BALIWAG VS CA

FACTS:
On 31 July 1980, Leticia Garcia, and her 5-year old son, Allan Garcia, boarded
Baliwag Transit Bus 2036 bound for Cabanatuan City driven by Jaime Santiago.
They took the seat behind the driver.
At about 7:30 p.m., in Malimba, Gapan, Nueva Ecija, the bus passengers saw a
cargo truck, owned by A & J Trading, parked at the shoulder of the national
highway. Its left rear portion jutted to the outer lane, as the shoulder of the road
was too narrow to accommodate the whole truck. A kerosene lamp appeared at
the edge of the road obviously to serve as a warning device. The truck driver,
and his helper were then replacing a flat tire.
Bus driver Santiago was driving at an inordinately fast speed and failed to notice
the truck and the kerosene lamp at the edge of the road. Santiagos passengers
urged him to slow down but he paid them no heed. Santiago even carried
animated conversations with his co-employees while driving. When the danger of
collision became imminent, the bus passengers shouted Babangga tayo!.
Santiago stepped on the brake, but it was too late. His bus rammed into the
stalled cargo truck killing him instantly and the trucks helper, and injury to
several others among them herein respondents.
Thus, a suit was filed against Baliwag Transit, Inc., A & J Trading and Julio
Recontique for damages in the RTC of Bulacan. After trial, it found Baliwag
Transit, Inc. liable for having failed to deliver Garcia and her son to their point of
destination safely in violation of Garcias and Baliwag Transits contractual
relation; and likewise found A & J and its truck driver liable for failure to provide
its cargo truck with an early warning device in violation of the Motor Vehicle Law.
All were ordered to pay solidarily the Garcia spouses.
On appeal, the CA modified the trial courts Decision by absolving A & J Trading
from liability.
ISSUE:
Whether or not Baliwag should be held solely liable for the injuries.
HELD:
Yes.
As a common carrier, Baliwag breached its contract of carriage when it failed to
deliver its passengers, Leticia and Allan Garcia to their destination safe and
sound. A common carrier is bound to carry its passengers safely as far as human
care and foresight can provide, using the utmost diligence of a very cautious
person, with due regard for all the circumstances. In a contract of carriage, it is
presumed that the common carrier was at fault or was negligent when a
passenger dies or is injured. Unless the presumption is rebutted, the court need
not even make an express finding of fault or negligence on the part of the
common carrier. This statutory presumption may only be overcome by evidence
that the carrier exercised extraordinary diligence as prescribed in Articles 1733
and 1755 of the Civil Code.
Article 1759 of the Civil Code provides that Common carriers are liable for the
death of or injuries to passengers through the negligence or willfull acts of the
formers employees, although such employees may have acted beyond the
scope of their authority or in violation of the orders of the common carriers. This
liability of the common carriers do not cease upon proof that they exercised all
the diligence of a good father of a family in the selection or supervision of their
employees.

Section 34 (g) of the Land Transportation and Traffic Code provides Lights and
reflector when parked or disabled. Appropriate parking lights or flares visible
one hundred meters away shall be displayed at the corner of the vehicle
whenever such vehicle is parked on highways or in places that are not welllighted or, is placed in such manner as to endanger passing traffic. Furthermore,
every motor vehicle shall be provided at all times with built-in reflectors or other
similar warning devices either pasted, painted or attached at its front and back
which shall likewise be visible at night at least one hundred meters away. No
vehicle not provided with any of the requirements mentioned in this subsection
shall be registered.
x x x However, the evidence shows that Recontique and Ecala placed a
kerosene lamp or torch at the edge of the road, near the rear portion of the truck
to serve as an early warning device. This substantially complies with Section 34
(g) of the Land Transportation and Traffic Code. The law clearly allows the use
not only of an early warning device of the triangular reflectorized plates variety
but also parking lights or flares visible 100 meters away. Indeed, Col. dela Cruz
himself admitted that a kerosene lamp is an acceptable substitute for the
reflectorized plates. No negligence, therefore, may be imputed to A & J Trading
and its driver, Recontique.
The Supreme Court affirmed the Decision of the Court of Appeals (CA-GR CV31246) with the modification reducing the actual damages for hospitalization and
medical fees to P5,017.74; without costs.
CIVIL LAW; CONTRACTS; SPECIAL CONTRACTS; COMMON CARRIERS;
LIABILITY FOR DAMAGES; ESTABLISHED IN CASE AT BAR. As a common
carrier, Baliwag breached its contract of carriage when it failed to deliver its
passengers, Leticia and Allan Garcia to their destination safe and sound. A
common carrier is bound to carry its passengers safely as far as human care and
foresight can provide, using the utmost diligence of a very cautious person, with
due regard for all the circumstances.In a contract of carriage, it is presumed that
the common carrier was at fault or was negligent when a passenger dies or is
injured. Unless the presumption is rebutted, the court need not even make an
express finding of fault or negligence on the part of the common carrier. This
statutory presumption may only be overcome by evidence that the carrier
exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the
Civil Code. The records are bereft of any proof to show that Baliwag exercised
extraordinary diligence. On the contrary, the evidence demonstrates its driver's
recklessness. Leticia Garcia testified that the bus was running at a very high
speed despite the drizzle and the darkness of the highway. The passengers
pleaded for its driver to slow down, but their plea was ignored. Leticia also
revealed that the driver was smelling of liquor. She could smell him as she was
seated right behind the driver. Another passenger, Felix Cruz testified that
immediately before the collision, the bus driver was conversing with a coemployee. All these prove the bus driver's wanton disregard for the physical
safety of his passengers, which make Baliwag as a common carrier liable for
damages under Article 1759 of the Civil Code.
DAMAGES; To PROVE ACTUAL DAMAGES, THE BEST EVIDENCE
AVAILABLE TO THE PARTIES MUST BE PRESENTED. The propriety of the
amount awarded as hospitalization and medical fees. The award of P25,000.00
is not supported by the evidence on record. The Garcias presented receipts
marked as Exhibits "B-1 " to "B-42" but their total amounted only to P5,017.74. To
be sure, Leticia testified as to the extra amount spent for her medical needs but
without more reliable evidence, her lone testimony cannot justify the award of
P25,000.00. To prove actual damages, the best evidence available to the injured
party must be presented. The court cannot rely on uncorroborated testimony
whose truth is suspect, but must depend upon competent proof that damages
have been actually suffered. Thus, we reduce the actual damages for medical
and hospitalization expenses to P5,017.74.

