would not be followed by any disaster, but in this case the leak
along the pipe line and the flooding of the carburetor had created a
dangerous situation, which a prudent mechanic, versed in repairs of this
nature, would have taken precautions to avoid. The back fire may have
been due either to the fact that the spark was too advanced or the fuel
improperly mixed.
In this connection it must be remembered that when a person holds himself
out as being competent to do things requiring professional skill, he will be
held liable for negligence if he fails to exhibit the care and skill of one
ordinarily skilled in the particular work which he attempts to do. The proof
shows that Quest had had ample experience in fixing the engines of
automobiles and tractors, but it does not appear that he was experienced in
the doing of similar work on boats. For this reason, possibly the dripping of
the mixture form the tank on deck and the flooding of the carburetor did
not convey to his mind an adequate impression of the danger of fire. But a
person skilled in that particular sort of work would, we think have been
sufficiently warned from those circumstances to cause him to take greater
and adequate precautions against the danger. In other words Quest did not
use the skill that would have been exhibited by one ordinarily expert in
repairing gasoline engines on boats. There was here, in our opinion, on the
part of Quest, a blameworthy antecedent inadvertence to possible harm,
and this constitutes negligence. The burning of the Gwendoline may be said
to have resulted from accident, but this accident was in no sense an
unavoidable accident. It would not have occured but for Quest's
carelessness or lack of skill. The test of liability is not whether the injury
was accidental in a sense, but whether Quest was free from blame.
We therefore see no escape from the conclusion that this accident is
chargeable to lack of skill or negligence in effecting the changes which
Quest undertook to accomplish; and even supposing that our theory as to
the exact manner in which the accident occurred might appear to be in
some respects incorrect, yet the origin of the fire in not so inscrutable as to
enable us to say that it was casus fortuitus.
The trial judge seems to have proceeded on the idea that, inasmuch as
Quest had control of the Gwendoline during the experimental run, the
defendant corporation was in the position of a bailee and that, as a

35

consequence, the burden of proof was on the defendant to exculpate itself

from responsibility by proving that the accident was not due to the fault of
Quest. We are unable to accede to this point of view. Certainly, Quest was
not in charge of the navigation of the boat on this trial run. His employment
contemplated the installation of new parts in the engine only, and it seems
rather strained to hold that the defendant corporation had thereby become
bailee of the boat. As a rule workmen who make repairs on a ship in its
owner's yard, or a mechanic who repairs a coach without taking it to his
shop, are not bailees, and their rights and liabilities are determined by the
general rules of law, under their contract. The true bailee acquires
possession and what is usually spoken of as special property in the chattel
bailed. As a consequence of such possession and special property, the
bailee is given a lien for his compensation. These ideas seem to be
incompatible with the situation now under consideration. But though
defendant cannot be held liable in the supposition that the burden of proof
had not been sustained by it in disproving the negligence of its manager,
we are nevertheless of the opinion that the proof shows by a clear
preponderance that the accident to the Gwendoline and the damages
resulting therefrom are chargeable to the negligence or lack of skill of
Quest.
This action was instituted about two years after the accident in question
had occured, and after Quest had ceased to be manager of the defendant
corporation and had gone back to the United States. Upon these facts, the
defendant bases the contention that the action should be considered stale.
It is sufficient reply to say that the action was brought within the period
limited by the statute of limitations and the situation is not one where the
defense of laches can be properly invoked.
It results that the judgment appealed from, awarding damages to the
plaintiff in the amount of P9,850, with interest, must be affirmed; and it is
so ordered, with costs against the appellant.

G.R. No. 102383 November 26, 1992

BANK
OF
THE
PHILIPPINE
ISLANDS,
petitioner,
vs.
THE HON. COURT OF APPEALS (SEVENTH JUDICIAL), HON. JUDGE
REGIONAL TRIAL COURT OF MAKATI, BRANCH 59, CHINA BANKING
CORP., and PHILIPPINE CLEARING HOUSE CORPORATION,
respondents.
GUTIERREZ, JR., J.:
The present petition asks us to set aside the decision and resolution of the
Court of Appeals in CA-G.R. SP No. 24306 which affirmed the earlier
decision of the Regional Trial Court of Makati, Branch 59 in Civil Case No.
14911 entitled Bank of the Philippine Islands v. China Banking Corporation
and the Philippine Clearing House Corporation, the dispositive portion of
which reads:

36

WHEREFORE, premises considered, judgment is hereby rendered dismissing

petitioner-appellant's (BPI's) appeal and affirming the appealed order of
August 26, 1986 (Annex B of BPI's Petition) with modification as follows:
1. Ordering the petitioner-appellant (BPI) to pay respondent-appellee
(CBC):
(a) the amount of One Million Two Hundred Six Thousand, Six Hundred
Seven Pesos and Fifty Eight Centavos (P1,206,607.58) with interest at the
legal rate of twelve percent (12%) per annum starting August 26, 1986, the
date when the order of the PCHC Board of Directors was issued until the full
amount is finally paid; and
(b) the amount of P150,000.00 representing attorney's fees;
2. BPI shall also bear 75% or P5,437.50 and CBC, 25% or P1,812.50 of the
cost of the arbitration proceedings amounting to P7,250.00;
3. The ownership of respondent-appellee (CBC) of the other sum of One
Million Two Hundred Six Thousand Six Hundred Seven Pesos and Fifty Eight
Centavos (P1,206,607.58) previously credited to its clearing account on
August 12, 1983 per PCHC Stockholders' Resolution No. 6083 dated April 6,
1983, is hereby confirmed.
4. The PCHC is hereby directed to immediately debit the clearing account of
BPI the sum of One Million Two Hundred Six Thousand Six Hundred Pesos
and Fifty Eight Centavos (P1,206,607.58) together with its interest as
decreed in paragraph 1 (a) herein above stated and credit the same to the
clearing account of CBC;
5. The PCHC's counterclaim and cross-claim are dismissed for lack of merit;
and
6. With costs against the petitioner-appellant. (Rollo, pp. 161-162)
The controversy in this case arose from the following facts as found by the
Arbitration Committee of respondent Philippine Clearing House Corporation
in Arbicom Case No. 83-029 entitled Bank of the Philippine Island v. China
Banking Corporation:
The story underlying this case began in the afternoon of October 9, 1981
with a phone call to BPI's Money Market Department by a woman who
identified herself as Eligia G. Fernando who had a money market placement
as evidenced by a promissory note with a maturity date of November 11,
1981 and a maturity value of P2,462,243.19. The caller wanted to
preterminate the placement, but Reginaldo Eustaquio, Dealer Trainee in
BPI's Money Market Department, who received the call and who happened
to be alone in the trading room at the time, told her "trading time" was
over for the day, which was a Friday, and suggested that she call again the
following week. The promissory note the caller wanted to preterminate was
a roll-over of an earlier 50-day money market placement that had matured
on September 24, 1981.
Later that afternoon, Eustaquio conveyed the request for pretermination to
the officer who before had handled Eligia G. Fernando's account, Penelope
Bulan, but Eustaquio was left to attend to the pretermination process.
The next Monday, October 12, 1981, in the morning, the caller of the
previous Friday followed up with Eustaquio, merely by phone again, on the
pretermination of the placement. Although not familiar with the voice of the
real Eligia G. Fernando, Eustaquio "made certain" that the caller was the

37

real Eligia G. Fernando by "verifying" that the details the caller gave about
the placement tallied with the details in "the ledger/folder" of the account.
Eustaquio knew the real Eligia G. Fernando to be the Treasurer of Philippine
American Life Insurance Company (Philamlife) since he was handling
Philamlife's corporate money market account. But neither Eustaquio nor
Bulan who originally handled Fernando's account, nor anybody else at BPI,
bothered to call up Fernando at her Philamlife office to verify the request for
pretermination.
Informed that the placement would yield less than the maturity value
because of its pretermination, the caller insisted on the pretermination just
the same and asked that two checks be issued for the proceeds, one for
P1,800,000.00 and the second for the balance, and that the checks be
delivered to her office at Philamlife.
Eustaquio, thus, proceeded to prepare the "purchase order slip" for the
requested pretermination as required by office procedure, and from his
desk, the papers, following the processing route, passed through the
position analyst, securities clerk, verifier clerk and documentation clerk,
before the two cashier's checks, nos. 021759 and 021760 for
P1,800,000.00 and P613,215.16, respectively, both payable to Eligia G.
Fernando, covering the preterminated placement, were prepared. The two
cashier's checks, together with the papers consisting of the money market
placement was to be preterminated and the promissory note (No. 35623) to
be preterminated, were sent to Gerlanda E. de Castro and Celestino
Sampiton, Jr., Manager and Administrative Assistant, respectively, in BPI's
Treasury Operations Department, both authorized signatories for BPI, who
signed the two checks that very morning. Having been singed, the checks
now went to the dispatcher for delivery.
Later in the same morning, however, the same caller changed the delivery
instructions; instead of the checks being delivered to her office at
Philamlife, she would herself pick up the checks or send her niece,
Rosemarie Fernando, to pick them up. Eustaquio then told her that if it
were her niece who was going to get the checks, her niece would have to
being a written authorization from her to pick up the checks. This telephone
conversation ended with the caller's statement that "definitely" it would be
her niece, Rosemarie Fernando, who would pick up the checks. Thus,
Eustaquio had to hurriedly go to the dispatcher, Bernardo Laderas, to tell
him of the new delivery instructions for the checks; in fact, he changed the
delivery instruction on the purchase order slip, writing thereon "Rosemarie
Fernando release only with authority to pick up.
It was, in fact Rosemarie Fernando who got the two checks from the
dispatcher, as shown by the delivery receipt. Actually, as it turned out, the
same impersonated both Eligia G. Fernando and Rosemarie Fernando.
Although the checks represented the termination proceeds of Eligia G.
Fernando's placement, not just a roll-over of the placement, the dispatcher
failed to get or to require the surrender of the promissory note evidencing
the placement. There is also no showing that Eligia G. Fernando's purported
signature on the letter requesting the pretermination and the latter
authorizing Rosemarie Fernando to pick up the two checks, both of which
letters were presumably handed to the dispatcher by Rosemarie Fernando,

38

was compared or verified with Eligia G. Fernando's signature in BPI's file.

Such purported signature has been established to be forged although it has
a "close similarity" to the real signature of Eligia G. Fernando (TSN of
January 15, 1985, pp. 24 and 26).
The story's scene now shifted when, in the afternoon of October 13, 1981, a
woman who represented herself to be Eligia G. Fernando applied at CBC's
Head Office for the opening of a current account.
She was accompanied and introduced to Emily Sylianco Cuaso, Cash
Supervisor, by Antonio Concepcion whom Cuaso knew to have opened,
earlier that year, an account upon the introduction of Valentin Co, a longstanding "valued client" of CBC. What Cuaso indicated in the application
form, however, was that the new client was introduced by Valentin Co, and
with her initials on the form signifying her approval, she referred the
application to the New Accounts Section for processing. As finally proceeds,
the application form shows the signature of "Eligia G. Fernando", "her" date
of birth, sex, civil status, nationality, occupation ("business woman"), tax
account number, and initial deposit of P10,000.00. This final approval of the
new current account is indicated on the application form by the initials of
Regina G. Dy, Cashier, who did not interview the new client but affixed her
initials on the application form after reviewing it. The new current account
was given the number: 26310-3.
The following day, October 14, 1981, the woman holding herself out as
Eligia G. Fernando deposited the two checks in controversy with Current
Account No. 126310-3. Her endorsement on the two checks was found to
conform with the depositor's specimen signature. CBC's guaranty of prior
endorsements and/or lack of endorsement was then stamped on the two
checks, which CBC forthwith sent to clearing and which BPI cleared on the
same day.
Two days after, withdrawals began on Current Account No. 26310-3: On
October 16, 1981, by means of Check No. 240005 dated the same day for
P1,000,000.00, payable to "cash", which the woman holding herself out as
Eligia G. Fernando encashed over the counter, and Check No. 240003 dated
October 15, 1981 for P48,500.00, payable to "cash" which was received
through clearing from PNB Pasay Branch; on October 19, 1981, by means
of Check No. 240006 dated the same day for P1,000,000.00, payable to
"cash," which the woman identifying herself as Eligia G. Fernando encashed
over the counter; on October 22, 1981, by means of Check No. 240007
dated the same day for P370,000.00, payable to "cash" which the woman
herself also encashed over the counter; and on November 4, 1981, by
means of Check No. 240001 dated November 3, 1981 for P4,100.00,
payable to "cash," which was received through clearing from Far East Bank.
All these withdrawals were allowed on the basis of the verification of the
drawer's signature with the specimen signature on file and the sufficiency of
the funds in the account. However, the balance shown in the computerized
teller terminal when a withdrawal is serviced at the counter, unlike the
ledger or usual statement prepared at month-end, does not show the
account's opening date, the amounts and dates of deposits and
withdrawals. The last withdrawal on November 4, 1981 left Current Account
No. 26310-3 with a balance of only P571.61.

39

The day of reckoning came on November 11, 1981, the maturity date of
Eligia G. Fernado's money market placement with BPI, when the real Eligia
G. Fernando went to BPI for the roll-over of her placement. She disclaimed
having preterminated her placement on October 12, 1981. She executed an
affidavit stating that while she was the payee of the two checks in
controversy, she never received nor endorsed them and that her purported
signature on the back of the checks was not hers but forged. With her
surrender of the original of the promissory note (No. 35623 with maturity
value of P2,462,243.19) evidencing the placement which matured that day,
BPI issued her a new promissory note (No. 40314 with maturity date of
December 23, 1981 and maturity value of P2,500.266.77) to evidence a
roll-over of the placement.
On November 12, 1981, supported by Eligia G. Fernando's affidavit, BPI
returned the two checks in controversy to CBC for the reason "Payee's
endorsement forged". A ping-pong started when CBC, in turn, returned the
checks for reason "Beyond Clearing Time", and the stoppage of this pingpong, as we mentioned at the outset, prompted the filing of this case.
Investigation of the fraud by the Presidential Security Command led to the
filing of criminal actions for "Estafa Thru Falsification of Commercial
Documents" against four employees of BPI, namely Quirino Victorio, Virgilio
Gayon, Bernardo Laderas and Jorge Atayan, and the woman who
impersonated Eligia G. Fernando, Susan Lopez San Juan. Victorio and
Gayon were both bookkeepers in BPI's Money Market Operations
Department, Laderas was a dispatcher in the same department. . . . (Rollo,
pp. 74-79)
The Arbitration Committee ruled in favor of petitioner BPI. The dispositive
portion of the decision reads:
WHEREFORE, we adjudge in favor of the Bank of the Philippine Islands and
hereby order China Banking Corporation to pay the former the amount of
P1,206,607.58 with interest thereon at 12% per annum from August 12,
1983, or the date when PCHC, pursuant to its procedure for compulsory
arbitration of the ping-pong checks under Stockholders' Resolution No. 6-83
was implemented, up to the date of actual payment.
Costs of suit in the total amount of P7,250.00 are to be assessed the
litigant banks in the following proportion:
a) Plaintiff BPI P1,812.50
b) Defendant China P5,437.50
Total Assessment P7,250.00
conformably with PCHC Resolution Nos. 46-83 dated October 25, 1983 and
4-85 dated February 25, 1985.
The PCHC is hereby directed to effect the corresponding entries to the
litigant banks' clearing accounts in accordance with the foregoing decision.
(Rollo, pp. 97-98)
However, upon motion for reconsideration filed by respondent CBC, the
Board of Directors of the PCHC reversed the Arbitration Committee's
decision in its Order, the dispositive portion of which reads:
WHEREFORE, the Board hereby reconsiders the Decision of the Arbitration
Committee dated March 24, 1986 in Arbicom Case No. 183-029 and in lieu
thereof, one is rendered modifying the decision so that the Complaint of BPI

