G.R. No.

157917

August 29, 2012

SPOUSES TEODORO1 and NANETTE PERENA, Petitioners,

vs.
SPOUSES TERESITA PHILIPPINE NICOLAS and L. ZARATE, NATIONAL RAILWAYS, and the COURT OF
APPEALS Respondents.
DECISION
BERSAMIN, J.:
The operator of a. school bus service is a common carrier in the eyes of the law. He is bound to observe extraordinary diligence in
the conduct of his business. He is presumed to be negligent when death occurs to a passenger. His liability may include indemnity
for loss of earning capacity even if the deceased passenger may only be an unemployed high school student at the time of the
accident.
The Case
By petition for review on certiorari, Spouses Teodoro and Nanette Perefia (Perefias) appeal the adverse decision promulgated on
November 13, 2002, by which the Court of Appeals (CA) affirmed with modification the decision rendered on December 3, 1999 by
the Regional Trial Court (RTC), Branch 260, in Paraaque City that had decreed them jointly and severally liable with Philippine
National Railways (PNR), their co-defendant, to Spouses Nicolas and Teresita Zarate (Zarates) for the death of their 15-year old
son, Aaron John L. Zarate (Aaron), then a high school student of Don Bosco Technical Institute (Don Bosco).
Antecedents
The Pereas were engaged in the business of transporting students from their respective residences in Paraaque City to Don
Bosco in Pasong Tamo, Makati City, and back. In their business, the Pereas used a KIA Ceres Van (van) with Plate No. PYA 896,
which had the capacity to transport 14 students at a time, two of whom would be seated in the front beside the driver, and the
others in the rear, with six students on either side. They employed Clemente Alfaro (Alfaro) as driver of the van.
In June 1996, the Zarates contracted the Pereas to transport Aaron to and from Don Bosco. On August 22, 1996, as on previous
school days, the van picked Aaron up around 6:00 a.m. from the Zarates residence. Aaron took his place on the left side of the van
near the rear door. The van, with its air-conditioning unit turned on and the stereo playing loudly, ultimately carried all the 14 student
riders on their way to Don Bosco. Considering that the students were due at Don Bosco by 7:15 a.m., and that they were already
running late because of the heavy vehicular traffic on the South Superhighway, Alfaro took the van to an alternate route at about
6:45 a.m. by traversing the narrow path underneath the Magallanes Interchange that was then commonly used by Makati-bound
vehicles as a short cut into Makati. At the time, the narrow path was marked by piles of construction materials and parked
passenger jeepneys, and the railroad crossing in the narrow path had no railroad warning signs, or watchmen, or other responsible
persons manning the crossing. In fact, the bamboo barandilla was up, leaving the railroad crossing open to traversing motorists.
At about the time the van was to traverse the railroad crossing, PNR Commuter No. 302 (train), operated by Jhonny Alano (Alano),
was in the vicinity of the Magallanes Interchange travelling northbound. As the train neared the railroad crossing, Alfaro drove the
van eastward across the railroad tracks, closely tailing a large passenger bus. His view of the oncoming train was blocked because
he overtook the passenger bus on its left side. The train blew its horn to warn motorists of its approach. When the train was about
50 meters away from the passenger bus and the van, Alano applied the ordinary brakes of the train. He applied the emergency
brakes only when he saw that a collision was imminent. The passenger bus successfully crossed the railroad tracks, but the van
driven by Alfaro did not. The train hit the rear end of the van, and the impact threw nine of the 12 students in the rear, including
Aaron, out of the van. Aaron landed in the path of the train, which dragged his body and severed his head, instantaneously killing
him. Alano fled the scene on board the train, and did not wait for the police investigator to arrive.
Devastated by the early and unexpected death of Aaron, the Zarates commenced this action for damages against Alfaro, the
Pereas, PNR and Alano. The Pereas and PNR filed their respective answers, with cross-claims against each other, but Alfaro
could not be served with summons.
At the pre-trial, the parties stipulated on the facts and issues, viz:
A. FACTS:
That spouses Zarate were the legitimate parents of Aaron John L. Zarate;

(1) Spouses Zarate engaged the services of spouses Perea for the adequate and safe transportation carriage of the
former spouses' son from their residence in Paraaque to his school at the Don Bosco Technical Institute in Makati City;
(2) During the effectivity of the contract of carriage and in the implementation thereof, Aaron, the minor son of spouses
Zarate died in connection with a vehicular/train collision which occurred while Aaron was riding the contracted carrier Kia
Ceres van of spouses Perea, then driven and operated by the latter's employee/authorized driver Clemente Alfaro, which
van collided with the train of PNR, at around 6:45 A.M. of August 22, 1996, within the vicinity of the Magallanes
Interchange in Makati City, Metro Manila, Philippines;
(3)At the time of the vehicular/train collision, the subject site of the vehicular/train collision was a railroad crossing used by
motorists for crossing the railroad tracks;
(4) During the said time of the vehicular/train collision, there were no appropriate and safety warning signs and railings at
the site commonly used for railroad crossing;
(5) At the material time, countless number of Makati bound public utility and private vehicles used on a daily basis the site
of the collision as an alternative route and short-cut to Makati;
(6) The train driver or operator left the scene of the incident on board the commuter train involved without waiting for the
police investigator;
(7) The site commonly used for railroad crossing by motorists was not in fact intended by the railroad operator for railroad
crossing at the time of the vehicular collision;
(8) PNR received the demand letter of the spouses Zarate;
(9) PNR refused to acknowledge any liability for the vehicular/train collision;
(10)The eventual closure of the railroad crossing alleged by PNR was an internal arrangement between the former and its
project contractor; and
(11)The site of the vehicular/train collision was within the vicinity or less than 100 meters from the Magallanes station of
PNR.(12)
B. ISSUES
(1) Whether or not defendant-driver of the van is, in the performance of his functions, liable for negligence constituting the
proximate cause of the vehicular collision, which resulted in the death of plaintiff spouses' son;
(2) Whether or not the defendant spouses Perea being the employer of defendant Alfaro are liable for any negligence
which may be attributed to defendant Alfaro;
(3) Whether or not defendant Philippine National Railways being the operator of the railroad system is liable for negligence
in failing to provide adequate safety warning signs and railings in the area commonly used by motorists for railroad
crossings, constituting the proximate cause of the vehicular collision which resulted in the death of the plaintiff spouses'
son;
(4) Whether or not defendant spouses Perea are liable for breach of the contract of carriage with plaintiff-spouses in
failing to provide adequate and safe transportation for the latter's son;
(5) Whether or not defendants spouses are liable for actual, moral damages, exemplary damages, and attorney's fees;
(6) Whether or not defendants spouses Teodorico and Nanette Perea observed the diligence of employers and school
bus operators;
(7) Whether or not defendant-spouses are civilly liable for the accidental death of Aaron John Zarate;

(8) Whether or not defendant PNR was grossly negligent in operating the commuter train involved in the accident, in
allowing or tolerating the motoring public to cross, and its failure to install safety devices or equipment at the site of the
accident for the protection of the public;
(9) Whether or not defendant PNR should be made to reimburse defendant spouses for any and whatever amount the
latter may be held answerable or which they may be ordered to pay in favor of plaintiffs by reason of the action;
(10) Whether or not defendant PNR should pay plaintiffs directly and fully on the amounts claimed by the latter in their
Complaint by reason of its gross negligence;
(11) Whether or not defendant PNR is liable to defendants spouses for actual, moral and exemplary damages and
attorney's fees.2
The Zarates claim against the Pereas was upon breach of the contract of carriage for the safe transport of Aaron; but that against
PNR was based on quasi-delict under Article 2176, Civil Code.
In their defense, the Pereas adduced evidence to show that they had exercised the diligence of a good father of the family in the
selection and supervision of Alfaro, by making sure that Alfaro had been issued a drivers license and had not been involved in any
vehicular accident prior to the collision; that their own son had taken the van daily; and that Teodoro Perea had sometimes
accompanied Alfaro in the vans trips transporting the students to school.
For its part, PNR tended to show that the proximate cause of the collision had been the reckless crossing of the van whose driver
had not first stopped, looked and listened; and that the narrow path traversed by the van had not been intended to be a railroad
crossing for motorists.
Ruling of the RTC
On December 3, 1999, the RTC rendered its decision,3 disposing:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendants ordering
them to jointly and severally pay the plaintiffs as follows:
(1) (for) the death of Aaron- Php50,000.00;
(2) Actual damages in the amount of Php100,000.00;
(3) For the loss of earning capacity- Php2,109,071.00;
(4) Moral damages in the amount of Php4,000,000.00;
(5) Exemplary damages in the amount of Php1,000,000.00;
(6) Attorneys fees in the amount of Php200,000.00; and
(7) Cost of suit.
SO ORDERED.
On June 29, 2000, the RTC denied the Pereas motion for reconsideration, 4 reiterating that the cooperative gross negligence of
the Pereas and PNR had caused the collision that led to the death of Aaron; and that the damages awarded to the Zarates were
not excessive, but based on the established circumstances.
The CAs Ruling
Both the Pereas and PNR appealed (C.A.-G.R. CV No. 68916).
PNR assigned the following errors, to wit:5
The Court a quo erred in:

1. In finding the defendant-appellant Philippine National Railways jointly and severally liable together with defendantappellants spouses Teodorico and Nanette Perea and defendant-appellant Clemente Alfaro to pay plaintiffs-appellees for
the death of Aaron Zarate and damages.
2. In giving full faith and merit to the oral testimonies of plaintiffs-appellees witnesses despite overwhelming documentary
evidence on record, supporting the case of defendants-appellants Philippine National Railways.
The Pereas ascribed the following errors to the RTC, namely:
The trial court erred in finding defendants-appellants jointly and severally liable for actual, moral and exemplary damages and
attorneys fees with the other defendants.
The trial court erred in dismissing the cross-claim of the appellants Pereas against the Philippine National Railways and in not
holding the latter and its train driver primarily responsible for the incident.
The trial court erred in awarding excessive damages and attorneys fees.
The trial court erred in awarding damages in the form of deceaseds loss of earning capacity in the absence of sufficient basis for
such an award.
On November 13, 2002, the CA promulgated its decision, affirming the findings of the RTC, but limited the moral damages
to P 2,500,000.00; and deleted the attorneys fees because the RTC did not state the factual and legal bases, to wit:6
WHEREFORE, premises considered, the assailed Decision of the Regional Trial Court, Branch 260 of Paraaque City is
AFFIRMED with the modification that the award of Actual Damages is reduced to P59,502.76; Moral Damages is reduced
to P 2,500,000.00; and the award for Attorneys Fees is Deleted.
SO ORDERED.
The CA upheld the award for the loss of Aarons earning capacity, taking cognizance of the ruling in Cariaga v. Laguna Tayabas
Bus Company and Manila Railroad Company,7 wherein the Court gave the heirs of Cariaga a sum representing the loss of the
deceaseds earning capacity despite Cariaga being only a medical student at the time of the fatal incident. Applying the formula
adopted in the American Expectancy Table of Mortality:
2/3 x (80 - age at the time of death) = life expectancy
the CA determined the life expectancy of Aaron to be 39.3 years upon reckoning his life expectancy from age of 21 (the age when
he would have graduated from college and started working for his own livelihood) instead of 15 years (his age when he died).
Considering that the nature of his work and his salary at the time of Aarons death were unknown, it used the prevailing minimum
wage of P 280.00/day to compute Aarons gross annual salary to be P 110,716.65, inclusive of the thirteenth month pay. Multiplying
this annual salary by Aarons life expectancy of 39.3 years, his gross income would aggregate to P 4,351,164.30, from which his
estimated expenses in the sum of P 2,189,664.30 was deducted to finally arrive at P 2,161,500.00 as net income. Due to Aarons
computed net income turning out to be higher than the amount claimed by the Zarates, only P 2,109,071.00, the amount expressly
prayed for by them, was granted.
On April 4, 2003, the CA denied the Pereas motion for reconsideration.8

Issues
In this appeal, the Pereas list the following as the errors committed by the CA, to wit:
I. The lower court erred when it upheld the trial courts decision holding the petitioners jointly and severally liable to pay damages
with Philippine National Railways and dismissing their cross-claim against the latter.
II. The lower court erred in affirming the trial courts decision awarding damages for loss of earning capacity of a minor who was
only a high school student at the time of his death in the absence of sufficient basis for such an award.
III. The lower court erred in not reducing further the amount of damages awarded, assuming petitioners are liable at all.

Ruling
The petition has no merit.
1.

Were the Pereas and PNR jointly and severally liable for damages?

The Zarates brought this action for recovery of damages against both the Pereas and the PNR, basing their claim against the
Pereas on breach of contract of carriage and against the PNR on quasi-delict.
The RTC found the Pereas and the PNR negligent. The CA affirmed the findings.
We concur with the CA.
To start with, the Pereas defense was that they exercised the diligence of a good father of the family in the selection and
supervision of Alfaro, the van driver, by seeing to it that Alfaro had a drivers license and that he had not been involved in any
vehicular accident prior to the fatal collision with the train; that they even had their own son travel to and from school on a daily
basis; and that Teodoro Perea himself sometimes accompanied Alfaro in transporting the passengers to and from school. The
RTC gave scant consideration to such defense by regarding such defense as inappropriate in an action for breach of contract of
carriage.
We find no adequate cause to differ from the conclusions of the lower courts that the Pereas operated as a common carrier; and
that their standard of care was extraordinary diligence, not the ordinary diligence of a good father of a family.
Although in this jurisdiction the operator of a school bus service has been usually regarded as a private carrier, 9primarily because
he only caters to some specific or privileged individuals, and his operation is neither open to the indefinite public nor for public use,
the exact nature of the operation of a school bus service has not been finally settled. This is the occasion to lay the matter to rest.
A carrier is a person or corporation who undertakes to transport or convey goods or persons from one place to another, gratuitously
or for hire. The carrier is classified either as a private/special carrier or as a common/public carrier.10 A private carrier is one who,
without making the activity a vocation, or without holding himself or itself out to the public as ready to act for all who may desire his
or its services, undertakes, by special agreement in a particular instance only, to transport goods or persons from one place to
another either gratuitously or for hire. 11The provisions on ordinary contracts of the Civil Code govern the contract of private
carriage.The diligence required of a private carrier is only ordinary, that is, the diligence of a good father of the family. In contrast, a
common carrier is a person, corporation, firm or association engaged in the business of carrying or transporting passengers or
goods or both, by land, water, or air, for compensation, offering such services to the public. 12Contracts of common carriage are
governed by the provisions on common carriers of the Civil Code, the Public Service Act, 13 and other special laws relating to
transportation. A common carrier is required to observe extraordinary diligence, and is presumed to be at fault or to have acted
negligently in case of the loss of the effects of passengers, or the death or injuries to passengers.14
In relation to common carriers, the Court defined public use in the following terms in United States v. Tan Piaco,15viz:
"Public use" is the same as "use by the public". The essential feature of the public use is not confined to privileged individuals, but
is open to the indefinite public. It is this indefinite or unrestricted quality that gives it its public character. In determining whether a
use is public, we must look not only to the character of the business to be done, but also to the proposed mode of doing it. If the
use is merely optional with the owners, or the public benefit is merely incidental, it is not a public use, authorizing the exercise of
the jurisdiction of the public utility commission. There must be, in general, a right which the law compels the owner to give to the
general public. It is not enough that the general prosperity of the public is promoted. Public use is not synonymous with public
interest. The true criterion by which to judge the character of the use is whether the public may enjoy it by right or only by
permission.
In De Guzman v. Court of Appeals,16 the Court noted that Article 1732 of the Civil Code avoided any distinction between a person or
an enterprise offering transportation on a regular or an isolated basis; and has not distinguished a carrier offering his services to the
general public, that is, the general community or population, from one offering his services only to a narrow segment of the general
population.
Nonetheless, the concept of a common carrier embodied in Article 1732 of the Civil Code coincides neatly with the notion of public
service under the Public Service Act, which supplements the law on common carriers found in the Civil Code. Public service,
according to Section 13, paragraph (b) of the Public Service Act, includes:
x x x every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with
general or limited clientle, whether permanent or occasional, and done for the general business purposes, any common carrier,
railroad, street railway, traction railway, subway motor vehicle, either for freight or passenger, or both, with or without fixed route

and whatever may be its classification, freight or carrier service of any class, express service, steamboat, or steamship line,
pontines, ferries and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine repair shop, icerefrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power petroleum, sewerage
system, wire or wireless communications systems, wire or wireless broadcasting stations and other similar public services. x x x.17
Given the breadth of the aforequoted characterization of a common carrier, the Court has considered as common carriers pipeline
operators,18 custom brokers and warehousemen,19 and barge operators20 even if they had limited clientle.
As all the foregoing indicate, the true test for a common carrier is not the quantity or extent of the business actually transacted, or
the number and character of the conveyances used in the activity, but whether the undertaking is a part of the activity engaged in
by the carrier that he has held out to the general public as his business or occupation. If the undertaking is a single transaction, not
a part of the general business or occupation engaged in, as advertised and held out to the general public, the individual or the
entity rendering such service is a private, not a common, carrier. The question must be determined by the character of the business
actually carried on by the carrier, not by any secret intention or mental reservation it may entertain or assert when charged with the
duties and obligations that the law imposes.21
Applying these considerations to the case before us, there is no question that the Pereas as the operators of a school bus service
were: (a) engaged in transporting passengers generally as a business, not just as a casual occupation; (b) undertaking to carry
passengers over established roads by the method by which the business was conducted; and (c) transporting students for a fee.
Despite catering to a limited clientle, the Pereas operated as a common carrier because they held themselves out as a ready
transportation indiscriminately to the students of a particular school living within or near where they operated the service and for a
fee.
The common carriers standard of care and vigilance as to the safety of the passengers is defined by law. Given the nature of the
business and for reasons of public policy, the common carrier is bound "to observe extraordinary diligence in the vigilance over the
goods and for the safety of the passengers transported by them, according to all the circumstances of each case." 22 Article 1755 of
the Civil Code specifies that the common carrier should "carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances." To successfully fend off
liability in an action upon the death or injury to a passenger, the common carrier must prove his or its observance of that
extraordinary diligence; otherwise, the legal presumption that he or it was at fault or acted negligently would stand. 23 No device,
whether by stipulation, posting of notices, statements on tickets, or otherwise, may dispense with or lessen the responsibility of the
common carrier as defined under Article 1755 of the Civil Code. 24
And, secondly, the Pereas have not presented any compelling defense or reason by which the Court might now reverse the CAs
findings on their liability. On the contrary, an examination of the records shows that the evidence fully supported the findings of the
CA.
As earlier stated, the Pereas, acting as a common carrier, were already presumed to be negligent at the time of the accident
because death had occurred to their passenger.25 The presumption of negligence, being a presumption of law, laid the burden of
evidence on their shoulders to establish that they had not been negligent. 26 It was the law no less that required them to prove their
observance of extraordinary diligence in seeing to the safe and secure carriage of the passengers to their destination. Until they did
so in a credible manner, they stood to be held legally responsible for the death of Aaron and thus to be held liable for all the natural
consequences of such death.
There is no question that the Pereas did not overturn the presumption of their negligence by credible evidence. Their defense of
having observed the diligence of a good father of a family in the selection and supervision of their driver was not legally sufficient.
According to Article 1759 of the Civil Code, their liability as a common carrier did not cease upon proof that they exercised all the
diligence of a good father of a family in the selection and supervision of their employee. This was the reason why the RTC treated
this defense of the Pereas as inappropriate in this action for breach of contract of carriage.
The Pereas were liable for the death of Aaron despite the fact that their driver might have acted beyond the scope of his authority
or even in violation of the orders of the common carrier.27 In this connection, the records showed their drivers actual negligence.
There was a showing, to begin with, that their driver traversed the railroad tracks at a point at which the PNR did not permit
motorists going into the Makati area to cross the railroad tracks. Although that point had been used by motorists as a shortcut into
the Makati area, that fact alone did not excuse their driver into taking that route. On the other hand, with his familiarity with that
shortcut, their driver was fully aware of the risks to his passengers but he still disregarded the risks. Compounding his lack of care
was that loud music was playing inside the air-conditioned van at the time of the accident. The loudness most probably reduced his
ability to hear the warning horns of the oncoming train to allow him to correctly appreciate the lurking dangers on the railroad
tracks. Also, he sought to overtake a passenger bus on the left side as both vehicles traversed the railroad tracks. In so doing, he
lost his view of the train that was then coming from the opposite side of the passenger bus, leading him to miscalculate his chances
of beating the bus in their race, and of getting clear of the train. As a result, the bus avoided a collision with the train but the van got
slammed at its rear, causing the fatality. Lastly, he did not slow down or go to a full stop before traversing the railroad tracks despite
knowing that his slackening of speed and going to a full stop were in observance of the right of way at railroad tracks as defined by