ID.; ID.; MORAL DAMAGES; RECOVERABLE IF THE CARRIER THROUGH

ITS AGENT, ACTED FRAUDULENTLY OR IN BAD FAITH. The award of moral
damages is in accord with law. In a breach of contract of carriage, moral
damages are recoverable if the carrier, through its agent, acted fraudulently or in
bad faith. The evidence shows the gross negligence of the driver of Baliwag bus
which amounted to bad faith. Without doubt, Leticia and Allan experienced
physical suffering, mental anguish and serious anxiety by reason of the accident.

Producers Bank of the Phils vs CA

Facts:
Vives (will be the creditor in this case) was asked by his friend Sanchez to help
thelatters friend, Doronilla (will be the debtor in this case) in incorporating
Doronillasbusiness Strela. This help basically involved Vives depositing a
certain amount of money in Strelas bank account for purposes of incorporation
(rationale: Doronilla had tos how that he had sufficient funds for incorporation).
This amount shall later be returned to Vives.
Relying on the assurances and representations of Sanchez and Doronilla, Vives
issued a check of P200,00 in favor of Strela and deposited the same into Strelas
newly-opened bank account (the passbook was given to the wife of Vives and
the passbook had an instruction that no withdrawals/deposits will be allowed
unless the passbook is presented).
Later on, Vives learned that Strela was no longer holding office in the address
previouslygiven to him. He later found out that the funds had already been
withdrawn leaving only a balance of P90,000. The Vives spouses tried to
withdraw the amount, but it was unable to since the balance had to answer for certain
postdated checks issued by Doronilla.
Doronilla made various tenders of check in favor of Vives in order to pay his
debt. All of which were dishonored.

Hence, Vives filed an action for recovery of sum against Doronilla, Sanchez,
Dumagpiand Producers Bank.
TC & CA: ruled in favor of Vives.
Issue/s:
(1)WON the transaction is a commodatum or a mutuum. COMMODATUM.
(2) WON the fact that there is an additional P 12,000 (allegedly representing
interest) in the amount to be returned to Vives converts the transaction from
commodatum to mutuum. NO.(3)WON Producers Bank is solidarily liable to Vives,
considering that it was not privy to the transaction between Vives and Doronilla.
YES.
Held/Ratio:
(1)The transaction is a commodatum.
CC 1933 (the provision distinguishing between the two kinds of loans) seem to
implythat if the subject of the contract is a consummable thing, such as money,
the contractwould be a mutuum. However, there are instances when a
commodatum may have forits object a consummable thing. Such can be found
in CC 1936 which states thatconsummable goods may be the subject of
commodatum if the purpose of the contractis not the consumption of the object,
as when it is merely for exhibition. In this case, the intention of the parties was
merely for exhibition. Vives agreed to deposit his moneyin Strelas account
specifically for purpose of making it appear that Streal had sufficientcapitalization
for incorporation, with the promise that the amount should be returned
within 30 days.
(2)CC 1935 states that the bailee in commodatum acquires the use of the thing
loaned but not its fruits. In this case, the additional P 12,000 corresponds to
the fruits of the lending of the P 200,000.
(3)Atienza, the Branch Manager of Producers Bank, allowed the withdrawals on
the account of Strela despite the rule written in the passbook that neither a
deposit, nor a withdrawal will be permitted except upon the production of the
passbook (recall in this case that the passbook was in the possession of the wife

of Vives all along). Hence, this only proves to show that Atienza allowed the
withdrawals because he was party to Doronillas scheme of defrauding Vives. By
virtue of CC 2180, PNB, as employer, is held primarily and solidarily liable for
damages caused by their employees acting within the scope of their assigned
tasks. Atienzas acts, in helping Doronilla, a customer of the bank, were obviously
done in furtherance of the business of the bank, even though in the process,
Atienza violated some rules.