40

is dismissed, and on the Counterclaim of CBC, BPI is sentenced to pay CBC

the sum of P1,206,607.58. In view of the facts, no interest nor attorney's
fees are awarded. BPI shall also bear 75% or P5,437.50 and CBC, 25% or
P1,812.50 of the cost of the Arbitration proceedings amounting to
P7,250.00.
The PCHC is hereby directed to debit the clearing account of the BPI the
sum of P1,206,607.58 and credit the same to that of CBC. The cost of
Arbitration proceedings are to be debited from the accounts of the parties in
the proportion above stated. (Rollo, pp. 112-113)
BPI then filed a petition for review of the abovestated order with the
Regional Trial Court of Makati. The trial court dismissed the petition but
modified the order as can be gleaned from the dispositive portion of its
decision quoted earlier.
Not satisfied with the trial court's decision petitioner BPI filed with us a
petition for review on certiorari under Rule 45 of the Rules of Court. The
case was docketed as G.R. No. 96376. However, in a Resolution dated
February 6, 1991, we referred the case to the Court of Appeals for proper
determination and disposition. The appellate court affirmed the trial court's
decision.
Hence, this petition.
In a resolution dated May 20, 1992 we gave due course to the petition:
Petitioner BPI now asseverates:
I
THE DECISION AND RESOLUTION OF THE RESPONDENT COURT LEAVES
THE UNDESIRABLE RESULT OF RENDERING NUGATORY THE VERY PURPOSE
FOR THE UNIFORM BANKING PRACTICE OF REQUIRING THE CLEARING
GUARANTEE OF COLLECTING BANKS.
II
CONTRARY TO THE RULING OF THE RESPONDENT COURT, THE PROXIMATE
CAUSE FOR THE LOSS OF THE PROCEEDS OF THE TWO CHECKS IN
QUESTION WAS THE NEGLIGENCE OF THE EMPLOYEES OF CBC AND NOT
BPI; CONSEQUENTLY, EVEN UNDER SECTION 23 OF THE NEGOTIABLE
INSTRUMENTS LAW, BPI WAS NOT PRECLUDED FROM RAISING THE
DEFENSE OF FORGERY.
III
THE RESPONDENT COURT COMMITTED REVERSIBLE ERROR IN FAILING TO
APPRECIATE THE FACT THAT CBC HAD THE "LAST CLEAR CHANCE" OF
AVOIDING THE LOSS OCCASIONED BY THE FRAUDULENT ACTS INVOLVED
IN THE INSTANT CASE. (Rollo, p. 24)
The main issues raised in the assignment of errors are: When a bank (in
this case CBC) presents checks for clearing and payment, what is the extent
of the bank's warranty of the validity of all prior endorsements stamped at
the back of the checks? In the event that the payee's signature is forged,
may the drawer/drawee bank (in this case BPI) claim reimbursement from
the collecting bank [CBC] which earlier paid the proceeds of the checks
after the same checks were cleared by petitioner BPI through the PCHC?
Anent the first issue, petitioner BPI contends that respondent CBC's clear
warranty that "all prior endorsements and/or lack of endorsements
guaranteed" stamped at the back of the checks was an unrestrictive

41

clearing guaranty that all prior endorsements in the checks are genuine.
Under this premise petitioner BPI asserts that the presenting or collecting
bank, respondent CBC, had an unquestioned liability when it turned out that
the payee's signature on the checks were forged. With these circumstances,
petitioner BPI maintains that considerations of relative negligence becomes
totally irrelevant.
In sum, petitioner BPI theorizes that the Negotiable Instruments Law,
specifically Section 23 thereof is not applicable in the light of the absolute
liability of the representing or collecting bank as regards forged
endorsements in consonance with the clearing guarantee requirement
imposed upon the presenting or collecting banks "as it is worded today."
Petitioner BPI first returned to CBC the two (2) checks on the ground that
"Payee's endorsement (was) forged" on November 12, 1981. At that time
the clearing regulation then in force under PCHC's Clearing House Rules and
Regulations as revised on September 19, 1980 provides:
Items which have been the subject of material alteration or items bearing a
forged endorsement when such endorsement is necessary for negotiation
shall be returned within twenty four (24) hours after discovery of the
alteration or the forgery, but in no event beyond the period prescribed by
law for the filing of a legal action by the returning bank/branch institution or
entity against the bank/branch, institution or entity sending the same.
(Section 23)
In the case of Banco de Oro Savings and Mortgage Bank v. Equitable
Banking Corporation (157 SCRA 188 [1988]) the clearing regulation (this is
the present clearing regulation) at the time the parties' dispute occurred
was as follows:
Sec. 21. . . . .
Items which have been the subject of material alteration or items bearing
forged endorsement when such endorsement is necessary for negotiation
shall be returned by direct presentation or demand to the Presenting Bank
and not through the regular clearing house facilities within the period
prescribed by law for the filing of a legal action by the returning
bank/branch, institution or entity sending the same.
It is to be noted that the above-cited clearing regulations are substantially
the same in that it allows a return of a check "bearing forged endorsement
when such endorsement is necessary for negotiation" even beyond the next
regular clearing although not beyond the prescriptive period "for the filing
of a legal action by the returning bank."
Bearing in mind this similarity in the clearing regulation in force at the time
the forged checks in the present case and the Banco de Oro case were
dishonored and returned to the presenting or collecting banks, we can be
guided by the principles enunciated in the Banco de Oro case on the
relevance of negligence of the drawee vis-a-vis the forged checks.
The facts in the Banco de Oro case are as follows: Sometime in March,
April, May and August 1983 Equitable Banking Corporation through its Visa
Card Department drew six (6) crossed Manager's check with the total
amount of Forty Five Thousand Nine Hundred and Eighty Two Pesos and
Twenty Three Centavos (P45,982.23) and payable to certain member
establishments of Visa Card. Later, the checks were deposited with Banco

42

de Oro to the credit of its depositor, a certain Aida Trencio. Following

normal procedures, and after stamping at the back of the checks the
endorsements: "All prior and/or lack of endorsements guaranteed" Banco
de Oro sent the checks for clearing through the PCHC. Accordingly,
Equitable Banking Corporation paid the checks; its clearing amount was
debited for the value of the checks and Banco de Oro's clearing account was
credited for the same amount. When Equitable Banking Corporation
discovered that the endorsements at the back of the checks and purporting
to be that of the payees were forged it presented the checks directly to
Banco de Oro for reimbursement. Banco de Oro refused to reimburse
Equitable Banking Corporation for the value of the checks. Equitable
Banking Corporation then filed a complaint with the Arbitration Committees
of the PCHC. The Arbiter, Atty. Ceasar Querubin, ruled in favor of Equitable
Banking Corporation. The Board of Directors of the PCHC affirmed the
Arbiter's decision. A petition for review of the decision filed by Banco de Oro
with the Regional Trial Court of Quezon City was dismissed. The decision of
the PCHC was affirmed in toto.
One of the main issues threshed out in this case centered on the effect of
Banco de Oro's (representing or collecting bank) guarantee of "all prior
endorsements and/or lack of endorsements" at the back of the checks. A
corollary issue was the effect of the forged endorsements of the payees
which were late discovered by the Equitable Banking Corporation (drawee
bank) resulting in the latter's claim for reimbursement of the value of
checks after it paid the proceeds of the checks.
We agreed with the following disquisition of the Regional Trial Court, to wit:
Anent petitioner's liability on said instruments, this court is in full accord
with the ruling of the PCHC Board of Directors that:
In presenting the checks for clearing and for payment, the defendant made
an express guarantee on the validity of "all prior endorsements." Thus,
stamped at the back of the checks are the defendant's clear warranty: ALL
PRIOR ENDORSEMENTS AND/OR LACK OF ENDORSEMENTS GUARANTEED.
Without such warranty, plaintiff would not have paid on the checks.
No amount of legal jargon can reverse the clear meaning of defendant's
warranty. As the warranty has proven to be false and inaccurate, the
defendant is liable for any damage arising out of the falsity of its
representation.
The principle of estoppel, effectively prevents the defendant from denying
liability for any damage sustained by the plaintiff which, relying upon an
action or declaration of the defendant, paid on the checks. The same
principle of estoppel effectively prevents the defendant from denying the
existence of the checks. (pp. 10-11, Decision, pp. 43-44, Rollo) (at pp. 194195)
We also ruled:
Apropos the matter of forgery in endorsements, this Court has presently
succintly emphasized that the collecting bank or last endorser generally
suffers the loss because it has the duty to ascertain the genuineness of all
prior endorsements considering that the act of presenting the check for
payment to the drawee is an assertion that the party making the
presentment has done its duty to ascertain the genuineness of the

43

endorsements. This is laid down in the case of PNB v. National City Bank.
(63 Phil. 1711) In another case, this court held that if the drawee-bank
discovers that the signature of the payee was forged after it has paid the
amount of the check to the holder thereof, it can recover the amount paid
from the collecting bank.
xxx xxx xxx
The point that comes uppermost is whether the drawee bank was negligent
in failing to discover the alteration or the forgery. (Emphasis supplied)
xxx xxx xxx
The court reproduces with approval the following disquisition of the PCHC in
its decision.
xxx xxx xxx
III. Having Violated Its Warranty On Validity Of All Endorsements,
Collecting Bank Cannot Deny Liability To Those Who Relied On Its Warranty.
xxx xxx xxx
The damage that will result if judgment is not rendered for the plaintiff is
irreparable. The collecting bank has privity with the depositor who is the
principal culprit in this case. The defendant knows the depositor; her
address and her history. Depositor is defendant's client. It has taken a risk
on its depositor when it allowed her to collect on the crossed-checks.
Having accepted the crossed checks from persons other than the payees,
the defendant is guilty of negligence; the risk of wrongful payment has to
be assumed by the defendant. (Emphasis supplied, at pp. 198-202)
As can be gleaned from the decision, one of the main considerations in
affirming the PCHC's decision was the finding that as between the drawee
bank (Equitable Bank) and the representing or collecting bank (Banco de
Oro) the latter was negligent and thus responsible for undue payment.
Parenthetically, petitioner BPI's theory that the present clearing guarantee
requirement imposed on the representing or collecting bank under the
PCHC rules and regulations is independent of the Negotiable Instruments
Law is not in order.
Another reason why the petitioner's theory is uncalled for is the fact that
the Negotiable Instruments Law (Act No. 2031) applied to negotiable
instruments as defined under section one thereof. Undeniably, the present
case involves checks as defined by and under the coverage of the
Negotiable Instruments Law. To affirm the theory of the petitioner would,
therefore, violate the rule that rules and regulations implementing the law
should conform to the law, otherwise the rules and regulations are null and
void. Thus, we held Shell Philippines, Inc. v. Central Bank of the Philippines
(162 SCRA 628 [1988]):
. . . while it is true that under the same law the Central Bank was given the
authority to promulgate rules and regulations to implement the statutory
provision in question, we reiterate the principle that this authority is limited
only to carrying into effect what the law being implemented provides.
In People v. Maceren (79 SCRA 450, 458 and 460), this Court ruled that:
Administrative regulations adopted under legislative authority by a
particular department must be in harmony with the provisions of the law,
and should be for the sole purpose of carrying into effect its general
provisions. By such regulations, of course, the law itself cannot be

44

extended. (U.S. v. Tupasi Molina, supra). An administrative agency cannot

amend an act of Congress (Santos v. Estenzo, 109 Phil. 419, 422; Teoxon
v. Members of the Board of Administrators, L-25619, June 30, 1970, 33
SCRA 585; Manuel v. General Auditing Office, L-28952, December 29,
1971, 42 SCRA 660; Deluao v. Casteel, L-21906, August 29, 1969, 29
SCRA 350).
The rule-making power must be confined to details for regulating the mode
or proceeding to carry into effect the law as it has been enacted. The power
cannot be extended to amending or expanding the statutory requirements
or to embrace matters not covered by the statute. Rules that subvert the
statute cannot be sanctioned. (University of Santo Tomas v. Board of Tax
Appeals, 93 Phil. 376, 382, citing 12 C.J. 845-46. as to invalid regulations,
see Collector of Internal Revenue v. Villaflor, 69 Phil. 319; Wise & Co. v.
Meer, 78 Phil. 655, 676; Del Mar v. Phil. Veterans Administration, L-27299,
June 27, 1973, 51 SCRA 340, 349).
xxx xxx xxx
. . . The rule or regulation should be within the scope of the statutory
authority granted by the legislature to the administrative agency. (Davis,
Administrative Law, p. 194, 197, cited in Victorias Milling Co., Inc. v. Social
Security Commission, 114 Phil. 555, 558).
In case of discrepancy between the basic law and a rule or regulation issued
to implement said law the basic law prevails because said rule or regulation
cannot go beyond the terms and provisions of the basic law (People v. Lim
108 Phil. 1091). (at pp. 633-634)
Section 23 of the Negotiable Instruments Law states:
When signature is forged or made without the authority of the person
whose signature it purports to be, it is wholly inoperative and no right to
retain the instrument, or to give discharge therefore, or to enforce payment
thereof, against any party thereto, can be acquired through or under such
forged signature, unless the party against whom it is sought to enforce such
right is precluded from setting up the forgery or want of authority.
There are two (2) parts of the provision. The first part states the general
rule while the second part states the exception to the general rule. The
general rule is to the effect that a forged signature is "wholly inoperative",
and payment made "through or under such signature" is ineffectual or does
not discharge the instrument. The exception to this rule is when the party
relying in the forgery is "precluded from setting up the forgery or want of
authority. In this jurisdiction we recognize negligence of the party invoking
forgery as an exception to the general rule. (See Banco de Oro Savings and
Mortgage Bank v. Equitable Banking Corporation supra; Philippine National
Bank v. Quimpo, 158 SCRA 582 [1988]; Philippine National Bank v. Court of
Appeals, 25 SCRA 693 [1968]; Republic v. Equitable Banking Corporation,
10 SCRA 8 [1964]; National Bank v. National City Bank of New York, 63
Phil. 711 [1936]; San Carlos Milling Co. v. Bank of P.I., 59 Phil. 59 [1933]).
In these cases we determined the rights and liabilities of the parties under a
forged endorsement by looking at the legal effects of the relative negligence
of the parties thereto.
In the present petition the payee's names in the two (2) subject checks
were forged. Following the general rule, the checks are "wholly inoperative"

45

and of no effect. However, the underlying circumstances of the case show

that the general rule on forgery is not applicable. The issue as to who
between the parties should bear the loss in the payment of the forged
checks necessities the determination of the rights and liabilities of the
parties involved in the controversy in relation to the forged checks.
The records show that petitioner BPI as drawee bank and respondent CBC
as representing or collecting bank were both negligent resulting in the
encashment of the forged checks.
The Arbitration Committee in its decision analyzed the negligence of the
employees of petitioner BPI involved in the processing of the pretermination of Eligia G. Fernando's money market placement and in the
issuance and delivery of the subject checks in this wise:
a) The impostor could have been readily unmasked by a mere telephone
call, which nobody in BPI bothered to make to Eligia G. Fernando, a vicepresident of Philamlife (Annex C, p. 13).
b) It is rather curious, too, that the officer who used to handle Eligia G.
Fernando's account did not do anything about the account's pre-termination
(Ibid, p. 13).
c) Again no verification appears to have been made by (sic) Eligia G.
Fernando's purported signature on the letter requesting the pre-termination
and the letter authorizing her niece to pick-up the checks, yet, her
signature was in BPI's file (Ibid., p. 13).
d) Another step that could have foiled the fraud, but which BPI neglected to
take, was requiring before the two checks in controversy were delivered,
the surrender of the promissory note evidencing the money market
placement that was supposedly pre-terminated. (Rollo, p. 13).
The Arbitration Committee, however, belittled petitioner BPI's negligence
compared to that of respondent CBC which it declared as graver and the
proximate cause of the loss of the subject checks to the impostor who
impersonated Eligia G. Fernando. Petitioner BPI now insists on the adoption
of the Arbitration Committee's evaluation of the negligence of both parties,
to wit:
a) But what about the lapses of BPI's employees who processed the
pretermination of Eligia G. Fernando's placement and issued the checks?
We do not think it was a serious lapse not to confirm the telephone request
for pretermination purportedly made by Eligia G. Fernando, considering that
it is common knowledge that business in the money market is done mostly
by telephone. Then, too, the initial request of the caller was for the two
checks representing the pretermination proceeds to be delivered to "her"
office, meaning Eligia G. Fernando's office at Philamlife, this clever ruse
must have put off guard the employee preparing the "purchase order slip",
enough at least for him to do away with having to call Eligia G. Fernando at
her office. (Annex C at p. 17).
b) We also do not think it unusual that Penelope Bulan, who used to handle
Eligia G. Fernando's account, should do nothing about the request for
pretermination and leave it to Eustaquio to process the pretermination. In a
bank the of BPI, it would be quite normal for an officer to take over from
another the handling of an account. (Ibid. p. 17)