the traffic laws and regulations.28 He thereby violated a specific traffic regulation on right of way, by virtue of which he was
immediately presumed to be negligent.29
The omissions of care on the part of the van driver constituted negligence, 30 which, according to Layugan v. Intermediate Appellate
Court,31 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, 32 or as Judge
Cooley defines it, (t)he failure to observe for the protection of the interests of another person, that degree of care, precaution, and
vigilance which the circumstances justly demand, whereby such other person suffers injury."33
The test by which to determine the existence of negligence in a particular case has been aptly stated in the leading case of Picart v.
Smith,34 thuswise:
The test by which to determine the existence of negligence in a particular case may be stated as follows: Did the defendant in
doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the
same situation? If not, then he is guilty of negligence. The law here in effect adopts the standard supposed to be supplied by the
imaginary conduct of the discreet paterfamilias of the Roman law. The existence of negligence in a given case is not determined by
reference to the personal judgment of the actor in the situation before him. The law considers what would be reckless,
blameworthy, or negligent in the man of ordinary intelligence and prudence and determines liability by that.
The question as to what would constitute the conduct of a prudent man in a given situation must of course be always determined in
the light of human experience and in view of the facts involved in the particular case. Abstract speculation cannot here be of much
value but this much can be profitably said: Reasonable men govern their conduct by the circumstances which are before them or
known to them. They are not, and are not supposed to be, omniscient of the future. Hence they can be expected to take care only
when there is something before them to suggest or warn of danger. Could a prudent man, in the case under consideration, foresee
harm as a result of the course actually pursued? If so, it was the duty of the actor to take precautions to guard against that harm.
Reasonable foresight of harm, followed by the ignoring of the suggestion born of this prevision, is always necessary before
negligence can be held to exist. Stated in these terms, the proper criterion for determining the existence of negligence in a given
case is this: Conduct is said to be negligent when a prudent man in the position of the tortfeasor would have foreseen that an effect
harmful to another was sufficiently probable to warrant his foregoing the conduct or guarding against its consequences. (Emphasis
supplied)
Pursuant to the Picart v. Smith test of negligence, the Pereas driver was entirely negligent when he traversed the railroad tracks
at a point not allowed for a motorists crossing despite being fully aware of the grave harm to be thereby caused to his passengers;
and when he disregarded the foresight of harm to his passengers by overtaking the bus on the left side as to leave himself blind to
the approach of the oncoming train that he knew was on the opposite side of the bus.
Unrelenting, the Pereas cite Phil. National Railways v. Intermediate Appellate Court, 35 where the Court held the PNR solely liable
for the damages caused to a passenger bus and its passengers when its train hit the rear end of the bus that was then traversing
the railroad crossing. But the circumstances of that case and this one share no similarities. In Philippine National Railways v.
Intermediate Appellate Court, no evidence of contributory negligence was adduced against the owner of the bus. Instead, it was the
owner of the bus who proved the exercise of extraordinary diligence by preponderant evidence. Also, the records are replete with
the showing of negligence on the part of both the Pereas and the PNR. Another distinction is that the passenger bus in Philippine
National Railways v. Intermediate Appellate Court was traversing the dedicated railroad crossing when it was hit by the train, but
the Pereas school van traversed the railroad tracks at a point not intended for that purpose.
At any rate, the lower courts correctly held both the Pereas and the PNR "jointly and severally" liable for damages arising from the
death of Aaron. They had been impleaded in the same complaint as defendants against whom the Zarates had the right to relief,
whether jointly, severally, or in the alternative, in respect to or arising out of the accident, and questions of fact and of law were
common as to the Zarates.36 Although the basis of the right to relief of the Zarates (i.e., breach of contract of carriage) against the
Pereas was distinct from the basis of the Zarates right to relief against the PNR (i.e., quasi-delict under Article 2176, Civil Code),
they nonetheless could be held jointly and severally liable by virtue of their respective negligence combining to cause the death of
Aaron. As to the PNR, the RTC rightly found the PNR also guilty of negligence despite the school van of the Pereas traversing the
railroad tracks at a point not dedicated by the PNR as a railroad crossing for pedestrians and motorists, because the PNR did not
ensure the safety of others through the placing of crossbars, signal lights, warning signs, and other permanent safety barriers to
prevent vehicles or pedestrians from crossing there. The RTC observed that the fact that a crossing guard had been assigned to
man that point from 7 a.m. to 5 p.m. was a good indicium that the PNR was aware of the risks to others as well as the need to
control the vehicular and other traffic there. Verily, the Pereas and the PNR were joint tortfeasors.
2. Was the indemnity for loss of Aarons earning capacity proper?
The RTC awarded indemnity for loss of Aarons earning capacity. Although agreeing with the RTC on the liability, the CA modified
the amount. Both lower courts took into consideration that Aaron, while only a high school student, had been enrolled in one of the
reputable schools in the Philippines and that he had been a normal and able-bodied child prior to his death. The basis for the

computation of Aarons earning capacity was not what he would have become or what he would have wanted to be if not for his
untimely death, but the minimum wage in effect at the time of his death. Moreover, the RTCs computation of Aarons life
expectancy rate was not reckoned from his age of 15 years at the time of his death, but on 21 years, his age when he would have
graduated from college.
We find the considerations taken into account by the lower courts to be reasonable and fully warranted.
Yet, the Pereas submit that the indemnity for loss of earning capacity was speculative and unfounded.1wphi1 They cited People
v. Teehankee, Jr.,37 where the Court deleted the indemnity for victim Jussi Leinos loss of earning capacity as a pilot for being
speculative due to his having graduated from high school at the International School in Manila only two years before the shooting,
and was at the time of the shooting only enrolled in the first semester at the Manila Aero Club to pursue his ambition to become a
professional pilot. That meant, according to the Court, that he was for all intents and purposes only a high school graduate.
We reject the Pereas submission.
First of all, a careful perusal of the Teehankee, Jr. case shows that the situation there of Jussi Leino was not akin to that of Aaron
here. The CA and the RTC were not speculating that Aaron would be some highly-paid professional, like a pilot (or, for that matter,
an engineer, a physician, or a lawyer). Instead, the computation of Aarons earning capacity was premised on him being a lowly
minimum wage earner despite his being then enrolled at a prestigious high school like Don Bosco in Makati, a fact that would have
likely ensured his success in his later years in life and at work.
And, secondly, the fact that Aaron was then without a history of earnings should not be taken against his parents and in favor of the
defendants whose negligence not only cost Aaron his life and his right to work and earn money, but also deprived his parents of
their right to his presence and his services as well. Our law itself states that the loss of the earning capacity of the deceased shall
be the liability of the guilty party in favor of the heirs of the deceased, and shall in every case be assessed and awarded by the
court "unless the deceased on account of permanent physical disability not caused by the defendant, had no earning capacity at
the time of his death."38Accordingly, we emphatically hold in favor of the indemnification for Aarons loss of earning capacity despite
him having been unemployed, because compensation of this nature is awarded not for loss of time or earnings but for loss of the
deceaseds power or ability to earn money.39
This favorable treatment of the Zarates claim is not unprecedented. In Cariaga v. Laguna Tayabas Bus Company and Manila
Railroad Company,40 fourth-year medical student Edgardo Carriagas earning capacity, although he survived the accident but his
injuries rendered him permanently incapacitated, was computed to be that of the physician that he dreamed to become. The Court
considered his scholastic record sufficient to justify the assumption that he could have finished the medical course and would have
passed the medical board examinations in due time, and that he could have possibly earned a modest income as a medical
practitioner. Also, in People v. Sanchez,41 the Court opined that murder and rape victim Eileen Sarmienta and murder victim Allan
Gomez could have easily landed good-paying jobs had they graduated in due time, and that their jobs would probably pay them
high monthly salaries from P 10,000.00 to P 15,000.00 upon their graduation. Their earning capacities were computed at rates
higher than the minimum wage at the time of their deaths due to their being already senior agriculture students of the University of
the Philippines in Los Baos, the countrys leading educational institution in agriculture.

3.

Were the amounts of damages excessive?

The Pereas plead for the reduction of the moral and exemplary damages awarded to the Zarates in the respective amounts
of P 2,500,000.00 and P 1,000,000.00 on the ground that such amounts were excessive.
The plea is unwarranted.
The moral damages of P 2,500,000.00 were really just and reasonable under the established circumstances of this case because
they were intended by the law to assuage the Zarates deep mental anguish over their sons unexpected and violent death, and
their moral shock over the senseless accident. That amount would not be too much, considering that it would help the Zarates
obtain the means, diversions or amusements that would alleviate their suffering for the loss of their child. At any rate, reducing the
amount as excessive might prove to be an injustice, given the passage of a long time from when their mental anguish was inflicted
on them on August 22, 1996.
Anent the P 1,000,000.00 allowed as exemplary damages, we should not reduce the amount if only to render effective the desired
example for the public good. As a common carrier, the Pereas needed to be vigorously reminded to observe their duty to exercise
extraordinary diligence to prevent a similarly senseless accident from happening again. Only by an award of exemplary damages in

that amount would suffice to instill in them and others similarly situated like them the ever-present need for greater and constant
vigilance in the conduct of a business imbued with public interest.
WHEREFORE, we DENY the petition for review on certiorari; AFFIRM the decision promulgated on November 13, 2002;
and ORDER the petitioners to pay the costs of suit.
SO ORDERED.

G.R. Nos. L-21353 and L-21354

May 20, 1966

GREGORIO ANURAN, MARIA MALIGAYA, LAPAZ LARO, ET AL., petitioners,

vs.
PEPITO BUO, PEDRO GAHOL, LUISA ALCANTARA, GUILLERMO RAZON, ANSELMO MALIGAYA and CEFERINA ARO, respondents.
BENGZON, C.J.:
At noon of January 12, 1958, a passenger jeepney was parked on the road to Taal, Batangas. A motor truck speeding along, negligently bumped it
from behind, with such violence that three of its passengers died, even as two others (passengers too) suffered injuries that required their
confinement at the Provincial Hospital for many days.
So, in February 1958 these suits were instituted by the representatives of the dead and of the injured, to recover consequently damages against the
driver and the owners of the truck and also against the driver and the owners of the jeepney.
The Batangas Court of First Instance, after trial, rendered judgment absolving the driver of the jeepney and its owners, but it required the truck
driver and the owners thereof to make compensation.

The plaintiffs appealed to the Court of Appeals insisting that the driver and the owners of the jeepney should also be made liable for damages.
The last mentioned court, upon reviewing the record, declared that:
It is admitted that at about noontime on January 13, 1958, the passenger jeepney owned by defendants spouses Pedro Gahol and Luisa
Alcantara, bearing plate No. TPU-13548, then being driven by their regular driver, defendant Pepito Buo was on its regular route
travelling from Mahabang Ludlud, Taal, Batangas, towards the poblacion of the said municipality. When said passenger jeepney crossed
the bridge separating Barrios Mahabang Ludlud and Balisong, Taal, Batangas, it had fourteen passengers, excluding the driver, according
to the testimony of defendant Buo (pp. 12 and 18, t.s.n. July 17, 1958), or sixteen passengers according to the testimony of plaintiff
Edita de Sagun, (pp. 9, 12 and 13, t.s.n. June 26, 1958). However, the fact remains that the vehicle was overloaded with passengers at
the time, because according to the partial stipulation of facts "the maximum capacity of the jeepney bearing plate No. TPU-13548 of said
defendants was eleven (11) passengers including the driver. (Printed Record on Appeal, pp. 35, 37.)
After crossing the bridge, defendant Buo stopped his vehicle in order to allow one of his passengers to alight. But he so parked his
jeepney in such a way that one-half of its width (the left wheels) was on the asphalted pavement of the road and the other half, on the
right shoulder of said road (pp. 21-22, t.s.n. May 26, 1958; p. 12 t.s.n. July 17, 1958). Approximately five minutes later and before Buo
could start his vehicle, a speeding water truck, which bore plate No. T-17526 and owned by defendants-spouses Anselmo Maligaya and
Ceferina Aro, then being driven by Guillermo Razon from the direction of Mahabang Ludlud, Taal, Batangas, towards the poblacion of that
municipality, violently smashed against the parked jeepney from behind, causing it to turn turtle into a nearby ditch.
Then said Appellate Court went on to affirm the exoneration of the jeepney driver and of its owners. It explained that although "the driver of the illstarred vehicle was not free from fault, for he was guilty of an antecedent negligence in parking his vehicle with a portion thereof occupying the
asphalted road", it considered the truck driver guilty of greater negligence which was the efficient cause of the collision; and applying the doctrine of
the "last clear chance"1 said Court ordered the owners of the truck to pay, solidarily with its driver, damages as follows:
x x x the sum of P6,000.00 for the death of their daughter Emelita, another sum of P5,000.00 as moral damages and the sum of P500.00
as actual damages, and to plaintiffs Simplicio, Alberto, Avelina and Alfredo, all surnamed Arriola, and represented by their guardian ad
litem Agustin Arriola, the sum of P6,000.00 for the death of their natural mother, Leonor Masongsong, another sum of P5,000.00 as moral
damages the sum of P3,600.00 for loss of earning capacity of said deceased and the sum of P850.00 as actual damages.
The plaintiffs brought the matter to this Supreme Court insisting that the driver and the owners of the jeepneyshould also be made liable.
We gave due course to the petition for review, because we thought the decision meant exoneration of the carrier from liability to its
passengers, notwithstanding the negligence of its driver.
Upon further and more extended consideration of the matter, we have become convinced that error of law was committed in releasing the jeepney
from liability. It must be remembered that the obligation of the carrier to transport its passengers safely is such that the New Civil Code requires
"utmost diligence" from the carriers (Art. 1755) who are "presumed to have been at fault or to have acted negligently, unless they prove that they
have observed extraordinary diligence" (Art. 1756). In this instance, this legal presumption of negligence is confirmed by the Court of Appeals'
finding that the driver of the jeepney in question was at fault in parking the vehicle improperly. It must follow that the driver and the owners of
the jeepney must answer for injuries to its passengers.
The principle about the "last clear chance" would call for application in a suit between the owners and drivers of the two colliding vehicles. It does
not arise where a passenger demands responsibility from the carrier to enforce its contractual obligations. For it would be inequitable to exempt the
negligent driver of the jeepney and its owners on the ground that the other driver was likewise guilty of negligence.
Now as to damages. The driver and the owners of the truck have not appealed from the Court of Appeals' assessment. The plaintiffs (petitioners)
have not asked here for a greater amount of indemnity. They merely pray for a declaration that Pepito Buo, Pedro Gahol and Luisa Alcantara (the
driver and the owners of the jeepney, respectively) be declared jointly and severally liable with the other defendants.1wph1.t
Wherefore, affirming the decision under review, we hereby modify it in the sense prayed for by plaintiffs-petitioners. The three defendants last
mentioned are required to pay solidarily with the other defendants-respondents the amounts fixed by the appealed decision. Costs of both appeals
against said three defendants. So ordered.

G.R. Nos. 74387-90 November 14, 1988

BATANGAS LAGUNA TAYABAS BUS COMPANY & ARMANDO PON, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, THE HEIRS OF PAZ VDA. DE PAMFILO, THE HEIRS OF NORMA NERI, and BAYLON
SALES and NENA VDA. DE ROSALES, respondents
PARAS, J.:

Before Us is a Petition to Review by Certiorari, the decision 1 of the respondent appellate court which affirmed with modification the
joint decision of the trial court in four (4) cases involving similar facts and issues, finding favorably for the plaintiffs (private
respondents herein), the dispositive portion of said appellate judgment reading as follows:
WHEREFORE, with the modification that the death indemnity is raised to P30,000.00 to each set of the victims'
heirs, the rest of the judgment appealed from is hereby affirmed in toto. Costs against the defendants-appellants.
SO ORDERED. (p. 20, Rollo)
From the records of the case We have gathered the following antecedent facts:
The collision between Bus No. 1046 of the Batangas Laguna Tayabas Bus Company (BLTB, for brevity) driven by Armando Pon
and Bus No. 404 of Superlines Transportation Company (Superlines, for brevity) driven by Ruben Dasco took place at the highway
traversing Barangay Isabong, Tayabas, Quezon in the afternoon of August 11, 1978, which collision resulted in the death of Aniceto
Rosales, Francisco Pamfilo and Romeo Neri and in several injuries to Nena Rosales (wife of Anecito) and Baylon Sales, all
passengers of the BLTB Bus No. 1046. The evidence shows that as BLTB Bus No. 1046 was negotiating the bend of the highway, it
tried to overtake a Ford Fiera car just as Bus No. 404 of Superlines was coming from the opposite direction. Seeing thus, Armando
Pon (driver of the BLTB Bus) made a belated attempt to slacken the speed of his bus and tried to return to his proper lane. It was
an unsuccessful try as the two (2) buses collided with each other.
Nena Vda. de Rosales and Baylon Sales and the surviving heirs of the deceased Francisco Pamfilo, Aniceto Rosales and Romeo
Neri instituted separate cases in the Court of First Instance of Marinduque against BLTB and Superlines together with their
respective drivers praying for damages, attorney's fees and litigation expenses plus costs. Criminal cases against the drivers of the
two buses were filed in the Court of First Instance of Quezon.
Defendants BLTB and Superlines, together with their drivers Pon and Dasco, denied liability by claiming that they exercised due
care and diligence and shifted the fault, against each other. They all interposed counterclaims against the plaintiffs and crossclaims
against each other.
After trial on the merits, the lower court exonerated defendants Superlines and its driver Dasco from liability and attributed sole
responsibility to defendants BLTB and its driver Pon, and ordered them jointly and severally to pay damages to the plaintiffs.
Defendants BLTB and Armando Pon appealed from the decision of the lower court to respondent appellate court which affirmed
with modification the judgment of the lower court as earlier stated.
Hence, this petition to review by certiorari of defendant BLTB assigning a lone error, to wit:
THE INTERMEDIATE APPELLATE COURT ERRED IN ADJUDGING THAT THE ACTIONS OF PRIVATE
RESPONDENTS ARE BASED ON CULPA CONTRACTUAL. (p. 12, Rollo)
It is argued by petitioners that if the intention of private respondents were to file an action based on culpa contractual or breach of
contract of carriage, they could have done so by merely impleading BLTB and its driver Pon. As it was in the trial court, private
respondents filed an action against all the defendants basing their action on culpa aquiliana or tort.
Petitioners' contentions deserve no merit. A reading of the respondent court's decision shows that it anchored petitioners' liability
both on culpa contractual and culpa aquiliana, to wit:
The proximate cause of the collision resulting in the death of three and injuries to two of the passengers of BLTB
was the negligence of the driver of the BLTB bus, who recklessly operated and drove said bus by overtaking a
Ford Fiera car as he was negotiating the ascending bend of the highway (tsn, October 4, 1979, pp. 9-10, 35, 36,
61; Exhibit 6 Superlines, p. 47) which was divided into two lanes by a continuous yellow strip (tsn, October 4,
1979, p. 36). The driver of the BLTB bus admitted in his cross-examination that the continuous yellow line on the
ascending bend of the highway signifies a no-overtaking zone (tsn, October 4, 1979, p. 36). It is no surprise then
that the driver of the Superlines bus was exonerated by the lower court. He had a valid reason to presuppose
that no one would overtake in such a dangerous situation. These facts show that patient imprudence of the BLTB
driver.
It is well settled that a driver abandoning his proper lane for the purpose of overtaking another vehicle in ordinary
situation has the duty to see that the road is clear and not to proceed if he can not do so in safety (People v.
Enriquez, 40 O.G. No. 5, 984).
... Before attempting to pass the vehicle ahead, the rear driver must see that the road is clear and if there is no
sufficient room for a safe passage, or the driver ahead does not turn out so as to afford opportunity to pass, or if,

after attempting to pass, the driver of the overtaking vehicle finds that he cannot make the passage in safety, the
latter must slacken his speed so as to avoid the danger of a collision, even bringing his car to a stop if necessary.
(3-4 Huddy Encyclopedia of Automobile Law, Sec. 212, p. 195).
The above rule becomes more particularly applicable in this case when the overtaking took place on an
ascending curved highway divided into two lanes by a continuous yellow line. Appellant Pon should have
remembered that:
When a motor vehicle is approaching or rounding a curve there is special necessity for keeping to the right side
of the road and the driver has not the right to drive on the left hand side relying upon having time to turn to the
right if a car is approaching from the opposite direction comes into view. (42 C.J. 42 906).
Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at
the time of the mishap, he was violating any traffic regulation. (Art. 2165, Civil Code).
In failing to observe these simple precautions, BLTB's driver undoubtedly failed to act with the diligence
demanded by the circumstances.
We now come to the subject of liability of the appellants.
For his own negligence in recklessly driving the truck owned by his employer, appellant Armando Pon is primarily
liable (Article 2176, Civil Code).<re||an1w>
On the other hand the liability of Pon's employer, appellant BLTB, is also primary, direct and immediate in view of
the fact that the death of or injuries to its passengers was through the negligence of its employee (Marahan v.
Mendoza, 24 SCRA 888, 894), and such liability does not cease even upon proof that BLTB had exercised all the
diligence of a good father of a family in the selection and supervision of its employees (Article 1759, Civil Code).
The common carrier's liability for the death of or injuries to its passengers is based on its contractual obligation to
carry its passengers safely to their destination. That obligation is so serious that the Civil Code requires "utmost
diligence of very cautious person (Article 1755, Civil Code). They are presumed to have been at fault or to have
acted negligently unless they prove that they have observed extraordinary diligence" (Article 1756, Civil Code). In
the present case, the appellants have failed to prove extraordinary diligence. Indeed, this legal presumption was
confirmed by the fact that the bus driver of BLTB was negligent. It must follow that both the driver and the owner
must answer for injuries or death to its passengers.
The liability of BLTB is also solidarily with its driver (Viluan v. Court of Appeals, 16 SCRA 742, 747) even though
the liability of the driver springs from quasi delict while that of the bus company from contract. (pp. 17-19, Rollo)
Conclusively therefore in consideration of the foregoing findings of the respondent appellate court it is settled that the proximate
cause of the collision resulting in the death of three and injuries to two of the passengers of BLTB was the sole negligence of the
driver of the BLTB Bus, who recklessly operated and drove said bus in a lane where overtaking is not allowed by Traffic Rules and
Regulations. Such negligence and recklessness is binding against petitioner BLTB, more so when We consider the fact that in an
action based on a contract of carriage, the court need not make an express finding of fault or negligence on the part of the carrier in
order to hold it responsible for the payment of the damages sought by the passenger. By the contract of carriage, the carrier BLTB
assumed the express obligation to transport the passengers to their destination safely and to observe extraordinary diligence with a
due regard for all the circumstances, and any injury that might be suffered by its passengers is right away attributable to the fault or
negligence of the carrier (Art. 1756, New Civil Code).
Petitioners also contend that "a common carrier is not an absolute insurer against all risks of travel and are not liable for acts or
accidents which cannot be foreseen or inevitable and that responsibility of a common carrier for the safety of its passenger
prescribed in Articles 1733 and 1755 of the New Civil Code is not susceptible of a precise and definite formulation." (p. 13, Rollo)
Petitioners' contention holds no water because they had totally failed to point out any factual basis for their defense of force
majeure in the light of the undisputed fact that the cause of the collision was the sole negligence and recklessness of petitioner
Armando Pon. For the defense offorce majeure or act of God to prosper the accident must be due to natural causes and
exclusively without human intervention.
WHEREFORE, premises considered, the appealed decision is hereby AFFIRMED.
SO ORDERED.