MARIKINA AUTO LINE G.R. No. 152040

TRANSPORT CORPORATION vs PEOPLE OF THE PHILIPPINES
FACTS:
Erlinda V. Valdellon is the owner of a two-door commercial apartment
located at No. 31 Kamias Road, Quezon City. The Marikina Auto Line
Transport Corporation (MALTC) is the owner-operator of a passenger
bus with Plate Number NCV-849. Suelto, its employee, was assigned as
the regular driver of the bus.
At around 2:00 p.m. on October 3, 1992, Suelto was driving the
aforementioned passenger bus along Kamias Road, Kamuning, Quezon
City, going towards Epifanio de los Santos Avenue (EDSA). The bus
suddenly swerved to the right and struck the terrace of the commercial
apartment owned by Valdellon located along Kamuning Road. Valdellon
demanded payment of P148,440.00 to cover the cost of the damage to
the terrace. The bus company and Suelto offered a P30,000.00
settlement which Valdellon refused.
Valdellon filed a criminal complaint for reckless imprudence resulting in
damage to property against Suelto. Valdellon also filed a separate civil
complaint against Suelto and the bus company for damages. Suelto
maintained that, in an emergency case, he was not, in law, negligent.
Both the trial court and the CA ruled in against herein petitioners.
ISSUE:
Whether or not the sudden emergency rule applies in the case at bar.
HELD:
No.x x x
It was the burden of petitioners herein to prove petitioner Sueltos
defense that he acted on an emergency, that is, he had to swerve the
bus to the right to avoid colliding with a passenger jeep coming from
EDSA that had overtaken another vehicle and intruded into the lane of
the bus. The sudden emergency rule was enunciated by this Court in
Gan v. Court of Appeals,23 thus:
[O]ne who suddenly finds himself in a place of danger, and is required
to act without time to consider the best means that may be adopted to
avoid the impending danger, is not guilty of negligence if he fails to
adopt what subsequently and upon reflection may appear to have been
a better method unless the emergency in which he finds himself is
brought about by his own negligence.
Under Section 37 of Republic Act No. 4136, as amended, otherwise
known as the Land Transportation and Traffic Code, motorists are
mandated to drive and operate vehicles on the right side of the road or
highway:
SEC. 37. Driving on right side of highway. Unless a different course of
action is required in the interest of the safety and the security of life,
person or property, or because of unreasonable difficulty of operation
in compliance herewith, every person operating a motor vehicle or an
animal-drawn vehicle on a highway shall pass to the right when
meeting persons or vehicles coming toward him, and to the left when
overtaking persons or vehicles going the same direction, and when

turning to the left in going from one highway to another, every vehicle
shall be conducted to the right of the center of the intersection of the
highway.
Section 35 of the law provides, thus:
Sec. 35. Restriction as to speed.(a) Any person driving a motor
vehicle on a highway shall drive the same at a careful and prudent
speed, not greater nor less than is reasonable and proper, having due
regard for the traffic, the width of the highway, and of any other
condition then and there existing; and no person shall drive any motor
vehicle upon a highway at such a speed as to endanger the life, limb
and property of any person, nor at a speed greater than will permit him
to bring the vehicle to a stop within the assured clear distance ahead.
In relation thereto, Article 2185 of the New Civil Code provides that
"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 mishap, he
was violating any traffic regulation." By his own admission, petitioner
Suelto violated the Land Transportation and Traffic Code when he
suddenly swerved the bus to the right, thereby causing damage to the
property of private respondent.
However, the trial court correctly rejected petitioner Sueltos defense,
in light of his contradictory testimony vis--vis his Counter-Affidavit
submitted during the preliminary investigation:
It is clear from the photographs submitted by the prosecution (Exhs. C,
D, G, H & I) that the commercial apartment of Dr. Valdellon sustained
heavy damage caused by the bus being driven by Suelto. "It seems
highly improbable that the said damages were not caused by a strong
impact. And, it is quite reasonable to conclude that, at the time of the
impact, the bus was traveling at a high speed when Suelto tried to
avoid the passenger jeepney." Such a conclusion finds support in the
decision of the Supreme Court in People vs. Ison, 173 SCRA 118, where
the Court stated that "physical evidence is of the highest order. It
speaks more eloquently than a hundred witnesses." The pictures
submitted do not lie, having been taken immediately after the incident.
The damages could not have been caused except by a speeding bus.
Had the accused not been speeding, he could have easily reduced his
speed and come to a full stop when he noticed the jeep. Were he more
prudent in driving, he could have avoided the incident or even if he
could not avoid the incident, the damages would have been less
severe.
In addition to this, the accused has made conflicting statements in his
counter-affidavit and his testimony in court. In the former, he stated
that the reason why he swerved to the right was because he wanted to
avoid the passenger jeepney in front of him that made a sudden stop.
But, in his testimony in court, he said that it was to avoid a passenger
jeepney coming from EDSA that was overtaking by occupying his lane.
Such glaring inconsistencies on material points render the testimony of
the witness doubtful and shatter his credibility. Furthermore, the
variance between testimony and prior statements renders the witness
unreliable. Such inconsistency results in the loss in the credibility of the
witness and his testimony as to his prudence and diligence.
As already maintained and concluded, the severe damages sustained
could not have resulted had the accused acted as a reasonable and
prudent man would. The accused was not diligent as he claims to be.
What is more probable is that the accused had to swerve to the right
and hit the commercial apartment of the plaintiff because he could not
make a full stop as he was driving too fast in a usually crowded street.
Moreover, if the claim of petitioners were true, they should have filed a
third-party complaint against the driver of the offending passenger
jeepney and the owner/operator thereof.