46

c) The failure to verify or compare Eligia G. Fernando's purported signature

on the letter requesting the pretermination and the letter authorizing the
pick-up of the checks in controversy with her signature in BPI's file showed
lack of care and prudence required by the circumstances, although it is
doubtful that such comparison would have disclosed the deception
considering the "close similarity" between her purported signature and her
signature in BPI's file. (Ibid., p. 17).
d) A significant lapse was, however, committed when the two checks in
controversy were delivered without requiring the surrender of the
promissory note evidencing the placement that was supposedly
preterminated. Although, as we already said, it is hard to determine
whether the failure to require the surrender of the promissory note was a
deliberate act of Laderas, the dispatcher, or simply because the "purchase
order slip" note, (sic) the fact remains that such failure contributed to the
consummation of the fraud. (Ibid., p. 17-18)
The Arbitration Committee Decision's conclusion was expressed thus
Except for Laderas, not one of the BPI personnel tasked with the
pretermination of Eligia G. Fernando's placement and the issuance of the
pretermination checks colluded in the fraud, although there may have been
lapses of negligence on their part which we shall discuss later. The
secreting out of BPI of Fernando's specimen signature, which, as admitted
by the impostor herself (Exhibit E-2, page 5), helped her in forging
Fernando's signature was no doubt an "inside job" but done by any of the
four employees colluding in the fraud, not by the personnel directly charged
with the custody of Fernando's records. (Annex C, p. 15)
With respect to the negligence of the CBC employees in the payment of the
two (2) BPI cashier's checks involved in this case, the Arbitration
Committee's Decision made incontrovertible findings undisputed in the
statement of facts found in the Court of Appeals' decision of 8 August 1991,
the Regional Trial Court decision of 28 November 1990 and the PCHC Board
of Directors' Order of 26 August 1986 (Annexes A, E, D, respectively).
These findings point to negligence of the CBC employees which led to: (a)
the opening of the impostor's current account in the name of Eligia G.
Fernando; (b) the deposit of said account of the two (2) checks in
controversy and (c) the withdrawal of their proceeds from said account.
The Arbitration Committee found that
1. Since the impostor presented only her tax account number as a means of
identification, we feel that Emily Sylianco Cuaso, Cash Supervisor, approved
the opening of her current account in the name of Eligia G. Fernando on the
strength of the introduction of Antonio Concepcion who had himself opened
an account earlier that year. That Mrs. Cuaso was not comfortable with the
introduction of the new depositor by Concepcion is betrayed by the fact that
she made it appear in the application form that the new depositor was
introduced by Valentin Co a long-standing valued client of CBC who had
introduced Concepcion when he opened his account. We find this
misrepresentation significant because when she reviewed the application
form she assumed that the new client was introduced by Valentin Co as
indicated in the application form (tsn of March 19, 1985, page 13). Thus we
find that the impostor was able to open with CBC's current account in the

47

name of Eligia G. Fernando due to the negligence, if not misrepresentation,

of its Cash Supervisor, (Annex C, p. 18).
2. Even with negligence attending the impostor's opening of a current
account, her encashment of the two checks in controversy could still have
been prevented if only the care and diligence demanded by the
circumstances were exercised. On October 14, 1981, just a day after she
opened her account, the impostor deposited the two checks which had an
aggregate value of P2,413,215.16, which was grossly disproportionate to
her initial deposit of P10,000. The very date of both checks, October 12,
1981, should have tipped off the real purpose of the opening of the account
on October 13, 1981. But what surely can be characterized only as
abandonment of caution was allowing the withdrawal of the checks'
proceeds which started on October 16, 1981 only two days after the two
checks were deposited; by October 22, 1981, the account had been
emptied of the checks' proceeds. (Annex C, p. 19).
3. We cannot accept CBC's contention that "big withdrawals" are "usual
business" with it. Huge withdrawals might be a matter of course with an
established account but not for a newly opened account, especially since
the
supposed
check
proceeds
being
withdrawn
were
grossly
disproportionate to the initial cash deposit. (Annex C, p. 19).
As intimated earlier, the foregoing findings of fact were not materially
disputed either by the respondent PCHC Board of Directors or by the
respondent courts (compare statement of facts of respondent court as
reproduced in pp. 9-11 of this petition).
Having seen the negligence of the employees of both Banks, the relevant
question is: which negligence was graver. The Arbitration Committee's
Decision found and concluded thus
Since there were lapses by both BPI and CBC, the question is: whose
negligence was the graver and which was the proximate cause of the loss?
Even viewing BPI's lapses in the worst light, it can be said that while its
negligence may have introduced the two checks in controversy into the
commercial stream. CBC's lack of care in approving the opening with it of
the impostor's current account, and its allowing the withdrawal's of the
checks' proceeds, the aggregate value of which was grossly
disproportionate to the initial cash deposit, so soon after such checks were
deposited, caused the "payment" of the checks. Being closest to the vent of
loss, therefore, CBC's negligence must be held to be proximate cause of the
loss. (Annex C, pp. 19-20) (Rollo, pp. 38-41)
While it is true that the PCHC Board of Directors, and the lower courts did
not dispute the findings of facts of the Arbitration Committee, the PCHC
Board of Directors evaluated the negligence of the parties, to wit:
The Board finds the ruling that the negligence of the employees of CBC is
graver than that of the BPI not warranted by the facts because:
1. The acts and omissions of which BPI employees are guilty are not only
negligent but criminal as found by the decision.
2. The act of BPI's dealer-trainee Eustaquio of disclosing information about
the money market placement of its client over the telephone is a violation,
if not of Republic Act 1405, of Sec. 87 (a) of the General Banking Act which
penalizes any officer-employee or agent of any banking institution who

48

discloses to any unauthorized person any information relative to the funds

or properties in the custody of the bank belonging to private individual,
corporations, or any other entity; and the bland excuse given by the
decision that "business in the money market is done mostly by the
telephone" cannot be accepted nor tolerated for it is an elementary rule of
law that no custom or usage of business can override what a law specifically
provides. (Ang Tek v. CA, 87 Phil. 383).
3. The failure of BPI employees to verify or compare Eligia G. Fernando's
purported signature on the letter requesting for pre-termination and the
letter authorizing the pick-up of the checks in controversy with the
signatures on file is not even justified but admitted in the decision as
showing lack of care and prudence required by the circumstances. The
conjectural excuse made in the decision that "it is doubtful that such
comparison would have disclosed the deception" does not give an excuse
for the omission by BPI employees of the act of verifying the signature, a
duty which is the basic requirement of all acts in the bank. From the very
first time an employee enters the services of a bank up to the time he
becomes the highest officer thereof, the cautionary rule is drilled on him to
always be sure that when he acts on the basis of any signature presented
before him, the signature is to be verified as genuine and that if the bank
acts on the basis of a forgery of such signature, the bank will be held liable.
There can be no excuse therefore for such an omission on the part of BPI
employees.
4. The decision admits that:
A significant lapse was, however, committed when the two checks in
controversy were delivered without requiring the surrender of the
promissory note evidencing the placement that was supposedly
preterminated.
This omission of the BPI to require the surrender of the promissory notes
evidencing the placement is justified by the decision by saying that Sec. 74
of the Negotiable Instrument Law is not violated by this omission of the BPI
employees because said provision is intended for the benefit of the person
paying (in this case the BPI) so that since the omission to surrender having
been waived by BPI, so the non-surrender does not invalidate the payment.
The fallacy of this argument is that the in this case is: whether or not such
non-surrender is a necessary ingredient in the cause of the success of the
fraud and not whether or not the payment was valid. This excuse may
perhaps be acceptable if the omission did not cause damage to any other
person. In this case, however, it did cause tremendous damage. Moreover,
this statement obviously overlooks the provision in Art. 1240 of the Civil
Code requiring the payor (which in this case is the BPI) to be sure he pays
to the right person and as Art. 1242 states, he can claim good faith in
paying to the right person only if he pays to the person possession of the
credit (which in this case is the promissory note evidencing the money
market placement). Clearly therefore, the excuse given in the decision for
the non-surrender of this promissory note evidencing the money market
placement cannot be accepted.
xxx xxx xxx

49

The decision, however, discusses in detail the negligent acts of the CBC in
its lapses or certain requirements in the opening of the account and in
allowing withdrawals against the deposited checks soon after the deposit
thereof. As stated by the decision however, in computerized banks the
history of the account is not shown in the computer terminal whenever a
withdrawal is made.
The Board therefore believes that these withdrawals, without any further
showing that the CBC employees "had actual knowledge of the infirmity or
defect, or knowledge of such facts" (Sec. 56, Negotiable Instruments Law)
that their action in accepting their checks for deposit and allowing the
withdrawals against the same "amounted to bad faith" cannot be considered
as basis for holding CBC liable. (Rollo, pp. 107-111)
Banks handle daily transactions involving millions of pesos. By the very
nature of their work the degree of responsibility, care and trustworthiness
expected of their employees and officials is far greater than those of
ordinary clerks and employees. For obvious reasons, the banks are
expected to exercise the highest degree of diligence in the selection and
supervision of their employees.
In the present case, there is no question that the banks were negligent in
the selection and supervision of their employees. The Arbitration
Committee, the PCHC Board of Directors and the lower court, however
disagree in the evaluation of the degree of negligence of the banks. While
the Arbitration Committee declared the negligence of respondent CBC
graver, the PCHC Board of Directors and the lower courts declared that
petitioner BPI's negligence was graver. To the extent that the degree of
negligence is equated to the proximate cause of the loss, we rule that the
issue as to whose negligence is graver is relevant. No matter how many
justifications both banks present to avoid responsibility, they cannot erase
the fact that they were both guilty in not exercising extraordinary diligence
in the selection and supervision of their employees. The next issue hinges
on whose negligence was the proximate cause of the payment of the forged
checks by an impostor.
Petitioner BPI accuses the Court of Appeals of inconsistency when it
affirmed the PCHC's Board of Directors' Order but in the same breath
declared that the negligent acts of the CBC employees occurred
immediately before the actual loss.
In this regard petitioner BPI insists that the doctrine of last clear chance
enunciated in the case of Picart v. Smith (37 Phil. 809 [1918]) should have
been applied considering the circumstances of the case.
In the Picart case, Amado Picart was then riding on his pony over the
Carlatan Bridge at San Fernando, La Union when Frank Smith approached
from the opposite direction in a car. As Smith neared the bridge he saw
Picart and blew his horn to give warning of his approach. When he was
already on the bridge Picart gave two more successive blasts as it appeared
to him that Picart was not observing the rule of the road. Picart saw the car
coming and heard the warning signals. An accident then ensued resulting in
the death of the horse and physical injuries suffered by Picart which caused
him temporary unconsciousness and required medical attention for several
days. Thereafter, Picart sued Smith for damages.

50

We ruled:
The question presented for decision is whether or not the defendant in
maneuvering his car in the manner above described was guilty of
negligence such as gives rise to a civil obligation to repair the damage
done; and we are of the opinion that he is so liable. As the defendant
started across the bridge, he had the right to assume that the horse and
rider would pass over to the proper side; but as he moved toward the
center of the bridge it was demonstrated to his eyes that this would not be
done; and he must in a moment have perceived that it was too late for the
horse to cross with safety in front of the moving vehicle. In the nature of
things this change of situation occurred while the automobile was yet some
distance away; and from this moment it was no longer within the power of
the plaintiff to escape being run down by going to a place of greater safety.
The control of the situation had then passed entirely to the defendant; and
it was his duty to either to bring his car to an immediate stop or, seeing
that there were no other persons on the bridge, to take the other side and
pass sufficiently far away from the horse to avoid the danger of collision.
Instead of doing this, the defendant ran starlight on until he was almost
upon the horse. He was, we think, deceived into doing this by the fact that
the horse had not yet exhibited fright. But in view of the known nature of
horses, there was an appreciable risk that, if the animal in question was
unacquainted with automobiles, he might get excited and jump under the
conditions which here confronted him. When the defendant exposed the
horse and rider to this danger he was, in our opinion, negligent in the eyes
of the law.
The test by which by which to determine the existence of negligence in a
particular case may be stated as follows: Did the defendant in doing the
alleged negligent act use that reasonable care and caution which an
ordinarily prudent person would have used in the same situation? If not,
then he is guilty of negligence.
xxx xxx xxx
It goes without saying that the plaintiff himself was not free from fault, for
he was guilty of antecedent negligence in planting himself on the wrong
side of the road. But as we have already stated, the defendant was also
negligent; and in such case the problem always is to discover which agent
is immediately and directly responsible. It will be noted that the negligent
acts of the two parties were not contemporaneous, since the negligence of
the defendant succeeded the negligence of the plaintiff by an appreciable
interval. Under these circumstances the law is that the person who has the
last fair chance to avoid the impending harm and fails to do so is
chargeable with the consequences, without reference to the prior
negligence of the other party."
Applying these principles, petitioner BPI's reliance on the doctrine of last
clear chance to clear it from liability is not well-taken. CBC had no prior
notice of the fraud perpetrated by BPI's employees on the pretermination of
Eligia G. Fernando's money market placement. Moreover, Fernando is not a
depositor of CBC. Hence, a comparison of the signature of Eligia G.
Fernando with that of the impostor Eligia G. Fernando, which respondent
CBC did, could not have resulted in the discovery of the fraud. Hence,

51

unlike in the Picart case herein the defendant, had he used reasonable care
and caution, would have recognized the risk he was taking and would have
foreseen harm to the horse and the plaintiff but did not, respondent CBC
had no way to discover the fraud at all. In fact the records fail to show that
respondent CBC had knowledge, actual or implied, of the fraud perpetrated
by the impostor and the employees of BPI.
However, petitioner BPI insists that even if the doctrine of proximate cause
is applied, still, respondent CBC should be held responsible for the payment
to the impostor of the two (2) checks. It argues that the acts and omissions
of respondent CBC are the cause "that set into motion the actual and
continuous sequence of events that produced the injury and without which
the result would not have occurred." On the other hand, it assets that its
acts and omissions did not end in a loss. Petitioner BPI anchors its
argument on its stance that there was "a gap, a hiatus, an interval between
the issuance and delivery of said checks by petitioner BPI to the impostor
and their actual payment of CBC to the impostor. Petitioner BPI points out
that the gap of one (1) day that elapsed from its issuance and delivery of
the checks to the impostor is material on the issue of proximate cause. At
this stage, according to petitioner BPI, there was yet no loss and the
impostor could have decided to desist from completing the same plan and
could have held to the checks without negotiating them.
We are not persuaded.
In the case of Vda. de Bataclan, et al, v. Medina (102 Phil. 181 [1957]), we
had occasion to discuss the doctrine of proximate cause.
Briefly, the facts of this case are as follows:
At about 2:00 o'clock in the morning of September 13, 1952 a bus carrying
about eighteen (18) passengers on its way to Amandeo, Cavite figured in
an accident. While the bus was running, one of the front tires burst and the
bus began to zigzag until it fell into a canal on the right side of the road and
turned turtle. Some passengers managed to get out from the overturned
bus except for four (4) passengers, among them, Bataclan. The passengers
who got out heard shouts for help from Bataclan and another passenger
Lara who said they could not get out from the bus. After half an hour, about
ten men came, one of them carrying a lighted torch made of bamboo with a
wick on one end fueled with petroleum. These men approached the
overturned bus, and almost immediately, a fierce fire started burning and
all but consuming the bus including the four (4) passengers trapped inside.
It turned out that as the bus overturned, gasoline began to leak and escape
from the gasoline tank on the side of the chassis spreading over and
permeating the body of the bus and the ground under and around it. The
lighted torch brought by one of the men who answered the call for help set
it on fire. On the same day, the charred bodies of the trapped passengers
were removed and identified. By reason of his death, Juan Bataclan's wife
and her children filed a suit for damages against Maximo Medina, the
operator and owner of the bus in the then Court of First Instance of Cavite.
The trial court ruled in favor of the defendant. However, we reversed and
set aside the trial court's decision and said:
There is no question that under the circumstances, the defendant carrier is
liable. The only question is to what degree. The trial court was of the