G.R. No. 147791

September 8, 2006

CONSTRUCTION DEVELOPMENT CORPORATION OF THE PHILIPPINES, petitioner,

vs.
REBECCA G. ESTRELLA, RACHEL E. FLETCHER, PHILIPPINE PHOENIX SURETY & INSURANCE INC., BATANGAS
LAGUNA TAYABAS BUS CO., and WILFREDO DATINGUINOO, respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for review assails the March 29, 2001 Decision 1 of the Court of Appeals in CA-G.R. CV No. 46896, which affirmed with
modification the February 9, 1993 Decision 2 of the Regional Trial Court of Manila, Branch 13, in Civil Case No. R-82-2137, finding
Batangas Laguna Tayabas Bus Co. (BLTB) and Construction Development Corporation of the Philippines (CDCP) liable for
damages.
The antecedent facts are as follows:
On December 29, 1978, respondents Rebecca G. Estrella and her granddaughter, Rachel E. Fletcher, boarded in San Pablo City, a
BLTB bus bound for Pasay City. However, they never reached their destination because their bus was rammed from behind by a
tractor-truck of CDCP in the South Expressway. The strong impact pushed forward their seats and pinned their knees to the seats
in front of them. They regained consciousness only when rescuers created a hole in the bus and extricated their legs from under
the seats. They were brought to the Makati Medical Center where the doctors diagnosed their injuries to be as follows:
Medical Certificate of Rebecca Estrella
Fracture, left tibia mid 3rd
Lacerated wound, chin
Contusions with abrasions, left lower leg
Fracture, 6th and 7th ribs, right3
Medical Certificate of Rachel Fletcher
Extensive lacerated wounds, right leg posterior aspect popliteal area
and antero-lateral aspect mid lower leg with severance of muscles.
Partial amputation BK left leg with severance of gastro-soleus and
antero-lateral compartment of lower leg.
Fracture, open comminuted, both tibial4
Thereafter, respondents filed a Complaint5 for damages against CDCP, BLTB, Espiridion Payunan, Jr. and Wilfredo Datinguinoo
before the Regional Trial Court of Manila, Branch 13. They alleged (1) that Payunan, Jr. and Datinguinoo, who were the drivers of
CDCP and BLTB buses, respectively, were negligent and did not obey traffic laws; (2) that BLTB and CDCP did not exercise the
diligence of a good father of a family in the selection and supervision of their employees; (3) that BLTB allowed its bus to operate
knowing that it lacked proper maintenance thus exposing its passengers to grave danger; (4) that they suffered actual damages
amounting to P250,000.00 for Estrella and P300,000.00 for Fletcher; (5) that they suffered physical discomfort, serious anxiety,
fright and mental anguish, besmirched reputation and wounded feelings, moral shock, and lifelong social humiliation; (6) that
defendants failed to act with justice, give respondents their due, observe honesty and good faith which entitles them to claim for
exemplary damage; and (7) that they are entitled to a reasonable amount of attorney's fees and litigation expenses.
CDCP filed its Answer6 which was later amended to include a third-party complaint against Philippine Phoenix Surety and
Insurance, Inc. (Phoenix).7
On February 9, 1993, the trial court rendered a decision finding CDCP and BLTB and their employees liable for damages, the
dispositive portion of which, states:
WHEREFORE, judgment is rendered:
In the Complaint
1. In favor of the plaintiffs and against the defendants BLTB, Wilfredo Datinguinoo, Construction and Development
Corporation of the Philippines (now PNCC) and Espiridion Payunan, Jr., ordering said defendants, jointly and severally to
pay the plaintiffs the sum of P79,254.43 as actual damages and to pay the sum of P10,000.00 as attorney's fees or a total
of P89,254.43;

2. In addition, defendant Construction and Development Corporation of the Philippines and defendant Espiridion Payunan,
Jr., shall pay the plaintiffs the amount of Fifty Thousand (P50,000.00) Pesos to plaintiff Rachel Fletcher and Twenty Five
Thousand (P25,000.00) Pesos to plaintiff Rebecca Estrella;
3. On the counterclaim of BLTB Co. and Wilfredo Datinguinoo
Dismissing the counterclaim;
4. On the crossclaim against Construction and Development Corporation of the Philippines (now PNCC) and Espiridion
Payunan, Jr.
Dismissing the crossclaim;
5. On the counterclaim of Construction and Development Corporation of the Philippines (now PNCC)
Dismissing the counterclaim;
6. On the crossclaim against BLTB
Dismissing the crossclaim;
7. On the Third Party Complaint by Construction and Development Corporation of the Philippines against Philippine
Phoenix Surety and Insurance, Incorporated
Dismissing the Third Party Complaint.
SO ORDERED.8
The trial court held that BLTB, as a common carrier, was bound to observe extraordinary diligence in the vigilance over the safety of
its passengers. It must carry the passengers safely as far as human care and foresight provide, using the utmost diligence of very
cautious persons, with a due regard for all the circumstances. Thus, where a passenger dies or is injured, the carrier is presumed
to have been at fault or has acted negligently. BLTB's inability to carry respondents to their destination gave rise to an action for
breach of contract of carriage while its failure to rebut the presumption of negligence made it liable to respondents for the breach.9
Regarding CDCP, the trial court found that the tractor-truck it owned bumped the BLTB bus from behind. Evidence showed that
CDCP's driver was reckless and driving very fast at the time of the incident. The gross negligence of its driver raised the
presumption that CDCP was negligent either in the selection or in the supervision of its employees which it failed to rebut thus
making it and its driver liable to respondents.10
Unsatisfied with the award of damages and attorney's fees by the trial court, respondents moved that the decision be reconsidered
but was denied. Respondents elevated the case11 to the Court of Appeals which affirmed the decision of the trial court but modified
the amount of damages, the dispositive portion of which provides:
WHEREFORE, the assailed decision dated October 7, 1993 of the Regional Trial Court, Branch 13, Manila is hereby
AFFIRMED with the following MODIFICATION:
1. The interest of six (6) percent per annum on the actual damages of P79,354.43 should commence to run from the time
the judicial demand was made or from the filing of the complaint on February 4, 1980;
2. Thirty (30) percent of the total amount recovered is hereby awarded as attorney's fees;
3. Defendants-appellants Construction and Development Corporation of the Philippines (now PNCC) and Espiridion
Payunan, Jr. are ordered to pay plaintiff-appellants Rebecca Estrella and Rachel Fletcher the amount of Twenty Thousand
(P20,000.00) each as exemplary damages and P80,000.00 by way of moral damages to Rachel Fletcher.
SO ORDERED.12
The Court of Appeals held that the actual or compensatory damage sought by respondents for the injuries they sustained in the
form of hospital bills were already liquidated and were ascertained. Accordingly, the 6% interest per annum should commence to
run from the time the judicial demand was made or from the filing of the complaint and not from the date of judgment. The Court of
Appeals also awarded attorney's fees equivalent to 30% of the total amount recovered based on the retainer agreement of the
parties. The appellate court also held that respondents are entitled to exemplary and moral damages. Finally, it affirmed the ruling
of the trial court that the claim of CDCP against Phoenix had already prescribed.

Hence, this petition raising the following issues:

I
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING RESPONDENTS BLTB AND/OR
ITS DRIVER WILFREDO DATINGUINOO SOLELY LIABLE FOR THE DAMAGES SUSTAINED BY HEREIN
RESPONDENTS FLETCHER AND ESTRELLA.
II
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN AWARDING EXCESSIVE OR UNFOUNDED
DAMAGES, ATTORNEY'S FEES AND LEGAL INTEREST TO RESPONDENTS FLETCHER AND ESTRELLA.
III
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING RESPONDENT PHOENIX
LIABLE UNDER ITS INSURANCE POLICY ON THE GROUND OF PRESCRIPTION.
The issues for resolution are as follows: (1) whether BLTB and its driver Wilfredo Datinguinoo are solely liable for the damages
sustained by respondents; (2) whether the damages, attorney's fees and legal interest awarded by the CA are excessive and
unfounded; (3) whether CDCP can recover under its insurance policy from Phoenix.
Petitioner contends that since it was made solidarily liable with BLTB for actual damages and attorney's fees in paragraph 1 of the
trial court's decision, then it should no longer be held liable to pay the amounts stated in paragraph 2 of the same decision.
Petitioner claims that the liability for actual damages and attorney's fees is based on culpa contractual, thus, only BLTB should be
held liable. As regards paragraph 2 of the trial court's decision, petitioner claims that it is ambiguous and arbitrary because the
dispositive portion did not state the basis and nature of such award.
Respondents, on the other hand, argue that petitioner is also at fault, hence, it was properly joined as a party. There may be an
action arising out of one incident where questions of fact are common to all. Thus, the cause of action based on culpa aquiliana in
the civil suit they filed against it was valid.
The petition lacks merit.
The case filed by respondents against petitioner is an action for culpa aquiliana or quasi-delict under Article 2176 of the Civil
Code.13 In this regard, Article 2180 provides that the obligation imposed by Article 2176 is demandable for the acts or omissions of
those persons for whom one is responsible. Consequently, an action based on quasi-delict may be instituted against the employer
for an employee's act or omission. The liability for the negligent conduct of the subordinate is direct and primary, but is subject to
the defense of due diligence in the selection and supervision of the employee. 14 In the instant case, the trial court found that
petitioner failed to prove that it exercised the diligence of a good father of a family in the selection and supervision of Payunan, Jr.
The trial court and the Court of Appeals found petitioner solidarily liable with BLTB for the actual damages suffered by respondents
because of the injuries they sustained. It was established that Payunan, Jr. was driving recklessly because of the skid marks as
shown in the sketch of the police investigator.
It is well-settled in Fabre, Jr. v. Court of Appeals,15 that the owner of the other vehicle which collided with a common carrier is
solidarily liable to the injured passenger of the same. We held, thus:
The same rule of liability was applied in situations where the negligence of the driver of the bus on which plaintiff was
riding concurred with the negligence of a third party who was the driver of another vehicle, thus causing an accident.
In Anuran v. Buo, Batangas Laguna Tayabas Bus Co. v. Intermediate Appellate Court, and Metro Manila Transit
Corporation v. Court of Appeals, the bus company, its driver, the operator of the other vehicle and the driver of the
vehicle were jointly and severally held liable to the injured passenger or the latter's heirs. The basis of this
allocation of liability was explained in Viluan v. Court of Appeals, thus:
Nor should it make any difference that the liability of petitioner [bus owner] springs from contract while that of
respondents [owner and driver of other vehicle] arises from quasi-delict. As early as 1913, we already ruled in
Gutierrez vs. Gutierrez, 56 Phil. 177, that in case of injury to a passenger due to the negligence of the driver of the bus on
which he was riding and of the driver of another vehicle, the drivers as well as the owners of the two vehicles are jointly
and severally liable for damages. x x x
xxxx

As in the case of BLTB, private respondents in this case and her co-plaintiffs did not stake out their claim against the
carrier and the driver exclusively on one theory, much less on that of breach of contract alone.After all, it was permitted
for them to allege alternative causes of action and join as many parties as may be liable on such causes of action
so long as private respondent and her co-plaintiffs do not recover twice for the same injury. What is clear from the
cases is the intent of the plaintiff there to recover from both the carrier and the driver, thus justifying the holding that the
carrier and the driver were jointly and severally liable because their separate and distinct acts concurred to produce the
same injury.16(Emphasis supplied)
In a "joint" obligation, each obligor answers only for a part of the whole liability; in a "solidary" or "joint and several" obligation, the
relationship between the active and the passive subjects is so close that each of them must comply with or demand the fulfillment
of the whole obligation. In Lafarge Cement v. Continental Cement Corporation,17we reiterated that joint tort feasors are jointly and
severally liable for the tort which they commit. Citing Worcester v. Ocampo,18 we held that:
x x x The difficulty in the contention of the appellants is that they fail to recognize that the basis of the present action is tort.
They fail to recognize the universal doctrine that each joint tort feasor is not only individually liable for the tort in which he
participates, but is also jointly liable with his tort feasors. x x x
It may be stated as a general rule that joint tort feasors are all the persons who command, instigate, promote, encourage,
advise, countenance, cooperate in, aid or abet the commission of a tort, or who approve of it after it is done, if done for
their benefit. They are each liable as principals, to the same extent and in the same manner as if they had performed the
wrongful act themselves. x x x
Joint tort feasors are jointly and severally liable for the tort which they commit. The persons injured may sue all of them or
any number less than all. Each is liable for the whole damages caused by all, and all together are jointly liable for the
whole damage. It is no defense for one sued alone, that the others who participated in the wrongful act are not joined with
him as defendants; nor is it any excuse for him that his participation in the tort was insignificant as compared to that of the
others. x x x
Joint tort feasors are not liable pro rata. The damages can not be apportioned among them, except among themselves.
They cannot insist upon an apportionment, for the purpose of each paying an aliquot part. They are jointly and severally
liable for the whole amount. x x x
A payment in full for the damage done, by one of the joint tort feasors, of course satisfies any claim which might exist
against the others. There can be but satisfaction. The release of one of the joint tort feasors by agreement generally
operates to discharge all. x x x
Of course the court during trial may find that some of the alleged tort feasors are liable and that others are not liable. The
courts may release some for lack of evidence while condemning others of the alleged tort feasors. And this is true even
though they are charged jointly and severally.19
Petitioner's claim that paragraph 2 of the dispositive portion of the trial court's decision is ambiguous and arbitrary and also entitles
respondents to recover twice is without basis. In the body of the trial court's decision, it was clearly stated that petitioner and its
driver Payunan, Jr., are jointly and solidarily liable for moral damages in the amount of P50,000.00 to respondent Fletcher and
P25,000.00 to respondent Estrella.20 Moreover, there could be no double recovery because the award in paragraph 2 is for moral
damages while the award in paragraph 1 is for actual damages and attorney's fees.
Petitioner next claims that the damages, attorney's fees, and legal interest awarded by the Court of Appeals are excessive.
Moral damages may be recovered in quasi-delicts causing physical injuries. 21 The award of moral damages in favor of Fletcher and
Estrella in the amount of P80,000.00 must be reduced since prevailing jurisprudence fixed the same at P50,000.00. 22 While moral
damages are not intended to enrich the plaintiff at the expense of the defendant, the award should nonetheless be commensurate
to the suffering inflicted.23
The Court of Appeals correctly awarded respondents exemplary damages in the amount of P20,000.00 each. Exemplary damages
may be awarded in addition to moral and compensatory damages. 24 Article 2231 of the Civil Code also states that in quasi-delicts,
exemplary damages may be granted if the defendant acted with gross negligence. 25 In this case, petitioner's driver was driving
recklessly at the time its truck rammed the BLTB bus. Petitioner, who has direct and primary liability for the negligent conduct of its
subordinates, was also found negligent in the selection and supervision of its employees. In Del Rosario v. Court of Appeals,26 we
held, thus:
ART. 2229 of the Civil Code also provides that such damages may be imposed, by way of example or correction for the
public good. While exemplary damages cannot be recovered as a matter of right, they need not be proved, although
plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the
question of whether or not exemplary damages should be awarded. Exemplary Damages are imposed not to enrich one
party or impoverish another but to serve as a deterrent against or as a negative incentive to curb socially deleterious
actions.
Regarding attorney's fees, we held in Traders Royal Bank Employees Union-Independent v. National Labor Relations
Commission,27 that:

There are two commonly accepted concepts of attorney's fees, the so-called ordinary and extraordinary. In its ordinary
concept, an attorney's fee is the reasonable compensation paid to a lawyer by his client for the legal services he has
rendered to the latter. The basis of this compensation is the fact of his employment by and his agreement with the client.
In its extraordinary concept, an attorney's fee is an indemnity for damages ordered by the court to be paid by the
losing party in a litigation. The basis of this is any of the cases provided by law where such award can be made, such
as those authorized in Article 2208, Civil Code, and is payable not to the lawyer but to the client, unless they have
agreed that the award shall pertain to the lawyer as additional compensation or as part thereof. 28 (Emphasis
supplied)
In the instant case, the Court of Appeals correctly awarded attorney's fees and other expenses of litigation as they may be
recovered as actual or compensatory damages when exemplary damages are awarded; when the defendant acted in gross and
evident bad faith in refusing to satisfy the plaintiff's valid, just and demandable claim; and in any other case where the court deems
it just and equitable that attorney's fees and expenses of litigation should be recovered.29
Regarding the imposition of legal interest at the rate of 6% from the time of the filing of the complaint, we held inEastern Shipping
Lines, Inc. v. Court of Appeals,30 that when an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or
quasi-delicts is breached, the contravenor can be held liable for payment of interest in the concept of actual and compensatory
damages,31 subject to the following rules, to wit
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money,
the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn
legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per
annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article
1169 of the Civil Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of
damages awarded may be imposed at the discretion of the court at the rate of 6% per annum.No interest, however, shall
be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable
certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the
time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably
established at the time the demand is made, the interest shall begin to run only from the date the judgment of the
court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained).
The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal
interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such
finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of
credit.32 (Emphasis supplied)
Accordingly, the legal interest of 6% shall begin to run on February 9, 1993 when the trial court rendered judgment and not on
February 4, 1980 when the complaint was filed. This is because at the time of the filing of the complaint, the amount of the
damages to which plaintiffs may be entitled remains unliquidated and unknown, until it is definitely ascertained, assessed and
determined by the court and only upon presentation of proof thereon. 33 From the time the judgment becomes final and executory,
the interest rate shall be 12% until its satisfaction.
Anent the last issue of whether petitioner can recover under its insurance policy from Phoenix, we affirm the findings of both the
trial court and the Court of Appeals, thus:
As regards the liability of Phoenix, the court a quo correctly ruled that defendant-appellant CDCP's claim against Phoenix
already prescribed pursuant to Section 384 of P.D. 612, as amended, which provides:
Any person having any claim upon the policy issued pursuant to this chapter shall, without any unnecessary
delay, present to the insurance company concerned a written notice of claim setting forth the nature, extent and
duration of the injuries sustained as certified by a duly licensed physician. Notice of claim must be filed within six
months from date of the accident, otherwise, the claim shall be deemed waived. Action or suit for recovery of
damage due to loss or injury must be brought in proper cases, with the Commissioner or Courts within one year
from denial of the claim, otherwise, the claimant's right of action shall prescribe. (As amended by PD 1814, BP
874.)34
The law is clear and leaves no room for interpretation. A written notice of claim must be filed within six months from the date of the
accident. Since petitioner never made any claim within six months from the date of the accident, its claim has already prescribed.
WHEREFORE, the instant petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No. 46896 dated March 29,
2001, which modified the Decision of the Regional Trial Court of Manila, Branch 13, in Civil Case No. R-82-2137, is AFFIRMED
with the MODIFICATIONS that petitioner is held jointly and severally liable to pay (1) actual damages in the amount of P79,354.43;
(2) moral damages in the amount of P50,000.00 each for Rachel Fletcher and Rebecca Estrella; (3) exemplary damages in the
amount of P20,000.00 each for Rebecca Estrella and Rachel Fletcher; and (4) thirty percent (30%) of the total amount recovered
as attorney's fees. The total amount adjudged shall earn interest at the rate of 6% per annum from the date of judgment of the trial

court until finality of this judgment. From the time this Decision becomes final and executory and the judgment amount remains
unsatisfied, the same shall earn interest at the rate of 12% per annum until its satisfaction.
SO ORDERED.