Petitioner Sueltos reliance on the sudden emergency rule to escape

conviction for the crime charged and his civil liabilities based thereon
is, thus, futile.
Damages:
On the second issue, we agree with the contention of petitioners that respondents failed to
prove
that
the
damages
to
the
terrace
caused
by
the
incident amounted to P100,000.00. The only evidence adduced by respondents to prove
actual damages claimed by private respondent were the summary computation of damage
made by Engr. Jesus R. Regal, Jr. amounting to P171,088.46 and the receipt issued by the
BB Construction and Steel Fabricator to private respondent for P35,000.00 representing
cost for carpentry works, masonry, welding, and electrical works. Respondents failed to
present Regal to testify on his estimation. In its five-page decision, the trial court
awarded P150,000.00 as actual damages to private respondent but failed to state the
factual basis for such award. Indeed, the trial court merely declared in the decretal portion
of its decision that the sum of P150,000.00 as reasonable compensation sustained by
plaintiff for her damaged apartment. The appellate court, for its part, failed to explain
how it arrived at the amount of P100,000.00 in its three-page decision.Thus, the appellate
court merely declared:
With respect to the civil liability of the appellants, they contend that there
was no urgent necessity to completely demolish the apartment in question
considering the nature of the damages sustained as a result of the
accident. Consequently, appellants continue, the award of P150,000.00 as
compensation sustained by the plaintiff-appellee for her damaged
apartment is an unconscionable amount.
The damaged portions of the apartment in question are not disputed.
Considering the aforesaid damages which are the direct result of the
accident, the reasonable, and adequate compensation due is hereby fixed
at P100,000.00.[25]
Under Article 2199 of the New Civil Code, actual damages include all the natural
and probable consequences of the act or omission complained of, classified as one for the
loss of what a person already possesses (dao emergente) and the other, for the failure to
receive, as a benefit, that which would have pertained to him (lucro cesante). As
expostulated by the Court in PNOC Shipping and Transport Corporation v. Court of
Appeals:[26]
Under Article 2199 of the Civil Code, actual or compensatory damages are
those awarded in satisfaction of, or in recompense for, loss or injury
sustained. They proceed from a sense of natural justice and are designed to
repair the wrong that has been done, to compensate for the injury inflicted
and not to impose a penalty. In actions based on torts or quasi-delicts,
actual damages include all the natural and probable consequences of the
act or omission complained of. There are two kinds of actual or
compensatory damages: one is the loss of what a person already possesses
(dao emergente), and the other is the failure to receive as a benefit that
which would have pertained to him (lucro cesante).[27]

The burden of proof is on the party who would be defeated if no evidence would
be presented on either side. The burden is to establish ones case by a preponderance of
evidence which means that the evidence, as a whole, adduced by one side, is superior to
that of the other. Actual damages are not presumed.The claimant must prove the actual
amount of loss with a reasonable degree of certainty premised upon competent proof and
on the best evidence obtainable. Specific facts that could afford a basis for measuring
whatever compensatory or actual damages are borne must be pointed out. Actual
damages cannot be anchored on mere surmises, speculations or conjectures. As the Court
declared:
As stated at the outset, to enable an injured party to recover actual or
compensatory damages, he is required to prove the actual amount of loss
with reasonable degree of certainty premised upon competent proof and on
the best evidence available. The burden of proof is on the party who would
be defeated if no evidence would be presented on either side. He must
establish his case by a preponderance of evidence which means that the
evidence, as a whole, adduced by one side is superior to that of the
other. In other words, damages cannot be presumed and courts, in making
an award, must point out specific facts that could afford a basis for
measuring whatever compensatory or actual damages are borne.[28]
The Court further declared that where goods are destroyed by the wrongful act of
defendant, the plaintiff is entitled to their value at the time of the destruction, that is,
normally, the sum of money which he would have to pay in the market for identical or
essentially similar goods, plus in a proper case, damages for the loss of the use during the
period before replacement.[29]
While claimants bare testimonial assertions in support of their claims for damages should
not be discarded altogether, however, the same should be admitted with extreme
caution. Their testimonies should be viewed in light of claimants self-interest, hence,
should not be taken as gospel truth. Such assertion should be buttressed by independent
evidence. In the language of the Court:
For this reason, Del Rosarios claim that private respondent incurred losses
in the total amount of P6,438,048.00 should be admitted with extreme
caution considering that, because it was a bare assertion, it should be
supported by independent evidence. Moreover, because he was the owner
of private respondent corporation whatever testimony he would give with
regard to the value of the lost vessel, its equipment and cargoes should be
viewed in the light of his self-interest therein. We agree with the Court of
Appeals that his testimony as to the equipment installed and the cargoes
loaded on the vessel should be given credence considering his familiarity
thereto.However, we do not subscribe to the conclusion that his valuation
of such equipment, cargo, and the vessel itself should be accepted as
gospel truth. We must, therefore, examine the documentary evidence
presented to support Del Rosarios claim as regards the amount of losses.[30]
An estimate of the damage cost will not suffice:
Private respondents failed to adduce adequate and competent proof of the
pecuniary loss they actually incurred. It is not enough that the damage be
capable of proof but must be actually proved with a reasonable degree of
certainty, pointing out specific facts that afford a basis for measuring
whatever compensatory damages are borne. Private respondents merely