52

opinion that the proximate cause of the death of Bataclan was not the
overturning of the bus, but rather the fire that burned the bus, including
himself and his co-passengers who were unable to leave it; that at the time
the fire started, Bataclan, though the must have suffered, physical injuries,
perhaps serious, was still alive and so damages were awarded, not for his
death, but for the physical satisfactory definition of promote cause is found
in Volume 38, pages 695-696 of American Jurisprudence, cited by plaintiffsappellants in their brief. It is as follows:
. . . that cause, which, in natural and continuous sequence, unbroken by
any efficient intervening cause, produces the injury, and without which the
result would not have occurred. And more comprehensively, the proximate
legal cause in that acting first and producing the injury, either immediately
or by setting other events in motion, all constituting a natural and
continuous chain of events, each having a close causal connection with its
immediate predecessor, the final event in the chain immediately effecting
the injury as natural and probable result of the cause which first acted,
under such circumstances that the person responsible for the first event
should, as an ordinarily prudent and intelligent person, have reasonable
ground to expect at the moment of his act or default that an injury to some
person might probably result therefrom.
It may be that ordinarily, when a passenger bus overturns, and pins down a
passenger, merely causing him physical injuries, if through some event,
unexpected and extraordinary, the overturned bus is set on fire, say, by
lightning, or if some highwaymen after looting the vehicle sets it on fire,
and the passenger is burned to death, on might still contend that the
proximate cause of his death was the fire and not the overturning of the
vehicle. But in the present case and under the circumstances obtaining in
the same, we do not hesitate to hold that the proximate cause of the death
of Bataclan was the overturning of the bus, this for the reason that when
the vehicle turned not only on its side but completely on its back, the
leaking of the gasoline from the tank was not unnatural or unexpected; that
the coming of the men with a lighted torch was in response to the call for
help, made not only by the passengers, but most probably, by the driver
and the conductor themselves, and that because it was very dark (about
2:30 in the morning), the rescuers had to carry a light with them; and
coming as they did from a rural area where lanterns and flashlights were
not available, they had to use a torch, the most handy and available; and
what was more natural than that said rescuers should innocently approach
the overturned vehicle to extend the aid and effect the rescue requested
from them. In other words, the coming of the men with the torch was to be
expected and was natural sequence of the overturning of the bus, the
trapping of some of its passengers and the call for outside help. (Emphasis
Supplied, at pp. 185-187)
Again, applying the doctrine of proximate cause, petitioner BPI's contention
that CBC alone should bear the loss must fail. The gap of one (1) day
between the issuance and delivery of the checks bearing the impostor's
name as payee and the impostor's negotiating the said forged checks by
opening an account and depositing the same with respondent CBC is not
controlling. It is not unnatural or unexpected that after taking the risk of

53

impersonating Eligia G. Fernando with the connivance of BPI's employees,

the impostor would complete her deception by encashing the forged checks.
There is therefore, greater reason to rule that the proximate cause of the
payment of the forged checks by an impostor was due to the negligence of
petitioner BPI. This finding, notwithstanding, we are not inclined to rule that
petitioner BPI must solely bear the loss of P2,413,215.16, the total amount
of the two (2) forged checks. Due care on the part of CBC could have
prevented any loss.
The Court cannot ignore the fact that the CBC employees closed their eyes
to the suspicious circumstances of huge over-the-counter withdrawals made
immediately after the account was opened. The opening of the account
itself was accompanied by inexplicable acts clearly showing negligence. And
while we do not apply the last clear chance doctrine as controlling in this
case, still the CBC employees had ample opportunity to avoid the harm
which befell both CBC and BPI. They let the opportunity slip by when the
ordinary prudence expected of bank employees would have sufficed to seize
it.
Both banks were negligent in the selection and supervision of their
employees resulting in the encashment of the forged checks by an
impostor. Both banks were not able to overcome the presumption of
negligence in the selection and supervision of their employees. It was the
gross negligence of the employees of both banks which resulted in the fraud
and the subsequent loss. While it is true that petitioner BPI's negligence
may have been the proximate cause of the loss, respondent CBC's
negligence contributed equally to the success of the impostor in encashing
the proceeds of the forged checks. Under these circumstances, we apply
Article 2179 of the Civil Code to the effect that while respondent CBC may
recover its losses, such losses are subject to mitigation by the courts. (See
Phoenix Construction Inc. v. Intermediate Appellate Courts, 148 SCRA 353
[1987]).
Considering the comparative negligence of the two (2) banks, we rule that
the demands of substantial justice are satisfied by allocating the loss of
P2,413,215.16 and the costs of the arbitration proceeding in the amount of
P7,250.00 and the cost of litigation on a 60-40 ratio. Conformably with this
ruling, no interests and attorney's fees can be awarded to either of the
parties.
WHEREFORE, the questioned DECISION and RESOLUTION of the Court of
Appeals are MODIFIED as outlined above. Petitioner Bank of the Philippine
Islands shall be responsible for sixty percent (60%) while respondent China
Banking Corporation shall share forty percent (40%) of the loss of TWO
MILLION FOUR HUNDRED THIRTEEN THOUSAND, TWO HUNDRED FIFTEEN
PESOS and SIXTEEN CENTAVOS (2,413,215.16) and the arbitration costs of
SEVEN THOUSAND, TWO HUNDRED FIFTY PESOS (7,250.00). The Philippine
Clearing House Corporation is hereby directed to effect the corresponding
entries to the banks' clearing accounts in accordance with this decision.
Costs in the same proportion against the Bank of the Philippine Islands and
the China Banking Corporation.
SO ORDERED

54

[G.R. No. L-8110. June 30, 1956.]

MARINDUQUE IRON MINES AGENTS, INC., Petitioner, vs. THE
WORKMENS COMPENSATION COMMISSION, THE HEIRS OF PEDRO
MAMADOR and GERONIMO MA. COLL, Respondents.
DECISION
BENGZON, J.:
The Marinduque Iron Mines Agents Inc. questions by certiorari the order of
the Workmens Compensation Commissioner confirming the referees award
of compensation to the heirs of Pedro Mamador for his accidental death.
Only the right to compensation is disputed; chan roblesvirtualawlibrarynot
the amount.
It appears, says the award, that on August 23, 1951, at
6:chanroblesvirtuallawlibrary00
a.m.
in
Bo.
Sumangga,
Mogpog,
Marinduque, the deceased Mamador together with other laborers of the
Respondent-corporation, (Marinduque Iron Mines Agents Inc.) boarded a
truck belonging to the latter, which was then driven by one Procopio
Macunat, also employed by the corporation, and on its way to their place of
work at the mine camp at Talantunan, while trying to overtake another
truck on the company road, it turned over and hit a coconut tree, resulting
in the death of said Mamador and injury to the others.
Procopio Macunat was prosecuted, convicted and sentenced to indemnify
the heirs of the deceased. (Criminal Case No. 1491). He has paid nothing
however, to the latter.
In his first proposition Petitioner challenges the validity of the proceedings
before the Commission, asserting it had not been given the opportunity to
cross-examine the opposing witnesses. According to Respondents.
The records show that pursuant to a request made by this Commission on
March 28, 1953 to investigate the above-entitled case, the Public Defender
of Boac, Marinduque, notified Respondent Geronimo Ma. Coll and the
general manager of the Respondent company, Mr. Eric Lenze, to appear
before him in an investigation, first on May 12, 1953, when neither of them
appeared, and the second on May 29, 1953, when only Mr. Geronimo Ma.
Coll. appeared. The sworn testimony of Mr. Ma. Coll was then taken down in
a question and answer method. On August 18, 1953, thru Referee Ramon
Villaflor, this Commission wrote the Respondent company to comment on
the enclosed copy of the sworn declaration of Ma. Coll. The Respondent
company, thru its Vice President, denied its liability under the Workmens
Compensation Act, as amended. In an investigation conducted on February
8, 1954 by the undersigned referee, the Respondent company thru Mr.
Lenze who was assisted by counsel, was allowed to examine the records of
the case including the sworn declaration of Ma. Coll and was given all the
opportunity to rebut the same by additional evidence.
In our opinion, Petitioners grievance does not rest on any sound basis,
because it was given notice, and therefore had the chance, to examine (and
cross-examine) the witnesses against it. The statute even permits the
Commissioner (or his referee) to take testimony without notice (section 48
Act 3428 as amended) provided of course such ex parte evidence is

55

reduced to writing, and the adverse party is afforded opportunity to

examine and rebut the same which was done in this instance.
Anyway we are not shown how its failure to cross-examine the witnesses
prejudiced the Petitioners position.
In its second proposition, Petitioner maintains that this claim is barred by
section 6 of the Workmens Compensation Law, because (a) Macunat was
prosecuted and required to indemnify the heirs of the deceased and (b) an
amicable settlement was concluded between said heirs and Macunat.
Section 6 provides as follows:chanroblesvirtuallawlibrary
Sec. 6. Liability of third parties. In case an employee suffers an injury
for which compensation is due under this Act by any other person besides
his employer, it shall be optional with such injured employee either to claim
compensation from his employer, under this Act, or sue such other person
for damages, in accordance with law; chan roblesvirtualawlibraryand in case
compensation is claimed and allowed in accordance with this Act, the
employer who paid such compensation or was found liable to pay the same,
shall succeed the injured employee to the right of recovering from such
person what he paid:chanroblesvirtuallawlibrary Provided, That in case the
employer recovers from such third person damages in excess of those paid
or allowed under this Act, such excess shall be delivered to the injured
employee or any other person entitled thereto, after deduction of the
expenses of the employer and the costs of the proceedings. The sum paid
by the employer for compensation or the amount of compensation to which
the employee or his dependents are entitled, shall not be admissible as
evidence in any damage suit or action.
It is the Petitioners contention that Criminal Case No. 1491 and its outcome
constituted an election by the employee (or his heirs) to sue the third
person, such election having the effect of releasing the employer. However,
Criminal Case No. 1491 was not a suit for damages against the third
person, it being alleged, without contradiction that the heirs did not
intervene therein and have not so far received the indemnity ordered by the
court. At any rate, we have already decided in Nava vs. Inchausti Co. 1 that
the indemnity granted the heirs in a criminal prosecution of the other
person does not affect the liability of the employer to pay compensation. 2
As to the alleged amicable settlement, it consists of an affidavit wherein,
for the sum of 150 pesos, Mamadors widow promised to forgive Macunat
for the wrong committed and not to bring him before the authorities for
prosecution. Upon making such promise Petitioner argues she elected
one of the remedies, (against the third person) and is barred from the other
remedy (against the employer). The contention may not be sustained,
inasmuch as all the widow promised was to forego the offenders criminal
prosecution. Note further that a question may be raised whether she could
bind the other heirs of the deceased.
The most important aspect of this appeal, is the effect of the deceaseds
having violated the employers prohibition against laborers riding the
haulage trucks. Petitioner claims such violation was the laborers notorious
negligence which, under the law, precludes recovery. The Commission has
not declared that the prohibition was known to Mamador. Yet the employer
does not point out in the record evidence to that effect. Supposing

56

Mamador knew the prohibition, said the referee, can we truthfully say that
he boarded the fatal truck with full apprehension of the existence of the
danger, if any at all, that an ordinary prudent man would try to avoid? I do
not believe so, and even in the presence of doubt, the same must be
resolved in his favor. Unless of course, we can attribute to him a desire to
end his life. Nowhere in the records of this case can we find the slightest
insinuation of that desire.
There is no doubt that mere riding on haulage truck or stealing a ride
thereon is not negligence, ordinarily. It couldnt be, because transportation
by truck is not dangerous per se. It is argued that there was notorious
negligence in this particular instance because there was the employers
prohibition. Does violation of this order constitute negligence? Many courts
hold that violation of a statute or ordinance constitutes negligence per se.
Others consider the circumstances.
However there is practical unanimity in the proposition that violation of a
rule promulgated by a Commission or board is not negligence per se; chan
roblesvirtualawlibrarybut it may be evidence of negligence. (C.J.S., Vol. 65,
p. 427.)
This order of the employer (prohibition rather) couldnt be of a greater
obligation than the rule of a Commission or board. And the referee correctly
considered this violation as possible evidence of negligence; chan
roblesvirtualawlibrarybut it declared that under the circumstance, the
laborer could not be declared to have acted with negligence. Correctly, it is
believed, since the prohibition had nothing to do with personal safety of the
riders.
Such finding is virtually a finding of fact which we may not overrule in this
certiorari proceeding.
Nevertheless, even granting there was negligence, it surely was not
notorious negligence, which we have interpreted to mean the same thing
as gross negligence 3 implying conscious indifference to
consequences pursuing a course of conduct which would naturally and
probably result in injury utter disregard of consequences. (38 Am. Jur.,
691) Getting or accepting a free ride on the companys haulage truck
couldnt be gross negligence, because as the referee found, no danger or
risk was apparent.
There being no other material point raised in the petition for review, the
award of compensation is hereby affirmed, with costs against Petitioner.

G.R. No. 73998 November 14, 1988

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

57

Assailed in this petition for review on certiorari are 1) the decision 1 of the
then Intermediate Appellate Court 2 in AC-G.R. CV No. 01055, entitled
"Pedro T. Layugan, Plaintiff-Appellee, versus Godofredo Isidro, DefendantAppellant and Third-Party Plaintiff-Appellee, versus Travellers MultiIndemnity Corporation, Third Party Defendant- Appellant, "which reversed
and set aside the decision 3 of the Regional Trial Court, Third Judicial
Region, Branch XXVI, Cabanatuan City, and also dismissed the complaint,
third party complaint, and the counter claims of the parties and 2) the
resolution 4 denying the plaintiff-appellee's (herein petitioner) motion for
reconsideration, for lack of merit.
The findings of fact by the trial court which were adopted by the appellate
court are as follows: 5
xxx xxx xxx
Pedro T. Layugan filed an action for damages against Godofredo Isidro,
alleging that on May 15, 1979 while at Baretbet, Bagabag, Nueva Vizcaya,
the Plaintiff and a companion were repairing the tire of their cargo truck
with Plate No. SU-730 which was parked along the right side of the National
Highway; that defendant's truck bearing Plate No. PW-583, driven
recklessly by Daniel Serrano bumped the plaintiff, that as a result, plaintiff
was injured and hospitalized at Dr. Paulino J. Garcia Research and Medical
Center and the Our Lady of Lourdes Hospital; that he spent TEN THOUSAND
PESOS (Pl0,000.00) and will incur more expenses as he recuperates from
said injuries; that because of said injuries he would be deprived of a
lifetime income in the sum of SEVENTY THOUSAND PESOS (P70,000.00);
and that he agreed to pay his lawyer the sum of TEN THOUSAND PESOS
(Pl0,000.00).
As prayed for by the plaintiffs counsel, the Court declared the defendant in
default on October 12, 1979, and plaintiff's evidence was received ex-parte
on January 11, 1978 and February 19, 1980. The decision on behalf of the
plaintiff was set aside to give a chance to the defendant to file his answer
and later on, a third-party complaint.
Defendant admitted his ownership of the vehicle involved in the accident
driven by Daniel Serrano. Defendant countered that the plaintiff was merely
a bystander, not a truck helper being a brother-in-law law of the driver of
said truck; that the truck allegedly being repaired was parked, occupying
almost half of the right lane towards Solano, Nueva Vizcaya, right after the
curve; that the proximate cause of the incident was the failure of the driver
of the parked truck in installing the early warning device, hence the driver
of the parked car should be liable for damages sustained by the truck of the
herein defendant in the amount of more than P20,000.00; that plaintiff
being a mere bystander and hitchhiker must suffer all the damages he
incurred. By way of counterclaim defendant alleged that due to plaintiffs
baseless complaint he was constrained to engage the services of counsel for
P5,000.00 and P200.00 per court appearance; that he suffered sleepless
nights, humiliation, wounded feelings which may be estimated at
P30.000.00.
On May 29, 1981, a third-party complaint was filed by the defendant
against his insurer, the Travellers Multi Indemnity Corporation; that the
third-party plaintiff, without admitting his liability to the plaintiff, claimed

58

that the third-party defendant is liable to the former for contribution,

indemnity and subrogation by virtue of their contract under Insurance
Policy No. 11723 which covers the insurer's liability for damages arising
from death, bodily injuries and damage to property.
Third-party defendant answered that, even assuming that the subject
matter of the complaint is covered by a valid and existing insurance policy,
its liability shall in no case exceed the limit defined under the terms and
conditions stated therein; that the complaint is premature as no claim has
been submitted to the third party defendant as prescribed under the
Insurance Code; that the accident in question was approximately caused by
the carelessness and gross negligence of the plaintiff-, that by reason of the
third-party complaint, third-party defendant was constrained to engage the
services of counsel for a fee of P3,000.00.
Pedro Layugan declared that he is a married man with one (1) child. He was
employed as security guard in Mandaluyong, Metro Manila, with a salary of
SIX HUNDRED PESOS (600.00) a month. When he is off-duty, he worked as
a truck helper and while working as such, he sustained injuries as a result
of the bumping of the cargo truck they were repairing at Baretbet,
Bagabag, Nueva Vizcaya by the driver of the defendant. He used to earn
TWO HUNDRED PESOS (P200.00) to THREE HUNDRED PESOS (P300.00)
monthly, at the rate of ONE HUNDRED PESOS (Pl00.00) per trip. Due to
said injuries, his left leg was amputated so he had to use crutches to walk.
Prior to the incident, he supported his family sufficiently, but after getting
injured, his family is now being supported by his parents and brother.
GODOFREDO ISIDRO, defendant/third-party plaintiff, testified that his truck
involved in this vehicular accident is insured with the Travellers Multi
Indemnity Corporation covering own damage and third-party liability, under
vehicle policy No. 11723 (Exh. "1") dated May 30, 1978; that after he filed
the insurance claim the insurance company paid him the sum of P18,000.00
for the damages sustained by this truck but not the third party liability.
DANIEL SERRANO, defendant driver, declared that he gave a statement
before the municipal police of Bagabag, Nueva Vizcaya on May 16, 1979;
that he knew the responsibilities of a driver; that before leaving, he
checked the truck. The truck owner used to instruct him to be careful in
driving. He bumped the truck being repaired by Pedro Layugan, plaintiff,
while the same was at a stop position. From the evidence presented, it has
been established clearly that the injuries sustained by the plaintiff was
caused by defendant's driver, Daniel Serrano. The police report confirmed
the allegation of the plaintiff and admitted by Daniel Serrano on crossexamination. The collision dislodged the jack from the parked truck and
pinned the plaintiff to the ground. As a result thereof, plaintiff sustained
injuries on his left forearm and left foot. The left leg of the plaintiff from
below the knee was later on amputated (Exh. "C") when gangrene had set
in, thereby rendering him incapacitated for work depriving him of his
income. (pp. 118 to 120, Record on Appeal.)
xxx xxx xxx
Upon such findings, amply supported by the evidence on record, the trial
court rendered its decision, the dispositive part of which reads as follows: 6
WHEREFORE, premises considered, the defendant is hereby ordered:

59

a) To pay the plaintiff SEVENTY THOUSAND (P70,000.00) PESOS actual and

compensatory damages;
b) TWO THOUSAND (P2,000.00) PESOS for attorney's fees;
c) FIVE THOUSAND (P5,000.00) PESOS for moral damages; and
d) To pay the costs of this suit. On the third-party complaint, the thirdparty defendant is ordered to indemnify the defendant/third party plaintiff-.
a) The sum of FIFTY THOUSAND (P50,000.00) PESOS for actual and
compensatory damages; and
b) The costs of this suit.
The Intermediate Appellate Court as earlier stated reversed the decision of
the trial court and dismissed the complaint, the third-party complaint, and
the counter- claims of both appellants. 7
Hence, this petition.
The petitioner alleges the following errors. 8
1. WHETHER UPON THE GIVEN FACTS, THE INTERMEDIATE APPELLATE
COURT ACTED CORRECTLY IN REVERSING AND SETTING ASIDE AND
DISMISSING THE PLAINTIFF-APPELLEE'S COMPLAINT.
2. WHETHER THE INTERMEDIATE APPELLATE COURT ACTED CORRECTLY IN
APPLYING THE DOCTRINE OF "RES IPSA LOQUITUR" WITH PROPER JURISPRUDENTIAL (sic) BASIS.
The crux of the controversy lies in the correctness or error of the decision of
the respondent court finding the petitioner negligent under the doctrine of
Res ipsa loquitur (The thing speaks for itself).<re||an1w> Corollary
thereto, is the question as to who is negligent, if the doctrine is
inapplicable.
The respondent corporation stresses that the issues raised in the petition
being factual, the same is not reviewable by this Court in a petition for
review by certiorari. 9
Indeed, it is an elementary rule in the review of decisions of the Court of
Appeals that its findings of fact are entitled to great respect and will not
ordinarily be disturbed by this Court. 10 For if we have to review every
question of fact elevated to us, we would hardly have any more time left for
the weightier issues compelling and deserving our preferential attention. 11
Be that as it may, this rule is not inflexible. Surely there are established
exceptions 12 when the Court should review and rectify the findings of fact
of the lower court, such as:
1) when the conclusion is a finding grounded entirely on speculation,
surmise, or conjecture; 2) the inference made is manifestly mistaken; 3)
there is grave abuse of discretion; 4) the judgment is based on
misapprehension of facts; 5) the Court of Appeals went beyond the issues
of the case if the findings are contrary to the admission of both the
appellant and the appellee; 6) the findings of the Court of Appeals are
contrary to those of the trial court; 7) the said findings of fact are
conclusions without citation of specific evidence on which they are based;
8) the facts set forth in the petition as well as in the petitioner's main and
reply briefs are not disputed by the respondents; and 9) when the findings
of fact of the Court of Appeals are premised on the absence of evidence and
are contradicted on record.

60

Exceptions 1, 2, 4, 6, 7, and 9 obtain in the instant case to warrant a

deviation from the general rule.
From its finding that the parked truck was loaded with ten (10) big round
logs 13 the Court of Appeals inferred that because of its weight the truck
could not have been driven to the shoulder of the road and concluded that
the same was parked on a portion of the road 14 at the time of the accident.
Consequently, the respondent court inferred that the mishap was due to the
negligence of the driver of the parked truck. 15 The inference or conclusion
is manifestly erroneous. In a large measure, it is grounded on speculation,
surmise, or conjecture. How the respondent court could have reversed the
finding of the trial court that a warning device was installed 16 escapes us
because it is evident from the record that really such a device, in the form
of a lighted kerosene lamp, was installed by the driver of the parked truck
three to four meters from the rear of his parked truck. 17 We see this
negative finding of the respondent appellate court as a misreading of the
facts and the evidence on record and directly contravening the positive
finding of the trial court that an early warning device was in proper place
when the accident happened and that the driver of the private respondent
was the one negligent. On the other hand, the respondent court, in refusing
to give its "imprimatur to the trial court's finding and conclusion that Daniel
Serrano (private respondent Isidro's driver) was negligent in driving the
truck that bumped the parked truck", did not cite specific evidence to
support its conclusion. In cavalier fashion, it simply and nebulously
adverted to unspecified "scanty evidence on record." 18
On the technical aspect of the case, the respondent corporation would want
us to dismiss this petition on the ground that it was filed out of time. It
must be noted that there was a motion for extension, 19 albeit filed
erroneously with the respondent court, dated March 19, 1986, requesting
for 30 days from March 20, 1986, to file the necessary petition or pleading
before the Supreme Court". Also, on April 1, 1986, an appearance of a new
lawyer for the petitioner before the Supreme Court" with motion 20 was
filed, again erroneously, with the Court of Appeals, requesting for 20 days
extension "to file the Petition for Review on Certiorari." Likewise a similar
motion 21 was filed with this Court also on April 1, 1986. On the other hand,
the instant petition for review was filed on April 17, 1986 22 but it was only
after three months, on August 1, 1986, in its comment 23 that the
respondent corporation raised the issue of tardiness. The respondent
corporation should not have waited in ambush before the comment was
required and before due course was given. In any event, to exact its "a
pound of flesh", so to speak, at this very late stage, would cause a grave
miscarriage of justice. Parenthetically, it must be noted that private
respondent Isidro did not raise this issue of late filing.
We now come to the merits of this petition.
The question before us is who was negligent? Negligence is the omission to
do something which a reasonable man, guided by those considerations
which ordinarily regulate the conduct of human affairs, would do, or the
doing of something which a prudent and reasonable man would not do 24 or
as Judge Cooley defines it, "(T)he failure to observe for the protection of
the interests of another person, that degree of care, precaution, and

61

vigilance which the circumstances justly demand, whereby such other

person suffers injury. 25
In Picart vs. Smith, 26 decided more than seventy years ago but still a
sound rule, we held:
The test by which to determine the existence of negligence in a particular
case may be stated as follows: Did the defendant in doing the alleged
negligent act use that reasonable care and caution which an ordinarily
prudent person would have used in the same situation? If not, then he is
guilty of negligence. The law here in effect adopts the standard supposed to
be supplied by the imaginary conduct of the discreet paterfamilias of the
Roman law. The existence of negligence in a given case is not determined
by reference to the personal judgment of the actor in the situation before
him. The Law considers what would be reckless, blameworthy, or negligent
in the man of ordinary intelligence and prudence and determines liability by
that.
Respondent Isidro posits that any immobile object along the highway, like a
parked truck, poses serious danger to a moving vehicle which has the right
to be on the highway. He argues that since the parked cargo truck in this
case was a threat to life and limb and property, it was incumbent upon the
driver as well as the petitioner, who claims to be a helper of the truck
driver, to exercise extreme care so that the motorist negotiating the road
would be properly forewarned of the peril of a parked vehicle. Isidro
submits that the burden of proving that care and diligence were observed is
shifted to the petitioner, for, as previously claimed, his (Isidro's) Isuzu
truck had a right to be on the road, while the immobile cargo truck had no
business, so to speak, to be there. Likewise, Isidro proffers that the
petitioner must show to the satisfaction of a reasonable mind that the
driver and he (petitioner) himself, provided an early warning device, like
that required by law, or, by some other adequate means that would
properly forewarn vehicles of the impending danger that the parked vehicle
posed considering the time, place, and other peculiar circumstances of the
occasion. Absent such proof of care, as in the case at bar, Isidro concludes,
would, under the doctrine of Res ipsa loquitur, evoke the presumption of
negligence on the part of the driver of the parked cargo truck as well as his
helper, the petitioner herein, who was fixing the flat tire of the said truck. 27
Respondent Isidro's contention is untenable.
The evidence on record discloses that three or four meters from the rear of
the parked truck, a lighted kerosene lamp was placed. 28 Moreover, there is
the admission of respondent Isidro's driver, Daniel Serrano, to Wit: 29
Question No. 8 (by Patrolman Josefino Velasco)Will you narrate to me in
brief how the accident happens (sic) if you can still remember?
Answer: (by Daniel Serrano)
That on or about 10:40 p.m., 15 May 1979 while driving Isuzu truck at
Baretbet, Bagabag, Nueva Vizcaya and at KM 285, I met another vehicle
who (sic) did not dim his (sic) lights which cause (sic) me to be blinded with
intense glare of the light that's why I did not notice a parked truck who (sic)
was repairing a front flat tire. When I was a few meters away, I saw the
truck which was loaded with round logs. I step (sic) on my foot brakes but
it did not function with my many attempts. I have (sic) found out later that

62

the fluid pipe on the rear right was cut that's why the breaks did not
function. (Emphasis supplied).
Whether the cargo truck was parked along the road or on half the shoulder
of the right side of the road would be of no moment taking into account the
warning device consisting of the lighted kerosene lamp placed three or four
meters from the back of the truck. 30 But despite this warning which we rule
as sufficient, the Isuzu truck driven by Daniel Serrano, an employee of the
private respondent, still bumped the rear of the parked cargo truck. As a
direct consequence of such accident the petitioner sustained injuries on his
left forearm and left foot. His left leg was later amputated from below the
knee when gangrene had set in. 31
It is clear from the foregoing disquisition that the absence or want of care
of Daniel Serrano has been established by clear and convincing evidence. It
follows that in stamping its imprimatur upon the invocation by respondent
Isidro of the doctrine of Res ipsa loquitur to escape liability for the
negligence of his employee, the respondent court committed reversible
error.
The respondent court ruled: 32
xxx xxx xxx
In addition to this, we agree with the following arguments of appellant
Godofredo Isidro which would show that the accident was caused due to the
negligence of the driver of the cargo truck:
xxx xxx xxx
... In the case at bar the burden of proving that care and diligence was (sic)
observed is shifted evidently to the plaintiff, for, as adverted to, the
motorists have the right to be on the road, while the immobile truck has no
business, so to speak, to be there. It is thus for the plaintiff to show to the
satisfaction of a reasonable mind that the driver and he himself did employ
early warning device such as that required by law or by some other
adequate means or device that would properly forewarn vehicles of the
impending danger that the parked vehicle posed considering the time, place
and other peculiar circumstances of the occasion. Absent such proof of care,
as in the case at bar, will evoke the presumption of negligence under the
doctrine of res ipsa loquitur, on the part of the driver of the parked cargo
truck as well as plaintiff who was fixing the flat tire of said truck. (pp. 1417, Appellant's Brief). (Emphasis supplied).
At this juncture, it may be enlightening and helpful in the proper resolution
of the issue of negligence to examine the doctrine of Res ipsa loquitur.
This doctrine is stated thus: "Where the thing which causes injury is shown
to be under the management of the defendant, and the accident is such as
in the ordinary course of things does not happen if those who have the
management use proper care, it affords reasonable evidence, in the
absence of an explanation by the defendant, that the accident arose from
want of care. 33 Or as Black's Law Dictionary 34 puts it:
Res ipsa loquitur. The thing speaks for itself Rebuttable presumption or
inference that defendant was negligent, which arises upon proof that
instrumentality causing injury was in defendant's exclusive control, and that
the accident was one which ordinarily does not happen in absence of
negligence. Res ipsa loquitur is rule of evidence whereby negligence of

63

alleged wrongdoer may be inferred from mere fact that accident happened
provided character of accident and circumstances attending it lead
reasonably to belief that in absence of negligence it would not have
occurred and that thing which caused injury is shown to have been under
management and control of alleged wrongdoer. Hillen v. Hooker Const. Co.,
Tex. Civ. App., 484 S.W. 2d 133, 155. Under doctrine of "res ipsa loquitur"
the happening of an injury permits an inference of negligence where
plaintiff produces substantial evidence that injury was caused by an agency
or instrumentality under exclusive control and management of defendant,
and that the occurrence was such that in the ordinary course of things
would not happen if reasonable care had been used.
In this jurisdiction we have applied this doctrine in quite a number of cases,
notably in Africa et al. vs. Caltex, Inc., et al., 35 and the latest is in the case
of F.F. Cruz and Co., Inc. vs. CA. 36
The doctrine of Res ipsa loquitur as a rule of evidence is peculiar to the law
of negligence which recognizes that prima facie negligence may be
established without direct proof and furnishes a substitute for specific proof
of negligence. 37 The doctrine is not a rule of substantive law 38 but merely
a mode of proof or a mere procedural convenience. 39 The rule, when
applicable to the facts and circumstances of a particular case, is not
intended to and does not dispense with the requirement of proof of culpable
negligence on the part of the party charged. 40 It merely determines and
regulates what shall be prima facie evidence thereof and facilitates the
burden of plaintiff of proving a breach of the duty of due care. 41 The
doctrine can be invoked when and only when, under the circumstances
involved, direct evidence is absent and not readily available. 42 Hence, it
has generally been held that the presumption of inference arising from the
doctrine cannot be availed of, or is overcome, where plaintiff has knowledge
and testifies or presents evidence as to the specific act of negligence which
is the cause of the injury complained of or where there is direct evidence as
to the precise cause of the accident and all the facts and circumstances
attendant on the occurrence clearly appear. 43 Finally, once the actual cause
of injury is established beyond controversy, whether by the plaintiff or by
the defendant, no presumptions will be involved and the doctrine becomes
inapplicable when the circumstances have been so completely eludicated
that no inference of defendant's liability can reasonably be made, whatever
the source of the evidence, 44 as in this case.
The private respondent is sued under Art. 2176 in relation to Art. 2180,
paragraph 5, of the Civil Code. In the latter, when an injury is caused by
the negligence of a servant or employee there instantly arises a
presumption of law that there was negligence on the part of the master or
employer either in the selection of the servant or employee, or in
supervision over him after selection, or both. Such presumption is juris
tantum and not juris et de jure and consequently, may be rebutted. If
follows necessarily that if the employer shows to the satisfaction of the
court that in the selection and in the supervision he has exercised the care
and diligence of a good father of a family, the presumption is overcome and
he is relieved from liability. 45 In disclaiming liability for the incident, the
private respondent stresses that the negligence of his employee has already

64

been adequately overcome by his driver's statement that he knew his

responsibilities as a driver and that the truck owner used to instruct him to
be careful in driving. 46
We do not agree with the private respondent in his submission. In the first
place, it is clear that the driver did not know his responsibilities because he
apparently did not check his vehicle before he took it on the road. If he did
he could have discovered earlier that the brake fluid pipe on the right was
cut, and could have repaired it and thus the accident could have been
avoided. Moveover, to our mind, the fact that the private respondent used
to intruct his driver to be careful in his driving, that the driver was licensed,
and the fact that he had no record of any accident, as found by the
respondent court, are not sufficient to destroy the finding of negligence of
the Regional Trial Court given the facts established at the trial 47 The
private respondent or his mechanic, who must be competent, should have
conducted a thorough inspection of his vehicle before allowing his driver to
drive it. In the light of the circumstances obtaining in the case, we hold that
Isidro failed to prove that the diligence of a good father of a family in the
supervision of his employees which would exculpate him from solidary
liability with his driver to the petitioner. But even if we concede that the
diligence of a good father of a family was observed by Isidro in the
supervision of his driver, there is not an iota of evidence on record of the
observance by Isidro of the same quantum of diligence in the supervision of
his mechanic, if any, who would be directly in charge in maintaining the
road worthiness of his (Isidro's) truck. But that is not all. There is paucity of
proof that Isidro exercised the diligence of a good father of a family in the
selection of his driver, Daniel Serrano, as well as in the selection of his
mechanic, if any, in order to insure the safe operation of his truck and thus
prevent damage to others. Accordingly, the responsibility of Isidro as
employer treated in Article 2180, paragraph 5, of the Civil Code has not
ceased.
WHEREFORE, the petition is hereby GRANTED. The Decision of the
respondent court as well as its Resolution denying the petitioner's motion
for reconsideration are hereby SET ASIDE and the decision of the trial
court, dated January 20, 1983, is hereby REINSTATED in toto. With costs
against the private respondents.
SO ORDERED.