LUIS JOSEPH, petitioner

vs.
HON. CRISPIN V. BAUTISTA, PATROCINIO PEREZ, ANTONIO SIOSON, JACINTO PAGARIGAN,
ALBERTO CARDENO and LAZARO VILLANUEVA, respondents.
REGALAD0, J.:
Petitioner prays in this appeal by certiorari for the annulment and setting aside of the order, dated July
8, 1975, dismissing petitioner's complaint, as well as the order, dated August 22, 1975, denying his
motion for reconsideration of said dismissal, both issued by respondent Judge Crispin V. Bautista of the
former Court of First Instance of Bulacan, Branch III.
Petitioner herein is the plaintiff in Civil Case No. 50-V-73 entitled "Luis Joseph vs. Patrocinio Perez,
Domingo Villa y de Jesus, Rosario Vargas, Antonio Sioson, Lazaro Villanueva and Jacinto Pagarigan",
filed before the Court of First Instance of Bulacan, Branch III, and presided over by respondent Judge
Crispin V. Bautista; while private respondents Patrocinio Perez, Antonio Sioson, Jacinto Pagarigan and
Lazaro Villanueva are four of the defendants in said case. Defendant Domingo Villa y de Jesus did not
answer either the original or the amended complaint, while defendant Rosario Vargas could not be
served with summons; and respondent Alberto Cardeno is included herein as he was impleaded by
defendant Patrocinio Perez, one of respondents herein, in her cross-claim.
The generative facts of this case, as culled from the written submission of the parties, are as follows:
Respondent Patrocinio Perez is the owner of a cargo truck with Plate No. 25-2 YT Phil. '73 for conveying
cargoes and passengers for a consideration from Dagupan City to Manila. On January 12, 1973, said
cargo truck driven by defendant Domingo Villa was on its way to Valenzuela, Bulacan from Pangasinan.
Petitioner, with a cargo of livestock, boarded the cargo truck at Dagupan City after paying the sum of P
9.00 as one way fare to Valenzuela, Bulacan. While said cargo truck was negotiating the National
Highway proceeding towards Manila, defendant Domingo Villa tried to overtake a tricycle likewise
proceeding in the same direction. At about the same time, a pick-up truck with Plate No. 45-95 B,
supposedly owned by respondents Antonio Sioson and Jacinto Pagarigan, then driven by respondent
Lazaro Villanueva, tried to overtake the cargo truck which was then in the process of overtaking the
tricycle, thereby forcing the cargo truck to veer towards the shoulder of the road and to ram a mango
tree. As a result, petitioner sustained a bone fracture in one of his legs. 1
The following proceedings thereafter took place:

Petitioner filed a complaint for damages against respondent Patrocinio Perez, as owner of the cargo
truck, based on a breach of contract of carriage and against respondents Antonio Sioson and Lazaro
Villanueva, as owner and driver, respectively, of the pick-up truck, based on quasi-delict.
Respondent Sioson filed his answer alleging that he is not and never was an owner of the pick-up truck
and neither would he acquire ownership thereof in the future.
On September 24, 1973, petitioner, with prior leave of court, filed his amended complaint impleading
respondents Jacinto Pagarigan and a certain Rosario Vargas as additional alternative defendants.
Petitioner apparently could not ascertain who the real owner of said cargo truck was, whether
respondents Patrocinio Perez or Rosario Vargas, and who was the real owner of said pick-up truck,
whether respondents Antonio Sioson or Jacinto Pagarigan.

Respondent Perez filed her amended answer with crossclaim against her co-defendants for indemnity
and subrogation in the event she is ordered to pay petitioner's claim, and therein impleaded crossdefendant Alberto Cardeno as additional alternative defendant.
On September 27, 1974, respondents Lazaro Villanueva, Alberto Cardeno, Antonio Sioson and Jacinto
Pagarigan, thru their insurer, Insurance Corporation of the Philippines, paid petitioner's claim for injuries
sustained in the amount of P 1,300.00. By reason thereof, petitioner executed a release of claim
releasing from liability the following parties, viz: Insurance Corporation of the Philippines, Alberto
Cardeno, Lazaro Villanueva, Antonio Sioson and Jacinto Pagarigan.
On December 2, 1974, respondents Lazaro Villanueva, Alberto Cardeno and their insurer, the Insurance
Corporation of the Philippines, paid respondent Patrocinio Perez' claim for damages to her cargo truck
in the amount of P 7,420.61.
Consequently, respondents Sioson, Pagarigan, Cardeno and Villanueva filed a "Motion to Exonerate and
Exclude Defs/ Cross defs. Alberto Cardeno, Lazaro Villanueva, Antonio Sioson and Jacinto Pagarigan on
the Instant Case", alleging that respondents Cardeno and Villanueva already paid P 7,420.61 by way of
damages to respondent Perez, and alleging further that respondents Cardeno, Villanueva, Sioson and
Pagarigan paid P 1,300.00 to petitioner by way of amicable settlement.
Thereafter, respondent Perez filed her "Opposition to Cross-defs.' motion dated Dec. 2, 1974 and
Counter Motion" to dismiss. The so-called counter motion to dismiss was premised on the fact that the
release of claim executed by petitioner in favor of the other respondents inured to the benefit of
respondent Perez, considering that all the respondents are solidarity liable to herein petitioner.
On July 8, 1975, respondent judge issued the questioned order dismissing the case, and a motion for
the reconsideration thereof was denied. Hence, this appeal, petitioner contending that respondent
judge erred in declaring that the release of claim executed by petitioner in favor of respondents Sioson,
Villanueva and Pagarigan inured to the benefit of respondent Perez; ergo, it likewise erred in dismissing
the case.
We find the present recourse devoid of merit.
The argument that there are two causes of action embodied in petitioner's complaint, hence the
judgment on the compromise agreement under the cause of action based on quasi-delict is not a bar to
the cause of action for breach of contract of carriage, is untenable.
A cause of action is understood to be the delict or wrongful act or omission committed by the defendant
in violation of the primary rights of the plaintiff. 3 It is true that a single act or omission can be violative
of various rights at the same time, as when the act constitutes juridically a violation of several separate
and distinct legal obligations. However where there is only one delict or wrong, there is but a single
cause of action regardless of the number of rights that may have been violated belonging to one
person. 4
The singleness of a cause of action lies in the singleness of the- delict or wrong violating the rights of
one person. Nevertheless, if only one injury resulted from several wrongful acts, only one cause of
action arises. 5 In the case at bar, there is no question that the petitioner sustained a single injury on
his person. That vested in him a single cause of action, albeit with the correlative rights of action
against the different respondents through the appropriate remedies allowed by law.
The trial court was, therefore, correct in holding that there was only one cause of action involved
although the bases of recovery invoked by petitioner against the defendants therein were not
necessarily Identical since the respondents were not identically circumstanced. However, a recovery by
the petitioner under one remedy necessarily bars recovery under the other. This, in essence, is the
rationale for the proscription in our law against double recovery for the same act or omission which,
obviously, stems from the fundamental rule against unjust enrichment.

There is no question that the respondents herein are solidarily liable to petitioner. On the evidence
presented in the court below, the trial court found them to be so liable. It is undisputed that petitioner,
in his amended complaint, prayed that the trial court hold respondents jointly and severally liable.
Furthermore, the allegations in the amended complaint clearly impleaded respondents as solidary
debtors. We cannot accept the vacuous contention of petitioner that said allegations are intended to
apply only in the event that execution be issued in his favor. There is nothing in law or jurisprudence
which would countenance such a procedure.
The respondents having been found to be solidarity liable to petitioner, the full payment made by some
of the solidary debtors and their subsequent release from any and all liability to petitioner inevitably
resulted in the extinguishment and release from liability of the other solidary debtors, including herein
respondent Patrocinio Perez.
The claim that there was an agreement entered into between the parties during the pre-trial conference
that, after such payment made by the other respondents, the case shall proceed as against respondent
Perez is both incredible and unsubstantiated. There is nothing in the records to show, either by way of a
pre-trial order, minutes or a transcript of the notes of the alleged pre-trial hearing, that there was
indeed such as agreement.
WHEREFORE, the challenged orders of the respondent judge are hereby AFFIRMED.
SO ORDERED.

G.R. No. 116617 November 16, 1998

METRO MANILA TRANSIT CORPORATION (MMTC), PEDRO A. MUSA, CONRADO TOLENTINO, FELICIANA CELEBRADO
and THE GOVERNMENT SERVICE INSURANCE SYSTEM, petitioners,
vs.
COURT OF APPEALS, SPS. RODOLFO V. ROSALES and LILY R. ROSALES, respondents.
MENDOZA, J.:
These are appeals brought, on the one hand, by the Metro Manila Transit Corporation (MMTC) and Pedro Musa and, on the other,
by the spouses Rodolfo V. Rosales and Lily R. Rosales from the decision, 1 dated August 5, 1994, of the Court of Appeals, which
affirmed with modification the judgment of the Regional Trial Court of Quezon City holding MMTC and Musa liable to the spouses
Rosales for actual, moral, and exemplary damages, attorney's fees, and the costs of suit for the death of the latter's daughter.
MMTC and Musa in G.R. No. 116617 appeal insofar as they are held liable for damages, while the spouses Rosales in G.R. No.
126395 appeal insofar as the amounts awarded are concerned.
The facts are as follows:
MMTC is the operator of a fleet of passenger buses within the Metro Manila area. Musa was its driver assigned to MMTC Bus No.
27. The spouses Rosales were parents of Liza Rosalie, a third-year high school student at the University of the Philippines
Integrated School.
At around a quarter past one in the afternoon of August 9, 1986, MMTC Bus No. 27, which was driven by Musa, hit Liza Rosalie
who was then crossing Katipunan Avenue in Quezon City. An eye witness said the girl was already near the center of the street
when the bus, then bound for the south, hit her. 2 She fell to the ground upon impact, rolled between the two front wheels of the bus,
and was run over by the left rear tires thereof. 3 Her body was dragged several meters away from the point of impact. Liza Rosalie
was taken to the Philippine Heart Center, 4 but efforts to revive her proved futile.

Pedro Musa was found guilty of reckless imprudence resulting in homicide and sentenced to imprisonment for a term of 2 years
and 4 months, as minimum, to 6 years, as maximum, by the Regional Trial Court of Quezon
City. 5 The trial court found:
All told, this Court, therefore, holds that the accused, who was then, the driver of MMTC Bus No. 027, is
criminally responsible for the death of the girl victim in violation of Article 365 (2) of the Revised Penal Code. For,
in the light of the evidence that the girl victim was already at the center of the Katipunan Road when she was
bumped, and, therefore, already past the right lane when the MMTC Bus No. 027 was supposed to have passed;
and, since the said bus was then running at a speed of about 25 kilometers per hour which is inappropriate since
Katipunan road is a busy street, there is, consequently, sufficient proof to show that the accused was careless,
reckless and imprudent in the operation of his MMTC Bus No. 027, which is made more evident by the
circumstance that the accused did not blow his horn at the time of the accident, and he did not even know that he
had bumped the girl victim and had ran over her, demonstrating thereby that he did not exercise diligence and
take the necessary precaution to avoid injury to persons in the operation of his vehicle, as, in fact, he ran over the
girl victim who died as a result thereof. 6
The spouses Rosales filed an independent civil action for damages against MMTC, Musa, MMTC Acting General Manager
Conrado Tolentino, and the Government Service Insurance System (GSIS). They subsequently amended their complaint to include
Feliciana Celebrado, a dispatcher of the MMTC, as a defendant therein. The counsel of MMTC and Musa attempted to introduce
testimony that Musa was not negligent in driving Bus No. 27 but was told by the trial judge:
COURT:
That is it. You can now limit your question to the other defendant here but to re-try again the actual facts of the
accident, this Court would not be in the position. It would be improper for this Court to make any findings with
respect to the negligence of herein driver. You ask questions only regarding the civil aspect as to the other
defendant
but
not
as
to
the
accused. 7
The counsel submitted to the ruling of the court. 8
In a decision rendered on March 6, 1990, the Regional Trial Court of Quezon City found MMTC and Musa guilty of negligence and
ordered them to pay damages and attorney's fees, as follows:
WHEREFORE, foregoing premises considered, judgment is hereby rendered ordering defendant Metro Manila
Transit Corporation primarily and defendant Pedro Musa subsidiarily liable to plaintiffs-spouses Rodolfo V.
Rosales and Lily R. Rosales as follows:
1. Actual damages in the amount of P150,000.00;
2. Moral damages in the amount of P500,000.00;
3. Exemplary damages in the amount of P100,000.00;
4. Attorney's fees in the amount of P50,000.00; and
5. Costs of suit. 9
Both parties appealed to the Court of Appeals. On August 5, 1994, the Court of Appeals affirmed the decision of the trial court with
the following modification:
WHEREFORE, except for the modification deleting the award of P150,000.00 as actual damages and awarding
in lieu thereof the amount of P30,000.00 as death indemnity, the decision appealed from is, in all other aspects,
hereby AFFIRMED. 10
The spouses Rosales filed a motion for reconsideration, which the appellate court, in a resolution, dated September 12, 1996,
partly granted by increasing the indemnity for the death of Liza Rosalie from P30,000.00 to P50,000.00. Hence, these appeals.
In G.R. No. 116617, MMTC and Musa assail the decision of the Court of Appeals on the following grounds:

PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE COURT A QUO'SDECISION

PARTICULARLY IN NOT HOLDING THAT APPELLANT MMTC EXERCISED THE DILIGENCE OF A GOOD
FATHER OF A FAMILY IN THE SELECTION AND SUPERVISION OF ITS DRIVERS. THIS BEING THE CASE,
APPELLANT MMTC IS ENTITLED TO BE ABSOLVED FROM ANY LIABILITY OR AT LEAST TO A REDUCTION
OF THE RECOVERABLE DAMAGES.
THE PUBLIC RESPONDENT COURT OF APPEALS, JUST LIKE THE COURT A QUO, OVERLOOKED THE
FACT THAT PETITIONER MMTC, A GOVERNMENT-OWNED CORPORATION, COMMITTED NO FRAUD,
MALICE, BAD FAITH, NOR WANTON, FRAUDULENT, OPPRESSIVE AND MALEVOLENT ACTUATIONS
AGAINST HEREIN RESPONDENTS-APPELLEES.
THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE COURT A QUO'SDECISION
TO HOLD PETITIONER-APPELLANT MMTC PRIMARILY LIABLE TO PRIVATE RESPONDENTS-APPELLEES
IN THE AMOUNT OF P500,000 AS MORAL DAMAGES, P100,000 AS EXEMPLARY DAMAGES AND P30,000
BY WAY OF DEATH INDEMNITY.
THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE COURT A QUO'SDECISION
IN RENDERING JUDGMENT FOR ATTORNEY'S FEES IN THE AMOUNT OF P50,000.00 IN FAVOR OF
PRIVATE RESPONDENTS-APPELLEES.
On the other hand, in G.R. No. 126395, the spouses Rosales contend:
The Court of Appeals erred in:
First, considering that death indemnity which this Honorable Court set at P50,000.00 is akin to actual damages;
Second, not increasing the amount of damages awarded;
Third, refusing to hold all the defendants, now private respondents, solidarily liable.
MMTC and Musa do not specifically question the findings of the Court of Appeals and the Regional Trial Court of Quezon City that
Liza Rosalie was hit by MMTC Bus No. 27. Nonetheless, their petition contains discussions which cast doubts on this point. 11 Not
only can they not do this as the rule is that an appellant may not be heard on a question not specifically assigned as error, but the
rule giving great weight, and even finality, to the factual conclusions of the Court of Appeals which affirm those of the trial court bars
a reversal of the finding of liability against petitioners MMTC and Musa. Only where it is shown that such findings are whimsical,
capricious, and arbitrary can they be overturned. To the contrary, the findings of both the Court of Appeals and the Regional Trial
Court are solidly anchored on the evidence submitted by the parties. We, therefore, regard them as conclusive in resolving the
petitions at bar. 12 Indeed, as already stated, petitioners' counsel submitted to the ruling of the court that the finding of the trial court
in the criminal case was conclusive on them with regard to the questions of whether Liza Rosalie was hit by MMTC Bus No. 27 and
whether its driver was negligent. Rather, the issue in this case turns on Art. 2180 of the Civil Code, which provides that "employers
shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks,
even though the former are not engaged in any business or industry." The responsibility of employers for the negligence of their
employees in the performance of their duties is primary, that is, the injured party may recover from the employers directly,
regardless of the solvency of their employees. 13 The rationale for the rule on vicarious liability has been adumbrated thus:
What has emerged as the modern justification for vicarious liability is a rule of policy, a deliberate allocation of a
risk. The losses caused by the torts of employees, which as a practical matter are sure to occur in the conduct of
the employer's enterprise, are placed upon that enterprise itself, as a required cost of doing business. They are
placed upon the employer because, having engaged in an enterprise, which will on the basis of all past
experience involve harm to others through the tort of employees, and sought to profit by it, it is just that he, rather
than the innocent injured plaintiff, should bear them; and because he is better able to absorb them, and to
distribute them, through prides, rates or liability insurance, to the public, and so to shift them to society, to the
community at large. Added to this is the makeweight argument that an employer who is held strictly liable is
under the greatest incentive to be careful in the selection, instruction and supervision of his servants, and to take
every precaution to see that the enterprise is conducted safely. 14
In Campo v. Camarote, 15 we explained the basis of the presumption of negligence in this wise:
The reason for the law is obvious. It is indeed difficult for any person injured by the carelessness of a driver to
prove the negligence or lack of due diligence of the owner of the vehicle in the choice of the driver. Were we to
require the injured party to prove the owner's lack of diligence, the right will in many cases prove illusory, as
seldom does a person in the community, especially in the cities, have the opportunity to observe the conduct of