sustained an estimated amount needed for the repair of the roof of their
subject building. What is more, whether the necessary repairs were caused
only by petitioners alleged negligence in the maintenance of its school
building, or included the ordinary wear and tear of the house itself, is an
essential question that remains indeterminable.[31]
We note, however, that petitioners adduced evidence that, in their view, the cost of the
damage to the terrace of private respondent would amount toP55,000.00.[32] Accordingly,
private respondent is entitled to P55,000.00 actual damages.
In the present case, the only damage caused by petitioner Sueltos act was to the terrace of
private respondents apartment, costing P55,000.00. Consequently, petitioners contention
that the CA erred in awarding P100,000.00 by way of actual damages to private
respondent is correct. We agree that private respondent is entitled to exemplary damages,
and find that the award given by the trial court, as affirmed by the CA, is
reasonable. Considering the attendant circumstances, we rule that private respondent
Valdellon is entitled to only P20,000.00 by way of exemplary damages.
IN
LIGHT
OF
ALL
THE
FOREGOING, the
petition
is PARTIALLY GRANTED. The joint decision of the Regional Trial Court of Quezon
City isAFFIRMED WITH THE MODIFICATION that petitioner Suelto is sentenced
to pay a fine of P55,000.00 with subsidiary imprisonment in case of
insolvency. Petitioners are ORDERED to pay to Erlinda V. Valdellon, jointly and
severally, the total amount of P55,000.00 by way of actual damages, andP20,000.00 by
way of exemplary damages.
Villa Rey Transit v. CA
Facts:
On March 17, 1960, Policronio Quintos, Jr. was riding the petitioners
bus, when the said bus frontally hit the rear side of a bullcart filled with
hay. The protruding end of the bamboo pole at the rear of the cart
penetrated the windshield of the bus and landed at Policronios face.
He died of traumatic shock due to cerebral injuries. Private
respondents are sisters and surviving heirs of the deceased. They
brought this action against Villa Rey Transit for breach of contract of
carriage. The trial court found that the death was caused by the
negligence of the bus driver, for whom petitioner was liable under the
contract of carriage with the deceased.
Issues:
(1) The number of years to be used as basis of computation
(2) The rate at which the losses sustained by respondents should be
fixed
Held:
(1) The determination of the indemnity to be awarded to the heirs of a
deceased person has no fixed basis. Much is left to the discretion of the
court considering the moral and material damages involved, and so it
has been said that "(t)here can be no exact or uniform rule for
measuring the value of a human life and the measure of damages
cannot be arrived at by precise mathematical calculation, but the
amount recoverable depends on the particular facts and circumstances
of each case. The life expectancy of the deceased or of the beneficiary,
whichever is shorter, is an important factor.' Other factors that are
usually considered are: (1) pecuniary loss to plaintiff or beneficiary; (2)
loss of support; (3) loss of service; (4) loss of society; (5) mental
suffering of beneficiaries; and (6) medical and funeral expenses."

Thus, life expectancy is, not only relevant, but, also, an important
element in fixing the amount recoverable by private respondents
herein. Although it is not the sole element determinative of said
amount, no cogent reason has been given to warrant its disregard and
the adoption, in the case at bar, of a purely arbitrary standard, such as
a four-year rule. In short, the Court of Appeals has not erred in basing
the computation of petitioner's liability upon the life expectancy of
Policronio Quintos, Jr.
(2) With respect to the rate at which the damages shall be computed,
petitioner impugns the decision appealed from upon the ground that
the damages awarded therein will have to be paid now, whereas most
of those sought to be indemnified will be suffered years later. This
argument is basically true, and this is, perhaps, one of the reasons why
the Alcantara case points out the absence of a "fixed basis" for the
ascertainment of the damages recoverable in litigations like the one at
bar. Just the same, the force of the said argument of petitioner herein
is offset by the fact that, although payment of the award in the case at
bar will have to take place upon the finality of the decision therein, the
liability of petitioner herein had been fixed at the rate only of
P2,184.00 a year, which is the annual salary of Policronio Quintos, Jr. at
the time of his death, as a young "training assistant" in the Bacnotan
Cement Industries, Inc. In other words, unlike the Alcantara case, on
which petitioner relies, the lower courts did not consider, in the present
case, Policronio's potentiality and capacity to increase his future
income. Indeed, upon the conclusion of his training period, he was
supposed to have a better job and be promoted from time to time, and,
hence, to earn more, if not considering the growing importance of
trade, commerce and industry and the concomitant rise in the income
level of officers and employees therein much more.
Damages consist, not of the full amount of his earnings, but of the
support, they received or would have received from him had he not
died in consequence of the negligence of petitioner's agent. In fixing
the amount of that support, We must reckon with the "necessary
expenses of his own living", which should be deducted from his
earnings. Only net earnings, not gross earning, are to be considered
that is, the total of the earnings less expenses necessary in the
creation of such earnings or income and less living and other incidental
expenses.
All things considered, We are of the opinion that it is fair and
reasonable to fix the deductible living and other expenses of the
deceased at the sum of P1,184.00 a year, or about P100.00 a month,
and that, consequently, the loss sustained by his sisters may be
roughly estimated at P1,000.00 a year or P33,333.33 for the 33-1/3
years of his life expectancy. To this sum of P33,333.33, the following
should be added: (a) P12,000.00, pursuant to Arts. 104 and 107 of the
Revised Penal Code, in relation to Article 2206 of our Civil Code, as
construed and applied by this Court; (b) P1,727.95, actually spent by
private respondents for medical and burial expenses; and (c) attorney's
fee, which was fixed by the trial court, at P500.00, but which, in view of
the appeal taken by petitioner herein, first to the Court of Appeals and
later to this Supreme Court, should be increased to P2,500.00. In other
words, the amount adjudged in the decision appealed from should be
reduced to the aggregate sum of P49,561.28, with interest thereon, at
the legal rate, from December 29, 1961, date of the promulgation of
the decision of the trial court.
Dangwa Transportation Co. Inc. V. CA Et Al.
FACTS:

May 13, 1985: Theodore M. Lardizabal was driving a passenger bus

belonging to Dangwa Transportation Co. Inc. (Dangwa)
The bus was at full stop between Bunkhouses 53 and 54 when
Pedro alighted
Pedro Cudiamat fell from the platform of the bus when it

suddenly accelerated forward

Pedro was ran over by the rear right tires of the
vehicle
Theodore first brought his other passengers and cargo to their

respective destinations before bringing Pedro to Lepanto Hospital where he

expired
Private respondents filed a complaint for damages against Dangwa for the

death of Pedro Cudiamat

Dangwa: observed and continued to observe the extraordinary
diligence required in the operation of the co. and the supervision of the

employees even as they are not absolute insurers of the public at large
RTC: in favour of Dangwa holding Pedrito as negligent and his negligence
was the cause of his death but still ordered to pay in equity P 10,000 to the

heirs of Pedrito
CA: reversed and ordered to pay Pedrito indemnity, moral damages,
actual and compensatory damages and cost of the suit

ISSUE: W/N Dangwa should be held liable for the negligence of its driver
Theodore
HELD: YES. CA affirmed.

A public utility once it stops, is in effect making a continuous offer to bus

riders (EVEN when moving as long as it is still slow in motion)

Duty of the driver: do NOT make acts that would have the effect of

increasing peril to a passenger while he is attempting to board the same

Premature acceleration of the bus in this case = breach of

duty
Stepping and standing on the platform of the bus is already considered a
passenger and is entitled all the rights and protection pertaining to such a

contractual relation
Duty extends to boarding and alighting
GR: By contract of carriage, the carrier assumes the express obligation to
transport the passenger to his destination safely and observe extraordinary
diligence with a due regard for all the circumstances, and any injury that
might be suffered by the passenger is right away attributable to the fault or

negligence of the carrier

EX: carrier to prove that it has exercised extraordinary diligence as

prescribed in Art. 1733 and 1755 of the Civil Code

Failure to immediately bring Pedrito to the hospital despite his serious

condition = patent and incontrovertible proof of their negligence

Hospital was in Bunk 56

1st proceeded to Bunk 70 to allow a passenger (who later called the

family of Pedrito on his own will) to alight and deliver a refrigerator
In tort, actual damages is based on net earnings

With respect to the award of damages, an oversight was, however, committed by respondent
Court of Appeals in computing the actual damages based on the gross income of the victim.

The rule is that the amount recoverable by the heirs of a victim of a tort is not the loss of the
entire earnings, but rather the loss of that portion of the earnings which the beneficiary would
have received. In other words, only net earnings, not gross earnings, are to be considered,
that is, the total of the earnings less expenses necessary in the creation of such earnings or
income and minus living and other incidental expenses. 22
We are of the opinion that the deductible living and other expense of the deceased may fairly
and reasonably be fixed at P500.00 a month or P6,000.00 a year. In adjudicating the actual
or compensatory damages, respondent court found that the deceased was 48 years old, in
good health with a remaining productive life expectancy of 12 years, and then earning
P24,000.00 a year. Using the gross annual income as the basis, and multiplying the same by
12 years, it accordingly awarded P288,000. Applying the aforestated rule on computation
based on the net earnings, said award must be, as it hereby is, rectified and reduced to
P216,000.00. However, in accordance with prevailing jurisprudence, the death indemnity is
hereby increased to P50,000.00.

PEOPLE VS QUILATON
GR No. L-69666 January 23, 1992
205 scra 279
FACTS:

Herein appellant, Gumercindo Quilaton, was tried and was found guilty beyond
reasonable doubt for the crime of murder by the trial court. He was sentenced to suffer
the penalty of reclusion perpetua and to pay the offended party various amounts of
money.