G.R. No. 118231 July 5, 1996

DR. VICTORIA L. BATIQUIN and ALLAN BATIQUIN, petitioners,
vs.
COURT OF APPEALS, SPOUSES QUEDO D. ACOGIDO and FLOTILDE G.
VILLEGAS, respondents.
DAVIDE, JR., J.:p
Throughout history, patients have consigned their fates and lives to the skill
of their doctors. For a breach of this trust, men have been quick to demand
retribution. Some 4,000 years ago, the Code of Hammurabi 1 then already
provided: "If a physician make a deep incision upon a man with his bronze

65

lancet and cause the man's death, or operate on the eye socket of a man
with his bronze lancet and destroy the man's eyes, they shall cut off his
hand." 2 Subsequently, Hippocrates 3 wrote what was to become part of the
healer's oath: "I will follow that method of treatment which according to my
ability and judgment, I consider for the benefit of my patients, and abstain
from whatever is deleterious and mischievous. . . . While I continue to keep
this oath unviolated may it be granted me to enjoy life and practice the art,
respected by all men at all times but should I trespass and violate this oath,
may the reverse be my lot." At present, the primary objective of the
medical profession if the preservation of life and maintenance of the health
of the people. 4
Needless to say then, when a physician strays from his sacred duty and
endangers instead the life of his patient, he must be made to answer
therefor. Although society today cannot and will not tolerate the
punishment meted out by the ancients, neither will it and this Court, as this
case would show, let the act go uncondemned.
The petitioners appeal from the decision 5 of the Court of Appeals of 11 May
1994 in CA-G.R. CV No. 30851, which reversed the decision 6 of 21
December 1990 of Branch 30 of the Regional Trial Court (RTC) of Negros
Oriental in Civil Case No. 9492.
The facts, as found by the trial court, are as follows:
Dr. Batiquin was a Resident Physician at the Negros Oriental Provincial
Hospital, Dumaguete City from January 9, 1978 to September 1989.
Between 1987 and September, 1989 she was also the Actg. Head of the
Department of Obstetrics and Gynecology at the said Hospital.
Mrs. Villegas is a married woman who submitted to Dr. Batiquin for prenatal
care as the latter's private patient sometime before September 21, 1988.
In the morning of September 21, 1988 Dr. Batiquin, with the assistance of
Dr. Doris Teresita Sy who was also a Resident Physician at the same
Hospital, C.I. and O.R. Nurse Arlene Diones and some student nurses
performed a simple caesarean section on Mrs. Villegas at the Negros
Oriental Provincial Hospital and after 45 minutes Mrs. Villegas delivered her
first child, Rachel Acogido, at about 11:45 that morning. Thereafter, Plaintiff
remained confined at the Hospital until September 27, 1988 during which
period of confinement she was regularly visited by Dr. Batiquin. On
September 28, 1988 Mrs. Villegas checked out of the Hospital. . . and on
that same day she paid Dr. Batiquin, thru the latter's secretary, the amount
of P1,500.00 as "professional fee". . . .
Soon after leaving the Hospital Mrs. Villegas began to suffer abdominal
pains and complained of being feverish. She also gradually lost her
appetite, so she consulted Dr. Batiquin at the latter's polyclinic who
prescribed for her certain medicines. . . which she had been taking up to
December, 1988.
In the meantime, Mrs. Villegas was given a Medical Certificate by Dr.
Batiquin on October 31, 1988. . . certifying to her physical fitness to return
to her work on November 7, 1988. So, on the second week of November,
1988 Mrs. Villegas returned to her work at the Rural Bank of Ayungon,
Negros Oriental.

66

The abdominal pains and fever kept on recurring and bothered Mrs. Villegas
no end despite the medications administered by Dr. Batiquin. When the
pains became unbearable and she was rapidly losing weight she consulted
Dr. Ma. Salud Kho at the Holy Child's Hospital in Dumaguete City on
January 20, 1989.
The evidence of Plaintiffs show that when Dr. Ma. Salud Kho examined Mrs.
Villegas at the Holy Child's Hospital on January 20, 1989 she found Mrs.
Villegas to be feverish, pale and was breathing fast. Upon examination she
felt an abdominal mass one finger below the umbilicus which she suspected
to be either a tumor of the uterus or an ovarian cyst, either of which could
be cancerous. She had an x-ray taken of Mrs. Villegas' chest, abdomen and
kidney. She also took blood tests of Plaintiff. A blood count showed that
Mrs. Villegas had [an] infection inside her abdominal cavity. The results of
all those examinations impelled Dr. Kho to suggest that Mrs. Villegas submit
to another surgery to which the latter agreed.
When Dr. Kho opened the abdomen of Mrs. Villegas she found whitishyellow discharge inside, an ovarian cyst on each of the left and right ovaries
which gave out pus, dirt and pus behind the uterus, and a piece of rubber
material on the right side of the uterus embedded on [sic] the ovarian cyst,
2 inches by 3/4 inch in size. This piece of rubber material which Dr. Kho
described as a "foreign body" looked like a piece of a "rubber glove". . . and
which is [sic] also "rubber-drain like". . . . It could have been a torn section
of a surgeon's gloves or could have come from other sources. And this
foreign body was the cause of the infection of the ovaries and consequently
of all the discomfort suffered by Mrs. Villegas after her delivery on
September 21, 1988. 7
The piece of rubber allegedly found near private respondent Flotilde
Villegas's uterus was not presented in court, and although Dr. Ma. Salud
Kho Testified that she sent it to a pathologist in Cebu City for examination, 8
it was not mentioned in the pathologist's Surgical Pathology Report. 9
Aside from Dr. Kho's testimony, the evidence which mentioned the piece of
rubber are a Medical Certificate, 10 a Progress Record, 11 an Anesthesia
Record, 12 a Nurse's Record, 13 and a Physician's Discharge Summary. 14 The
trial court, however, regarded these documentary evidence as mere
hearsay, "there being no showing that the person or persons who prepared
them are deceased or unable to testify on the facts therein stated. . . .
Except for the Medical Certificate (Exhibit "F"), all the above documents
were allegedly prepared by persons other than Dr. Kho, and she merely
affixed her signature on some of them to express her agreement thereto. . .
." 15 The trial court also refused to give weight to Dr. Kho's testimony
regarding the subject piece of rubber as Dr. Kho "may not have had firsthand knowledge" thereof, 16 as could be gleaned from her statement, thus:
A . . . I have heard somebody that [sic] says [sic] there is [sic] a foreign
body that goes with the tissues but unluckily I don't know where the rubber
was. 17
The trial court deemed vital Dr. Victoria Batiquin's testimony that when she
confronted Dr. Kho regarding the piece of rubber, "Dr. Kho answered that
there was rubber indeed but that she threw it away." 18 This statement, the

67

trial court noted, was never denied nor disputed by Dr. Kho, leading it to
conclude:
There are now two different versions on the whereabouts of that offending
"rubber" (1) that it was sent to the Pathologist in Cebu as testified to in
Court by Dr. Kho and (2) that Dr. Kho threw it away as told by her to
Defendant. The failure of the Plaintiffs to reconcile these two different
versions serve only to weaken their claim against Defendant Batiquin. 19
All told, the trial court held in favor of the petitioners herein.
The Court of Appeals reviewed the entirety of Dr. Kho's testimony and,
even without admitting the private respondents' documentary evidence,
deemed Dr. Kho's positive testimony to definitely establish that a piece of
rubber was found near private respondent Villegas's uterus. Thus, the Court
of Appeals reversed the decision of the trial court, holding:
4. The fault or negligence of appellee Dr. Batiquin is established by
preponderance of evidence. The trial court itself had narrated what
happened to appellant Flotilde after the caesarean operation made by
appellee doctor. . . . After the second operation, appellant Flotilde became
well and healthy. Appellant Flotilde's troubles were caused by the infection
due to the "rubber" that was left inside her abdomen. Both appellant;
testified that after the operation made by appellee doctor, they did not go
to any other doctor until they finally decided to see another doctor in
January, 1989 when she was not getting any better under the care of
appellee Dr. Batiquin. . . . Appellee Dr. Batiquin admitted on the witness
stand that she alone decided when to close the operating area; that she
examined the portion she operated on before closing the same. . . Had she
exercised due diligence, appellee Dr. Batiquin would have found the rubber
and removed it before closing the operating area. 20
The appellate court then ruled:
Appellants' evidence show[s] that they paid a total of P17,000.00 [deposit
of P7,100.00 (Exh. G-1-A) plus hospital and medical expenses together with
doctor's fees in the total amount P9,900.00 (Exhs. G and G-2)] for the
second operation that saved her life.
For the miseries appellants endured for more than three (3) months, due to
the negligence of appellee Dr. Batiquin they are entitled to moral damages
in the amount of P100,000.00; exemplary damages in the amount of
P20,000.00 and attorney's fees in the amount of P25,000.00.
The fact that appellant Flotilde can no longer bear children because her
uterus and ovaries were removed by Dr. Kho is not taken into consideration
as it is not shown that the removal of said organs were the direct result of
the rubber left by appellee Dr. Batiquin near the uterus. What is established
is that the rubber left by appellee caused infection, placed the life of
appellant Flotilde in jeopardy and caused appellant fear, worry and anxiety.
...
WHEREFORE, the appealed judgment, dismissing the complaint for
damages is REVERSED and SET ASIDE. Another judgment is hereby entered
ordering defendants-appellees to pay plaintiffs-appellants the amounts of
P17,000.00 as and for actual damages; P100,000.00 as and for moral
damages; P20,000.00 as and for exemplary damages; and P25,000.00 as
and for attorney's fees plus the costs of litigation.

68

SO ORDERED. 21
From the above judgment, the petitioners appealed to this Court claiming
that the appellate court: (1) committed grave abuse of discretion by
resorting to findings of fact not supported by the evidence on record, and
(2) exceeded its discretion, amounting to lack or excess of jurisdiction,
when it gave credence to testimonies punctured with contradictions and
falsities.
The private respondents commented that the petition raised only questions
of fact, which were not proper for review by this Court.
While the rule is that only questions of law may be raised in a petition for
review on certiorari, there are exceptions, among which are when the
factual findings of the trial court and the appellate court conflict, when the
appealed decision is clearly contradicted by the evidence on record, or when
the appellate court misapprehended the facts. 22
After deciphering the cryptic petition, we find that the focal point of the
instant appeal is the appreciation of Dr. Kho's testimony. The petitioners
contend that the Court of Appeals misappreciated the following portion of
Dr. Kho's testimony:
Q What is the purpose of the examination?
A Just in case, I was just thinking at the back of my mind, just in case this
would turn out to be a medico-legal case, I have heard somebody that [sic]
says [sic] there is [sic] a foreign body that goes with the tissues but
unluckily I don't know where the rubber was. It was not in the Lab, it was
not in Cebu. 23 (emphasis supplied)
The petitioners prefer the trial court's interpretation of the above testimony,
i.e., that Dr. Kho's knowledge of the piece of rubber was based on hearsay.
The Court of Appeals, on the other hand, concluded that the underscored
phrase was taken out of context by the trial court. According to the Court of
Appeals, the trial court should have likewise considered the other portions
of Dr. Kho's testimony, especially the following:
Q So you did actually conduct the operation on her?
A Yes, I did.
Q And what was the result?
A Opening up her abdomen, there was whitish-yellow discharge inside the
abdomen, there was an ovarian cyst on the left and side and there was also
an ovarian cyst on the right which, on opening up or freeing it up from the
uterus, turned out to be pus. Both ovaries turned out. . . to have pus. And
then, cleaning up the uterus, at the back of the uterus it was very dirty, it
was full of pus. And there was a [piece of] rubber, we found a [piece of]
rubber
on
the
right
24
side.
We agree with the Court of Appeals. The phrase relied upon by the trial
court does not negate the fact that Dr. Kho saw a piece of rubber in private
respondent Villegas's abdomen, and that she sent it to a laboratory and
then to Cebu City for examination by a pathologist. 25 Not even the
Pathologist's Report, although devoid of any mention of a piece of rubber,
could alter what Dr. Kho saw. Furthermore, Dr. Kho's knowledge of the
piece of rubber could not be based on other than first-hand knowledge for,
as she asserted before the trial court:

69

Q But you are sure you have seen [the piece of rubber]?
A Oh yes. I was not the only one who saw it. 26
The petitioners emphasize that the private respondents never reconciled Dr.
Kho's testimony with Dr. Batiquin's claim on the witness stand that when
Dr. Batiquin confronted Dr. Kho about the foreign body, the latter said that
there was a piece of rubber but that she threw it away. Although hearsay,
Dr. Batiquin's claim was not objected to, and hence, the same is admissible
2
7 but it carries no probative value. 28 Nevertheless, assuming otherwise,
Dr. Batiquin's statement cannot belie the fact that Dr. Kho found a piece of
rubber near private respondent Villegas's uterus. And even if we were to
doubt Dr. Kho as to what she did to the piece of rubber, i.e., whether she
threw it away or sent it to Cebu City, we are not justified in distrusting her
as to her recovery of a piece of rubber from private respondent Villegas's
abdomen. On this score, it is perfectly reasonable to believe the testimony
of a witness with respect to some facts and disbelieve his testimony with
respect to other facts. And it has been aptly said that even when a witness
is found to have deliberately falsified in some material particulars, it is not
required that the whole of his uncorroborated testimony be rejected, but
such portions thereof deemed worthy of belief may be credited. 29
It is here worth noting that the trial court paid heed to the following
portions of Dr. Batiquin's testimony: that no rubber drain was used in the
operation, 30 and that there was neither any tear on Dr. Batiquin's gloves
after the operation nor blood smears on her hands upon removing her
gloves. 31 Moreover, the trial court pointed out that the absence of a rubber
drain was corroborated by Dr. Doris Sy, Dr. Batiquin's assistant during the
operation on private respondent Villegas. 32 But the trial court failed to
recognize that the assertions of Drs. Batiquin and Sy were denials or
negative testimonies. Well-settled is the rule that positive testimony is
stronger than negative testimony. 33 Of course, as the petitioners advocate,
such positive testimony must come from a credible source, which leads us
to the second assigned error.
While the petitioners claim that contradictions and falsities punctured Dr.
Kho's testimony, a regarding of the said testimony reveals no such infirmity
and establishes Dr. Kho as a credible witness. Dr. Kho was frank throughout
her turn on the witness stand. Furthermore, no motive to state any untruth
was ever imputed against Dr. Kho, leaving her trustworthiness unimpaired.
34
The trial court's following declaration shows that while it was critical of
the lack of care with which Dr. Kho handled the piece of rubber, it was not
prepared to doubt Dr. Kho's credibility, thus only supporting our appraisal
of Dr. Kho's trustworthiness:
This is not to say that she was less than honest when she testified about
her findings, but it can also be said that she did not take the most
appropriate precaution to preserve that "piece of rubber" as an eloquent
evidence of what she would reveal should there be a "legal problem" which
she claim[s] to have anticipated. 35
Considering that we have assessed Dr. Kho to be a credible witness, her
positive testimony [that a piece of rubber was indeed found in private
respondent Villega's abdomen] prevails over the negative testimony in favor
of the petitioners.