all possible car owners therein. So the law imposes the burden of proof of innocence on the vehicle owner. If the
driver is negligent and causes damage, the law presumes that the owner was negligent and imposes upon him
the burden of proving the contrary.
Employers may be relieved of responsibility for the negligent acts of their employees within the scope of their assigned tasks only if
they can show that "they observed all the diligence of a good father of a family to prevent
damage." 16 For this purpose, they have the burden of proving that they have indeed exercised such diligence, both in the selection
of the employee who committed the quasi-delict and in the supervision of the performance of his duties.
In the selection of prospective employees, employers are required to examine them as to their qualifications, experience, and
service records. 17 On the other hand, with respect to the supervision of employees, employers should formulate standard
operating, procedures, monitor their implementation, and impose disciplinary measures for breaches thereof. 18 To establish these
factors in a trial involving the issue of vicarious liability, employers must submit concrete proof, including documentary evidence. 19
In this case, MMTC sought to prove that it exercised the diligence of a good father of a family with respect to the selection of
employees by presenting mainly testimonial evidence on its hiring procedure. According to MMTC, applicants are required to
submit professional driving licenses, certifications of work experience, and clearances from the National Bureau of Investigation; to
undergo tests of their driving skills, concentration, reflexes, and vision; and, to complete training programs on traffic rules, vehicle
maintenance, and standard operating procedures during emergency cases. 20
MMTC's evidence consists entirely of testimonial evidence (1) that transport supervisors are assigned to oversee field operations in
designated areas; (2) that the maintenance department daily inspects the engines of the vehicles; and, (3) that for infraction of
company rules there are corresponding penalties. 21 Although testimonies were offered that in the case of Pedro Musa all these
precautions were followed, 22 the records of his interview, of the results of his examinations, and of his service were not presented.
MMTC submitted brochures and programs of seminars for prospective employees on vehicle maintenance, traffic regulations, and
driving skills and claimed that applicants are given tests to determine driving skills, concentration, reflexes, and vision, 23 but there
is no record that Musa attended such training programs and passed the said examinations before he was employed. No proof was
presented that Musa did not have any record of traffic violations. Nor were records of daily inspections, allegedly conducted by
supervisors, ever presented.
Normally, employers' keep files concerning the qualifications, work experience, training evaluation, and discipline of their
employees. The failure of MMTC to present such documentary proof puts in doubt the credibility of its witnesses. What was said
in Central Taxicab Corporation v. Ex-Meralco Employees Transportation Corporation 24applies to this case:
This witness spoke of an affidavit of experience which a driver-applicant must accomplish before he is employed
by the company, a written time schedule for each bus, and a record of the inspections and thorough checks
pertaining to each bus before it leaves the car barn; yet no attempt was ever made to present in evidence any of
these documents, despite the fact that they were obviously in the possession and control of the defendant
company.
....
Albert also testified that he kept records of the preliminary and final tests given by him as well as a record of the
qualifications and experience of each of the drivers of the company. It is rather' strange, therefore, that he failed
to produce in court the all important record of Roberto, the driver involved in this case.
The failure of the defendant company to produce in court any record or other documentary proof tending to
establish that it had exercised all the diligence of a good father of a family in the selection and supervision of its
drivers and buses, notwithstanding the calls therefor by both the trial court and the opposing counsel, argues
strongly against its pretensions.
It is noteworthy that, in another case involving MMTC, testimonial evidence of identical content, which MMTC presented to show
that it exercised the diligence of a good father of a family in the selection and supervision of employees and thus avoid vicarious
liability for the negligent acts of its employees, was held to be insufficient to overcome the presumption of negligence against it.
In Metro Manila Transit Corp. v. Court of Appeals, 25 this Court said:
Coming now to the case at bar, while there is no rule which requires that testimonial evidence, to hold sway, must
be corroborated by documentary evidence, or even object evidence for that matter, inasmuch as the witnesses'
testimonies dwelt on mere generalities, we cannot consider the same as sufficiently persuasive proof that there
was observance of due diligence in the selection and supervision of employees. Petitioner's attempt to prove
its diligentissimi patris familias in the selection and supervision of employees through oral evidence must fail as it

was unable to buttress the same with any other evidence, object or documentary, which might obviate the
apparent biased nature of the testimony.
Having found both MMTC and its driver Pedro Musa liable for negligence for the death of Liza Rosalie on August 9, 1986; we now
consider the question of damages which her parents, the spouses Rosales, are entitled to recover, which is the subject of the
appeal in G.R. No. 126395.
Indemnity for Death. Art. 2206 provides for the payment of indemnity for death caused by a crime or quasi-delict. Initially fixed in
said article of the Civil Code at P3,000.00, the amount of the indemnity has through the years been gradually increased based on
the value of the peso. At present, it is fixed at P50,000.00. 26 To conform to this new ruling, the Court of Appeals correctly increased
the indemnity it had originally ordered the spouses Rosales to be paid from P30,000.00 to P50,000.00 in its resolution, dated
September 12, 1996.
Actual Damages. Art. 2199 provides that "except as provided by law or by stipulation, one is entitled to an adequate compensation
only for such pecuniary loss suffered by him as he has duly proved." The spouses Rosales are claiming actual damages in the
amount of P239,245.40. However, during the trial, they submitted receipts showing that expenses for the funeral, wake, and
interment of Liza Rosalie amounted only to P60,226.65 itemized as follows: 27
Medical Attendance P 739.65
Funeral Services 5,100.00
Wreaths 2,500.00
Embalment 1,000.00
Obituaries 7,125.00
Interment fees 2,350.00
Expenses during wake 14,935.00
Mourning clothes 5,000.00
Photography 3,500.00
Video Coverage 10,000.00
Printing of invitation cards 7,977.00
TOTAL 60,226.65
Hence, apart from the indemnity for death, the spouses Rosales are entitled to recover the above amount as actual damages.
Moral Damages. Under Art. 2206, the "spouse, legitimate and illegitimate descendants and ascendants of the deceased may
demand moral damages for mental anguish by reason of the death of the deceased." The reason for the grant of moral damages
has been explained thus:
. . . the award of moral damages is aimed at a restoration, within the limits of the possible, of the spiritual status
quo ante; and therefore, it must be proportionate to the suffering inflicted. The intensity of the pain experienced
by the relatives of the victim is proportionate to the intensity of affection for him and bears no relation whatsoever
with the wealth or means of the offender. 28
In the instant case, the spouses Rosales presented evidence of the intense moral suffering they had gone through as a result of the
loss of Liza Rosalie who was their youngest child. Rodolfo Rosales recounted the place of Liza Rosalie in the family and their
relationship with her in the following words:
Q: Mr. Rosales, how was Liza to you as a daughter?
A: Well, Liza as a daughter was the greatest joy of the family; she was our pride, and
everybody loved her all her brothers and sisters because she was sweet and unspoiled. .

. . She was soft-spoken to all of us; and she still slept with us at night although she had her
own room. Sometimes in the middle of the night she would open our door and ask if she could
sleep with us. So we let her sleep with us, as she was the youngest. 29
The death of Liza Rosalie left a void in their lives. Rodolfo Rosales testified on the devastating effect of the death of Liza Rosalie:
Q: And after she died, what changes, if any, did you feel in your family?
A: Well, there is something hollow in our family, something is missing. She used to greet me
when I came home and smell if I was drunk and would tell me to dress up and take a shower
before her mommy could see me. She would call me up at the office and say: "Daddy, come
home, please help me with my homework." Now, all these things, I am missing, you know. . . I
do not feel like going home early. Sometimes my wife would complain and ask: "Where did you
go?" But I cannot explain to her how I feel. 30
Lily Rosales described life without Liza Rosalie thus:
Q: Now, your life without Liza, how would you describe it, Dr. Rosales?
A: You know it is very hard to describe. The family was broken apart. We could not go together
because we remember Liza. Every time we go to the cemetery we try as much as possible not
to go together. So, we go to the cemetery one at a time, sometimes, my husband and I, or my
son and another one, but we never go together because we remember Liza. But before her
death we would always be together, the whole family on weekends and on our days off. My
husband works very hard, I also work very hard and my children go to school. They study very
hard. Now we cannot go together on outings because of the absence of Liza. 31
The spouses Rosales claim moral damages in the amount of P5,000,000.00. In People v. Teehankee, Jr., 32 this Court awarded P1
million as moral damages to the heirs of a seventeen-year-old girl who was murdered. This amount seems reasonable to us as
moral damages for the loss of a minor child, whether he or she was a victim of a crime or a quasi-delict. Hence, we hold that the
MMTC and Musa are solidarily liable to the spouses Rosales in the amount of P1,000,000.00 as moral damages for the death of
Liza Rosalie.
Exemplary Damages. Art. 2231 provides that exemplary damages may be recovered in cases involving quasi-delicts if "the
defendant acted with gross negligence." This circumstance obtains in the instant case. The records indicate that at the time of the
mishap, there was a pending criminal case against Musa for reckless imprudence resulting in slight physical injuries with another
branch of the Regional Trial Court, Quezon City. 33 The evidence also shows that he failed to stop his vehicle at once even after eye
witnesses shouted at him. The spouses Rosales claim exemplary damages in the amount of P5,000,000.00. Under the
circumstances, we deem it reasonable to award the spouses Rosales exemplary damages in the amount of five hundred thousand
pesos (P500,000.00).
Attorney's Fees. Pursuant to Art. 2208, attorney's fees may be recovered when, as in the instant case, exemplary damages are
awarded. In the recent case of Sulpicio Lines, Inc. v. Court of Appeals, 34 which involved the death of a minor child in the sinking of
a vessel, we held an award of P50,000.00 as attorney's fees to be reasonable. Hence, we affirm the award of attorney's fees made
by the Court of Appeals to the spouses Rosales in that amount.
Compensation for Loss of Earning Capacity. Art. 2206 of the Civil Code provides that in addition to the indemnity for death caused
by a crime or quasi delict, the "defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall
be paid to the heirs of the latter; . . ." Compensation of this nature is awarded not for loss of earnings but for loss of capacity to earn
money. 35 Evidence must be presented that the victim, if not yet employed at the time of death, was reasonably certain to complete
training for a specific profession. 36 InPeople v. Teehankee 37 no award of compensation for loss of earning capacity was granted to
the heirs of a college freshman because there was no sufficient evidence on record to show that the victim would eventually
become a professional pilot. 38 But compensation should be allowed for loss of earning capacity resulting from the death of a minor
who has not yet commenced employment or training for a specific profession if sufficient evidence is presented to establish the
amount thereof. In the United States it has been observed:
This raises the broader question of the proper measure of damages in death cases involving children,
housewives, the old, and others who do not have market income so that there is no pecuniary loss to survivors or
to the estate of the decedent. The traditional approach was to award no or merely nominal damages in such
cases. . . . Increasingly, however, courts allow expert testimony to be used to project those lost earnings. 39

Thus, in Haumersen v. Ford Motor Co., 40 the court allowed the heirs of a seven-year-old boy who was killed in a car accident to
recover compensation for loss of earning capacity:
Considerable evidence was presented by plaintiffs in an effort to give the jury a foundation on which to make an
award. Briefly stated, this evidence showed Charles Haumersen was a seven-year-old of above average
characteristics. He was described as "very intelligent" and "all-American." He received high marks in school. He
was active in church affairs and participated in recreational and athletic events, often with, children older than
himself. In addition, he had an unusual talent for creating numerous cartoons and other drawings, some of which
plaintiffs introduced at trial.
The record does not disclose passion and prejudice. The key question is whether the verdict of $100,000 has
support in the evidence.
Upon analysis of the record, we conclude that we should not disturb the award.
The argument for allowing compensation for loss of earning capacity of a minor is even stronger if he or she was a student,
whether already training for a specific profession or still engaged in general studies. In Krohmer v. Dahl, 41 the court, in affirming the
award by the jury of $85,000.00 to the heirs of an eighteen-year-old college freshman who died of carbon monoxide poisoning,
stated as follows:
There are numerous cases that have held admissible evidence of prospective earnings of a student or
trainee. . . . The appellants contend that such evidence is not admissible unless the course under study relates to
a given occupation or profession and it is shown that the student is reasonably certain to follow that occupation or
profession. It is true that the majority of these decisions deal with students who are studying for a specific
occupation or profession. However, not one of these cases indicate that evidence of one's education as a guide
to future earnings is not admissible where the student is engaged in general studies or whose education does not
relate to a specific occupation.
In sharp contrast with the situation obtaining in People v. Teehankee, where the prosecution merely presented evidence to show
the fact of the victim's graduation from high school and the fact of his enrollment in a flying school, spouses Rosales did not content
themselves with simply establishing Liza Rosalie's enrollment at UP Integrated School. They presented evidence to show that Liza
Rosalie was a good student, promising artist, and obedient child. She consistently performed well in her studies since grade
school. 42 A survey taken in 1984 when Liza Rosalie was twelve years old showed that she had good study habits and
attitudes. 43 Cleofe Chi, guidance counselor of the University of the Philippines Integrated School, described Liza Rosalie as
personable, well-liked, and with a balanced personality. 44 Professor Alfredo Rebillon, a faculty member of the University of the
Philippines College of Fine Arts, who organized workshops which Liza Rosalie attended in 1982 and 1983, testified that Liza
Rosalie had the potential of eventually becoming an artist. 45 Professor Rebillon's testimony is more than sufficiently established by
the 51 samples of Liza Rosalie's watercolor, charcoal, and pencil drawings submitted as exhibits by the spouses Rosales. 46 Neither
MMTC nor Pedro Musa controverted this evidence.
Considering her good academic record, extra-curricular activities, and varied interests, it is reasonable to assume that Liza Rosalie
would have enjoyed a successful professional career had it not been for her untimely death. Hence, it is proper that compensation
for loss of earning capacity should be awarded to her heirs in accordance with the formula established in decided cases 47 for
computing net earning capacity, to wit:
Net Earning = Life [Gross Necessary
Capacity Expectancy x [Annual Living
[Income Expenses
Life expectancy is equivalent to two thirds (2/3) multiplied by the difference of eighty (80) and the age of the deceased. 48 Since Liza
Rosalie was 16 at the time of her death, her life expectancy was 44 more years. 49 Her projected gross annual income, computed
based on the minimum wage for workers in the non-agricultural sector in effect at the time of her death, 50 then fixed at P37.00, 51 is
P14,630.46. 52 Allowing for necessary living expenses of fifty percent (50%) of her projected gross annual income, 53 her total net
earning capacity amounts to P321,870.12. 54
Finally, the spouses Rosales argue that the Court of Appeals erred in absolving Conrado Tolentino, Feliciana Celebrado, and the
GSIS of liability. The Spouses Rosales alleged that Tolentino, as Acting General Manager of the MMTC, and Celebrado, as a
dispatcher thereof, were charged with the supervision of Musa and should, therefore, be held vicariously liable under Art. 2180 of
the Civil Code. With respect to the GSIS, they contend that it was the insurer in a contract for third party liability it had with the
MMTC.

Although the fourth paragraph of Art. 2180 mentions "managers" among those made responsible for the negligent acts of others, it
is settled that this term is used in the said provision in the sense of "employers." 55 Thus, Tolentino and Celebrado cannot be held
liable for the tort of Pedro Musa.
In Vda. de Maglana v. Consolacion, 56 it was ruled that an insurer in an indemnity contract for third party liability is directly liable to
the injured party up to the extent specified in the agreement, but it cannot be held solidarily liable beyond that amount. The GSIS
admitted in its answer that it was the insurer of the MMTC for third party liability with respect to MMTC Bus No. 27 to the extent of
P50,000.00. 57 Hence, the spouses Rosales have the option either to claim the said amount from the GSIS and the balance of the
award from MMTC and Musa or to enforce the entire judgment against the latter, subject to reimbursement from the former to the
extent of the insurance coverage. 58
One last word. The Regional Trial Court of Quezon City erred in holding MMTC primarily and Musa secondarily liable for damages
arising from the death of Liza Rosalie. It was error for the appellate court to affirm this aspect of the trial court's decision.
As already stated, MMTC is primarily liable for damages for the negligence of its employee in view of Art. 2180. Pursuant to Art.
2181, it can recover from its employee what it may pay. This does not make the employee's liability subsidiary. It only means that if
the judgment for damages is satisfied by the common carrier, the latter has a right to recover what it has paid from its employee
who committed the fault or negligence which gave rise to the action based on quasi-delict. 59 Hence, the spouses Rosales have the
option of enforcing the judgment against either MMTC or Musa.
From another point of view, Art. 2194 provides that "the responsibility of two or more persons who are liable for a quasi-delict is
solidary." We ruled in Gelisan v. Alday 60 that "the registered owner/operator of a public service vehicle is jointly and severally liable
with the driver for damages incurred by passengers or third persons as a consequence of injuries sustained in the operation of said
vehicle." In Baliwag Transit Inc. v. Court of Appeals 61 it was held that "to escapesolidary liability for a quasi-delict committed by an
employee, the employer must adduce sufficient proof that it exercised such degree of care." Finally, we held in the recent case
of Philtranco Service Enterprises, Inc. v. Court of Appeals 62 that "the liability of the registered owner of a public service vehicle . . .
for damages arising from the tortious acts of the driver is primary, direct, and joint and several or solidary with the driver."
WHEREFORE, the decision of the Court of Appeals is SET ASIDE and another one is RENDERED holding the Metro Manila
Transit Corporation and Pedro Musa jointly and severally liable for the death of Liza Rosalie R. Rosales and ORDERING them as
such to pay to the spouses Rodolfo V. Rosales and Lily R. Rosales the following amounts:
1) death indemnity in the amount of fifty-thousand pesos (P50,000,00);
2) actual damages in the amount of sixty thousand two hundred twenty six pesos and sixty five centavos (P60,226.65);
3) moral damages in the amount of one million pesos (P1,000,000.00);
4) exemplary damages in the amount of five hundred thousand pesos (P500,000.00);
5) attorney's fees in the amount of fifty thousand pesos (P50,000.00);
6) compensation for loss of earning capacity in the amount of three hundred twenty-one thousand eight hundred seventy pesos and
twelve centavos (P321,870.12); and
7) the costs of suit.
SO ORDERED.

G. R. No. 154278

December 27, 2002

VICTORY LINER, INC. petitioner,

vs.
HEIRS OF ANDRES MALECDAN, respondents.
MENDOZA, J.:
This is a petition for review of the decision 1 of the Eighth Division of the Court of Appeals, which
affirmed the decision2 of the Regional Trial Court of Baguio City, Branch 5, in Civil Case No. 3082-R,
ordering petitioner and its driver, Ricardo Joson, Jr., to pay damages to the heirs of Andres Malecdan,
who had been killed after being hit by a bus while attempting to cross the National Highway in
Barangay Nungnungan 2 in Cauayan, Isabela.
The facts of the case are as follows:
Petitioner is a common carrier. Private respondent Elena Malecdan is the widow of the deceased, while
private respondents Veronica, Virginia, Mary Pauline, Arthur, Viola, Manuel and Valentin Malecdan are
their children.
Andres Malecdan was a 75 year-old farmer residing in Barangay Nungnungan 2, Municipality of
Cauayan, Province of Isabela.3 On July 15, 1994, at around 7:00 p.m., while Andres was crossing the
National Highway on his way home from the farm, a Dalin Liner bus on the southbound lane stopped to
allow him and his carabao to pass. However, as Andres was crossing the highway, a bus of petitioner
Victory Liner, driven by Ricardo C. Joson, Jr., bypassed the Dalin bus. In so doing, respondent hit the old
man and the carabao on which he was riding. As a result, Andres Malecdan was thrown off the carabao,
while the beast toppled over.4 The Victory Liner bus sped past the old man, while the Dalin bus
proceeded to its destination without helping him.
The incident was witnessed by Andres Malecdan's neighbor, Virgilio Lorena, who was resting in a nearby
waiting shed after working on his farm. Malecdan sustained a wound on his left shoulder, from which
bone fragments protruded. He was taken by Lorena and another person to the Cagayan District
Hospital where he died a few hours after arrival. 5 The carabao also died soon afterwards.6 Lorena
executed a sworn statement before the police authorities. Subsequently, a criminal complaint for
reckless imprudence resulting in homicide and damage to property was filed against the Victory Liner
bus driver Ricardo Joson, Jr.7
On October 5, 1994, private respondents brought this suit for damages in the Regional Trial Court,
Branch 5, Baguio City,8 which, in a decision rendered on July 17, 2000, found the driver guilty of gross
negligence in the operation of his vehicle and Victory Liner, Inc. also guilty of gross negligence in the
selection and supervision of Joson, Jr. Petitioner and its driver were held liable for damages. The
dispositive portion of the trial court's decision reads:

WHEREFORE, judgment is hereby rendered ordering the defendants to pay, jointly and severally to the
plaintiffs the amounts of:
a. P50,000.00 as death indemnity;
b. P88,339.00 for actual damages;
c. P200,000.00 for moral damages;
d. P50,000.00 as exemplary damages;
e. Thirty percent (30%) as attorney's fees of whatever amount that can be collected by the
plaintiff; and
f. The costs of the suit.
The counterclaim of the defendant Victory Liner, Inc. against the plaintiffs and the third-party complaint
of the same defendant against the Zenith Insurance Corporation are dismissed.
SO ORDERED.9
On appeal, the decision was affirmed by the Court of Appeals, with the modification that the award of
attorney's fees was fixed at P50,000.00.10
Hence, this appeal raising the following issues:
I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE APPEALED
DECISION OF THE REGIONAL TRIAL COURT GRANTING P200,000.00 AS MORAL DAMAGES WHICH IS
DOUBLE THE P100,000.00 AS PRAYED FOR BY THE PRIVATE RESPONDENTS IN THEIR COMPLAINT AND IN
GRANTING ACTUAL DAMAGES NOT SUPPORTED BY OFFICIAL RECEIPTS AND SPENT WAY BEYOND THE
BURIAL OF THE DECEASED VICTIM.
II. WHETHER OR NOT THE AFFIRMATION BY THE HONORABLE COURT OF APPEALS OF THE APPEALED
DECISION OF THE REGIONAL TRIAL COURT GRANTING THE AWARD OF MORAL AND EXEMPLARY
DAMAGES AND ATTORNEY'S FEES WHICH WERE NOT PROVED AND CONSIDERING THAT THERE IS NO
FINDING OF BAD FAITH AND GROSS NEGLIGENCE ON THE PART OF THE PETITIONER WAS NOT
ESTABLISHED, IS IN ACCORD WITH LAW AND JURISPRUDENCE.
III. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE APPEALED
DECISION OF THE REGIONAL TRIAL COURT WHICH DISREGARDED THE APPELLANT'S TESTIMONIAL AND
DOCUMENTARY EVIDENCE THAT IT HAS EXERCISED EXTRAORDINARY DILIGENCE IN THE SELECTION AND
SUPERVISION OF ITS EMPLOYEES, OR STATED DIFFERENTLY, WHETHER OR NOT THE AFFIRMATION BY
THE COURT OF APPEALS OF THE APPEALED DECISION OF THE TRIAL COURT THAT IS CONTRARY TO LAW
AND JURISPRUDENCE CONSTITUTES GRAVE ABUSE AND EXCESS OF JURISDICTION. 11
We find the appealed decision to be in order.
First. Victory Liner, Inc. no longer questions the findings of the Regional Trial Court that Andres
Malecdan was injured as a result of the gross negligence of its driver, Ricardo Joson, Jr. What petitioner
now questions is the finding that it (petitioner) failed to exercise the diligence of a good father of the
family in the selection and supervision of its employee. Petitioner argues,
With all due respect, the assignment of three inspectors to check and remind the drivers of petitioner
Victory Liner of its policies in a two-and-a-half hour driving distance, the installation of tachometers to
monitor the speed of the bus all throughout the trip, the periodic monitoring and checking of the trips
from one station to another through a trip ticket from station to station, the regular periodic conducting
of safety and defensive driving [training sessions] for its drivers are concrete and physical proofs of the

formulated operating standards, the implementation and monitoring of the same, designed for the
exercise of due diligence of a good father of a family in the supervision of its employees. 12
It explained that it did not present bus driver Joson, Jr. on the witness stands because he had been
dismissed from the company after the incident, which it found was a breach in the company
regulations. Petitioner blames private respondents for the death of their father, Andres Malecdan, who
was already 75 years old, for allowing him to plough their field by himself. 13
The contention has no merit.
Article 2176 provides:
Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to
pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
Article 2180 provides for the solidary liability of an employer for the quasi-delict committed by an
employee. The responsibility of employers for the negligence of their employees in the performance of
their duties is primary and, therefore, the injured party may recover from the employers directly,
regardless of the solvency of their employees. 14 The rationale for the rule on vicarious liability has been
explained thus:
What has emerged as the modern justification for vicarious liability is a rule of policy, a deliberate
allocation of a risk. The losses caused by the torts of employees, which as a practical matter are sure to
occur in the conduct of the employer's enterprise, are placed upon that enterprise itself, as a required
cost of doing business. They are placed upon the employer because, having engaged in an enterprise,
which will on the basis of all past experience involve harm to others through the tort of employees, and
sought to profit by it, it is just that he, rather than the innocent injured plaintiff, should bear them; and
because he is better able to absorb them and to distribute them, through prices, rates or liability
insurance, to the public, and so to shift them to society, to the community at large. Added to this is the
makeweight argument that an employer who is held strictly liable is under the greatest incentive to be
careful in the selection, instruction and supervision of his servants, and to take every precaution to see
that the enterprise is conducted safely.15
Employers may be relieved of responsibility for the negligent acts of their employees acting within the
scope of their assigned task only if they can show that "they observed all the diligence of a good father
of a family to prevent damage." 16 For this purpose, they have the burden of proving that they have
indeed exercised such diligence, both in the selection of the employee and in the supervision of the
performance of his duties.17
In the selection of prospective employees, employers are required to
qualifications, experience and service records. 18 With respect to the
employers must formulate standard operating procedures, monitor their
disciplinary measures for breaches thereof. 19 These facts must be shown
documentary evidence.20

examine them as to their

supervision of employees,
implementation and impose
by concrete proof, including

In the instant case, petitioner presented the results of Joson, Jr.'s written examination, 21 actual driving
tests,22 x-ray
examination,23 psychological
examination,24 NBI
clearance,25 physical
examination,26 hematology examination,27 urinalysis,28 student driver training,29 shop training,30 birth
certificate,31 high school diploma32and reports from the General Maintenance Manager and the
Personnel Manager showing that he had passed all the tests and training sessions and was ready to
work as a professional driver.33 However, as the trial court noted, petitioner did not present proof that
Joson, Jr. had nine years of driving experience.34
Petitioner also presented testimonial evidence that drivers of the company were given seminars on
driving safety at least twice a year.35 Again, however, as the trial court noted there is no record of Joson,
Jr. ever attending such a seminar. 36 Petitioner likewise failed to establish the speed of its buses during

its daily trips or to submit in evidence the trip tickets, speed meters and reports of field inspectors. The
finding of the trial court that petitioner's bus was running at a very fast speed when it overtook the
Dalin bus and hit the deceased was not disputed by petitioner. For these reasons, we hold that the trial
court did not err in finding petitioner to be negligent in the supervision of its driver Joson, Jr.
Second. To justify an award of actual damages, there should be proof of the actual amount of loss
incurred in connection with the death, wake or burial of the victim. 37 We cannot take into account
receipts showing expenses incurred some time after the burial of the victim, such as expenses relating
to the 9th day, 40th day and 1st year death anniversaries. 38 In this case, the trial court
awarded P88,339.00 as actual damages. While these were duly supported by receipts, these included
the amount of P5,900.00, the cost of one pig which had been butchered for the 9th day death
anniversary of the deceased. This item cannot be allowed. We, therefore, reduce the amount of actual
damages to P82,439.00.00. The award of P200,000.00 for moral damages should likewise be reduced.
The trial court found that the wife and children of the deceased underwent "intense moral suffering" as
a result of the latter's death.39 Under Art. 2206 of the Civil Code, the spouse, legitimate children and
illegitimate descendants and ascendants of the deceased may demand moral damages for mental
anguish by reason of the death of the deceased. Under the circumstances of this case an award
of P100,000.00 would be in keeping with the purpose of the law in allowing moral damages. 40
On the other hand, the award of P50,000.00 for indemnity is in accordance with current rulings of the
Court.41
Art. 2231 provides that exemplary damages may be recovered in cases involving quasi-delicts if the
defendant acted with gross negligence. Exemplary damages are imposed not to enrich one party or
impoverish another but to serve as a deterrent against or as a negative incentive to curb socially
deleterious actions.42 In this case, petitioner's driver Joson, Jr. was grossly negligent in driving at such a
high speed along the national highway and overtaking another vehicle which had stopped to allow a
pedestrian to cross. Worse, after the accident, Joson, Jr. did not stop the bus to help the victim. Under
the circumstances, we believe that the trial court's award ofP50,000.00 as exemplary damages is
proper.
Finally, private respondents are entitled to attorney's fees. Under Art. 2008 of the Civil Code, attorney's
fees may be recovered when, as in the instant case, exemplary damages are awarded. In the recent
case of Metro Manila Transit Corporation v. Court of Appeals,43 we held an award of P50,000.00 as
attorney's fees to be reasonable. Hence, private respondents are entitled to attorney's fees in that
amount.
WHEREFORE, the decision of the Court of Appeals, dated January 17, 2002, is hereby AFFIRMED, with
the MODIFICATION that petitioner Victory Liner, Inc. is ordered to pay the following amounts to the
respondent heirs of Andres Malecdan:
1. Death indemnity in the amount of Fifty Thousand Pesos (P50,000.00);
2. Actual damages in the amount of Eighty-Two Thousand Four Hundred Thirty-Nine Pesos
(P82,439.00);
3. Moral damages in the amount of One Hundred Thousand Pesos (P100,000.00);
4. Exemplary damages in the amount of Fifty Thousand Pesos (P50,000.00);
5. Attorney's fees in the amount of Fifty Thousand Pesos (P50,000.00); and 6. Costs of suit.
SO ORDERED.

G.R. No. 82465 February 25, 1991

ST. FRANCIS HIGH SCHOOL, as represented by SPS. FERNANDO NANTES AND ROSARIO LACANDULA,
BENJAMIN ILUMIN, TIRSO DE CHAVEZ, LUISITO VINAS, CONNIE ARQUIO AND PATRIA CADIZ, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ELEVENTH DIVISION and DR. ROMULO CASTILLO and LILIA
CADIZ, respondents.
PARAS, J.:p
This is a petition for review of the decision * of the Court of Appeals, the dispositive portion of which reads:
WHEREFORE, the decision under appeal is hereby affirmed, with the following modifications: (1)
Exemplary damages in the amount of P20,000.00 are hereby awarded to plaintiffs, in addition to the
actual damages of P30,000.00, moral damages of P20,000.00 and attorney's fees in the amount of
P15,000.00 awarded to plaintiffs in the decision under appeal; (2) St. Francis High School,
represented by the Spouses Fernando Nantes and Rosario Lacandula, and Benjamin Illumin, are
hereby held jointly and severally liable with defendants Connie Arquio, Tirso de Chaves, Luisito Vinas
and Patria Cadis for the payment to plaintiffs of the abovementioned actual damages, moral
damages, exemplary damages and attorney's fees, and for costs; and (3) Defendants Yoly Jaro and
Nida Aragones are hereby absolved from liability, and the case against them, together with their
respective counterclaims, is hereby ordered dismissed.
SO ORDERED. (p. 60, Rollo)
The complaint alleged that Ferdinand Castillo, then a freshman student of Section 1-C at the St. Francis High School,
wanted to join a school picnic undertaken by Class I-B and Class I-C at Talaan Beach, Sariaya, Quezon. Ferdinand's
parents, respondents spouses Dr. Romulo Castillo and Lilia Cadiz Castillo, because of short notice, did not allow their
son to join but merely allowed him to bring food to the teachers for the picnic, with the directive that he should go back
home after doing so. However, because of persuasion of the teachers, Ferdinand went on with them to the beach.
During the picnic and while the students, including Ferdinand, were in the water, one of the female teachers was
apparently drowning. Some of the students, including Ferdinand, came to her rescue, but in the process, it was
Ferdinand himself who drowned. His body was recovered but efforts to resuscitate him ashore failed. He was brought
to a certain Dr. Luna in Sariaya, Quezon and later to the Mt. Cannel General Hospital where he was pronounced dead
on arrival.
Thereupon, respondent spouses filed a complaint docketed as Civil Case No. 8834, in the Regional Trial Court,
Branch LVIII of Lucena City, against the St. Francis High School, represented by the spouses Fernando Nantes and
Rosario Lacandula, Benjamin Illumin (its principal), and the teachers: Tirso de Chaves, Luisito Vinas, Connie Arquio,
Nida Aragones, Yoly Jaro, and Patria Cadiz, for Damages which respondents allegedly incurred from the death of their
13-year old son, Ferdinand Castillo. Contending that the death of their son was due to the failure of the petitioners to
exercise the proper diligence of a good father of the family in preventing their son's drowning, respondents prayed of
actual, moral and exemplary damages, attorney's fees and expenses for litigation.
The trial court found in favor of the respondents and against petitioners-teachers Arquio, de Chaves, Vinas, Aragones,
Jaro and Cadiz, ordering all of them jointly and severally to pay respondents the sum of P30,000.00 as actual
damages, P20,000.00 as moral damages, P15,000.00 as attorney's fees, and to pay the costs. The court a
quo reasoned:
Taking into consideration the evidence presented, this Court believes that the defendant teachers
namely: Connie Arquio, Luisito Vinas, Tirso de Chaves, Yoly Jaro, Nida Aragones and Patria Cadiz
had failed to exercise the diligence required of them by law under the circumstances to guard against
the harm they had foreseen. (pp. 2930, Rollo)
xxx xxx xxx
While it is alleged that when defendants Yoly Jaro and Nida Aragones arrived at the picnic site, the
drowning incident had already occurred, such fact does not and cannot excuse them from their

liability. In fact, it could be said that by coming late, they were remiss in their duty to safeguard the
students. (p. 30, Rollo)
The students, young as they were then (12 to 13 years old), were easily attracted to the sea without
aforethought of the dangers it offers. Yet, the precautions and reminders allegedly performed by the
defendants-teachers definitely fell short of the standard required by law under the circumstances.
While the defendants-teachers admitted that some parts of the sea where the picnic was held are
deep, the supposed lifeguards of the children did not even actually go to the water to test the depth of
the particular area where the children would swim. And indeed the fears of the plaintiffs that the picnic
area was dangerous was confirmed by the fact that three persons during the picnic got drowned at the
same time. Had the defendant teachers made an actual and physical observation of the water before
they allowed the students to swim, they could have found out that the area where the children were
swimming was indeed dangerous. And not only that, the male teachers who according to the female
teachers were there to supervise the children to ensure their safety were not even at the area where
the children were swimming. They were somewhere and as testified to by plaintiffs' witness they were
having a drinking spree. (pp. 55-56, Rollo)
On the other hand, the trial court dismissed the case against the St. Francis High School, Benjamin Illumin and Aurora
Cadorna. Said the court a quo:
As shown and adverted to above, this Court cannot find sufficient evidence showing that the picnic
was a school sanctioned one. Similarly no evidence has been shown to hold defendants Benjamin
Illumin and Aurora Cadorna responsible for the death of Ferdinand Castillo together with the other
defendant teachers. It has been sufficiently shown that Benjamin Illumin had himself not consented to
the picnic and in fact he did not join it. On the other hand, defendant Aurora Cadorna had then her
own class to supervise and in fact she was not amongst those allegedly invited by defendant Connie
Arquio to supervise class I-C to which Ferdinand Castillo belongs. (p. 30, Rollo)
Both petitioners and respondents appealed to the Court of Appeals. Respondents-spouses assigned the following
errors committed by the trial court:
1. The lower court erred in not declaring the defendant St. Francis High School and its
administrator/principal Benjamin Illumin as equally liable not only for its approved co-curricular
activities but also for those which they unreasonably failed to exercise control and supervision like the
holding of picnic in the dangerous water of Talaan Beach, Sariaya, Quezon.
2. The lower court erred in not declaring the St. Francis High School and principal Benjamin Illumin as
jointly and solidarily liable with their co-defendants-teachers Rosario Lacandula, et als., for the tragic
death of Ferdinand Castillo in a picnic at Talaan Beach, Sariaya, Quezon, last March 20, 1982.
3. The lower court erred in not declaring higher amount for actual and moral damages for the untimely
and tragic death of Ferdinand Castillo in favor of plaintiffs-appellants against all the defendants. (pp.
56-57, Rollo)
The Court of Appeals ruled:
We find plaintiffs-appellants' submission well-taken.
Even were We to find that the picnic in question was not a school-sponsored activity, nonetheless it
cannot be gainsaid that the same was held under the supervision of the teachers employed by the
said school, particularly the teacher in charge of Class I-C to whom the victim belonged, and those
whom she invited to help her in supervising the class during the picnic. Considering that the court a
quo found negligence on the part of the six defendants-teachers who, as such, were charged with the
supervision of the children during the picnic, the St. Francis High School and the school principal,
Benjamin Illumin, are liable under Article 2176 taken together with the 1st, 4th and 5th paragraphs of
Article 2180 of the Civil Code. They cannot escape liability on the mere excuse that the picnic was not
an "extra-curricular activity of the St. Francis High School." We find from the evidence that, as claimed

by plaintiffs-appellants, the school principal had knowledge of the picnic even from its planning stage
and had even been invited to attend the affair; and yet he did not express any prohibition against
undertaking the picnic, nor did he prescribe any precautionary measures to be adopted during the
picnic. At the least, We must find that the school and the responsible school officials, particularly the
principal, Benjamin Illumin, had acquiesced to the holding of the picnic.
Under Article 2180, supra, the defendant school and defendant school principal must be found jointly
and severally liable with the defendants-teachers for the damages incurred by the plaintiffs as a result
of the death of their son. It is the rule that in cases where the above-cited provisions find application,
the negligence of the employees in causing the injury or damage gives rise to a presumption of
negligence on the part of the owner and/or manager of the establishment (in the present case, St.
Francis High School and its principal); and while this presumption is not conclusive, it may be
overthrown only by clear and convincing proof that the owner and/or manager exercised the care and
diligence of a good father of a family in the selection and/or supervision of the employee or employees
causing the injury or damage (in this case, the defendants-teachers). The record does not disclose
such evidence as would serve to overcome the aforesaid presumption and absolve the St. Francis
High School and its principal from liability under the above-cited provisions.
As to the third assigned error interposed by plaintiffs-appellants, while We cannot but commiserate
with the plaintiffs for the tragedy that befell them in the untimely death of their son Ferdinand Castillo
and understand their suffering as parents, especially the victim's mother who, according to appellants,
suffered a nervous breakdown as a result of the tragedy, We find that the amounts fixed by the court a
quo as actual damages and moral damages (P30,000.00 and P20,000.00, respectively) are
reasonable and are those which are sustained by the evidence and the law.
However, We believe that exemplary or corrective damages in the amount of P20,000.00 may and
should be, as it is hereby, imposed in the present case by way of example of correction for the public
good, pursuant to Article 2229 of the Civil Code. (pp. 57-59, Rollo)
On the other hand, petitioners-teachers assigned the following errors committed by the trial court:
1. ". . . in finding the defendants Connie Arquio, Tirso de Chavez, Luisito Vinas, Nida Aragones, Yoly
Jaro and Patria Cadiz guilty of negligence and jointly and severally liable for damages such finding not
being supported by facts and evidence.
2. ". . . in dismissing the counterclaim interposed by the defendants. (p. 59, Rollo)
On this score, respondent Court ruled:
The main thrust of defendants-appellants appeal is that plaintiffs, the parents of the victim Ferdinand
Castillo, were not able to prove by their evidence that they did not give their son consent to join the
picnic in question. However, We agree with the trial court in its finding that whether or not the victim's
parents had given such permission to their son was immaterial to the determination of the existence of
liability on the part of the defendants for the damage incurred by the plaintiffs-appellants as a result of
the death of their son. What is material to such a determination is whether or not there was
negligence on the part of defendants vis-a-vis the supervision of the victim's group during the picnic;
and, as correctly found by the trial court, an affirmative reply to this question has been satisfactorily
established by the evidence, as already pointed out.
However, We sustain defendants-appellants insofar as two of the defendants-teachers, Yoly Jaro and
Nida Aragones, are concerned. As to them, the trial court found:
While it is alleged that when defendants Yoly Jaro and Nida Aragones arrived at the
picnic site, the drowning incident had already occurred, such fact does not and
cannot excuse them from their liability. In fact, it could be said that by coming late,
they were remiss in their duty to safeguard the students.

The evidence shows that these two defendants had satisfactorily explained why they were late in
going to the picnic site, namely, that they had to attend to the entrance examination being conducted
by the school which is part of their duty as teachers thereof. Since they were not at the picnic site
during the occurrence in question, it cannot be said that they had any participation in the negligence
attributable to the other defendants-teachers who failed to exercise diligence in the supervision of the
children during the picnic and which failure resulted in the drowning of plaintiffs' son. Thus, We may
not attribute any act or omission to the two teachers, Yoly Jaro and Nida Aragones, as to make them
liable for the injury caused to the plaintiffs because of the death of their son resulting from his
drowning at the picnic. Accordingly, they must be absolved from any liability.
As to the second assigned error raised by defendants-appellants, We agree with the court a quo that
the counterclaim must be dismissed for lack of merit. (pp. 59-60, Rollo)
Hence, this petition.
The issues presented by petitioners are:
A) Whether or not there was negligence attributable to the defendants which will warrant the award of
damages to the plaintiffs;
B) Whether or not Art. 2180, in relation to Art. 2176 of the New Civil Code is applicable to the case at
bar;
C) Whether or not the award of exemplary and moral damages is proper under the circumstances
surrounding the case at bar. (pp. 81-82, Rollo)
In the resolution of January 16, 1989, We gave due course to the petition and required the parties to submit their
respective memoranda.
The petition is impressed with merit.
If at all petitioners are liable for negligence, this is because of their own negligence or the negligence of people under
them. In the instant case however, as will be shown hereunder, petitioners are neither guilty of their own negligence or
guilty of the negligence of those under them.
Hence, it cannot be said that they are guilty at all of any negligence. Consequently they cannot be held liable for
damages of any kind.
At the outset, it should be noted that respondent spouses, parents of the victim Ferdinand, allowed their son to join the
excursion.
Testimony of Dr. Castillo on cross exam. by Atty. Flores
Q Now, when your son asked you for money to buy food, did you not ask him where
he will bring this?
A I asked him where he was going, he answered, I am going to the picnic, and when I
asked him where, he did not answer, sir.
Q And after giving the money, you did not tell him anything more?
A No more, sir.
Q And after that you just learned that your son join the picnic?
A Yes, sir.