Particularly, the trial court rendered the following penalties:

Reclusion Perpetua
100,000 for the death of Rolando Manahan
26,445 for actual damages spent on burial and other expenses of the deceased
250,000 for moral damages

ISSUE: WON the damages awarded by the trial court were correct.
RULING:
In relation to the actual damages of P26,445.00, AFFIRMED as the brother of Rolando
Manahan testified on this matter and submitted various receipts in support of their
claim for actual damages.
In relation to P100,000.00 as indemnity for the death of Rolando Manahan, REDUCED
to P50,000 conformably with prevailing jurisprudence on the matter.
In relation to the award of moral damages in the amount of P250,000.00, ANALYZED,
AND CONSIDERED AS BEING LUMPED AS MORAL DAMAGES IN THIS CASE, as follows:

Aside from the ordinary indemnity for death, the appellant is obliged to
following, in accordance to Art. 2206 o the New Civil Code:
a) to compensate the heirs of Rolando Manahan for the latter's loss of
capacity
b) to give support in the form of expenses for education to the sisters of
Manahan who had been dependent on him therefor; and
c) to pay the heirs of Rolando Manahan moral damages for the mental
suffered by them.

pay the
earning
Rolando
anguish

SC also laid down the following guidelines in determining the compensable amount
of loss earnings:
a) the number of years for which the victim would otherwise have lived

b)

the rate of loss sustained by the heirs of the deceased

- Considering that Rolando Manahan was 26 years of age at the time of death,
he was expected to live for another 46 years. This is derived by using the
generally accepted formula in computing for life expectancy, based on the
1980 CSO table.
- But a man does not normally continue working to earn money up to the final
month or year of his life; hence 46 years could be reasonably reduced to 39
years. Besides, Rolando Manahan was a government employee who is
expected to retire at the age of 65.

- If there are 261 working days in a year and Rolando Manahan was receiving
P23.00 a day, Rolando Manahan's gross earnings would be approximately
P234,000.00.
- A reasonable amount must be deducted therefrom that would represent
Rolando Manahan's necessary expenses had he been living, in this case
P120,000.00.
- The net or compensable earnings lost by reason of Rolando Manahan's death
is, accordingly, P114,000.00.

1.
2.
3.
4.
5.

SC also considered and awarded P20,000.00 as morral damages o the heirs of Rolando
Manahan as it was found hat their mother suffered a mild stroke upon learning of
Rolando Manahan's slaying which eventually led to her paralysis.
SC then modified the award of damages as follows:

P50,000.00 as indemnity for death;

P26,445.00 as actual damages;
P114,000.00 by way of lost earnings;
P10,000.00 by way of educational assistance to Rolando Manahan's two (2) sisters; and
P20,000.00 as moral damages.

EASTERN SHIPPING VS CA
FACTS
Two fiber drums were shipped owned by Eastern Shipping from Japan. The shipment as
insured with a marine policy. Upon arrival in Manila unto the custody of metro Port Service, which
excepted to one drum, said to be in bad order and which damage was unknown the Mercantile
Insurance Company. Allied Brokerage Corporation received the shipment from Metro, one drum
opened and without seal. Allied delivered the shipment to the consignees warehouse. The latter
excepted to one drum which contained spillages while the rest of the contents was
adulterated/fake. As consequence of the loss, the insurance company paid the consignee, so that
it became subrogated to all the rights of action of consignee against the defendants Eastern
Shipping, Metro Port and Allied Brokerage. The insurance company filed before the trial court.
The trial court ruled in favor of plaintiff an ordered defendants to pay the former with present legal
interest of 12% per annum from the date of the filing of the complaint. On appeal by defendants,
the appellate court denied the same and affirmed in toto the decision of the trial court.
ISSUE
(1) Whether the applicable rate of legal interest is 12% or 6%.
(2) Whether the payment of legal interest on the award for loss or damage is to be computed from
the time the complaint is filed from the date the decision appealed from is rendered.
HELD
(1)
The Court held that the legal interest is 6% computed from the decision of the
court a quo. When an obligation, not constituting a loan or forbearance of money, is breached, an
interest on the amount of damaes awarded may be imposed at the discretion of the court at the
rate of 6% per annum. No interest shall be adjudged on unliquidated claims or damages except
when or until the demand can be established with reasonable certainty.
When the judgment of the court awarding a sum of money becomes final and
executor, the rate of legal interest shall be 12% per annum from such finality until satisfaction, this
interim period being deemed to be by then an equivalent to a forbearance of money.
The interest due shall be 12% PA to be computed fro default, J or EJD.
(2)
From the date the judgment is made. Where the demand is established with
reasonable certainty, the interest shall begin to run from the time the claim is made judicially or EJ
but when such certainty cannot be so reasonably established at the time the demand is made,
the interest shll begin to run only from the date of judgment of the court is made.

(3) The Court held that it should be computed from the decision rendered by the court a quo.