70

As such, the rule of res ipsa loquitur comes to fore. This Court has had
occasion to delve into the nature and operation of this doctrine:
This doctrine [res ipsa loquitur] is stated thus: "Where the thing which
causes injury is shown to be under the management of the defendant, and
the accident is such as in the ordinary course of things does not happen in
those who have the management use proper care, it affords reasonable
evidence, in the absence of an explanation by the defendant, that the
accident arose from want of care." Or as Black's Law Dictionary puts it:
Res ipsa loquitur. The thing speaks for itself. Rebuctable presumption or
inference that defendant was negligent, which arises upon proof that [the]
instrumentality causing injury was in defendant's exclusive control, and that
the accident was one which ordinary does not happen in absence of
negligence. Res ipsa loquitur is [a] rule of evidence whereby negligence of
[the] alleged wrongdoer may be inferred from [the] mere fact that [the]
accident happened provided [the] character of [the] accident and
circumstances attending it lead reasonably to belief that in [the] absence of
negligence it would not have occurred and that thing which caused injury is
shown to have been under [the] management and control of [the] alleged
wrongdoer.
.
.
.
Under
[this]
doctrine
. . . the happening of an injury permits an inference of negligence where
plaintiff produces substantial evidence that [the] injury was caused by an
agency or instrumentality under [the] exclusive control and management of
defendant, and that the occurrence [sic] was such that in the ordinary
course of things would not happen if reasonable care had been used.
xxx xxx xxx
The doctrine of [r]es ipsa loquitur as a rule of evidence is peculiar to the
law of negligence which recognizes that prima facie negligence may be
established without direct proof and furnishes a substitute for specific proof
of negligence. The doctrine is not a rule of substantive law, but merely a
mode of proof or a mere procedural convenience. The rule, when applicable
to the facts and circumstances of a particular case, is not intended to and
does not dispense with the requirement of proof of culpable negligence on
the party charged. It merely determines and regulates what shall be prima
facie evidence thereof and facilitates the burden of plaintiff of proving a
breach of the duty of due care. The doctrine can be invoked when and only
when, under the circumstances involved, direct evidence is absent and not
readily available. 36
In the instant case, all the requisites for recourse to the doctrine are
present. First, the entire proceedings of the caesarean section were under
the exclusive control of Dr. Batiquin. In this light, the private respondents
were bereft of direct evidence as to the actual culprit or the exact cause of
the foreign object finding its way into private respondent Villegas's body,
which, needless to say, does not occur unless through the intersection of
negligence. Second, since aside from the caesarean section, private
respondent Villegas underwent no other operation which could have caused
the offending piece of rubber to appear in her uterus, it stands to reason
that such could only have been a by-product of the caesarean section
performed by Dr. Batiquin. The petitioners, in this regard, failed to
overcome the presumption of negligence arising from resort to the doctrine

71

of res ipsa loquitur. Dr. Batiquin is therefore liable for negligently leaving
behind a piece of rubber in private respondent Villegas's abdomen and for
all the adverse effects thereof.
As a final word, this Court reiterates its recognition of the vital role the
medical profession plays in the lives of the people, 37 and the State's
compelling interest to enact measures to protect the public from "the
potentially deadly effects of incompetence and ignorance in those who
would undertake to treat our bodies and minds for disease or trauma." 38
Indeed, a physician is bound to serve the interest of his patients "with the
greatest of solicitude, giving them always his best talent and skill." 39
Through her tortious conduct, the petitioner endangered the life of Flotilde
Villegas, in violation of her profession's rigid ethical code and in
contravention of the legal standards set forth for professionals, in general,
40
and members of the medical profession, 41 in particular.
WHEREFORE, the challenged decision of 11 May 1994 of the Court of
Appeals in CA-G.R. CV No. 30851 is hereby AFFIRMED in toto.
Costs against the petitioners.
SO ORDERED.

G.R. No. 137873

April 20, 2001
D.
M.
CONSUNJI,
INC.,
petitioner,
vs.
COURT OF APPEALS and MARIA J. JUEGO, respondents.
KAPUNAN, J.:
At around 1:30 p.m., November 2, 1990, Jose Juego, a construction worker
of D. M. Consunji, Inc., fell 14 floors from the Renaissance Tower, Pasig
City to his death.
PO3 Rogelio Villanueva of the Eastern Police District investigated the
tragedy and filed a report dated November 25, 1990, stating that:
x x x. [The] [v]ictim was rushed to [the] Rizal Medical Center in Pasig,
Metro Manila where he was pronounced dead on arrival (DOA) by the
attending physician, Dr. Errol de Yzo[,] at around 2:15 p.m. of the same
date.
Investigation disclosed that at the given time, date and place, while victim
Jose A. Juego together with Jessie Jaluag and Delso Destajo [were]
performing their work as carpenter[s] at the elevator core of the 14th floor
of the Tower D, Renaissance Tower Building on board a [p]latform made of
channel beam (steel) measuring 4.8 meters by 2 meters wide with pinulid
plywood flooring and cable wires attached to its four corners and hooked at
the 5 ton chain block, when suddenly, the bolt or pin which was merely
inserted to connect the chain block with the [p]latform, got loose xxx
causing the whole [p]latform assembly and the victim to fall down to the
basement of the elevator core, Tower D of the building under construction
thereby crushing the victim of death, save his two (2) companions who
luckily jumped out for safety.
It is thus manifest that Jose A. Juego was crushed to death when the
[p]latform he was then on board and performing work, fell. And the falling
of the [p]latform was due to the removal or getting loose of the pin which

72

was merely inserted to the connecting points of the chain block and
[p]latform but without a safety lock.1
On May 9, 1991, Jose Juegos widow, Maria, filed in the Regional Trial Court
(RTC) of Pasig a complaint for damages against the deceaseds employer,
D.M. Consunji, Inc. The employer raised, among other defenses, the
widows prior availment of the benefits from the State Insurance Fund.
After trial, the RTC rendered a decision in favor of the widow Maria Juego.
The dispositive portion of the RTC decision reads:
WHEREFORE, judgment is hereby rendered ordering defendant to pay
plaintiff, as follows:
1. P50,000.00 for the death of Jose A. Juego.
2. P10,000.00 as actual and compensatory damages.
3. P464,000.00 for the loss of Jose A. Juegos earning capacity.
4. P100,000.00 as moral damages.
5. P20,000.00 as attorneys fees, plus the costs of suit.
SO ORDERED.2
On appeal by D. M. Consunji, the Court of Appeals (CA) affirmed the
decision of the RTC in toto.
D. M. Consunji now seeks the reversal of the CA decision on the following
grounds:

THE APPELLATE COURT ERRED IN HOLDING THAT THE POLICE

REPORT WAS ADMISSIBLE EVIDENCE OF THE ALLEGED NEGLIGENCE OF
PETITIONER.

THE APPELLATE COURT ERRED IN HOLDING THAT THE DOCTRINE OF

RES IPSA LOQUITOR [sic] IS APPLICABLE TO PROVE NEGLIGENCE ON THE
PART OF PETITIONER.

THE APPELLATE COURT ERRED IN HOLDING THAT PETITIONER IS

PRESUMED NEGLIGENT UNDER ARTICLE 2180 OF THE CIVIL CODE, AND

THE APPELLATE COURT ERRED IN HOLDING THAT RESPONDENT IS

NOT PRECLUDED FROM RECOVERING DAMAGES UNDER THE CIVIL CODE.3
Petitioner maintains that the police report reproduced above is hearsay and,
therefore, inadmissible. The CA ruled otherwise. It held that said report,
being an entry in official records, is an exception to the hearsay rule.
The Rules of Court provide that a witness can testify only to those facts
which he knows of his personal knowledge, that is, which are derived from
his perception.4 A witness, therefore, may not testify as what he merely
learned from others either because he was told or read or heard the same.
Such testimony is considered hearsay and may not be received as proof of
the truth of what he has learned.5 This is known as the hearsay rule.
Hearsay is not limited to oral testimony or statements; the general rule that
excludes hearsay as evidence applies to written, as well as oral
statements.6
The theory of the hearsay rule is that the many possible deficiencies,
suppressions, sources of error and untrustworthiness, which lie underneath
the bare untested assertion of a witness, may be best brought to light and
exposed by the test of cross-examiantion.7 The hearsay rule, therefore,
excludes evidence that cannot be tested by cross-examination.8
The Rules of Court allow several exceptions to the rule,9 among which are
entries in official records. Section 44, Rule 130 provides:

73

Entries in official records made in the performance of his duty made in the
performance of his duty by a public officer of the Philippines, or by a person
in the performance of a duty specially enjoined by law are prima facie
evidence of the facts therein stated.
In Africa, et al. vs. Caltex (Phil.), Inc., et al.,10 this Court, citing the work of
Chief Justice Moran, enumerated the requisites for admissibility under the
above rule:
(a) that the entry was made by a public officer or by another person
specially enjoined by law to do so;
(b) that it was made by the public officer in the performance of his duties,
or by such other person in the performance of a duty specially enjoined by
law; and
(c) that the public officer or other person had sufficient knowledge of the
facts by him stated, which must have been acquired by him personally or
through official information.
The CA held that the police report meets all these requisites. Petitioner
contends that the last requisite is not present.
The Court notes that PO3 Villanueva, who signed the report in question,
also testified before the trial court. In Rodriguez vs. Court of Appeals,11
which involved a Fire Investigation Report, the officer who signed the fire
report also testified before the trial court. This Court held that the report
was inadmissible for the purpose of proving the truth of the statements
contained in the report but admissible insofar as it constitutes part of the
testimony of the officer who executed the report.
x x x. Since Major Enriquez himself took the witness stand and was
available for cross-examination, the portions of the report which were of his
personal knowledge or which consisted of his perceptions and conclusions
were not hearsay. The rest of the report, such as the summary of the
statements of the parties based on their sworn statements (which were
annexed to the Report) as well as the latter, having been included in the
first purpose of the offer [as part of the testimony of Major Enriquez], may
then be considered as independently relevant statements which were
gathered in the course of the investigation and may thus be admitted as
such, but not necessarily to prove the truth thereof. It has been said that:
"Where regardless of the truth or falsity of a statement, the fact that it has
been made is relevant, the hearsay rule does not apply, but the statement
may be shown. Evidence as to the making of such statement is not
secondary but primary, for the statement itself may constitute a fact in
issue, or be circumstantially relevant as to the existence of such a fact."
When Major Enriquez took the witness stand, testified for petitioners on his
Report and made himself available for cross-examination by the adverse
party, the Report, insofar as it proved that certain utterances were made
(but not their truth), was effectively removed from the ambit of the
aforementioned Section 44 of Rule 130. Properly understood, this section
does away with the testimony in open court of the officer who made the
official record, considers the matter as an exception to the hearsay rule and
makes the entries in said official record admissible in evidence as prima
facie evidence of the facts therein stated. The underlying reasons for this

74

exceptionary rule are necessity and trustworthiness, as explained in Antillon

v. Barcelon.
The litigation is unlimited in which testimony by officials is daily needed; the
occasions in which the officials would be summoned from his ordinary
duties to declare as a witness are numberless. The public officers are few in
whose daily work something is not done in which testimony is not needed
from official sources. Were there no exception for official statements, hosts
of officials would be found devoting the greater part of their time to
attending as witnesses in court or delivering deposition before an officer.
The work of administration of government and the interest of the public
having business with officials would alike suffer in consequence. For these
reasons, and for many others, a certain verity is accorded such documents,
which is not extended to private documents. (3 Wigmore on Evidence, Sec.
1631).
The law reposes a particular confidence in public officers that it presumes
they will discharge their several trusts with accuracy and fidelity; and,
therefore, whatever acts they do in discharge of their duty may be given in
evidence and shall be taken to be true under such a degree of caution as to
the nature and circumstances of each case may appear to require.
It would have been an entirely different matter if Major Enriquez was not
presented to testify on his report. In that case the applicability of Section
44 of Rule 143 would have been ripe for determination, and this Court
would have agreed with the Court of Appeals that said report was
inadmissible since the aforementioned third requisite was not satisfied. The
statements given by the sources of information of Major Enriquez failed to
qualify as "official information," there being no showing that, at the very
least, they were under a duty to give the statements for record.
Similarly, the police report in this case is inadmissible for the purpose of
proving the truth of the statements contained therein but is admissible
insofar as it constitutes part of the testimony of PO3 Villanueva.
In any case, the Court holds that portions of PO3 Villanuevas testimony
which were of his personal knowledge suffice to prove that Jose Juego
indeed died as a result of the elevator crash. PO3 Villanueva had seen
Juegos remains at the morgue,12 making the latters death beyond dispute.
PO3 Villanueva also conducted an ocular inspection of the premises of the
building the day after the incident13 and saw the platform for himself.14 He
observed that the platform was crushed15 and that it was totally damaged.16
PO3 Villanueva also required Garcia and Fabro to bring the chain block to
the police headquarters. Upon inspection, he noticed that the chain was
detached from the lifting machine, without any pin or bolt.17
What petitioner takes particular exception to is PO3 Villanuevas testimony
that the cause of the fall of the platform was the loosening of the bolt from
the chain block. It is claimed that such portion of the testimony is mere
opinion. Subject to certain exceptions,18 the opinion of a witness is
generally not admissible.19
Petitioners contention, however, loses relevance in the face of the
application of res ipsa loquitur by the CA. The effect of the doctrine is to
warrant a presumption or inference that the mere fall of the elevator was a
result of the person having charge of the instrumentality was negligent. As

75

a rule of evidence, the doctrine of res ipsa loquitur is peculiar to the law of
negligence which recognizes that prima facie negligence may be established
without direct proof and furnishes a substitute for specific proof of
negligence.20
The concept of res ipsa loquitur has been explained in this wise:
While negligence is not ordinarily inferred or presumed, and while the mere
happening of an accident or injury will not generally give rise to an
inference or presumption that it was due to negligence on defendants part,
under the doctrine of res ipsa loquitur, which means, literally, the thing or
transaction speaks for itself, or in one jurisdiction, that the thing or
instrumentality speaks for itself, the facts or circumstances accompanying
an injury may be such as to raise a presumption, or at least permit an
inference of negligence on the part of the defendant, or some other person
who is charged with negligence.
x x x where it is shown that the thing or instrumentality which caused the
injury complained of was under the control or management of the
defendant, and that the occurrence resulting in the injury was such as in
the ordinary course of things would not happen if those who had its control
or management used proper care, there is sufficient evidence, or, as
sometimes stated, reasonable evidence, in the absence of explanation by
the defendant, that the injury arose from or was caused by the defendants
want of care.21
One of the theoretical based for the doctrine is its necessity, i.e., that
necessary evidence is absent or not available.22
The res ipsa loquitur doctrine is based in part upon the theory that the
defendant in charge of the instrumentality which causes the injury either
knows the cause of the accident or has the best opportunity of ascertaining
it and that the plaintiff has no such knowledge, and therefore is compelled
to allege negligence in general terms and to rely upon the proof of the
happening of the accident in order to establish negligence. The inference
which the doctrine permits is grounded upon the fact that the chief
evidence of the true cause, whether culpable or innocent, is practically
accessible to the defendant but inaccessible to the injured person.
It has been said that the doctrine of res ipsa loquitur furnishes a bridge by
which a plaintiff, without knowledge of the cause, reaches over to
defendant who knows or should know the cause, for any explanation of care
exercised by the defendant in respect of the matter of which the plaintiff
complains. The res ipsa loquitur doctrine, another court has said, is a rule of
necessity, in that it proceeds on the theory that under the peculiar
circumstances in which the doctrine is applicable, it is within the power of
the defendant to show that there was no negligence on his part, and direct
proof of defendants negligence is beyond plaintiffs power. Accordingly,
some court add to the three prerequisites for the application of the res ipsa
loquitur doctrine the further requirement that for the res ipsa loquitur
doctrine to apply, it must appear that the injured party had no knowledge
or means of knowledge as to the cause of the accident, or that the party to
be charged with negligence has superior knowledge or opportunity for
explanation of the accident.23

76

The CA held that all the requisites of res ipsa loquitur are present in the
case at bar:
There is no dispute that appellees husband fell down from the 14th floor of
a building to the basement while he was working with appellants
construction project, resulting to his death. The construction site is within
the exclusive control and management of appellant. It has a safety
engineer, a project superintendent, a carpenter leadman and others who
are in complete control of the situation therein. The circumstances of any
accident that would occur therein are peculiarly within the knowledge of the
appellant or its employees. On the other hand, the appellee is not in a
position to know what caused the accident. Res ipsa loquitur is a rule of
necessity and it applies where evidence is absent or not readily available,
provided the following requisites are present: (1) the accident was of a kind
which does not ordinarily occur unless someone is negligent; (2) the
instrumentality or agency which caused the injury was under the exclusive
control of the person charged with negligence; and (3) the injury suffered
must not have been due to any voluntary action or contribution on the part
of the person injured. x x x.
No worker is going to fall from the 14th floor of a building to the basement
while performing work in a construction site unless someone is negligent[;]
thus, the first requisite for the application of the rule of res ipsa loquitur is
present. As explained earlier, the construction site with all its paraphernalia
and human resources that likely caused the injury is under the exclusive
control and management of appellant[;] thus[,] the second requisite is also
present. No contributory negligence was attributed to the appellees
deceased husband[;] thus[,] the last requisite is also present. All the
requisites for the application of the rule of res ipsa loquitur are present,
thus a reasonable presumption or inference of appellants negligence arises.
x x x.24
Petitioner does not dispute the existence of the requisites for the application
of res ipsa loquitur, but argues that the presumption or inference that it
was negligent did not arise since it "proved that it exercised due care to
avoid the accident which befell respondents husband."
Petitioner apparently misapprehends the procedural effect of the doctrine.
As stated earlier, the defendants negligence is presumed or inferred25 when
the plaintiff establishes the requisites for the application of res ipsa loquitur.
Once the plaintiff makes out a prima facie case of all the elements, the
burden then shifts to defendant to explain.26 The presumption or inference
may be rebutted or overcome by other evidence and, under appropriate
circumstances disputable presumption, such as that of due care or
innocence, may outweigh the inference.27 It is not for the defendant to
explain or prove its defense to prevent the presumption or inference from
arising. Evidence by the defendant of say, due care, comes into play only
after the circumstances for the application of the doctrine has been
established.1wphi1.nt
In any case, petitioner cites the sworn statement of its leadman Ferdinand
Fabro executed before the police investigator as evidence of its due care.
According to Fabros sworn statement, the company enacted rules and