Q And you came to know of it after the news that your son was drowned in the picnic
came to you, is that correct?
A Yes, sir.
Q From 8:00 o'clock in the morning up to 12:00 o'clock noon of March 20, 1982, you
did not know that your son join the picnic?
A No, sir, I did not know.
Q Did you not look for your son during that time?
A I am too busy with my profession, that is why I was not able, sir.
Q You did not ask your wife?
A I did not, sir.
Q And neither did your wife tell you that your son join the picnic?
A Later on after 12:00, sir.
Q And during that time you were too busy that you did not inquire whether your son
have joined that picnic?
A Yes, sir.
(TSN, pp. 16-17, hearing of April 2, 1984 witness Romulo Castillo)
The fact that he gave money to his son to buy food for the picnic even without knowing where it will be held, is a sign
of consent for his son to join the same. Furthermore.
Testimony of Dr. Lazaro on cross examination:
Q How did you conduct this mental and physical examination?
A I have interviewed several persons and the patient herself She even felt guilty
about the death of her son because she cooked adobo for him so he could join the
excursion where her son died of drowning.
Q Why were you able to say she was feeling guilty because she was the one who
personally cooked the adobo for her son?
A It was during the interview that I had gathered it from the patient herself. She was
very sorry had she not allowed her son to join the excursion her son would have not
drowned. I don't know if she actually permitted her son although she said she cooked
adobo so he could join. (Emphasis Supplied) (TSN, p. 19, hearing of April 30, 1984,
Dr. Lazaro witness).
Respondent Court of Appeals committed an error in applying Article 2180 of the Civil Code in rendering petitioner
school liable for the death of respondent's son.
Article 2180, par. 4 states that:
The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but
also for those of persons for whom one is responsible.

xxx xxx xxx

Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks, even though the former are not engaged in any business or
industry.
Under this paragraph, it is clear that before an employer may be held liable for the negligence of his employee, the act
or omission which caused damage or prejudice must have occurred while an employee was in the performance of his
assigned tasks.
In the case at bar, the teachers/petitioners were not in the actual performance of their assigned tasks. The incident
happened not within the school premises, not on a school day and most importantly while the teachers and students
were holding a purely private affair, a picnic. It is clear from the beginning that the incident happened while some
members of the I-C class of St. Francis High School were having a picnic at Talaan Beach. This picnic had no permit
from the school head or its principal, Benjamin Illumin because this picnic is not a school sanctioned activity neither is
it considered as an extra-curricular activity.
As earlier pointed out by the trial court, mere knowledge by petitioner/principal Illumin of the planning of the picnic by
the students and their teachers does not in any way or in any manner show acquiescence or consent to the holding of
the same. The application therefore of Article 2180 has no basis in law and neither is it supported by any
jurisprudence. If we were to affirm the findings of respondent Court on this score, employers wig forever be exposed to
the risk and danger of being hailed to Court to answer for the misdeeds or omissions of the employees even if such
act or omission he committed while they are not in the performance of their duties.
Finally, no negligence could be attributable to the petitioners-teachers to warrant the award of damages to the
respondents-spouses.
Petitioners Connie Arquio the class adviser of I-aq
C, the section where Ferdinand belonged, did her best and
exercised diligence of a good father of a family to prevent any untoward incident or damages to all the students who
joined the picnic.
In fact, Connie invited co-petitioners Tirso de Chavez and Luisito Vinas who are both P.E. instructors and scout
masters who have knowledge in First Aid application and swimming. Moreover, even respondents' witness, Segundo
Vinas, testified that "the defendants (petitioners herein) had life savers especially brought by the defendants in case of
emergency." (p. 85, Rollo) The records also show that both petitioners Chavez and Vinas did all what is humanly
possible to save the child.
Testimony of Luisito Vinas on cross examination,
Q And when you saw the boy, Ferdinand Castillo, you approached the boy and claim
also having applied first aid on him?
A Yes, sir.
Q And while you were applying the so called first aid, the children were covering you
up or were surrounding you?
A Yes, sir.
Q You were rattled at that time, is it not?
A No, sir.
Q You mean you were in calm and peaceful condition?
A Yes, sir.

Q Despite the fact that the boy was no longer responding to your application of first
aid?
A Yes, sir.
Q You have never been disturbed, "nababahala" in the process of your application of
the first aid on the body of Ferdinand Castillo?
A No, sir, because we were attending to the application of first aid that we were doing,
sir.
Q After you have applied back to back pressure and which you claimed the boy did
not respond, were you not disturb anyway?
A I was disturbed during that time, sir.
Q For how many minutes have you applied the back to back pressure?
A From 9 to 11 times, sir.
Q You mean 9 to 11 times of having applied the pressure of your body on the body of
Ferdinand Castillo?
A Yes, sir.
Q Will you please describe how you applied a single act of back to back pressure?
A This has been done by placing the boy lay first downwards, then the face was a
little bit facing right and doing it by massaging the back of the child, sir." (TSN, pp. 3235, hearing of July 30, 1984)
Testimony of Tirso de Chavez on direct examination
ATTY. FLORES:
Q Who actually applied the first aid or artificial respiration to the child?
A Myself, sir.
Q How did you apply the first aid to the guy?
A The first step that I took, with the help of Mr. Luisito Vinas, was I applied back to
back pressure and took notice of the condition of the child. We placed the feet in a
higher position, that of the head of the child, sir.
Q After you have placed the boy in that particular position, where the feet were on a
higher level than that of the head, what did you do next?
A The first thing that we did, particularly myself, was that after putting the child in that
position, I applied the back to back pressure and started to massage from the
waistline up, but I noticed that the boy was not responding, sir.
Q For how long did you apply this back to back pressure on the boy?
A About 10 seconds, sir.
Q What about Mr. Vinas?

A Almost the same a little longer, for 15 seconds, sir.

Q After you noticed that the boy was not responding, what did you do?
A When we noticed that the boy was not responding, we changed the position of the
boy by placing the child facing upwards laying on the sand then we applied the mouth
to mouth resuscitation, sir. (pp. 92-93, Rollo)
With these facts in mind, no moral nor exemplary damages may be awarded in favor of respondents-spouses. The
case at bar does not fall under any of the grounds to grant moral damages.
Art. 2217. Moral Damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though
incapable of pecuniary computation, moral damages may be recovered if they are the proximate
result of the defendant's wrongful act or omission.
Moreover, as already pointed out hereinabove, petitioners are not guilty of any fault or negligence, hence, no moral
damages can be assessed against them.
While it is true that respondents-spouses did give their consent to their son to join the picnic, this does not mean that
the petitioners were already relieved of their duty to observe the required diligence of a good father of a family in
ensuring the safety of the children. But in the case at bar, petitioners were able to prove that they had exercised the
required diligence. Hence, the claim for moral or exemplary damages becomes baseless.
PREMISES CONSIDERED, the questioned decision dated November 19, 1987, finding petitioners herein guilty of
negligence and liable for the death of Ferdinand Castillo and awarding the respondents damages, is hereby SET
ASIDE insofar as the petitioners herein are concerned, but the portion of the said decision dismissing their
counterclaim, there being no merit, is hereby AFFIRMED.
SO ORDERED.

G.R. No. 75112 October 16, 1990

FILAMER CHRISTIAN INSTITUTE, petitioner,
vs.
HONORABLE COURT OF APPEALS, HONORABLE ENRIQUE P. SUPLICO, in his capacity
as Judge of the Regional Trial Court,. Branch XIV, Roxas City and the late
POTENCIANO KAPUNAN, SR., as substituted by his heirs, namely: LEONA KAPUNAN
TIANGCO, CICERO KAPUNAN, JESUS KAPUNAN, SANTIAGO KAPUNAN, POTENCIANO
KAPUNAN, JR., PAZ KAPUNAN PUBLICO, SUSA KAPUNAN GENUINO and ERLINDA
KAPUNAN TESORO, respondents.
FERNAN, C.J.:
This is a petition for review of the decision 1 of the Court of Appeals affirming the judgment of the Regional Trial Court (RTC) of
Roxas City, Branch 14 in Civil Case No. V-4222 which found petitioner Filamer Christian Institute and Daniel Funtecha negligent
and therefore answerable for the resulting injuries caused to private respondent Potenciano Kapunan, Sr.
Private respondent Potenciano Kapunan, Sr., an eighty-two-year old retired schoolteacher (now deceased), was struck by the
Pinoy jeep owned by petitioner Filamer and driven by its alleged employee, Funtecha, as Kapunan, Sr. was walking along Roxas
Avenue, Roxas City at 6:30 in the evening of October 20, 1977. As a result of the accident, Kapunan, Sr. suffered multiple injuries
for which he was hospitalized for a total of twenty (20) days.

Evidence showed that at the precise time of the vehicular accident, only one headlight of the jeep was functioning. Funtecha, who
only had a student driver's permit, was driving after having persuaded Allan Masa, the authorized driver, to turn over the wheels to
him. The two fled from the scene after the incident. A tricycle driver brought the unconscious victim to the hospital.
Thereafter, Kapunan, Sr. instituted a criminal case against Funtecha alone in the City Court of Roxas City for serious physical
injuries through reckless imprudence. Kapunan, Sr. reserved his right to file an independent civil action. The inferior court found
Funtecha guilty as charged and on appeal, his conviction was affirmed by the then Court of First Instance of Capiz. 2
Pursuant to his reservation, Kapunan, Sr. commenced a civil case for damages 3 before the RTC of Roxas City. Named defendants
in the complaint were petitioner Filamer and Funtecha. Also included was Agustin Masa, the director and president of Filamer
Christian Institute, in his personal capacity in that he personally authorized and allowed said Daniel Funtecha who was his
houseboy at the time of the incident, to drive the vehicle in question despite his knowledge and awareness that the latter did not
have the necessary license or permit to drive said vehicle. His son, Allan Masa, who was with Funtecha at the time of the accident,
was not impleaded as a co-defendant. 4
On December 14, 1983, the trial court rendered judgment finding not only petitioner Filamer and Funtecha to be at fault but also
Allan Masa, a non-party. Thus:
WHEREFORE, finding the averments in the complaint as supported by preponderance of evidence to be reasonable and justified,
and that defendants Daniel Funtecha, Filamer Christian Institute and Allan Masa are at fault and negligent of the acts complained of
which causes (sic) injury to plaintiff, judgment is hereby rendered in favor of the plaintiff and against the defendants, namely: Daniel
Funtecha and Filamer Christian Institute, the employer whose liability is primary and direct, jointly and severally, to pay plaintiff the
following:
(1) to pay the sum of TWO THOUSAND NINE HUNDRED FIFTY PESOS AND FIFTY CENTAVOS (P2,950.50)
as medical expenses (Exh. "A");
(2) to pay TWO HUNDRED FORTY ONE PESOS (P241.00) as doctor's fee (Exh. "C");
(3) to pay THREE HUNDRED NINETY PESOS (P390.00) as additional expenses incurred for thirty-nine days at
P10.00 a day, for remuneration of plaintiff's helper while recuperating;
(4) to pay FOUR THOUSAND PESOS (P4,000.00) as Court litigation expenses;
(5) to pay THREE THOUSAND PESOS (P3,000.00) as loss of earnings capacity;
(6) to pay TWENTY THOUSAND (P20,000.00) pesos as moral damages;
(7) to pay FOUR THOUSAND FIVE HUNDRED PESOS (P4,500.00) as attorney's fees;
(8) to pay TWENTY THOUSAND PESOS (P20,000.00)as insurance indemnity on the policy contract;
and without prejudice to the right of defendant Filamer Christian Institute to demand from co-defendant Daniel
Funtecha part-time employee and/or Allan Masa a full time employee reimbursement of the damages paid to
herein plaintiff.
The defendant Agustin Masa as director of defendant Filamer Christian Institute has also failed to exercise the
diligence required of a good father of a family in the supervision of his employee Allan Masa, being his son.
However, the court absolved defendant Agustin Masa from any personal liability with respect to the complaint
filed against him in his personal and private capacity, cause he was not in the vehicle during the alleged incident.
For failure to prove their respective counterclaims filed by the defendant Daniel Funtecha, Dr. Agustin Masa, and
Filamer Christian Institute, as against the herein plaintiff, same are hereby dismissed.
The Zenith Insurance Corporation as third party defendant has failed to prove that there was a policy violation
made by the defendant Filamer Christian Institute which absolves them from liability under the aforesaid
insurance policy. The record shows that the defendant Daniel Funtecha while driving the said vehicle was having
a student drivers license marked Exh. "1" and accompanied by Allan Masa who is the authorized driver of said
vehicle with a professional drivers license as shown by Exh. "3".

This Court finds that defendant Daniel Funtecha while driving the said vehicle is considered as authorized driver
in accordance with the policy in question marked Exh. "2-Masa and FCI".
Finding the averments in the third party complaint filed by defendant Filamer Christian Institute as supported by
preponderance of evidence as shown by their exhibits to be reasonable and justified, judgment is hereby
rendered in favor of the said defendant and third party plaintiff Filamer Christian Institute as against third party
defendant Zenith Insurance Corporation.
The Zenith Insurance Corporation as third party defendant is hereby ordered to pay in favor of the defendant and
third party plaintiff, Filamer Christian Institute, the following:
(1) to pay TWENTY THOUSAND PESOS (P20,000.00) as third party liability as provided in the
Zenith Insurance Corporation policy (Exh. "2");
(2) to pay TEN THOUSAND PESOS (P10,000.00)as moral damages;
(3) to pay FOUR THOUSAND PESOS (P4,000.00) as Court litigation and actual expenses;
(4) to pay THREE THOUSAND PESOS (P3,000.00) as attorney's fees;
The defendants Daniel Funtecha, Filamer Christian Institute and third party defendant Zenith Insurance
Corporation are hereby ordered jointly and severally, to pay the costs of the suit. 5
Only petitioner Filamer and third-party defendant Zenith Insurance Corporation appealed the lower court's judgment to the Court of
Appeals and as a consequence, said lower court's decision became final as to Funtecha. For failure of the insurance firm to pay the
docket fees, its appeal was dismissed on September 18, 1984. On December 17, 1985, the Appellate Court rendered the assailed
judgment affirming the trial court's decision in toto.6 Hence the present recourse by petitioner Filamer.
It is petitioner Filamer's basic contention that it cannot be held responsible for the tortious act of Funtecha on the ground that there
is no existing employer-employee relationship between them. We agree.
The Civil Code provides:
Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to
pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict and is governed by the provisions of this Chapter.
Art. 2180. The obligation imposed by article 2176 is demandable not only for one's own acts or omissions but
also for those of persons for whom one is responsible.
xxx xxx xxx
Employers shall be liable for the damages caused by their employees and household helpers acting within the
scope of their assigned tasks, even though the former are not engaged in any business or industry.
xxx xxx xxx
The responsibility treated of in this article shall cease when the persons herein mentioned prove that they
observe all the diligence of a good father of a family to prevent damage. (Emphasis supplied).
The legal issue in this appeal is whether or not the term "employer" as used in Article 2180 is applicable to petitioner Filamer with
reference to Funtecha.
In disclaiming liability, petitioner Filamer has invoked the provisions of the Labor Code, 7 specifically Section 14, Rule X of Book III
which reads:
Sec. 14. Working scholars. There is no employer-employee relationship between students on the one hand,
and schools, colleges or universities on the other, where students work for the latter in exchange for the privilege
to study free of charge; provided the students are given real opportunity, including such facilities as may be
reasonable, necessary to finish their chosen court under such arrangement. (Emphasis supplied).

It is manifest that under the just-quoted provision of law, petitioner Filamer cannot be considered as Funtecha's employer. Funtecha
belongs to that special category of students who render service to the school in exchange for free tuition Funtecha worked for
petitioner for two hours daily for five days a week. He was assigned to clean the school passageways from 4:00 a.m. to 6:00 a.m.
with sufficient time to prepare for his 7:30 a.m. classes. As admitted by Agustin Masa in open court, Funtecha was not included in
the company payroll. 8
The wording of Section 14 is clear and explicit and leaves no room for equivocation. To dismiss the implementing rule as one which
governs only the "personal relationship" between the school and its students and not where there is already a third person involved,
as espoused by private respondents, is to read into the law something that was not legislated there in the first place. The provision
of Section 14 is obviously intended to eliminate an erstwhile gray area in labor relations and seeks to define in categorical terms the
precise status of working scholars in relation to the learning institutions in which they work for the privilege of a free education.
But even if we were to concede the status of an employee on Funtecha, still the primary responsibility for his wrongdoing cannot be
imputed to petitioner Filamer for the plain reason that at the time of the accident, it has been satisfactorily shown that Funtecha was
not acting within the scope of his supposed employment. His duty was to sweep the school passages for two hours every morning
before his regular classes. Taking the wheels of the Pinoy jeep from the authorized driver at 6:30 in the evening and then driving
the vehicle in a reckless manner resulting in multiple injuries to a third person were certainly not within the ambit of his assigned
tasks. In other words, at the time of the injury, Funtecha was not engaged in the execution of the janitorial services for which he
was employed, but for some purpose of his own. It is but fair therefore that Funtecha should bear the full brunt of his tortious
negligence. Petitioner Filamer cannot be made liable for the damages he had caused.
Private respondents' attempt to hold petitioner Filamer directly and primarily answerable to the injured party under Article 2180 of
the Civil Code would have prospered had they proceeded against Allan Masa, the authorized driver of the Pinoy jeep and
undisputably an employee of petitioner. It was Allan's irresponsible act of entrusting the wheels of the vehicle to the inexperienced
Funtecha which set into motion the chain of events leading to the accident resulting in injuries to Kapunan, Sr. But under the
present set of circumstances, even if the trial court did find Allan guilty of negligence, such conclusion would not be binding on
Allan. It must be recalled that Allan was never impleaded in the complaint for damages and should be considered as a stranger as
far as the trial court's judgment is concerned. It is axiomatic that no man shall be affected by a proceeding to which he is a
stranger. 9
WHEREFORE, in view of the foregoing, the decision under review of the Court of Appeals is hereby SET ASIDE. The complaint for
damages 10 is ordered DISMISSED as against petitioner Filamer Christian Institute for lack of cause of action. No costs.
SO ORDERED.

G.R. No. 116624 September 20, 1996

BALIWAG TRANSIT, INC., petitioner,

vs.
COURT OF APPEALS, DIVINA VDA. DE DIONISIO, for herself and in behalf of her
minor children MARK ANGELO and MA. LIZA, both surnamed DIONISIO, respondents.