POLICARPIO VS CA
FACTS:
(1) Petitioner (along with his co-plaintiffs in the antecedent cases, namely, Rodolfo
Gayatin, Jose Villacin and Jocelyn Montinola) and private respondent Rosito Uy were
former tenants of the 30-door Barretto Apartments formerly owned by Serapia
Realty, Inc..
(2) Sometime in April 1984, private respondent was elected President of the Barretto
Tenants Association (hereafter referred to as the "Association") which was formed,
among others, "to promote, safeguard and protect the general interest and welfare
of its members."
(3) In a letter dated July 30, 1984, private respondent as president of the
Association sought the assistance of the then Minister of Human Settlements to
cause the expropriation of the subject property under the Urban Land Reform
Program for subsequent resale to its tenants.
(4) Failing to get the assistance of the government, the tenants undertook to
negotiate directly with the owners of the Barretto Apartments. Initially, Private
Respondent Rosito Uy orally expressed to Mrs. Rosita Barretto Ochoa the tenants'
desire to purchase their respective units. Later, in a letter dated May 29, 1985,
signed by thirty (30) tenants of the commercial and residential units, the tenants
formally expressed to Mrs. Ochoa their intent to purchase.
(5) One and a half years later, on March 12, 1987, petitioner and his co-plaintiffs
were notified that private respondent was the new owner of the apartment units
occupied by them.
Applicable Laws:
(1) Article 1924. The agency is revoked if the principal directly manages the business
entrusted to the agent, dealing directly with third persons. (n)
(2) Article 1447. The enumeration of the following cases of implied trust does not
exclude others established by the general law of trust, but the limitation laid down in
article 1442 shall be applicable.
(3) Article 1442. The principles of the general law of trusts, insofar as they are not in
conflict with this Code, the Code of Commerce, the Rules of Court and special laws
are hereby adopted.
ISSUE: Whether or not a constructive trust existed between the plaintiffs and the
defendant.
RTC: The trial court found that private respondent had been designated and
entrusted by plaintiffs to negotiate with the Barretto family for the sale of the units.
It also found that a constructive trust was created between the private respondent as
"the cestui que trust [should be trustee] and plaintiffs as beneficiaries [or cestuis que
trust] vis-a-vis the subject units."
CA: Reversed the RTC decision and denied the subsequent motion for
reconsideration.
HELD: There was a constructive trust.
RATIO: (1) Implied trust was created by the agreement between petitioner (and the
other tenants) and private respondent. Implied trusts are those which, without being
expressed, are deducible from the nature of the transaction by operation of law as
matters of equity, independently of the particular intention of the parties.
Constructive trusts are created in order to satisfy the demands of justice and prevent
unjust enrichment. They arise against one who, by fraud, duress or abuse of
confidence, obtains or holds the legal right to property which he ought not, in equity
and good conscience, to hold.
(2) The tenants could not be faulted for not inquiring into the status of private
respondent's negotiation with the owners of the apartments. They had a right to
expect private respondent to be true to his duty as their representative and to take
the initiative of informing them of the progress of his negotiations.

Citybank N.A. vs. Cabamongan 488 SCRA 517 Digest

Citybank v. Cabamongan
488 SCRA 517

G.R. No. 146918 May 2, 2006

Ponente: Austria-Martinez, J.:
Bank negligent
Facts:
1. The Cabamongan spouses Luis and Carmelita are both based in California, USA.
The spouses opened a foreign currency time deposit account for their children with
petitioner CityBank with a 180-day term. An impostor who claimed to be Carmelita
(wife) succeeded to preterminate the time deposit after presenting passport, credit
card and other identification.
2. The bank personnel who attended to the transaction ignored several red flags which
could have alerted the bank as to the real identity of the person claiming to be
'Carmelita'. For one, she failed to present the certificate of time deposit, there was also
a discrepancy in her signature with that in the signature cards of the bank. Finally, the
photo in the bank's file did not look like this person claiming to be Carmelita. Despite
all these irregularities, the bank went through with the transaction, which only took 40
minutes. The document waiver which the impostor signed was also not notarized, as
required under bank's procedures.
3. To the aghast of the spouses, they only came to learn of the incident through a
daughter-in-law who called them up in the US. Apparently, a break-in occurred
previously in their US residence and several important documents were lost to the
thief. The spouses demanded payment from the bank who refused. Hence the filing of
the suit against petitioner bank.
4. The spouses presented a PNP Document Examiner expert who analysed the
signature and concluded that the signature was forged, hence the discrepancy between
the signature of the impostor and the one written in the signature cards held by the
bank.
4. The trial court ruled in favor of the spouses Cabamongan, held the bank negligent
and awarded actual, moral and exemplary damages. The bank appealed to the CA
which affirmed the lower court's decision. Both parties filed a petition for review on
certiorari before the SC where the petitioner insisted that it Carmela who
preterminated the TD despite claims to the contrary, while the Cabamongan spouses
contended that Citybank's negligence was established by evidence.
Issue: Whether or not the bank is negligent and therefor should be held liable
when it allowed the pretermination of the TD in favor of the impostor
HELD:
YES. The bank was indeed negligent as it failed to exercise the highest degree of care
and diligence required of it. The banking business is impressed with public interest
and of paramount importance thereto is the trust and confidence of the public in
general. The Court has held that the bank "is bound to know the signatures of its
customers; and if it pays a forged check, it must be considered as making payment out
of its own funds, and cannot ordinarily charge the amount so paid to the account of
the depositor whose name was forged."(San Carlos Milling Ltd. vs. BPI)
It has been sufficiently shown that the signatures of Carmelita in the pretermination
were forged. The petitioner, even with its signature verification procedure failed to
detect the forgeries. Citybank cannot label its negligence as mere error. For not
exercising the degree of diligence required of banking institutions, it is liable for
damages.