77

regulations for the safety and security of its workers. Moreover, the
leadman and the bodegero inspect the chain block before allowing its use.
It is ironic that petitioner relies on Fabros sworn statement as proof of its
due care but, in arguing that private respondent failed to prove negligence
on the part of petitioners employees, also assails the same statement for
being hearsay.
Petitioner is correct. Fabros sworn statement is hearsay and inadmissible.
Affidavits are inadmissible as evidence under the hearsay rule, unless the
affiant is placed on the witness stand to testify thereon.28 The
inadmissibility of this sort of evidence is based not only on the lack of
opportunity on the part of the adverse party to cross-examine the affiant,
but also on the commonly known fact that, generally, an affidavit is not
prepared by the affiant himself but by another who uses his own language
in writing the affiants statements which may either be omitted or
misunderstood by the one writing them.29 Petitioner, therefore, cannot use
said statement as proof of its due care any more than private respondent
can use it to prove the cause of her husbands death. Regrettably,
petitioner does not cite any other evidence to rebut the inference or
presumption of negligence arising from the application of res ipsa loquitur,
or to establish any defense relating to the incident.
Next, petitioner argues that private respondent had previously availed of
the death benefits provided under the Labor Code and is, therefore,
precluded from claiming from the deceaseds employer damages under the
Civil Code.
Article 173 of the Labor Code states:
Article 173. Extent of liability. Unless otherwise provided, the liability of
the State Insurance Fund under this Title shall be exclusive and in place of
all other liabilities of the employer to the employee, his dependents or
anyone otherwise entitled to receive damages on behalf of the employee or
his dependents. The payment of compensation under this Title shall not bar
the recovery of benefits as provided for in Section 699 of the Revised
Administrative Code, Republic Act Numbered Eleven hundred sixty-one, as
amended, Republic Act Numbered Six hundred ten, as amended, Republic
Act Numbered Forty-eight hundred sixty-four as amended, and other laws
whose benefits are administered by the System or by other agencies of the
government.
The precursor of Article 173 of the Labor Code, Section 5 of the Workmens
Compensation Act, provided that:
Section 5. Exclusive right to compensation. The rights and remedies
granted by this Act to an employee by reason of a personal injury entitling
him to compensation shall exclude all other rights and remedies accruing to
the employee, his personal representatives, dependents or nearest of kin
against the employer under the Civil Code and other laws because of said
injury x x x.
Whether Section 5 of the Workmens Compensation Act allowed recovery
under said Act as well as under the Civil Code used to be the subject of
conflicting decisions. The Court finally settled the matter in Floresca
vs.Philex Mining Corporation,30 which involved a cave-in resulting in the
death of the employees of the Philex Mining Corporation. Alleging that the

78

mining corporation, in violation of government rules and regulations, failed

to take the required precautions for the protection of the employees, the
heirs of the deceased employees filed a complaint against Philex Mining in
the Court of First Instance (CFI). Upon motion of Philex Mining, the CFI
dismissed the complaint for lack of jurisdiction. The heirs sought relief from
this Court.
Addressing the issue of whether the heirs had a choice of remedies,
majority of the Court En Banc,31 following the rule in Pacaa vs. Cebu
Autobus Company, held in the affirmative.
WE now come to the query as to whether or not the injured employee or his
heirs in case of death have a right of selection or choice of action between
availing themselves of the workers right under the Workmens
Compensation Act and suing in the regular courts under the Civil Code for
higher damages (actual, moral and exemplary) from the employers by
virtue of the negligence or fault of the employers or whether they may avail
themselves cumulatively of both actions, i.e., collect the limited
compensation under the Workmens Compensation Act and sue in addition
for damages in the regular courts.
In disposing of a similar issue, this Court in Pacaa vs. Cebu Autobus
Company, 32 SCRA 442, ruled that an injured worker has a choice of either
to recover from the employer the fixed amounts set by the Workmens
Compensation Act or to prosecute an ordinary civil action against the
tortfeasor for higher damages but he cannot pursue both courses of action
simultaneously. [Underscoring supplied.]
Nevertheless, the Court allowed some of the petitioners in said case to
proceed with their suit under the Civil Code despite having availed of the
benefits provided under the Workmens Compensation Act. The Court
reasoned:
With regard to the other petitioners, it was alleged by Philex in its motion to
dismiss dated May 14, 1968 before the court a quo, that the heirs of the
deceased employees, namely Emerito Obra, Larry Villar, Jr., Aurelio Lanuza,
Lorenzo Isla and Saturnino submitted notices and claims for compensation
to the Regional Office No. 1 of the then Department of Labor and all of
them have been paid in full as of August 25, 1967, except Saturnino
Martinez whose heirs decided that they be paid in installments x x x. Such
allegation was admitted by herein petitioners in their opposition to the
motion to dismiss dated may 27, 1968 x x x in the lower court, but they set
up the defense that the claims were filed under the Workmens
Compensation Act before they learned of the official report of the
committee created to investigate the accident which established the
criminal negligence and violation of law by Philex, and which report was
forwarded by the Director of Mines to then Executive Secretary Rafael Salas
in a letter dated October 19, 1967 only x x x.
WE hold that although the other petitioners had received the benefits under
the Workmens Compensation Act, such my not preclude them from
bringing an action before the regular court because they became cognizant
of the fact that Philex has been remiss in its contractual obligations with the
deceased miners only after receiving compensation under the Act. Had
petitioners been aware of said violation of government rules and regulations

79

by Philex, and of its negligence, they would not have sought redress under
the Workmens Compensation Commission which awarded a lesser amount
for compensation. The choice of the first remedy was based on ignorance or
a mistake of fact, which nullifies the choice as it was not an intelligent
choice. The case should therefore be remanded to the lower court for
further proceedings. However, should the petitioners be successful in their
bid before the lower court, the payments made under the Workmens
Compensation Act should be deducted from the damages that may be
decreed in their favor. [Underscoring supplied.]
The ruling in Floresca providing the claimant a choice of remedies was
reiterated in Ysmael Maritime Corporation vs. Avelino,32 Vda. De Severo vs.
Feliciano-Go,33 and Marcopper Mining Corp. vs. Abeleda.34 In the last case,
the Court again recognized that a claimant who had been paid under the
Act could still sue under the Civil Code. The Court said:
In the Robles case, it was held that claims for damages sustained by
workers in the course of their employment could be filed only under the
Workmens Compensation Law, to the exclusion of all further claims under
other laws. In Floresca, this doctrine was abrogated in favor of the new rule
that the claimants may invoke either the Workmens Compensation Act or
the provisions of the Civil Code, subject to the consequence that the choice
of one remedy will exclude the other and that the acceptance of
compensation under the remedy chosen will preclude a claim for additional
benefits under the other remedy. The exception is where a claimant who
has already been paid under the Workmens Compensation Act may still sue
for damages under the Civil Code on the basis of supervening facts or
developments occurring after he opted for the first remedy. (Underscoring
supplied.)
Here, the CA held that private respondents case came under the exception
because private respondent was unaware of petitioners negligence when
she filed her claim for death benefits from the State Insurance Fund. Private
respondent filed the civil complaint for damages after she received a copy
of the police investigation report and the Prosecutors Memorandum
dismissing the criminal complaint against petitioners personnel. While
stating that there was no negligence attributable to the respondents in the
complaint, the prosecutor nevertheless noted in the Memorandum that, "if
at all," the "case is civil in nature." The CA thus applied the exception in
Floresca:
x x x We do not agree that appellee has knowledge of the alleged
negligence of appellant as early as November 25, 1990, the date of the
police investigators report. The appellee merely executed her sworn
statement before the police investigator concerning her personal
circumstances, her relation to the victim, and her knowledge of the
accident. She did not file the complaint for "Simple Negligence Resulting to
Homicide" against appellants employees. It was the investigator who
recommended the filing of said case and his supervisor referred the same to
the prosecutors office. This is a standard operating procedure for police
investigators which appellee may not have even known. This may explain
why no complainant is mentioned in the preliminary statement of the public
prosecutor in her memorandum dated February 6, 1991, to wit:

80

"Respondent Ferdinand Fabro x x x are being charged by complainant of

"Simple Negligence Resulting to Homicide." It is also possible that the
appellee did not have a chance to appear before the public prosecutor as
can be inferred from the following statement in said memorandum:
"Respondents who were notified pursuant to Law waived their rights to
present controverting evidence," thus there was no reason for the public
prosecutor to summon the appellee. Hence, notice of appellants negligence
cannot be imputed on appellee before she applied for death benefits under
ECC or before she received the first payment therefrom. Her using the
police investigation report to support her complaint filed on May 9, 1991
may just be an afterthought after receiving a copy of the February 6, 1991
Memorandum of the Prosecutors Office dismissing the criminal complaint
for insufficiency of evidence, stating therein that: "The death of the victim is
not attributable to any negligence on the part of the respondents. If at all
and as shown by the records this case is civil in nature." (Underscoring
supplied.) Considering the foregoing, We are more inclined to believe
appellees allegation that she learned about appellants negligence only
after she applied for and received the benefits under ECC. This is a mistake
of fact that will make this case fall under the exception held in the Floresca
ruling.35
The CA further held that not only was private respondent ignorant of the
facts, but of her rights as well:
x x x. Appellee [Maria Juego] testified that she has reached only elementary
school for her educational attainment; that she did not know what damages
could be recovered from the death of her husband; and that she did not
know that she may also recover more from the Civil Code than from the
ECC. x x x.36
Petitioner impugns the foregoing rulings. It contends that private
respondent "failed to allege in her complaint that her application and receipt
of benefits from the ECC were attended by ignorance or mistake of fact. Not
being an issue submitted during the trial, the trial court had no authority to
hear or adjudicate that issue."
Petitioner also claims that private respondent could not have been ignorant
of the facts because as early as November 28, 1990, private respondent
was the complainant in a criminal complaint for "Simple Negligence
Resulting to Homicide" against petitioners employees. On February 6,
1991, two months before the filing of the action in the lower court,
Prosecutor Lorna Lee issued a resolution finding that, although there was
insufficient evidence against petitioners employees, the case was "civil in
nature." These purportedly show that prior to her receipt of death benefits
from the ECC on January 2, 1991 and every month thereafter, private
respondent also knew of the two choices of remedies available to her and
yet she chose to claim and receive the benefits from the ECC.
When a party having knowledge of the facts makes an election between
inconsistent remedies, the election is final and bars any action, suit, or
proceeding inconsistent with the elected remedy, in the absence of fraud by
the other party. The first act of election acts as a bar.37 Equitable in nature,
the doctrine of election of remedies is designed to mitigate possible
unfairness to both parties. It rests on the moral premise that it is fair to

81

hold people responsible for their choices. The purpose of the doctrine is not
to prevent any recourse to any remedy, but to prevent a double redress for
a single wrong.38
The choice of a party between inconsistent remedies results in a waiver by
election. Hence, the rule in Floresca that a claimant cannot simultaneously
pursue recovery under the Labor Code and prosecute an ordinary course of
action under the Civil Code. The claimant, by his choice of one remedy, is
deemed to have waived the other.
Waiver is the intentional relinquishment of a known right.39
[It] is an act of understanding that presupposes that a party has knowledge
of its rights, but chooses not to assert them. It must be generally shown by
the party claiming a waiver that the person against whom the waiver is
asserted had at the time knowledge, actual or constructive, of the existence
of the partys rights or of all material facts upon which they depended.
Where one lacks knowledge of a right, there is no basis upon which waiver
of it can rest. Ignorance of a material fact negates waiver, and waiver
cannot be established by a consent given under a mistake or
misapprehension of fact.
A person makes a knowing and intelligent waiver when that person knows
that a right exists and has adequate knowledge upon which to make an
intelligent decision.
Waiver requires a knowledge of the facts basic to the exercise of the right
waived, with an awareness of its consequences. That a waiver is made
knowingly and intelligently must be illustrated on the record or by the
evidence.40
That lack of knowledge of a fact that nullifies the election of a remedy is the
basis for the exception in Floresca.
It is in light of the foregoing principles that we address petitioners
contentions.
Waiver is a defense, and it was not incumbent upon private respondent, as
plaintiff, to allege in her complaint that she had availed of benefits from the
ECC. It is, thus, erroneous for petitioner to burden private respondent with
raising waiver as an issue. On the contrary, it is the defendant who ought to
plead waiver, as petitioner did in pages 2-3 of its Answer;41 otherwise, the
defense is waived. It is, therefore, perplexing for petitioner to now contend
that the trial court had no jurisdiction over the issue when petitioner itself
pleaded waiver in the proceedings before the trial court.
Does the evidence show that private respondent knew of the facts that led
to her husbands death and the rights pertaining to a choice of remedies?
It bears stressing that what negates waiver is lack of knowledge or a
mistake of fact. In this case, the "fact" that served as a basis for nullifying
the waiver is the negligence of petitioners employees, of which private
respondent purportedly learned only after the prosecutor issued a resolution
stating that there may be civil liability. In Floresca, it was the negligence of
the mining corporation and its violation of government rules and
regulations. Negligence, or violation of government rules and regulations,
for that matter, however, is not a fact, but a conclusion of law, over which
only the courts have the final say. Such a conclusion binds no one until the
courts have decreed so. It appears, therefore, that the principle that

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ignorance or mistake of fact nullifies a waiver has been misapplied in

Floresca and in the case at bar.
In any event, there is no proof that private respondent knew that her
husband died in the elevator crash when on November 15, 1990 she
accomplished her application for benefits from the ECC. The police
investigation report is dated November 25, 1990, 10 days after the
accomplishment of the form. Petitioner filed the application in her behalf on
November 27, 1990.
There is also no showing that private respondent knew of the remedies
available to her when the claim before the ECC was filed. On the contrary,
private respondent testified that she was not aware of her rights.
Petitioner, though, argues that under Article 3 of the Civil Code, ignorance
of the law excuses no one from compliance therewith. As judicial decisions
applying or interpreting the laws or the Constitution form part of the
Philippine legal system (Article 8, Civil Code), private respondent cannot
claim ignorance of this Courts ruling in Floresca allowing a choice of
remedies.
The argument has no merit. The application of Article 3 is limited to
mandatory and prohibitory laws.42 This may be deduced from the language
of the provision, which, notwithstanding a persons ignorance, does not
excuse his or her compliance with the laws. The rule in Floresca allowing
private respondent a choice of remedies is neither mandatory nor
prohibitory. Accordingly, her ignorance thereof cannot be held against her.
Finally, the Court modifies the affirmance of the award of damages. The
records do not indicate the total amount private respondent ought to
receive from the ECC, although it appears from Exhibit "K"43 that she
received P3,581.85 as initial payment representing the accrued pension
from November 1990 to March 1991. Her initial monthly pension, according
to the same Exhibit "K," was P596.97 and present total monthly pension
was P716.40. Whether the total amount she will eventually receive from the
ECC is less than the sum of P644,000.00 in total damages awarded by the
trial court is subject to speculation, and the case is remanded to the trial
court for such determination. Should the trial court find that its award is
greater than that of the ECC, payments already received by private
respondent under the Labor Code shall be deducted from the trial court'
award of damages. Consistent with our ruling in Floresca, this adjudication
aims to prevent double compensation.
WHEREFORE, the case is REMANDED to the Regional Trial Court of Pasig
City to determine whether the award decreed in its decision is more than
that of the ECC. Should the award decreed by the trial court be greater
than that awarded by the ECC, payments already made to private
respondent pursuant to the Labor Code shall be deducted therefrom. In all
other respects, the Decision of the Court of Appeals is AFFIRMED.
SO ORDERED.

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