BELLOSILLO, J.:
The wages earned by Mario Dionisio were the lifeblood of his family his wife Divina and their children Mark Angelo
and Ma. Liza, both minors. A work-related disruption unfortunately abruptly ended the means of livelihood of Mario
prompting his defendant family to sue his employer and co-employee for damages.
On 2 November 1990, at about 3:30 in the afternoon, petitioner's Baliwag Transit Bus No. 117 was driven by Juanito
Fidel to its terminal on 2nd Avenue, Caloocan City, for repair of its brake system. Juanito Fidel told mechanic Mario
Dionisio to inform the headman about the matters so that proper order to the mechanics could be made. Fidel then
alighted from the bus and told the gasman to fill up the gas tank.
Shortly after, Juanito Fidel returned to the bus and sat on the driver's seat. Suddenly the bus moved; he felt something
was hit. When he went down to investigate he saw Mario Dionisio lying on the ground bleeding and convulsive,
sandwiched between Bus No. 117 and another bus parked thereat owned by the same petitioner. Fidel summoned his
co-employees and they all helped to extricate Mario Dionisio. They rushed him to St. Luke's Hospital in Quezon City.
On 6 November 1990 however he expired as evidenced by his Certificate of Death issued 22 November 1990.
Thereafter a complaint for damages was lodged by private respondents Divina Vda. de Dionisio, for herself and in
behalf of her minor children Mark Angelo and Ma. Liza as heirs of the deceased, before the Regional Trial Court of
Quezon City. On 3 February 1993 the trial court rendered a decision ordering petitioner Baliwag Transit, Inc., and its
employee Juanito Fidel jointly and severally to pay the heirs of Mario Dionisio the following amounts: P50,000.00 as
death indemnity, P10,000.00 as attorney's fees, P3,000.00 as funeral expenses, and costs of suit. 1
Private respondents appealed to the Court of Appeals which on 23 March 1994 rendered a decision modifying the
appealed judgment and ordering petitioners instead to pay jointly and severally, P50,000.00 as death indemnity,
P1,429,050.00 for loss of earning capacity, P3,000.00 for funeral expenses, P60,000.00 for moral damages,
P30,000.00 for exemplary damages, P50,000.00 for attorney's fees, plus the costs of suit 2 On 8 August 1994 the
motion to reconsider the decision was denied. 3 Hence, this petition.
Petitioners maintain that respondent Court of Appeals erred in affirming the appealed judgment despite the
contributory negligence of the deceased Mario Dionisio, i.e., in failing to take the necessary precaution while doing
repair work on the brake system of Bus No. 117, and that the increase of the award of damages in unreasonable being
unsupported by law and the evidence.
The petition must fail. The circumstances clearly show that the proximate cause of the death of Mario Dionisio was the
negligence of driver Juanito Fidel when he failed to take the necessary precaution to prevent the accident. He boarded
his bus, sat on the driver's seat and was at the steering wheel when the bus moved pinning down the deceased who
was repairing the defective brake system below. Driver Fidel should have parked the bus properly and safely. After
alighting from the bus to tell the gasman to fill the tank, he should have placed a stopper or any hard object against a
tire or two of the bus. But without taking the necessary precaution he boarded Bus No. 117 causing it to move and roll,
pinning down the deceased which resulted in his serious injuries and eventual death. The reckless imprudence of
Juanito Fidel makes him liable to the heirs of offended party for damages together with his employer. Article 2176 of
the Civil Code provides
Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to
pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
Complementing Art 2176 is Art. 2180 which states

The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but
also for those of persons for whom one is responsible . . .
Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks, even though the former are not engaged in any business or
industry . . .
The responsibility treated of in this article shall cease when the persons herein mentioned prove that
they observed all the diligence of a good father of a family to prevent damage.
Article 2180, in relation to Art. 2176, of the Civil Code provides that the employer of a negligent employee is liable for
the damages caused by the latter. When an injury is caused by the negligence of an employee there instantly arises a
presumption of the law that there was negligence on the part of the employer either in the selection of his employee or
in the selection of his employee or in the supervision over him after such selection. The presumption however may be
rebutted by a clear showing on the part of the employer that it had exercised the care and diligence of a good father of
a family in the selection and supervision of his employee. Hence, to escape solidary liability for quasi-delict committed
by an employee, the employer must adduce sufficient proof that it exercised such degree of care. 4 Petitioner's failure
to prove that it exercised the due diligence of a good father of a family in the selection and supervision of its driver
Juanito Fidel will make it solidarily liable with the latter for damages caused by him.
As regards the reasonableness of the damages awarded, under Art. 1764, in conjunction with Art. 2206, of the Civil
Code, as well as established jurisprudence, several factors are considered, namely: (a) life expectancy (considering
the health of the deceased and the mortality table being deemed conclusive) and loss of earning capacity; (b)
pecuniary loss, loss of support and service; and (c) moral and mental sufferings. The loss of earnings capacity is
based mainly on two factors, namely, the number of years on the basis of which the damages shall be computed, and
the rate at which the loss sustained by the heirs should be fixed. 5
Finding discrepancies in the computation of respondent Court of Appeals, we here opine that the correct computation
of the loss of earning capacity of the deceased, considering that he was the sole bread-winner of the family and only
29 years old when he met his untimely death, should be based on the formula: 2/3 x 51 (80 - 29 [age at time of death])
= life expectancy. Thus
P33,273.60 gross annual income (P2,772.80 x 12 mos.)
Add: 4,244.64 gross annual allowance (P353.72 x 12 mos.)
3,199.00 13th month pay
P40,717.24 total annual income
Less: 6,000.00 annual expenses (P500.00 x 12 mos.)
13,776.00 annual pension (P1,148.00 x 12 mos.)
P20,941.24 total annual net income
Multiply: 34 life expectancy of Mario (2/3 x 51 [80 -29
{age at date of death}])
P712,002.16 total loss of earning capacity
Article 2206 grants the spouse, legitimate descendants and ascendants of the deceased moral damages for mental
anguish by reason of death. Indisputably, the heirs of Mario suffered no small amount of mental anguish brought about
by the manner he died and bearing in mind that he was the sole breadwinner of the family.
Article 2231 also awards exemplary damages if the defendant acted with gross negligence, as Juanito did, when he
moved Bus No. 117 without first ascertaining if the repair of its break system was already undertaken. Exemplary
damages having been awarded, recovery of attorney's fees follows under Art. 2208, par. (1), of the Civil Code.
WHEREFORE, the decision and resolution of respondent Court of Appeals subject of the instant petition are
MODIFIED as follows: petitioner BALIWAG TRANSIT INC., and JUANITO FIDEL are ordered to pay jointly and
severally the heirs of Mario Dionisio (a) P50,000.00 for death indemnity, (b) P712,002.16 for loss of earning capacity,
(c) P3,000.00 for funeral expenses, (d) P40,000.00 for moral damages, (e) P15,000.00 for exemplary damages (f)
P20,000.00 for attorney's fees, and, (g) to pay the costs of suit.

SO ORDERED.

G.R. No. L-29803 September 14, 1979

LEOPOLDO POBLETE, plaintiff-appellant,
vs.
DONATO FABROS and GODOFREDO DE LA CRUZ, defendants-appellees.
DE CASTRO, J.:
This is an action for damages, arising from a vehicular accident, filed by the plaintiff
Godofredo Poblete as owner of the damaged taxicab against the driver and owner of the
allegedly offending vehicle, Donato Fabros and Godofredo de la Cruz, respectively.
After trial on the merits, and the case submitted for decision, the trial court, the Court of First
Instance of Davao, Judge Vicente Cusi, Jr., presiding, dismissed the case on the ground that
from the allegation of the complaint, the action is one to hold Donato Fabros, as the employer
of the allegedly negligent driver, Godofredo de la Cruz, subsidiarily liable for the damage
caused the plaintiff, and is, therefore, premature, there having been no criminal action filed
against the driver who had died during the pendency of the case at bar, and, in effect, states
no cause of action. A motion for reconsideration was filed to the order of dismissal, but to no
avail. Hence, this appeal.
The question raised is whether on the basis of the allegation of the complaint, the action is
one to enforce the subsidiary liability of the employer of the negligent driver as provided in
Article 103 of the Revised Penal Code, as held by the court a quo, or it is an action based on
quasi-delict. In the first case, the action would be premature and would, accordingly, be
wanting in a cause of action before a judgment of conviction has been rendered against the
negligent driver, for, while a separate civil action may be filed for damages arising from the
criminal offense of the accused for negligence, upon proper reservation of said action (Section
2, Rule III, Rules of Court), the same may not be heard separately in advance or ahead of the
criminal action. While in the second case, the action, being for liability based on quasi-delict,
not for liability arising from crime, may proceed independently from the criminal action. It is
also for a different purpose, the liability sought to be imposed on the employer being a
primary and direct liability, not merely subsidiary. Civil liability for quasi-delict and that arising
out of a crime are clearly different and distinct from each other, as lucidly demonstrated and
discussed in Barredo vs. Garcia, et al., 78 Phil. 607.
Examining the allegations of the complaints, to determine what is made the basis thereof for
the relief sought, which is to impose a "joint and several" liability on the defendants (p. 5
Record on Appeal; Page 26, Rollo), there is absolutely no reason to exclude and rule out, as
the court a quo did, the fact that the action is one based onquasi delict and hold, as again the
court did, that the action is based on the criminal offense of negligence, as defined in the
Revised Penal Code, committed by the driver alone, and concluding that the purpose of the
action is to impose the subsidiary liability on the employer as provided in the same Code.

The court a quo said:

As it is, the complaint really states no cause of action against Donato Fabros in
his capacity as employer of Godofredo de la Cruz. Stated differently, the
complaint against Donato Fabros is premature, because he is only subsidiarily
liable under the Penal Code. His subsidiary liability should not be litigated in the
civil action against de la Cruz. It follows that the third-party complaint that he
filed is also premature.
From the above observation of the Court, it is crystal clear that the court itself has found that
the employer-employee relation of the two defendants has been sufficiently alleged;
otherwise, it would have no basis for saying that the complaint is "against Donato Fabros in
his capacity as employer of Godofredo de la Cruz." The defendant Donato Fabros has himself
correctly perceived the basis of the complaint against him, as one based on quasi-delict, for
instead of filing a motion for a bill of particulars if he deemed the allegations vague or
ambiguous, he interposed in his answer the defense of a "due diligence of a good father of a
family in the selection, employment and supervision of his driver." (Page 8, Record on Appeal;
Page 26, Rollo).
In the second place, in alluding to the subsidiary liability of the employer, Donato Fabros, the
court a quo has, likewise, found sufficiently alleged negligence as the basis for the action. The
complaint expressly and clearly alleges that the accident was "due solely to the gross
negligence, carelessness and unskillful driving of defendant Godofredo de la Cruz" (Page 3,
Record on Appeal, Page 20, Rollo).
With the allegation of negligence against the driver, Godofredo de la Cruz, and that of an
employer-employee relation between him and his co-defendant, Donato Fabros, the complaint
clearly and unmistakably makes out a case based on quasi-delict, as explicitly provided in
Article 2180 of the Civil Code which, inter alia, provides:
... The owners and managers of an establishment or enterprise are likewise
responsible for damages caused by their employees in the service of the
branches in which the latter are employed or on the occasion of their functions.
What needs only to be alleged under the aforequoted provision is that the employee (driver)
has, by his negligence (quasi-delict) caused damage to make the employer, likewise,
responsible for the tortious act of the employee, and his liability is, as earlier observed,
primary and solidary. (Bachrach Motor Co. vs. Gamboa, L-10296, May 21, 1957; Malipol vs.
Tan, 55 SCRA 202: Barredo vs. Garcia and Almario, 73 Phil. 607; Vinluan vs. Court of Appeals,
et al., 16 SCRA 742; Anuran, et al. vs. Buno et al. 17 SCRA 224).
It is such a firmly established principle, as to have virtually formed part of the 'law itself, that
the negligence of the employee gives rise to the presumption of negligence on the part of the
employer. This is the presumed negligence in the selection and supervision of the employee.
The theory of presumed negligence, in contrast with the American doctrine of respondent
superior, where the negligence of the employee is conclusively presumed to be the
negligence of the employer, is clearly deducible from the last paragraph of Article 2180 of the
Civil Code which provides that the responsibility therein mentioned shall cease if the
employers prove that they observed all the diligence of a good father of a family to prevent
damages (12 Manresa, 657; Balica vs. Litonjua and Leynes, 30 Phil. 624; Cangco vs. Manila
Railroad Co., 38 Phil. 768), as observed in the same cases just cited.

From what has been said, the error of the court a quo in dismissing the case on his mistaken
notion that the action is based on crime, not quasi-delict, becomes very patent. How the court
concluded that the action is to enforce the subsidiary liability of Donato Fabros as the
employer of the negligent driver Godofredo de la Cruz is inconceivable, with the plain and
explicit prayer of the complaint to declare the defendants "jointly and severally" liable for
damages, a concept antagonistic to that of subsidiary liability. The death of defendant,
Godofredo de la Cruz, the driver, is therefore, no hindrance to the present action, at least as
against the employer, Donato Fabros, taking its course to final judgment, which the court a
quo should have rendered, the trial of the case having been terminated, instead of dismissing
the case, without even a motion to dismiss, with the evidence, in an probability, supportive of
an action on quasi-delict, which the pleadings, both the complaint and the answer, raised as
the specific issue involved and as joined by said pleadings.
A word of advice at least as a reminder, may be meet at this juncture, for judges to give a
deeper study and reflection in the disposition of cases, so that undue delay which could very
well be avoided, as in this case, had the judge been more circumspect and analytical, would
not cause injustice to litigants, under the familiar maxim that justice delayed is justice denied,
which should constantly sound its stern warning to all dispensers of justice.
WHEREFORE, the order of dismissal dated April 17, 1968 is hereby set aside, and let this case
be remanded to the court of origin for the rendition of the judgment on the merits based on
the evidence adduced during the trial. This judgment shall be immediately executory upon its
promulgation.

G.R. No. L-32774

October 14, 1930

BALBINO CUISON, plaintiff-appellant,

vs.
NORTON & HARRISON CO., TELESFORO BINOYA Y ALMINANZA and FRANCISCO
BAUTISTA Y CRUZ,defendants.
NORTON & HARRISON CO., appellee.
MALCOLM, J.:
This is an action brought by the father to recover damages in the amount of P30,000 for the
death of his son, alleged to have been caused by the negligence of the defendant. The answer
pleaded the general issue. The judgment in the Court of First Instance absolved the defendant
from the complaint, without pronouncement as to costs.
A succinct statement of the facts will be first undertaken as follows: On the afternoon of
August 9, 1928, Moises Cuison, a boy 7 years of age, the son of the plaintiff, was on his way to
the Santa Mesa School, in the City of Manila, in company with his sister Marciana. As they
came near to the fire station, some large pieces of lumber on a truck which had stopped fell

from it pinning the boy beneath, and causing his almost instant death. The truck in
questioned was owned by Antonio Ora. It was driven by Felix Jose, with Telesforo Binoya as
the washing and Francisco Bautista as the helper, the two latter being youths less than18
years of age. Jose Binoya, and Bautista were employees of Ora. The truck was rented by Ora
to Norton & Harrison Co. On the truck were the letters "N-H," which were the first letters of the
firm name. Ora was in the employ of Norton & Harrison Co. as a capataz. It was his duty as
such employee to direct the loading and transportation of the lumber. When the accident
occurred the lumber had become loosened, and it was to rearrange it that the truck halted,
without, however, there arrangement having been made before the pieces of lumber had
fallen and killed the boy.
Important details were not brought out in the testimony, although it would have been easy to
supply those details. The most important question of fact to determine was the relationship of
Ora to Norton & Harrison Co., whether he was a servant of the company or an independent
contractor. In view of the debatabel facts found in the record, and in view of the propriety of
obtaining as much enlightenment as possible on the main issue, it is deemed advisable to set
forth a considerable portion of Ora's testimony. He testified:
Q. Do you know the truck T-101? A. Yes, sir.
Q. Whose is that truck ? A. Mine.
Q. Showing you this document which I ask to be marked Exhibit 1(certificate of
ownership of a truck ) state what is that document? A.This is the document of my
truck.
Q. On August 9,1928, when, according to the complaint, the boy Moises Cuison was
killed, was that truck used? A. Yes, sir.
Q. For Whom? A. For me.
Q. For what kind of work? A. For loading lumber.
Q. Lumber of whom? A. Of Norton & Harrison Co.
Q. Where was the lumber to be taken? A. To Santa Mesa.
Q. What was the agreement between you and Norton & Harrison Co. regarding the
transportation of lumber to Santa Mesa?
xxx

xxx

xxx

A. The truck carried the lumber which I contracted with Norton & Harrison for
transportation to certain places. I had an agreement with Norton & Harrison to carry
and transport lumber coming from its lumber yard to the place of its destination.
Q. Did you rent the truck to Norton & Harrison monthly or annually? A. By the cubic
foot, depending upon the distance travelled.
Q. Do you know Telesforo Binoya y Alminanza and Francisco Bautista y Cruz? A. Yes,
sir.

Q. Had they anything to do with the loading of the lumber of Norton & Harrison on the
truck?
xxx

xxx

xxx

A. The said Bautista and Binoya were not the ones who did the loading on my truck.
There were other persons stronger than these two who did the loading.
Q. What I mean to say is whether Binoya and Bautista, on August 9,1928, when the
truck went to the office of Norton & Harrison to carry lumber to Santa Mesa, had
anything to do with the loading of the lumber on said truck ? A. No, sir.
xxx

xxx

xxx

Q. In your agreement with Norton & Harrison for the transportation of lumber, who was
under the obligation to load the lumber on the truck?
xxx

xxx

xxx

A. I have already said that the agreement with Norton & Harrison was to load the
lumber on my truck and take it to its destination.
JUDGE:
Q. But who was to do the loading of the lumber, your men or their men? A. My men.
xxx

xxx

xxx

Q. You said that you are an employee? A. Yes, sir.

Q. Where are you employed? A. In the firm of Norton & Harrison.
Q. Since when? A. Since 1911.
Q. In what capacity? A. As foreman.
Q. What kind of work do you have? A. Foreman.
Q. Capataz? A. Yes, sir.
Q. And as foreman, are you in charge of paying the wages of the workers? A. No, sir.
Q. Therefore you are the capataz who directs the loading and transportation of lumber?
A. Yes, sir.
Q. Please see Exhibit 1 of the plaintiff and state if truck T-101 is what appears therein?
A. Yes, sir.
Q. Do you admit that the condition of that truck on August 9, 1928, is as it appears in
this photograph? A. yes, sir.

Q. What explanation can you give the court accounting for the sign 'N- H' which
appears on the coach box of the truck? A. The sign 'N-H' appearing there means that
the lumber belongs to Norton & Harrison.
Q. And as a foreman of Norton & Harrison, do you receive any salary? A. Yes, sir.
Q. How much? A. P200.
Q. You said that you entered into a contract with Norton & Harrison, do you have a copy
of that contract? A. No, sir, we had an agreement and not a contract.
Q. Verbal agreement? A. Yes,sir.
xxx

xxx

xxx

Q. How do you collect the rent of the truck, monthly or daily? A. It depends upon the
cargo and the distance travelled.
Q. Daily? A. If I have loaded three times, then I have three collections.
Q. Do you issue receipts therefor? A. Yes,sir.
Q. Have you any with you? A. I don't have.
Q. Can that truck of yours be rented by anybody? A. No, sir.
Q. Only by Norton & Harrison? A. Only for my work.
Q. Do you have with you any books of account pertaining to the business of your truck?
A. No, sir.
Q. Not even a note? A. I don't have.
Q. Not even the firm of Norton & Harrison? A. They may have because the number of
truck and the total number of board feet appear on every receipt.
Q. As owner of the truck, don't you have any note? A. No, sir.
Q. Is that truck No. T-101 the only one you have? A. I Have some more.
Q. Some more? A. Yes, sir.
Q. For rent? A. For my own use. 1awph!l.net
Q. For the exclusive use of Norton & Harrison ? A. I have a lime factory, and they are
used for the transportation lime.
Q. But this truck T-101 is exclusively intended to be rented by Norton & Harrison? A.
It is not rented exclusively to Norton & Harrison. I use it in my other contracts to carry
cargoes, and also to carry lime.
Q. For the exclusive use of Norton & Harrison ? A. No, sir, I use it also for the
transportation of lime.

It is evident from the foregoing that Ora was a contractor and an employee at the same time
of Norton & Harrison Co. Reverting now to the law, counsel for neither party has considered it
necessary to assist the court in this regard. However, just as the ascertainment of the facts is
important, so is it important to have before us the applicable law.
The Penal Code makes provisions for the civil liability of persons criminally liable, and
establishes subsidiary liability for persons and corporations engaged in any kind of industry
for felonies and misdemeanors committed by their servants in the discharge of their duties.
(Penal Code, arts. 17-20.) In this instance, recurring to the facts, it should have been
mentioned that the two youths, Binoya and Bautista, pleaded guilty to the crime of homicide
through reckless negligence, and were sentenced accordingly.
The basis of civil law liability is not respondeat superior but the relationship of paterfamilias.
This theory bases the liability of the master ultimately on his own negligece and not on that of
his servant. (Bahia vs. Litonjua and Leynes [1915], 30 Phil., 624; Cangco vs. Manila Railroad
Co. [1918], 38 Phil., 768. As to Porto Rico, see Acosta vs. Porto Rico Gas Co. [1915], 7 Porto
Rico Fed., 475; and Ortiz vs. Ezquiaga [1918], 10 Porto Rico Fed., 350.) Article 1902 of the
Civil Code provides:
Any person who by an act or omission causes damage to another by his fault or
negligence shall be liable for the damage so done. Article 1903, paragraphs 4 and 7 of
the same Code provides:
Owners or directors of any establishment or business are, in the same way, liable for
any damages caused by their employees while engaged in the branch of the service in
which employed, or an occasion of the performance of their duties.
The liability imposed by this article shall cease in case the persons subject thereto
prove that they exercised all the diligence of a good father of a family to prevent the
damage.
It is well to repeat that under the civil law an employer is only liable for the negligence of his
employees in the discharge of their respective duties. The defense of independent contractor
would be a valid one in the Philippines just as it would be in the United States. Here Ora was a
contractor, but it does not necessarily follow that he was an independent contractor. The
reason for this distinction is that the employer retained the power of directing and controlling
the work. The chauffeur and the two persons on the truck were the employees of Ora, the
contractor, but Ora, the contractor, was an employee of Norton & Harrison Co., charged with
the duty of directing the loading and transportation of the lumber. And it was the negligence
in loading the lumber and the use of minors on the truck which caused the death of the
unfortunate boy. On the facts and the law, Ora was not an independent contractor, but was
the servant of the defendant, and for his negligence defendant was responsible.
Conceding that the record discloses a most unusual state of facts, and conceding that the
evidence is not as ample as it should be, nevertheless on the record as it is and on the law as
it is, it is incumbent on the court to rule that error was committed in the lower court in not
awarding the father of the dead boy damages for the wrongful death of his son. It has been
the practice of this court in cases of death through negligence, in the absence of special
proof, to allow the sum of P1,000. (Manzanares vs. Moreta [1918], 38 Phil., 821; Bernal and
Enverso vs. House and Tacloban Electric & Ice Plant [1930], 54 Phil., 327.) Judgment will be
reversed, and in the court of origin another judgment will issue in favor of the plaintiff and

against the defendant for the sum of P1,000. So ordered, without special finding as to costs in
either instance.
Avancea, C.J., Street, Villamor and Romualdez, JJ., concur.